Mark Peterson, director in Procter & Gamble’s External Business Development organization, speaking last week at the Brite Conference, offered one of the most compelling stats underscoring why companies need to organize themselves to cultivate innovation from the outside, as well as inside.
Peterson – who has responsibility for technology transfer (in and out) for a number of the company’s divisions and brands, including Family Care, Snacks and Beverage, Household Care, Pet Care and Baby Care Business Units, as well as the Glad joint venture – noted that P&G has roughly 9,000 R&D scientists internally, though there are approximately one million working on problems related to its business. P&G, the world’s dominant CPG marketer and renowned innovator, has less than one percent of relevant scientists’ working under its umbrella!
Considering such a stat, the “invent-it-ourselves” model is a sure path to diminishing success for any 20th century company. Of course, the million-dollar question becomes: How do you cultivate and harness innovation in large, distributed environments? The answer is complicated, but starts with embracing innovation as a fundamental value. What, really, is the management and overall organization’s commitment to innovation? It must be high because the solution is rooted to core company functions and attributes, from organizational design, to funding, individual and group compensation, risk and frienemy tolerance, and spirit of intellectual curiosity – among a host of other.
See here for P&G’s new innovation model.