Procter and Gamble's Innovation Techniques

The level of competition is continually increasing in the corporate environment. Achieving and sustaining a competitive advantage in today’s marketplace is highly dependent upon an organization’s ability to innovate. In order to compete, companies must create new products and/or services based on state of the art technology. Robbins, DeCenzo, and Coulter (2011) assert “Nothing is more risky than not innovating” (p.17). Innovation does not happen automatically. A deep commitment to building the right culture and infrastructure is required to support innovation. Innovation is the lifeblood of Procter and Gamble. While Procter and Gamble is widely known for its marketing, its heritage as an innovator is equally rich (Innosight LLC, 2012). Over its 175 year history, P&G has consistently created new products. From the invention of Ivory Soap and the first disposable diaper to the recent creation of Tide Pods, Procter and Gamble proves to be a powerhouse of innovation. Procter and Gamble currently has 26 billon dollar brands in its product portfolio and owes much of its success to the techniques it uses to stimulate innovation.

The consumer centered focus of Procter and Gamble’s product development process has produced a number of winning brands. The company’s research and development department relies heavily on product testing with consumers in an iterative process of design, test, refine, and re-test. This process enables P&G scientists to improve and perfect the products and marketing messages to ensure they meet consumer needs prior to market launch. Leveraging its scientists to innovate on the premise that ‘the consumer is boss’ has rarely failed the consumer products giant. Making external connections is important to innovation and business growth at Procter and Gamble (Sakkab, 2002). Procter and Gamble not only relies on its internal research and development department, but also uses a connect and develop program aimed at sourcing product ideas from outside of the company (Brown & Anthony, 2011). The connect and develop program isn’t about outsourcing, but rather is designed to find good ideas and bring those ideas in-house to enhance and capitalize on P&G’s internal capabilities (Hutson & Sakkab 2006). To fulfill consumer needs, P&G searches for promising solutions and then applies its own R&D, manufacturing, and purchasing capabilities to create better and cheaper products, faster.

While external idea sourcing is a great idea, it will not succeed if the internal P&G organization is not supportive of the program. Once an idea is identified, it needs alignment and support from R&D, manufacturing, market research, marketing and other functions to be successful. The formation of several new business creation organizations