P&G Web 2.0 Success Story
Tuesday: November 27, 2007 6:38 AM
Proctor and Gamble had a Research and Development (R&D) team of over 9,000 employees. While they produced some legendary products, the CEO declared that they were not doing enough and with a success rate less than 20%, one could see why. He declared that by the end of 2010, 50% of the R&D efforts would be successful thus increasing productivity by 30%. In order to pull this off, the CEO turned outside the organization for help. That is to say, he turned to Web 2.0 tools for help and gain access to the millions of potential contributors.
The internal resistance was predictable just as we see inside our enterprise. The fear of losing power or prestige was brought up time and time again by the staff. How will we manage the information, who would get the credit, how will we be evaluated and is this too risky were are key questions that need to be answered.
Staying focused, the CEO pushed forward by submitting ideas to externals communities like Innocentive. The result? More than 35% of the ideas now come from outside the R&D department and productivity has soared 60%. Almost 80% of the product launches are successful as compared to 30% for the industry. Here is one example:
One of these products is Pringles Prints potato chips, which uses edible inks to print designs directly on every chip. Because P&G faced a problem relative to printing technology using edible inks, the company used online networks to seek solutions extensively from outside experts worldwide. The company found a professor at the University of Bologna, Italy, who had invented an ink-jet method for print edible images. The technology helped the company market the product within a single year, which was about half the normal time for such a process.
How many more success stories do we need to read about before the community steps up to the plate and embraces Web 2.0?
Why Are Companies Adopting 2.0 Technology? According to Forrester:
1. Business efficiency improvement: 74%
2. Competitive pressure to do so: 64%
3. Specific problem solution: 53%
4. Partner recommendation: 53%
5. Employee request: 45%
6. Bundled services: 25%
Proctor and Gamble had a Research and Development (R&D) team of over 9,000 employees. While they produced some legendary products, the CEO declared that they were not doing enough and with a success rate less than 20%, one could see why. He declared that by the end of 2010, 50% of the R&D efforts would be successful thus increasing productivity by 30%. In order to pull this off, the CEO turned outside the organization for help. That is to say, he turned to Web 2.0 tools for help and gain access to the millions of potential contributors.
The internal resistance was predictable just as we see inside our enterprise. The fear of losing power or prestige was brought up time and time again by the staff. How will we manage the information, who would get the credit, how will we be evaluated and is this too risky were are key questions that need to be answered.
Staying focused, the CEO pushed forward by submitting ideas to externals communities like Innocentive. The result? More than 35% of the ideas now come from outside the R&D department and productivity has soared 60%. Almost 80% of the product launches are successful as compared to 30% for the industry. Here is one example:
One of these products is Pringles Prints potato chips, which uses edible inks to print designs directly on every chip. Because P&G faced a problem relative to printing technology using edible inks, the company used online networks to seek solutions extensively from outside experts worldwide. The company found a professor at the University of Bologna, Italy, who had invented an ink-jet method for print edible images. The technology helped the company market the product within a single year, which was about half the normal time for such a process.
How many more success stories do we need to read about before the community steps up to the plate and embraces Web 2.0?
Why Are Companies Adopting 2.0 Technology? According to Forrester:
1. Business efficiency improvement: 74%
2. Competitive pressure to do so: 64%
3. Specific problem solution: 53%
4. Partner recommendation: 53%
5. Employee request: 45%
6. Bundled services: 25%
Comments (1)
"The fear of losing power or prestige was brought up time and time again by the staff. How will we manage the information, who would get the credit, how will we be evaluated..."
How were these questions answered? The bottom line results you cite are only part of the story. They risk being one-time unless the structures that equate knowledge and innovation with power, prestige and reward are changed. Did P&G in fact change in ways that reward collaboration?
Posted by: Andy Scherer on November 27, 2007 08:35