How a Japanese duster helped P&G clean up
Tuesday, November 8, 2011 by DIANE PETERS
By being open to outside ideas, the consumer-products giant was able to speed innovative new products to market.
About a decade ago, research and development staff at Cincinnati-based Proctor&Gamble made a presentation to the executive team, showcasing a possible follow-up to the wildly successful Swiffer mop. The prototype for the first Swiffer Duster, however, resembled an "ugly mitt," recalls Jeff Weedman, vice-president for global business development for the $80million personal- and household-care product powerhouse. No one was overly impressed. "Here's what I'd really like," said one research and development staffer. He pulled out a duster with a disposable fluffy fibre head and a plastic handle made by Japan's Unicharm. P&G quickly signed a deal with Unicharm to distribute the duster under the P&G name everywhere in the world except Japan. Unicharm then helped customize an existing P&G factory in Brockville, Ont., to manufacture the product. The Duster hit the market in 2003 and has become as ubiquitous as the original Swiffer - and has made millions for both P&G and its Japanese partner. The Duster was one of P&G's hits under an innovation strategy that began a decade ago. Under its Connect + Develop program, P&G has brought to market hundreds of new products with help from outside inventors, academics and companies. And in recent years, companies in Canada and around the world have started doing the same thing.
It's a near-perfect solution to a common problem: Large companies have the knowhow to bring products to market, but even the largest, best-funded R&D department simply cannot keep formulating hit after hit. Yet small companies and solo inventors around the world have a multitude of great ideas but rarely have the resources to take their innovations to market. With R&D budgets getting slashed in this turbulent economy, this practice has more relevance today than ever before. "Big companies have a huge need for growth and for bringing new things to their customers, and that's hard to feed internally," says Tom King, partner and managing director with Boston Consulting Group of Canada Ltd. The result: The marketplace is littered with products developed at least in part outside the company whose name is on the label. As well, companies use outside innovators to solve product-related problems, do testing and build prototypes. And the more tech-reliant an item, the more partners it may require. Technology also helps potential collaborators find each other. Web sites such as NineSigma.com and Yourencore.com allow companies to put out requests for help creating products, solving business problems, and testing components. The responses can come from a nearby small company, an entrepreneur in India, or a U.S. academic. P&G runs its own public site, pgconnectdevelop.com, which posts calls for consumer diagnostic kits, water filtration systems, and hair removers. It draws 300 idea submissions a month. Companies also look to their networks of existing partners, university affiliations and associations to link with smaller-scale innovators.
For large and medium companies that hook up with smaller entities, the benefits are numerous. "There's just up sides from my point of view," says John Pliniussen, associate professor at the Queen's School of Business. "The goal of any senior manager is to get the best idea," no matter where it comes from. These organizations get access to great ideas - and they only pay for what they get. Most larger organizations still run an R&D department, but they're able to keep that unit trim, use staff to vet the ideas coming in, and finesse finished products. Meanwhile, for an inventor, entrepreneur, or academic who gets a contract with a big player, it can secure their future. "If you have a big hit with General Mills, you'll get more business and you'll promote that on your web site," says Prof. Pliniussen. As entrepreneurship grows, and consumer demand for the latest and greatest remains strong, big players and small players will inevitably continue to meet up and swap clever ideas for a path to market. ***** TIPS FOR R&D PARTNERS For big players Make sure it's a good fit. When your businesses' values don't mesh, Jeff Weedman of P&G says, it's best to walk away. Think long-term. Borrowing intellectual property or putting too much fine print in a contract with a smaller organization will come back to haunt you later. Go global. Small-scale innovators from all parts of the globe have great ideas; plus these ideas could better suit international customers. For small players Wait. Be sure your idea is really ready. Moving too quickly could see your idea fail at testing; plus you'll get less value from your intellectual property agreement.
Adjust your expectations. David Miller of The Woodbridge Group says innovators often feel their idea is worth more than it is, and it will take less time to get to market than is truly realistic.
By being open to outside ideas, the consumer-products giant "Proctor&Gamble" , was able to speed innovative new products to market. It's a near-perfect solution to a common problem: Large companies have the know-how to bring products to market, but even the largest, best-funded R&D department simply cannot keep formulating hit after hit.
P&G runs its own public site, pgconnectdevelop.com, which posts calls for consumer diagnostic kits, water filtration systems, and hair removers. It draws 300 idea submissions a month.And as entrepreneurship grows, and consumer demand for the latest and greatest remains strong, big players and small players will inevitably continue to meet up and swap clever ideas for a path to market.