Procter and Gamble’s Chris Thoen on Open Innovation
Procter and Gamble’s Connect and Develop program signalled the transition of big business from a past based on internal R&D to a future based on connectivity and openness. Connect and Develop kick-started the open innovation movement. In a revealing interview Chris Thoen, who runs P&G’s open innovation practice, tells Innovation Management about the future of P&G’s Open Innovation strategy.
IM: Can you tell us where P&G are at with Connect and Develop?
Chris Thoen (CT): In October of 2010 we set a goal to triple the impact of Connect and Develop and become a partner of choice for external innovators, with a target of an additional $3 billion of revenue growth each year.
IM: Your role is managing director of the Global Innovation Office but also Knowledge Management. Knowledge Management is routinely overlooked in innovation these days. How important is it for P&G?
CT: It is totally integral to everything we do. P&G is a company of data. We generate enormous amounts of data but data is just the start. We need a system to capture the knowledge and to make implicit knowledge explicit and to share it. Especially in big companies it is very easy to redo things you have already done. We have found, in the past, especially in open innovation where different groups go to talk to the same external party, it doesn’t create the best image and nor is it effective. It is duplicating activity and maybe even gives slightly different messages and is confusing to external parties. So knowledge management is extremely important as an underlying capability.
IM: And you make extensive use of social media?
CT: Yes. Now, essentially, information can come from anywhere but it is also easier to tap into innovation wherever it is happening. But information is not filtered or qualified to the same extent as it was in the age of printed information where there was oversight and validity checking. Now anyone with a keyboard can get information out whether the information is sound or not. Bringing it back to open innovation, and being a preferred partner of choice, social media is a general platform for making your needs available – you never know where your best possible solution might come from – so LinkedIn, Twitter and Facebook provide a good way of reaching out.
You never know where your best possible solution might come from – so LinkedIn, Twitter and Facebook provide a good way of reaching out.
IM: How much do you invest in these platforms?
CT: It is mainly an investment of time and people. Tapping into the networks costs nothing. But you can’t go half way with this. If you put a message out there you have to be willing to engage with the people who connect with you, the same with our website Connect and Develop. We want to provide to people and universities, etc., an open door where they can come in and talk about their opportunity. That brings obligations. When someone knocks on your door you have to be responsive to that party and their potential solution. So when you engage you have to be sure you have the resources internally to respond and have the technical people to do the due diligence and to link it to the business units and do this with immediate responsiveness. To be decisive after six months is good for a large company but it can be the difference between flourishing and going bankrupt for a start-up.
We have tried to create a response system that matches the expectations of our partners. You do need to make sure you allow your people to spend enough time with them. Have we found a recipe for success? These channels are still young and we are still trying to find the best way to avoid our own information overload, But we are getting there.
IM: How many people do you employ in open innovation?
CT: We have different engagement models. For example we reach out through Facebook, LinkedIn, Twitter and our website. More broadly these are a great way to engage with consumers, and every business unit and product has a social media strategy. We also connect with many very diverse networks, for example those centred around industry associations, professional associations, or networks centred around venture capitalists or private equity; or national laboratories, university networks or individual inventor networks.
Our philosophy is we have to create or be present where innovation is happening in the language or culture of those networks and ecosystems.
Our philosophy is we have to create or be present where innovation is happening in the language or culture of those networks and ecosystems. To be present physically and responsive in networks where we feel the innovation is happening. We are present in about 100+ networks.
You continuously manage those networks and make sure your portfolio of networks match up to your needs today and into the future.
It takes time to build up the networks. We have been on the journey for ten years. It does require commitment from the company. We need to build that outreach to innovators no matter where they are.
IM: How many people does that take?
CT: There are over 100 people in Global Business Development, of which we are a part. And there are 30 in the Open Innovation office. That is 30 people around the world with presence for example in the Americas (West, South, east, North), Europe (the UK, Germany, Belgium, Luxembourg, Israel), Asia (Japan, China, India and recently Singapore).
IM: So what is your system of internal responsiveness?
CT: This is still a journey, even for us. We are further along than some companies. And every step you take you learn more. We see it as very fluid. Two things that are important in setting up an innovation system that is effective and works well are that even before looking externally you need good innovation processes internally. Open innovation will not make you a good innovator if you don’t have the processes to deal with innovation – you will only overload. If the processes are not smooth and well oiled, don’t focus on open innovation.
Open innovation will not make you a good innovator if you don’t have the processes to deal with innovation.
The second is what are your choices? There will always be more opportunities than you can deal with. It is very important therefore to have strong relationships with the business units and their business innovation strategies. They too need to have the right people with the right mindset.
We have a very matrixed way of operating. Our business units help people define very clearly the need. This is already 50% of the way to a solution and the solution you find will be sticky and appropriate to your need.
We’ll continue with part 2 of Chris’s interview in a couple of weeks time. Next week IM looks at the business of rethinking Innovation.
By Haydn Shaughnessy
About the author
Haydn Shaughnessy, senior editor, has worked at the epicentre of innovation in a 25 year career spanning journalism, consultancy and research management. He began his technology career as a manager of application research in broadband, mobile and downstream satellite services and has maintained a continuous production of analysis and intellectual material around innovation since then, having written on Wired Cities, Fibre to the Home, Future Search Engines, and international collaboration. He is an emerging thought leader in systemic innovation building on his PhD research in large scale economic transformations. He was previously a parter at The Conversation Group, the leading global social technologies consultancy where he helped companies such as Alcatel Lucent, Volvo, General Motors, Symbian Foundation, and Unilever adapt to the current transformations in the global digital economy. He has written for the Wall St Journal, Forbes.com, Harvard Business Review, and many newspapers as well as making documentaries for the BBC, Channel 4 and RTE. His consultancy and research work encompasses changing enterprise structures, new business models and long-term trends in attitudes. He is in demand as a speaker on the impact of changing attitudes on business and on gearing innovation to new consumer requirements.