How Customers Drive Innovation at P&G

Stefan Lindegaard has an interesting post on P&G: How Open Innovation is Done over at his Stefan Lindegaard blog. The post shows how despite having over 9,000 researchers in-house, P&G reaches out to some of the almost 2 million external researchers that it thinks it needs access to to keep the flow of successful new products going. It does this through an open innovation programme called Connect & Develop that reaches out to independent researchers, suppliers and other industrial companies to solve problems it cannot solve by itself.

P&G is not only active with its network of suppliers and industrial customers through its Connect & Develop open innovation programme. It is also active with its consumer customers through its Vocalpoint programme for mothers, its Tremor programme for adolescents and its Living It programme for lead-customers. All three programmes use different ways to harness customers as sources of ideas and to test new products before they hit the market.

Of these, potentially the most interesting is the Living It programme. Rather than just use suppliers or customers as sources of ideas, or as testers of new products, Living It allows P&G's ethnographers to live with lead-customers, to observe how they live their everyday lives and to identify customers’ needs first hand. In other words, Living it allows P&G to understand the everyday jobs lead-customers are trying to do, the outcomes they are looking to achieve by doing them, and to use these insights to identify potential new products that would make customers' everyday lives easier. This focus on understanding customers’ needs through jobs and desired outcomes is a missing link in much of what passes for innovation today (and of which far too much is costly invention rather than valuable innovation).

It is refreshing to see that even with the enormous resources of one of the biggest companies in the world at their disposal, P&G recognises that it cannot do all its innovation in-house. And that it needs to understand customers needs much better than it did in the past to drive successful innovation in the future.

P&G's innovating of innovation contains many lessons for all of us involved in the risky business of innovation. And who isn't involved in innovating their way into the future today?

What do you think? Is P&G right to open innovation to outsiders? Or is it too risky for P&G?

Post a comment, blog, re-blog or tweet about this post to get the conversation going.

Graham Hill
Customer-driven Innovator
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Further Reading:

Stefan Lindegaard, P&G: How Open Innovation is Done

P&G, Connect & Develop

P&G, Vocalpoint

P&G,Tremor

Business Week, How P&G Pambers New Thinking