INTRODUCTION
Many people believe innovation springs serendipitously from some kind of “aha” moment
– literally a bolt out of the blue.
P&G knows differently. Innovation has been the corporate lifeblood since P&G’s humble
beginning in 1837 when William Procter and James Gamble signed a partnership
agreement formalizing The Procter & Gamble Company. Today, P&G’s products touch
and improve the lives of over 4.8 billion consumers in 180 countries. Fifty “Leadership
Brands” include some of the world’s most well-known household names with 25 of these
50 brands each generating more than $1 billion in annual sales.
Simply put, this degree of corporate growth could not be achieved without significant
innovation across all aspects of the business even extending to our relationships with
suppliers and partners. In 2001, P&G radically changed its approach to Research &
Development (R&D). Instead of relying solely on its own, highly capable R&D
resources, P&G welcomed ideas from individual entrepreneurs and scientists from other
companies, and universities, the concept came to be known as Connect & Develop; the
goal was to gain half the ideas from inside and half from outside the company.
Connect and Develop brought many great ideas, but the question remained. How does
a company like P&G drive innovation in its outsourcing efforts? After all, P&G’s
outsourced service providers are companies that have their own priorities, business
objectives and investment requirements. Larry Bridge, P&G’s Global Facilities and Real
Estate (F&RE) Governance Manager, explains. “In the world of outsourcing, innovation
has to come from all places - including suppliers. Outsourcing is a strategic decision
where a company decides it can benefit from expertise and industry knowledge
externally. And, to be successful at driving innovation in outsourcing, we must work in
highly-strategic partnerships with our very best suppliers on jointly- defined business
priorities.”1