Procter & Gamble: Mastering the Art of the Innovation Tournament

15 Jan 2012 Sandeep Mehta

[email protected] has an interesting article Procter & Gamble: Mastering the Art of the Innovation Tournament.  P&G CEO has set up a great challenge for the company (A great way to foster innovation is for the leader to create or emphasize challenges):

Procter & Gamble CEO Bob McDonald is a man with a plan. Last year, he and his company declared a bold vision — one that includes making all products and packaging with recycled or renewable materials, and ensuring that no waste from P&G products touches a landfill. Prominent in the vision, too, is powering all plants with renewable energy. Because all of this will take decades to achieve, P&G also declared a series of shorter-term, 10-year goals to guarantee that the company is making progress. The 2020 renewable energy goal is to power 30% of P&G’s energy needs for 180 plants worldwide with renewable sources.

Interesting: the no waste recyclable product idea became accessing renewable electricity.   The challenge could have been used to drive P&G engineers to develop new innovative renewable products…  Anyway,  the energy problem was solved by an Innovation Tournament.  I am not sure if accessing renewable energy can be counted as innovation, but there are some interesting lessons in the article.

First: P&G defined a narrow scope for the brainstorming (innovation tournament).  This would help focus the discussion and help generate more useful results.

Second, P&G involved both internal and external experts in the brainstorming. There were more internal participants than external. Hopefully, this would get more internal buy-in to ideas and ease the transition of external ideas into practice.

Instead of a far-flung event like X-Prize, P&G chose a more controlled process, inviting seven external experts to propose and brainstorm solutions with a team of 20 internal experts. Common among corporations that need to protect proprietary information, this format also made sense in P&G’s case “because a lot of it was about process innovation,” says Favaloro. “We wanted to engage people in an ongoing process that involves interaction between internal and external teams. They needed to be steeped in the process itself, instead of the next big widget.”

Third, everyone was asked to do preparatory work before the brainstorming sessions.  This not only increased the quality of ideas, but also ensured external experts’ discussion was more relevant to company needs:

Moreover, significant spadework at the outset resulted in a fast-paced, productive final round in late July. To start, P&G’s internal teams delivered in-depth briefs via webinar to bring the external experts up to speed on the plants so they could frame more workable, tailored recommendations. Then the outside experts submitted 150 ideas, which the internal and external teams together winnowed to 45 via online voting. By the time the groups met in person, “it was a supercharged environment,” says Favaloro. “Everyone was up on the problem and had already worked on it independently.” Adds Stefano Zenezini, P&G’s family care product supply vice president: “One hour into the discussion, [and] you’re already discovering new things.”

Fourth, a very broad set of experts were selected that could represent a wide variety of perspectives (e.g a public policy expert and a project finance expert):

From this discussion came one of the biggest differences in perspective between the external and internal teams. External finance expert Gardner suggested that P&G should add utility-sized renewable power projects to its portfolio. “Their overall electricity demand is 800 megawatts worldwide,” says Gardner. “At each plant, if you have less than five megawatts of renewable energy potential, that’s not significant enough to move the needle to 30% renewable energy at each plant. You could get 25% of your goal with one few-hundred megawatt wind project.”

Fifth and final point, there was enough time allocated to follow through and have detailed discussions about new ideas:

The P&G team was intrigued enough to ask for more information, and Gardner spent the first evening of the tournament preparing a presentation on project finance for the next day. From the presentation, it was clear that new approaches could be beneficial, in particular for large projects.

Pretty good addition to the checklist for my next brainstorming session!

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