Turning the Tide at P&G
"The first time we talked about it, we totally bombed," Lafley recalls of his initial meeting with top P&G scientists. "They said, 'You're outsourcing R&D! That's ridiculous.'"
Lafley knew the effort would never succeed without their buy-in. So he and Chief Technology Officer Gil Cloyd convened a series of meetings to address the scientists' concerns. Making the case that "more of the things you thought up are going to happen," they laid out a plan to reward employees regardless of where a new product idea originates-particularly because outside ideas often get to market faster.
Take, for example, a stain-removing sponge one P&G-er found selling in a market in Osaka, Japan, in 2001. He sent a sample to R&D researchers in Cincinnati and posted an evaluation of its market potential on an internal website known as the "eureka" catalog. P&G soon purchased the technology from German chemical giant BASF, whose researchers collaborated with P&G scientists on future versions of the product. Brought to market in just two years (less than half P&G's traditional product development cycle), the result was the Mr. Clean Magic Eraser, one of P&G's hottest new products.
The proof of Lafley's approach is plain enough. Since he took the helm, P&G has not only doubled the number of new products with elements originated outside the company but also more than doubled its portfolio of billion-dollar brands-and its stock price.
How's that for a simple recipe for success?