How P&G Tripled Its Innovation Success Rate
SPOTLIGHT ON PRODUCT INNOVATION
Spotlight
ARTWORK Josef Schulz, Form #1, 2001 C-print, 120 x 160 cm
How P&G Tripled Its Innovation Success Rate
Inside the company’s new-growth factory by Bruce Brown and Scott D. Anthony
64 Harvard Business Review June 2011
HBR.ORG
Bruce Brown is the chief technology officer of Procter & Gamble.
Scott D. Anthony is the managing director of Innosight.
June 2011 Harvard Business Review 65
B
SPOTLIGHT ON PRODUCT INNOVATION
66 Harvard Business Review June 2011
BACK IN 2000 the prospects for Procter & Gamble’s Tide, the biggest brand in the company’s fabric and household care division, seemed limited. The laundry detergent had been around for more than 50 years and still dominated its core markets, but it was no longer growing fast enough to support P&G’s needs. A decade later Tide’s revenues have nearly doubled, helping push annual division revenues from $12 billion to almost $24 billion. The brand is surging in emerging markets, and its iconic bull’seye logo is turning up on an array of new products and even new businesses, from instant clothes fresheners to neighborhood dry cleaners. This isn’t accidental. It’s the result of a strategic effort by P&G over the past decade to systematize innovation and growth. To understand P&G’s strategy, we need to go back more than a century to the sources of its inspiration— Thomas Edison and Henry Ford. In the 1870s Edison created the world’s first industrial research lab, Menlo Park, which gave rise to the technologies behind the modern electric-power and motion-picture industries. Under his inspired direction, the lab churned out ideas; Edison himself ultimately held more than 1,000 patents. Edison of course understood the importance of mass production, but it was his friend Henry Ford who, decades later, perfected it. In 1910 the Ford Motor Company shifted the production of its famous Model T from the Piquette Avenue Plant, in Detroit, to its new Highland Park
Spotlight
ARTWORK Josef Schulz, Form #1, 2001 C-print, 120 x 160 cm
How P&G Tripled Its Innovation Success Rate
Inside the company’s new-growth factory by Bruce Brown and Scott D. Anthony
64 Harvard Business Review June 2011
HBR.ORG
Bruce Brown is the chief technology officer of Procter & Gamble.
Scott D. Anthony is the managing director of Innosight.
June 2011 Harvard Business Review 65
B
SPOTLIGHT ON PRODUCT INNOVATION
66 Harvard Business Review June 2011
BACK IN 2000 the prospects for Procter & Gamble’s Tide, the biggest brand in the company’s fabric and household care division, seemed limited. The laundry detergent had been around for more than 50 years and still dominated its core markets, but it was no longer growing fast enough to support P&G’s needs. A decade later Tide’s revenues have nearly doubled, helping push annual division revenues from $12 billion to almost $24 billion. The brand is surging in emerging markets, and its iconic bull’seye logo is turning up on an array of new products and even new businesses, from instant clothes fresheners to neighborhood dry cleaners. This isn’t accidental. It’s the result of a strategic effort by P&G over the past decade to systematize innovation and growth. To understand P&G’s strategy, we need to go back more than a century to the sources of its inspiration— Thomas Edison and Henry Ford. In the 1870s Edison created the world’s first industrial research lab, Menlo Park, which gave rise to the technologies behind the modern electric-power and motion-picture industries. Under his inspired direction, the lab churned out ideas; Edison himself ultimately held more than 1,000 patents. Edison of course understood the importance of mass production, but it was his friend Henry Ford who, decades later, perfected it. In 1910 the Ford Motor Company shifted the production of its famous Model T from the Piquette Avenue Plant, in Detroit, to its new Highland Park