Procter & Gamble Gets Some IDEO

By Janet Wiscombe

Feb. 2, 2007

A couple of years ago, Procter & Gamble CEO Alan G. Lafley loaded up his entire Global Leadership Council, 40 business-unit heads, for a pilgrimage to San Francisco. The one-day immersion, sponsored by IDEO, was designed to open the eyes of the executives to new ways of thinking.

    “I think the world of them,” says Lafley, one of dozens of top execs who maintain a close strategic relationship with IDEO and who has been at the helm of P&G as earnings at the $70 billion consumer products giant have more than doubled in five years.

    IDEO general manager Tom Kelley says that successful businesses like P&G build fresh innovation strategies into the fabric of their operations, from product design to people management. Their goal isn’t just to develop hot new products, but to learn how to create the process of creativity itself though constant collaboration, brainstorming and the free expression of ideas.

    Kent Lynde, P&G’s associate director of research and development, credits IDEO chief executive Tim Brown with being the one of the forces in the change of thinking at P&G. At IDEO, “all company levels are fluid and organic,” Lynde says. “There’s no ‘I’m better than you.’ There are no barriers. People work quickly and holistically. The human and the mechanical are symbiotic.

    “P&G is very well structured about how it profiles people to a corporate standard,” Lynde continues. “The person we hire in Russia has the same profile as here in America. The major element is this: Core skill sets project the winners of the future. We hire outside but only promote from within.”

    Jennifer Irwin, P&G’s senior manager of global HR, says the 140,000-employee company has updated its HR programs in the past couple of years to reflect the high priority the CEO places on innovation throughout the organization.

    “Innovation was called out as a key competency,” Irwin says. “It is communicated through our global competencies, or ‘success drivers.’ All of our businesses use it in every region of the world to find out the aspects of successful employees.

    “P&G is a leader in assessment technology—more than any other company. We try to get innovation into the process of our assessment methodology,” she says. “Our focus is on innovation in the creation of the brand and on new ideas and products.”

    At P&G, where as many as 200,000 assessments can be conducted in a year, the evaluations are developed and executed internally and are delivered online. Applicants with the highest scores are then given multiple interviews that typically last an hour or more for entry-level management or office administration positions. The same interview standards are used worldwide.

    “We measure online biographical assessments in our competency model,” Irwin says. “We look at historical behavior, how a person handles new ideas to solve new problems. It’s very rigorous.”

    At P&G, the centerpiece of its new model for innovation is the company’s connect-and-develop program, a highly successful strategy that dispensed with the company’s “invent it ourselves” model and now scours the Earth for new technology and people. It created new job classifications such as 70 worldwide technology “entrepreneurs” to embrace the brains of the world from places like university labs.

    The radical strategy now produces more than 35 percent of the company’s innovations and billions of dollars in revenue. “We have expanded the mind-set of people throughout the organization,” says Larry Huston, P&G’s vice president for innovation and knowledge and the principle architect of the program.

    “We are developing specialty roles and redefining roles,” he says. “If we need innovation, we use to run to the bench. Now, we have to be clear about what [we need’ and ask, ‘Does the solution exist within P&G? Does it exist in the world?’

    “It used to be that we’d go back to the bench and find the solution ourselves. It used to be about know-how. Now it’s know-how plus know-who.”

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