Business Daily from THE HINDU group of publications
Friday, Nov 03, 2006
Corporate - Research & Development
Marketing - Strategy
Getting paid by P&G to solve problems
P&G is building a huge network of resource persons and institutions, any of whom could chip in and help, and be paid if found useful.
Singapore , Nov. 2
Procter & Gamble, the $68-billion pharma and FMCG major, is keen on rolling out its `connect+develop' model for bringing in innovations into India. A C+D centre has recently come up in Bangalore.
But, what is this connect+develop model? P&G has a huge portfolio of consumer products. The challenge faced by it is how to grow from here.
The company has ambitions for growth. It wants to double its turnover in the next 10 years. In-house R&D, despite a fleet of 9,000 technical persons, cannot generate enough innovation ideas as needed for such growth. "It is mathematically not possible,'' says Mr Nabil Y. Sakkab, Senior Vice-President, Corporate R&D, P&G.
The company, therefore, decided a few years ago to build a huge network of technical people any of whom could be co-opted to generate ideas or come up with solutions for a given problem.
Some of the problems are put up on the Internet. Anybody could provide a solution. If it works, he gets paid.
For example, P&G asked for a solution for printing short messages on potato chips. The solution came from an Italian professor, who also ran a bakery.
"This way, we pay for performance, not employees,'' Mr Sakkab noted in an interaction with journalists, on the sidelines of the `Global Entrepolis @ Singapore' conference, a business networking meet organised here by the Singapore Economic Development Board.
Apart from such a net-based approach, P&G also networks with companies and professionals for generating ideas, solutions. Hence `connect+develop'.
For example, if it is a material sciences problem, a scientist from Central Scientific and Industrial Research laboratory could be reached for help. If it is a chemical problem, it could be one of the IITs, Mr Sakkab said.
In his words, the issue in R&D today is "not know-how, but know-who and know-who-knows-who''. Thus, P&G is building a huge network of resource persons and institutions, any of whom could chip in and help, and be paid if found useful. This approach has enhanced the company's R&D productivity by 60 per cent, he said.
Now, the global major intends to extend the network to India.
Mr Nakkab said the idea for such an approach came from a Canadian company called Gold Corp, a once ailing company which turned around and prospered by putting all its geological data on the Internet and announcing a $5,00,000 reward for any successful prospecting.
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