How P&G Tripled Its Innovation Success Rate

foreground ON production establishment dapple ARTWORK Josef Schulz, Form 1, 2001 C-print, 120 x 160 cm How P&038G Tripled Its asylum Success Rate within the ships smart sets immature- crop grind by Bruce brown and Scott D. Anthony 64 Harvard championship revaluation June 2011 HBR. ORG Bruce Brown is the principal(prenominal) technology o? cer of Procter &038 assay. Scott D. Anthony is the managing director of Innosight. June 2011 Harvard job freshen 65 B SPOTLIGHT ON PRODUCT INNOVATION 66 Harvard note freshen up June 2011 BACK IN 2000 the prospects for Procter &038 ad approximates run, the bigheartedgest brand in the attach tos fabric and ho practicehold deal expose division, come a biged limited.The laun modify detersive had been around for to a greater extent(prenominal) than 50 eld and so far predominate its bone marrow market places, tho it was no long-run evokeing fast sufficient to nurse P&038Gs consumes. A ten later soar ups grosss hu rl or so doubled, wait oning shake annual division taxs from $12 trillion to al abtaboo $24 billion. The brand is inflate in acclivitous markets, and its iconic dickheadseye logo is turning up on an array of parvenue products and scour in the altogether traffices, from instant substantiales fresheners to neighborhood dry cleaners. This isnt accidental. Its the result of a strategic grounds by P&038G over the past decennium to systematize mutation and offset.To understand P&038Gs schema, we necessity to go back much than than than a atomic act 6 to the sources of its inspiration Thomas Edison and Henry crossway. In the 1870s Edison ca handlingd the worlds first industrial research laboratory, Menlo Park, which gave rise to the technologies behind the advance(a) electric-power and motion-picture industries. Under his inspired direction, the lab churned out humors Edison himself ultimately held more than 1,000 patents. Edison of flow understand the importa nce of mass production, but it was his confederate Henry fording who, decades later, perfected it.In 1910 the Ford Motor Comp any(prenominal) shifted the production of its noned sticker T from the Piquette Avenue Plant, in Detroit, to its wise highland Park analyzable nearby. Although the assembly line wasnt a novel concept, Highland Park showed w wear it was undecided of In four age Ford slashed the time mandatory to stimulate a car from more than 12 hours to just 93 transactions. How could P&038G marry the creativity of Edisons lab with the speed and reliability of Fords grind? The answer its attractionship devised, a modern- branch pulverisation, is still ramping up. barely already it has seconded the fraternity alter both its core craftes and its ability to captivate innovative young- suppuration opportunities. P&038Gs efforts to systematize the serendipity that so practically sparks recent-fangled- furrow origination carry Coperni undersurface lesso ns for draw outers face up with shrinking product life cycles and change magnitude global competition. Laying the Foundation conversion has long been the backbone of P&038Gs crystallize. As chairman, chair, and CEO pier McDonald notes, We k like a shot from our history that while promotions may win quarters, grounding wins decades. The caller-out spends n archean $2 billion annually on R&038Droughly 50% more than its closest competitor, and more than most other competitors combined. distributively year it invests at least another $400 cardinal in foundational consumer research to discover opportunities for cosmos, conducting almost 20,000 studies involving more than 5 one thousand thousand consumers in nearly 100 countries. Odds atomic number 18 that as youre reading this, P&038G researchers ar in a neckcloth umpteenwhere observing shoppers, or even in a consumers hearthstone.These investments atomic number 18 necessary but not sufficient to achieve P&038Gs r evolution goals. plurality pass on innovate for financial gain or for competitive advantage, but this brook be self-limiting, McDonald says. There call for to be an ruttish component as wella source of inspiration that motivates state. At P&038G that inspiration lies in a sense of purpose poken from the superlative degree downthe message that all(prenominal) plan improves peoples lives. At the initiation of the 2000s only astir(predicate) 15% of P&038Gs intros were meeting tax income and profit targets.So the caller-up launched its instanter well-known(a) Connect + dumbfound program to ask in outdoors originations and built a robust stage-gate bidding to help wield ideas from inception to launch. (For more on C+D, moderate Larry Huston and Nabil Sakkab, Connect and Develop in spite of appearance Procter &038 Gambles New Model for Innovation, HBR March 2006. ) These actions showed early signs of raising basis success rates, but it was clear that P&038G requ ired more discovery purposes. And it had to come up with them as faith overflowingy as Fords pulverisation had rolled out Model Ts.HOW P&038G TRIPLED ITS INNOVATION triumph drift? HBR. ORG Idea in Brief Procter &038 Gamble is a famous innovator. Nonetheless, in the early 2000s only 15% of its worlds were meeting their revenue and pro? t targets. To deal out this, the federation set more or less showing organizational structures to systematize innovation. The resulting wise- issue factory includes large-scale impudentheadache inception groups, steeringed mould aggroups, and entrepreneurial guides who help teams rapidly persona and test untried products and vexation models in the market.The teams follow a step-by-step business teaching manual(a) and social function specialise project and portfolio commission tools. Innovation and outline assessments, once distinguish, are now combined in revamped executive reviews. P&038Gs buzz off suggests six lessons for leaders looking to build new-growth factories Coordinate the factory with the familys core businesses, be a ready portfolio manager, start gnomish and grow compassionatefully, make up tools for gauging new businesses, make sure the righteousness on people are doing the right work, and call down cross-pollination. ithout a further boost to its constitutional growth capabilities, the company would still earn trouble hitting its targets. P&038Gs leaders recognized that the variant of growth the company was after couldnt come from simply doing more of the same. It require to come up with more prevail innovationsones that could hold completely new markets. And it requisite to do this as reliably as Henry Fords Highland Park factory had rolled out Model Ts. In 2004 Gil Cloyd, hence the chief technology officer, and A. G.Lafley, hence the CEO, tasked cardinal 30-year P&038G veterans, John Leikhim and David Goulait, with designing a new-growth factory whose intellec tual underpinnings would derive from the Harvard Business School professor Clayton Christensens exuberant-innovation theory. The fundamental concept of disruptiondriving growth with new offerings that are childlyr, more convenient, easier to access, or more affordablewas scarce foreign to P&038G. Many of the companys powerho habituate brands, including surge, tip, Pampers, and Swiffer, had followed de puzzle feeds.Leikhim and Goulait, with clog from other managers, began by holding a two-day plant lifehop for cardinal new-product- eruptment teams, guided by facilitators from Innosight (a firm Christensen cofounded). The attendees explored how to shake up imbed ship canal of thinking that can reduce roily adventes. They formulated creative ways to address critical commercial message questionsfor example, whether requirement would be sufficient to warrant a new-product launch. Learning from the workshop helped anxiety reaction the instruction of new products, su ch as the probiotic add Align, and in addition bolstered alive ones, such as Pampers.In the years that followed, Leikhim and Goulait shored up the factorys foundation, working with Cloyd and other P&038G leaders to Teach senior forethought and project team members the mind-sets and behaviors that foster roily growth. The training, which has changed over time, initially ranged from short modules on topics such as assessing the demand for an early-stage idea to multiday courses in entrepreneurial thinking. Form a group of new-growth-business guides to help teams working on disruptive projects.These experts might, for instance, advise teams to remain short until their projects bring out commercial questions, such as whether consumers would habitually use the new product, redeem been answered. The guides include several(prenominal)(prenominal) entrepreneurs who have succeededand, even more important, failedin starting businesses. Develop organizational structures to drive new gro wth. For example, in a fistful of business About the units the company created small groups focused Spotlight Artist Each month we illustrate primarily on new-growth initiatives.The groups our Spotlight package with (which, like the training, have evolved importantly) a serial publication of works from an acaugmented an lively entity, Future bets, whose complished artist. We hope charter is to create new brands and business mod- that the lively and cerebral creations of these photograels. sacred teams within the groups conducted phers, painters, and instalmarket research, developed technology, created lation artists will saturate our pages with surplus energy business plans, and time- time-tested assumptions for specific and intelligence and amplify projects. hat are often complex and fuck off a surgery manuala step-by-step abstract concepts. This months artist is guide to creating new-growth businesses. The Josef Schulz, a German manual includes overarching principles as w ell as photographer who often detailed procedures and templates to help teams turns his lens on modern industrial constructs and describe opportunities, identify requirements for digitally strips outdoor(a) de? ning success, monitor progress, make go/no-go decisions, details to render moreand more. abstract, universally relRun evidence projects to showcase the evant images. In the ? rst step Im a photographer emerge factorys work. One of these was a line of with his limitations, he pocket-size products called shove along, which chop-chop once told an interviewer, refresh clothes For example, person whos in a and then an artist with his freedom of decisions. hurry can give a not-quite-clean shirt a spray rather View more of the artists than putting it through the wash. work at josefschulz. de. June 2011 Harvard Business survey 67 SPOTLIGHT ON PRODUCT INNOVATION Sustaining CommercialCommercial innovations use creative marketing, packaging, and promotional approaches to grow l iving o? erings. During the 2010 wintertime Olympics, P&038G ran a series of ads celebrating mothers. The campaign covered 18 brands, was viewed repeatedly by hundreds of trillions of consumers, and drove $100 million in revenues. P&038Gs Four Types of Innovation Sustaining innovations perplex additive improvements to existing products a detailed more make clean power to a slip pullulate detergent, a give out ? avor to a toothpaste. These ply what P&038G calls er bene? sbetter, easier, cheaperthat are important to sustaining parting among occurrent customers and getting new people to contribute a product. Sharpening the Focus By 2008 P&038G had a working prototype of the factory, but the companys innovation portfolio was weighed down by a proliferation of small projects. A. G. Lafley charged Bob McDonald (then the COO) and CTO Bruce Brown (a coauthor of this article) to spectacularally emergence innovation proceeds by focusing the factory on fewer but bigger initiativ es. McDonald and Browns team drove tether critical improvements.First, rather than strictly separating innovations knowing to bolster existing product lines from efforts to create new product lines or business models, P&038G increased its accent on an intermediate category transformational-sustaining innovations, which demo study new benefits in existing product categories. Consider the crownwork brand, the market leader until the late 1990s, when it was usurped by Colgate. expression for a comeback, in 2000 P&038G launched a disruptive innovation, cover Whitestrips, that make teething whitening at home affordable and tripping.In 2006 it introduced Crest Pro-Health, which squeezes half a dozen benefits into one tubethe toothpaste fights cavities, plaque, tartar, stains, gingivitis, and with child(p) breath. In 2010 it rolled out Crest 3D White, a line of travel oral contend products, including one that whitens teeth in two hours. Such efforts helped Crest retake the lea d in galore(postnominal) markets. Pro-Health and 3D White were both transformational-sustaining innovations, meant to draw to current consumers while attracting new ones. These sorts of innovations piece of land an mportant trait with market-creating disruptive innovations They have a high degree of uncertaintysomething the factory is specifically designed to manage. Second, P&038G changeed organizational supports for the formation of transformationalsustaining and disruptive businesses. It open several new-business-creation groups, larger in size 68 Harvard Business inspection June 2011 and scope than any previous growth-factory team, whose elections and counselling are kept carefully separate from the core business.These groups dedicated teams led by a general managerdevelop ideas that cut across multiple businesses, and as well pursue solely new business opportunities. One group covers all of P&038Gs beauty and personalised care businesses another covers its household care business (the parent unit of the fabric-and-household and the family-and- bollix-care divisions) a third, FutureWorks, focuses largely on enabling polar business models (it helped guide P&038Gs recent partnership with the Indian business Healthpoint Services).The new groups supplement (rather than replace) existing supports such as the Corporate Innovation entrepot, which submits seed great(p) to ideas that might diversely slip through the cracks. P&038G also created a specialized team called LearningWorks, which helps plan and execute in-market experiments to learn about(predicate) purchase decisions and postpurchase use. Third, P&038G revamped its strategy development and review process. Innovation and strategy assessments had historically been handled separately. Now the CEO, CTO, and CFO explicitly link company, business, and innovation strategies.This integration, coupled with new analyses of such issues as competitive factors that could venture a given business, has surfaced more opportunities for innovation. The process has also prompted examinations of each units production schedule, or pipeline of growth opportunities, to ensure that its robust enough to supply against growth goals for the abutting seven to 10 years. Evaluations are made of psyche business units (feminine care, for example) as well as broad sectors (household care).This revised approach calls for each business unit to determine the mixture of innovation types it needs to deliver the required growth. HOW P&038G TRIPLED ITS INNOVATION SUCCESS RATE? HBR. ORG Transformational-Sustaining Transformational-sustaining innovations reframe existing categories. They typically bring order-of-magnitude improvements and fundamental changes to a business and often lead to breakthroughs in market share, pro? t levels, and consumer acceptance. In 2009 P&038G introduced the wrinkle-reducing cream Olay Pro-X.Launching a $40-a-bottle product in the depths of a recession might seem a que stionable strategy. But P&038G went ahead because it considered the product a transformational-sustaining innovationclinically proven to be as e? ective as its such(prenominal) more expensive prescription counterparts, and shining to the companys other antiaging o? erings. The cream and related products generated ? rst-year sales of $50 million in U. S. food sellers and drugstores alone. libertine Disruptive innovations represent newto-the-world business opportunities.A company enters entirely new businesses with radically new o? erings, as P&038G did with Swi? er and Febreze. Running the milling machinery permits return now to tide, whose dramatic growth highlights the potential of P&038Gs approach. Over the past decade the brand has launched numerous products and product-line extensions, carved new paths in emerging markets, and tested a hopeful new business model. If you had looked for surge in a U. S. supermarket 10 years ago, you would have found, for the most part, ord inary bottles and boxes of detergent.Now youll see the Tide name on dozens of products, all with different scents and capabilities. For example, in 2009 P&038G introduced a line of wash additives called Tide Stain Release. Within a year, building on 26 patents, it incarnate these additives into a sible to 70% of Indian consumers and has helped to significantly increase Tides share in India. More radically, tittup go the Tide brand out of the lavation room. The line has clear disruptive characteristics Swash products codt clean as thoroughly as laundry detergents or remove wrinkles as effectively as professional pressing.But because theyre ardent and easy to use, they offer good enough fooling alternatives between washes. Swash took an unconventional path to commercialization. When the products were first sold, in a store near P&038Gs headquarters in Ohio, they carried a different brand name and had no plain connection to Tide. by and by that experiment, P&038G opened a po p up Swash store at The Ohio take University. Both Tide Dry cleaners is a factory innovation that represents an entirely new business model. new detergent, Tide with Acti-Liftthe first major redesign of Tides liquid laundry detergent in a decade.The products launch drove immediate marketshare growth of the Tide brand in the unify States. P&038G has also customized formulations for emerging markets. Ethnographic research showed that about 80% of consumers in India wash their clothes by hand. They had to read between detergents that were relatively racy on the skin but not very good at rattling cleaning clothes, and more-potent but harsher agents. With the problem understandably identified, in 2009 a team came up with Tide Naturals, which cleaned well without causing irritation.Mindful of the need in emerging markets to provide greater benefit at lower followmore for lessP&038G priced Tide Naturals 30% below comparably effective but harsher products. This made the Tide brand ac cestests helped the company understand how consumers would barter for and use the products, which P&038G then began selling exclusively through amazon and other online channels. In early 2011 the company ramped down its promotion of Swash, although learning from the effort will inform its work on other disruptive ideas in the clothes-refreshing space.Whereas Swash was a new product line, Tide Dry cleaners represents an entirely new business model. It started when a team began exploring ways to disrupt the dry-cleaning market, using proprietary technologies and a unique store design grounded in insights about consumers frustrations with existing options. Many cleaning establishments are dingy, unfriendly places. Customers have to park, walk, and wait. very practically the cleaners hours are inconvenient. P&038Gs alternative bright, boldly slanting cleaners June 2011 Harvard Business Review 69 SPOTLIGHT ON PRODUCT INNOVATIONThe Factorys Consumer Research at Work In October 2010 P&038G launched the Gillette resistance razor in India, a transformational-sustaining innovation whose strategic intent was simple to provide a cheaper and e? ective alternative for the hundreds of millions of Indians who use double-edged razors. The companys researchers worn-out(a) thousands of hours in the market to understand these consumers needs. They gained important insights by observing men in rural areas who, lacking indoor plumbing, typically shave outdoors using teeny-weeny or no waterand dont shave every(prenominal) day.The single-blade Gillette entertain was thus designed to clean easily, with nominal water, and to manage longer stubble. The initial retail price was 15 rupees (33 cents), with re? ll cartridges for ? ve rupees (11 cents). proterozoic tests showed that consumers preferred the new product to double-edged razors by a six-to-one margin. Its breakthrough mental process and a? ordability position it for rapid growth. featuring specialized treatments, d rive-through windows, and 24-hour storage lockers to facilitate after-hours take down and pickup.Using the new-growth factorys process manual, the development team identified key assumptions about the proposed dry cleaners. For example, could the business model generate enough returns to attract store owners voluntary to pay up to $1 million for franchise rights? In 2009 P&038Gs guides helped the team open troika originals in Kansas urban center to try to find out. That year P&038G also formed vigorous Pursuits Franchising, a supplemental to oversee such efforts, and transferred ownership of the dry-cleaning venture to FutureWorks, whose main mission is to pursue new business models that lie outside P&038Gs established systems.It remain to be seen how Tide Dry Cleaners will fare, but one promising sign came in 2010, when Andrew Cherng, the founder of the cat bear Restaurant Group, announced plans to open one hundred fifty franchises in four years. He told BusinessWeek, I w asnt around when McDonalds was taking franchisees, but Im not spill to miss this one. To ensure strategic gluiness and smart resource allocation, Tides innovation efforts have been closely twin(a) through regular dialogues among several leadersCEO McDonald, CTO Brown, the vice-chair of the household business unit, and the president of the fabric care division.Theyve also been the focus of discussions at Corporate Innovation Fund meetings and similar reviews. This isnt just the organized pursuit of a single innovation. Its part of a steady stream of ideas in developmenta factory humming with work. and learning, and personally engage. Our journey at P&038G suggests six lessons for leaders looking to create new-growth factories. 1. Closely prepare the factory and the core business. Leaders sometimes see efforts to foster new growth as completely distinct from efforts to bolster the core indeed, umteen in the innovation community have argued as much for years.Our throw indicates the opposite. First, new-growth efforts depend on a good core business. A healthy core produces a cash endure that can be invested in new growth. And weve all known times when an hurt core has demanded solicitudes full attention a healthy core frees leaders to think about more-expansive growth initiatives. Second, a core business is risque with capabilities that can support new-growth efforts. Consider P&038Gs excellent relationships with major retailers. Those relationships are a powerful, hard-to-replicate asset that helps the factory expedite new-growth initiatives. Swiffer wouldnt be Swiffer without them.Third, some of the tools for managing core effortsparticularly those that track a projects progressare also useful for managing new-growth efforts. And finally, the factorys rapid-learning approach often yields insights that can strengthen existing product lines. One of the project teams at the 2004 workshop was seeking to spur conversion in emerging markets from cloth to disposable diapers. Subsequent in-market tests yielded a critical discovery Babies who wore disposable diapers fell at rest(prenominal) 30% faster and slept 30 minutes longer than babies wearing cloth diapersan evident benefit for infants (and their parents).Advertising campaigns touting this advantage helped make Pampers the number one brand in several emerging markets. 2. Promote a portfolio mind-set. P&038G communicates to both internal and external stakeholders that it is building a varied portfolio of innovation Lessons for Leaders Efforts to build a new-growth factory in any company will fail unless senior managers create the right organizational structures, provide the proper resources, set aside sufficient time for experimentation 70 Harvard Business Review June 2011 HOW P&038G TRIPLED ITS INNOVATION SUCCESS RATE? HBR. ORG approaches, ranging from sustaining to disruptive ones. See the sidebar P&038Gs Four Types of Innovation. ) It uses a set of master-planning tools to equal the pace of innovation to the overall needs of the business. It also deploys portfolio-optimization tools that help managers identify and efface the least-promising programs and nurture the best bets. These tools create projections for every active idea, including estimates of the financial potential and the tender and bully investments that will be required. about ideas are evaluated with classic net-present-value calculations, others with a risk-adjusted real-option approach, and still others with more-qualitative criteria.Although the tools assemble a rank-ordered list of projects, P&038Gs portfolio management isnt, at its core, a mechanical exercise its a dialogue about resource allocation and business-growth building blocks. Numerical infix informs but doesnt dictate decisions. A portfolio approach has several benefits. First, it sets up the lookout that different projects will be managed, resourced, and deliberate in different ways, just as an investor would use different criteria to evaluate an rectitude investment and a real terra firma one.Second, because the portfolio consists largely of sustaining and transformational-sustaining efforts, seeing it as a whole highlights the critical importance of these activities, which treasure and extend legitimate disagreement about the best way to organize for new growth. Whereas we believe in a factory with relatively strong ties to the core, some exhort a skunkworks organization. Others argue for distinct but linked organizations under an ambidextrous leader still others recommend mirroring the structure of a venture capital firm. (P&038Gs factory uses several organizational approaches. Treating aptitude development itself as a new-growth innovation lets companies try different approaches and learn what works best for them. A staged approach serves another important purpose Its a built-in reminder that a new-growth factory is not a quick fix. The factory wont provide a sudden boost to next qu arters results, nor can it at a time rein in an out-of-control core business thats veering from crisis to crisis. GILLETTE GUARD After thousands of hours of research in the ? eld, P&038G learned that a single-blade razor was a cheaper and e? ective alternative to double-edged razors for many a(prenominal) consumers in India. CREST 3D WHITEUsurped by Colgate in the late 1990s, Crest has regained the lead in many markets owing to its universe of several innovative oral care products, including ones that make teeth whitening at home a? ordable and easy. 4. Create new tools for gauging new businesses. Anticipated and nascent markets are notoriously hard to analyze. Detailed review article with one of the project teams that attended the pilot workshop showed P&038G that it needed new tools for this purpose. P&038G now conducts transaction learning experiments, or TLEs, in which a team makes a little and sells a little, thus letting consumers choose with their wallets.Teams have sold small amounts of products online, at mall kiosks, in pop-up stores, and at enjoyment parkseven in the company store P&038G now conducts transaction learning experiments, which let consumers pick out with their wallets. core businesses. Finally, a portfolio approach helps repay the message that any project, particularly a disruptive one, may carry stiff risk and might not deliver commercial resultsand thats fine, as long as the portfolio accounts for the risk. 3. Start small and grow carefully. Remember how the new-growth factory began with a simple two-day workshop.It then expanded to small-scale pilots in several business units before comme il faut a companywide initiative. Staged investment allows for early, rapid revisionbefore lines scribbled on a hypothetical organizational chart are engraved in stone. It also provides for targeted experimentation. For example, thither is and outside company cafeterias. P&038G devised a venture capital approach to testing the market for Al ign, its probiotic supplement, providing seed capital for a controlled pilot. The company has also tested entire business modelsrecall the Kansas City pilots of Tide Dry Cleaners. 5.Make sure you have the right people doing the right work. twist the factory forced P&038G to change the way it staffed certain teams. At any given time the company has hundreds of teams working on various innovation efforts. In the past, most teams consisted mainly of irregular membersemployees who had other responsibilities pulling at them. But disruptive and transformational-sustaining efforts June 2011 Harvard Business Review 71 SPOTLIGHT ON PRODUCT INNOVATION HBR. ORG CONNECT WITH THE AUTHORS Do you have questions or comments about this article? The authors will serve to reader feedback at hbr. org. TIDE wry CLEANERSStill in an early stage, this innovation arose in part from insights about consumers frustrations with the dinginess and get at of most existing drycleaning establishments. require single(a) attention. (As the old saying goes, nine women cant make a baby in a month. ) There need to be people who wake up each day and go to quiescence each night obsessing about the new business. New-growth teams also need to be small and nimble, and they should include seasoned members. P&038G found that big teams often peat bog down because they pursue too many ideas at once, whereas small teams are better able to quickly focus on the mostpromising initiatives.Having several members with substantial innovation experience helps teams confidently make sound intellect calls when data are inconclusive or absent. Finally, building a factory requires a substantial investment in widespread, on-going training. Changing mind-sets begins, literally, with teaching a new language. Key terms such as disruptive innovation, job to be done, business model, and critical assumptions must be clear and consistently defined. P&038G reinforces key innovation concepts both at large meetings and at smaller, focused workshops, and in 2007 it established a disruptive innovation college. People working on new-growth projects can choose from more than a dozen courses, ranging from elemental innovation language to designing and carrying out a TLE, sketching out a business model, staffing a new-growth team, and identifying a job to be done. 6. Encourage intersections. Successful innovation requires robust cross-pollination both inside and outside the organization. P&038Gs Connect + Develop program is part of a larger effort to intersect with other disciplines and gain new perspectives.Over the past few years P&038G has Shared people with noncompeting companies. In 2008 P&038G and Google swapped two dozen employees for a few weeks. P&038G wanted greater film to online models Google was interested in learning more about how to build brands. Engaged even more outside innovators. In 2010 P&038G refreshed its C+D goals. It aims to become the partner of choice for innovation coll aboration, and to triple C+Ds contribution to P&038Gs innovation development (which would mean derivation $3 billion of the companys annual sales growth from outside innovators).It has expanded the program to forge additional connections with government labs, universities, small and medium-sized entrepreneurs, consortia, and venture capital firms. Brought in outside talent. P&038G has traditionally promoted from within. But it recognized that ingrained reliance on this approach could hinder its ability to create new-growth businesses. So it began bringing in high-level people to address needs beyond its core capabilities, as when it hired an outsider to run Agile Pursuits Franchising. In that one stroke, it acquired expertise in franchise-based business models that would have taken years to build organically.SOME THINK its cockamamie for large companies to even attempt to create innovative-growth businesses. They maintain that organizations should just outsource innovation, by acquiring promising start-ups. But P&038Gs efforts appear to be working. Recall that in 2000 only 15% of its innovation efforts met profit and revenue targets. at present the figure is 50%. The past financial year was one of the most successful innovation years in the companys history, and the companys three- and five-year innovation portfolios are sufficient to deliver against their growth objectives.Projections suggest that the typical initiative in 2014 and 2015 will have nearly double the revenue of todays initiatives. Thats a sixfold increase in output without any significant increase in inputs. Our experience tells us that although one-on-one creativity can be occasional and uncontrollable, collective creativity can be managed. Although the next Tide or Crest innovation might stumble, the factorys methodical approach should bring many more innovations successfully to market. The factory process can create sustainable sources of revenue growthno matter how big a company b ecomes.HBR Reprint R1106C At P&038Gs disruptive innovation college, people working on new-growth projects can choose from more than a dozen courses. 72 Harvard Business Review June 2011 Harvard Business Review Notice of function Restrictions, May 2009 Harvard Business Review and Harvard Business publishing Newsletter inwardnessed on EBSCO boniface is licensed for the private individual use of authorized EBSCOhost users. 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