The “P” in P&G Stands for “Partnership”
Procter & Gamble is planning to give ConAgra (one of the US’s biggest food groups) access to its industry-leading packaging and design skills in one of the largest co-operation deals struck by the world’s biggest seller of consumer goods and personal products. ConAgra will be able to use everything ranging from P&G’s non-splatter valves on plastic bottles to their advanced wrapping techniques to improve the user-friendliness of its products. This is the first time that P&G has ever allowed another company to access its unique packaging technologies, and this could mean changes to hundreds of food lines across the country.
This has the potential to become of the largest deals to be developed under P&G’s “connect and develop” open-innovation strategy and could be the blueprint for further collaboration with other companies in areas such as manufacturing, research, and marketing.
I think the recent successes under the “connect and develop” strategy can be attributed to A.G Laftley, who became P&G’s CEO in 2000. Soon after becoming chief, he set a target of having half of P&G’s innovating coming from external partnerships. Unlike other companies and chiefs that are all talk when it comes to open innovation, though, A.G Laftley and P&G are actually forming these external partnerships and reaping great benefits. I was fortunate enough to hear Mr. Laftley speak this past February at the Undergraduate Business School Leadership Conference hosted by Emory’s Goizueta Business School. The theme of the conference was innovation so he spoke about a lot of the usual things… goals, strategy, core strengths, flexible culture, etc. but the thing I found most interesting was his enthusiasm in regards to partnerships. He was a huge proponent of collaboration between firms because he said that people don’t realize that there will always be more talent outside the firm than inside (just by nature of the size of the firm in comparison to all the innovators, engineers, etc. out there). The “not made here” stigma needs to go and corporations need to recognize the value in carefully executed collaboration.
