IAOP’s P&G Study: Innovation Takes Work, Thought and Partnership!

innovation_masonBy now you probably know that P&G’s approach to innovation is very close to my Vested heart – I’ve written extensively about it in books, case studies and blogs. That’s why I’m thrilled to see that others, namely the International Association of Outsourcing Professionals, are also taking notice.

Actually IAOP is more than just taking notice, it has bestowed its 2014 Global Excellence in Outsourcing Award for Innovation—known as the GEO Award—to P&G for how it is driving supplier innovation with Jones Lang LaSalle (JLL) – P&G’s global real estate and facilities management partner. The IAOP case study is highly instructive in how P&G has established a culture of innovation both internally and with its suppliers.

As the study notes, P&G’s huge growth since it first started operations in 1837 (yes, 1837!) “could not be achieved without significant innovation across all aspects of the business,” including its relationships with suppliers and partners.

P&G took a huge innovative leap forward in 2001 when it radically changed its approach to Research & Development . Instead of relying solely on its own R&D resources, P&G welcomed ideas from individual entrepreneurs and scientists from other companies and universities. This concept came to be known as Connect & Develop, and the goal was to gain half the ideas from inside and half from outside the company.

Again, in 2003 – P&G took another giant step forward by rethinking how it approached its outsourcing efforts. The complete story is profiled in Vested: How P&G, McDonald’s and Microsoft are Redefining Winning in Business Relationships, but the IAOP case study gives real and tangible examples of supplier innovation in action with the JLL partnership.

The case highlights how the “innovation process” is much like a pipeline “where ideas go through a conversion process all the way through implementation.” Another unique aspect well worth reading about is P&G’s “Innovation Performance Metric,” which is supported by an Innovation Initiative Scorecard designed to measure and validate innovation deliverables. The scorecard measures (with weighted values) Fit – Strategic Importance, Problem Resolution, Business Risk; Feasibility – Scalability, Reliability; and Attractiveness – Direct Value, Indirect Value, End-User Satisfaction.

Lastly, the IAOP case study shows the power of innovation in action, providing a great example of how P&G and JLL are collaborating on solving environmental sustainability challenges with their approach to “Smart Building.”

If you are searching for some good tips on how to work smarter with suppliers – I encourage you to explore the IAOP case study and the full case study featured in the book.

[Image: Innovation by masondan via Flickr cc]

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