MANAGING INNOVATION
P&G is a disciplined innovator. We select innovation projects, allocate resources, and bring innovation to market with disciplined processes and systems that ensure a steady new-product pipeline for every P&G business.
We select innovation projects by identifying consumer-inspired ideas that will build the most short- and long-term shareholder value, whether the ideas begin with P&G or our partners.
We allocate resources to innovation projects by applying rigorous success criteria at every step. Innovations must meet all criteria before moving to the next stage of development and investment.
We bring innovation to market with plans and goals that span multiple years, and with disciplined systems that help ensure high levels of innovation success.
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Game-changing innovations like 2x concentrated liquid laundry detergents are successful because we apply a disciplined, systematic approach to innovation management.
P&G’s Innovation Process
1. SEARCH & DISCOVER.
Great innovation ideas come from many places, including consumers, customers, external partners, and our own research. Many small investments are made to test the viability of new ideas, focusing on the long-term market potential of a new technology or product concept. Each year, P&G researchers and business development professionals explore an estimated 5,000 new innovation ideas.
2. SELECT & RESOURCE.
With the data from the initial research phase, our disciplined selection process allocates limited resources — human and financial — to the most promising innovation opportunities. Projects are sometimes combined to create even bigger consumer opportunities while conserving resources. P&G spends over $2 billion each year on R&D, by far the most in the consumer products industry — but each dollar of research funding and each hour of research time is treated like a scarce commodity.
3. DESIGN & QUALIFY.
Next, multifunctional teams — including professionals from product research, marketing, manufacturing, engineering, finance, and other functions — develop comprehensive plans to deliver against challenging success criteria. They leverage best-in-class tools, including virtual product and package design and consumer testing, to qualify each idea technically, conceptually and financially before it is approved for market launch. P&G has built world-class expertise in 11 core technology areas, each critical to creating and qualifying winning innovations in our product categories.
4. LAUNCH & LEVERAGE.
Finally, an innovation is introduced to consumers and retail customers along with a plan to help deliver key business objectives, including retail distribution, correct pricing, consumer trial, repeat purchase, and ultimately sales and profit. The performance of a new innovation is monitored and measured against these goals. We routinely modify plans to keep new innovations growing for years after launch, and many new brands and products are still building consumer trial after years in the market.