Collaboration and Innovation at Procter & Gamble Essay Example for Free

Collaboration and Innovation at Procter Gamble EssayLook in your medicine cabinet. No matter where you love in the universe, odds are that youll find many Procter Gamble products that you wont every day. PG is the largest manufacturer of consumer products in the world, and unitary of the top 10 largest companies in the world by market capitalization. The partnership is k instantlyn for its successful brands, as well as its ability to develop y breakhful brands and maintain its brands popularity with unique patronage innovations. favourite PG brands include Pampers, Tide, Bounty, Folgers, Pringles, Charmin, Swiffer, Crest, and many much. The company has approximately 140,000 employees in more than 80 countries, and its leading competitor is Britain-based Unilever. Founded in 1837 and headquartered in Cincinnati, Ohio, PG has been a mainstay in the American business landscape for well everywhere 150 years. In 2009, it had $79 billion in revenue and earned a $13.2 bill ion profit.PGs business operations are divided into three main units Beauty Care, Household Care, and Health and Well-Being, apiece of which are further subdivided into more specific units. In each of these divisions, PG has three main focuses as a business. It needs to maintain the popularity of its existing brands, via advertising and marketing it must extend its brands to related products by developing new products under those brands and it must innovate and create new brands entirely from scratch.Because so much of PGs business is build around brand creation and management, its critical that the company facilitate collaboration between rehunters, marketers, and managers. And because PG is such a big company, and makes such a wide array of products, achieving these goals is a daunting task.PG spends 3.4 pct of revenue on innovation, which is more than twice the industry average of 1.6 percent. Its research and development teams consist of 8,000 scientists spread across 30 sites glob entirelyy. Though the company has an 80 percent hit rate on ideas that lead to products, making truly innovative and original new products is very difficult in an extremely matched field like consumer products. Whats more, the creativity of bigger companies like PG has been on the decline, with the top consumer ethicals companies accounting for only 5 percent of patents loadd on home attention products in the early 2000s.Finding better ways to innovate and develop new ideas is critical in a marketplace like consumer goods, and for any company as large as PG, finding methods of collaboration that are effective across the enterprise can be difficult. Thats why PG has been active in implementing learning systems that foster effective collaboration and innovation. The social networking and collaborative tools popularized by Web 2.0 have been especially attractive to PG management, starting at the top with fountain CEO A.G. Lafley. Lafley was succeeded by Robert McDonald in 2010, but has been a major force in revitalizing the company.When Lafley became PGs CEO in 2000, he immediately maintain that by the end of the decade, the company would generate half of its new product ideas using sources from outside the company, both as a way to develop groundbreaking innovations more quickly and to reduce research and development costs. At the time, Lafleys proclamation was considered to be visionary, but in the knightly 10 years, PG has made good on his promise.The first order of business for PG was to develop alternatives to business practices that were not sufficiently collaborative. The biggest culprit, says Joe Schueller, Innovation Manager for PGs Global Business Services division, was peradventure an unlikely one e-mail. Though its ostensibly a tool for communication, e-mail is not a sufficiently collaborative way to assign information senders control the flow of information, but may fail to send mail to colleagues who most need to see it, and colleag ues that dont need to see current e-mails will receive mailings long after theyve lost interest. Blogs and other collaborative tools, on the other hand, are open to anyone implicated in their content, and attract comments from interested users.However, getting PG employees to actually use these newer products in place of e-mail has been a struggle for Schueller. Employees have resisted the changes, insisting that newer collaborative tools represent more work on top of e-mail, as opposed to a better alternative. People are accustomed to e-mail, and theres significant organizational inertia against switching to a new way of doing things. Some PG processes for sharing knowledge were notoriously inefficient. For instance, some researchers used to write up their experiments using Microsoft Office applications, then print them out and glue them page by page into seambooks. PG was determined to implement more efficient and collaborative methods of communication to supplant some of these outdated processes.To that end, PG launched a make out overhaul of its collaboration systems, led by a suite of Microsoft products. The services provided include unified communications (which integrates services for voice transmission, data transmission, instant messaging, e-mail, and electronic conferencing), Microsoft Live Communications Server functionality, Web conferencing with Live Meeting, and content management with SharePoint. According to PG, over 80,000 employees use instant messaging, and 20,000 use Microsoft Outlook, which provides tools for e-mail, calendaring, task management, contact management, note taking, and Web browsing. Outlook works with Microsoft Office SharePoint Server to support multiple users with shared mailboxes and calendars, SharePoint lists, and meeting schedules.The presence of these tools suggests more collaborative approaches are taking hold. Researchers use the tools to share the data theyve collected on various brands marketers can more effect ively access the data they need to create more highly targeted ad campaigns and managers are more easily able to find the people and data they need to make critical business decisions.Companies like PG are finding that one vendor simply isnt enough to satisfy their diverse needs. That introduces a new challenges managing information and applications across multiple platforms. For example, PG found that Google search was inadequate because it doesnt always link information from within the company, and its reliance on keywords for its searches isnt ideal for all of the topics for which employees might search. PG decided to implement a new search product from start-up Connectbeam, which allows employees to share bookmarks and tag content with descriptive words that appear in future searches, and facilitates social networks of coworkers to help them find and share information more effectively.The results of the initiative have been immediate. For example, when PG executives traveled to meet with regional managers, there was no way to integrate all the reports and discussions into a single document. One executive glued the results of experiments into Word documents and passed them out at a conference. Another executive manually entered his data and speech into PowerPoint slides, and then e-mailed the file to his colleagues. One result was that the same file ended up in countless individual mailboxes. Now, PGs IT department can create a Microsoft SharePoint page where that executive can post all of his presentations. Using SharePoint, the presentations are stored in a single location, but are still accessible to employees and colleagues in other parts of the company. Another collaborative tool, InnovationNet, contains over 5 million researchrelated documents in digital format accessible via a browser-based portal. Thats a far cry from experiments glued in notebooks.One business organization PG had when implementing these collaborative tools was that if enough empl oyees didnt use them, the tools would be much less useful for those that did use them. Collaboration tools are like business and social networksthe more people connect to the network, the greater the value to all participants. Collaborative tools grow in usefulness as more and more workers contribute their information and insights. They in addition allow employees quicker access to the experts within the company that have needed information and knowledge. But these benefits are contingent on the lions share of company employees using the tools.Another major innovation for PG was its largescale adoption of Cisco TelePresence conference rooms at many locations across the globe. For a company as large as PG, telepresence is an excellent way to foster collaboration between employees across not just countries, but continents. In the past, telepresence technologies were prohibitively expensive and to a fault prone to malfunction. Today, the technology makes it possible to hold high-defi nition meetings over long distances. PG boasts the worlds largest rollout of Cisco TelePresence technology.PGs biggest challenge in adopting the technology was to ensure that the studios were built to particular specifications in each of the geographically diverse locations where they were installed. Cisco accomplished this, and now PGs estimates that 35 percent of its employees use telepresence regularly. In some locations, rule is as high as 70 percent. Benefits of telepresence include significant travel savings, more efficient flow of ideas, and quicker decision making. Decisions that once took days now take minutes.Laurie Heltsley, PGs director of global business services, noted that the company has saved $4 for every $1 invested in the 70 high-end telepresence systems it has installed over the past few years These high-definition systems are used four times as often as the companys earlier versions of videoconferencing systems.SourcesJoe Sharkey, Setbacks in the Air tack to L ure of Virtual Meetings, The New York Times, April 26, 2010 Matt Hamblen, Firms Use Collaboration Tools to Tap the Ultimate IP-Worker Ideas, Computerworld, September 2, 2009 Computerworld Honors Program PG, 2008 www.pg.com, accessed may 18, 2010 Procter Gamble Revolutionizes Collaboration with Cisco TelePresence, www.cisco.com, accessed May 18, 2010 ITs Role in Collaboration at Procter Gamble, Information Week, February 1, 2007.