The article under consideration is written by Huston and Sakkab (2006). It dwells upon the application of a new model for innovation by one of the largest companies in the world Procter & Gamble. The model is called connect and develop (C&D).
The authors compare the new model with the model largely used in 1980s ‘research and develop’ (R&D). The R&D model is proved to be less effective in the contemporary business environment (Huston & Sakkab, 2006). The authors comment upon the peculiarities of the new model and provide some advice for the implementation of the new C&D model.
Huston and Sakkab (2006) point out that Procter & Gamble first used the new model in 2002. The first product to be developed was a “line of Pringles potato crisps” which was launched in 2004 (Huston & Sakkab, 2006, p.58). The company decided to find the necessary solutions outsides the company. The experience was very successful.
Therefore, A.G. Lafley, CEO, decided to change the R&D model into more appropriate and effective model for innovation. The authors state that the use of the new model led to the increase of innovation success rate whereas costs of innovation fell. Apart from providing good examples of the effectiveness of the new model, the authors give some advice.
For instance, they note that it is important to determine the area of innovations. The company should determine the categories of products to be developed. When the categories are determined, it is possible to find institutions and individuals to collaborate with.
The authors provide an effective pattern to determine areas of innovation: researching top 10 consumers’ needs, defining adjacencies and technology game boards. The authors also comment upon possible networks to use.
Procter & Gamble use propriety networks (technology entrepreneurs and suppliers) or open networks specially designed for C&D model (NineSigma, InnoCentive, YourEncore, Yet2.com).
Huston & Sakkab (2006) also comment upon the most appropriate time to use this model. Finally, the authors emphasize the rapid change of business environment which requires the use of the new model for innovation.
Key points
The article under analysis provides a detailed description of the use of the new model for innovation, C&D model. The authors share a valuable experience of one of the largest companies in the world. It goes without saying that such a detailed and exemplary illustration of the model’s effectiveness can be very helpful for many other companies.
The authors justify the effectiveness of the new model for innovation. They state that there are far too many resources outside companies, so it is but natural that companies can use those resources. However, they point out that it is impossible to create new products using the new model only as it can lead to failure.
This is a very valuable tip for companies which are trying to adapt in the modern business environment. More so, Huston & Sakkab (2006) stress that ideas taken from outside have been still analyzed by researchers in the labs of Procter & Gamble.
The authors provide particular examples when ideas were taken outside, but they were checked and developed by researchers of Procter & Gamble. It is important to note that the authors comment upon each stage of the process of creating new products. Huston & Sakkab (2006) outline helpful strategies of developing new products.
For instance, many companies fail to implement the new model as they fail to choose the right ideas and develop new products. The authors note that it is essential to choose products which will meet top ten consumers’ needs and will ‘support’ existing products. The authors also name precise networks used by Procter & Gamble.
Of course, the same networks can be used by many other people interested in suggesting or acquiring various ideas. Finally, the authors highlight certain threats.
The authors point out that it is crucial not to overestimate external sources or underestimate internal resources as ideas found outside usually need further development. Basically, the authors draw a successful pattern of the use of C&D model illustrating all their arguments with particular examples.
Follow-on research
The new model for innovation has been discussed for at least two decades by researchers. Huston & Sakkab (2006) focus on the experience of Procter & Gamble whereas Huizingh (2010) and Li & Kozhikode (2009) deal with some other examples concentrating on more theoretical points. Thus, Huizingh (2010) dwells upon the essence of the notion.
The author provides an analysis of the major peculiarities of the model. Interestingly, Huizingh (2010) states that there will be no such a term ‘open innovation’ (or Connect & Develop model) soon as the model will be used by all companies. In other words, it will become a norm.
Nonetheless, the author also stresses that although many companies used the model effectively, the further study is necessary as there are many essential phenomena to be identified. Huizingh (2010) points out that profound quantitative and qualitative research should be implemented. Li and Kozhikode (2009) also note that further study is necessary.
The authors also mention several successful examples of the model implementation, but they stress that companies should be prepared to face certain threats as the strategies used by multinationals cannot be always used by smaller companies.
It is important to note that Li and Kozhikode (2009) concentrate on Asian companies (and individuals) which are regarded as the main sources of outside ideas for Western companies. The researchers suggest that smaller companies should work out their own strategies using the successful experience of other companies (both multinationals and smaller companies).
Li and Kzhikode (2009) focus on the implementation of the new model by multinational companies and smaller enterprises. The researchers point out threats which can both multinationals and smaller companies face. It is necessary to point out that both articles provide several successful examples of the use of the open innovation model.
Applications
The article under consideration provides new insights into the process of new products development. The article depicts a successful model of new products creation. This model can be useful for many companies. The detailed analysis of the C&D model provided can help companies develop their own strategies. More so, companies or even individuals can make use of the mentioned networks.
Huston & Sakkab (2006) also depict certain threats. For instance, the authors point out that companies should not underestimate internal resources. This is a very important observation which can be helpful for many companies. Admittedly, lots of companies fail to launch new products as they misuse successful strategies used by others.
The authors comment upon every stage of the new products development using the C&D model (providing helpful tips). Following that pattern companies will be able to work out their own successful strategies. The article under consideration can help companies to adapt and succeed in the contemporary rapidly changing business environment.
Reference List
Huizingh, E.K.R.E. (2010). Open innovation: State of the Art and Future Perspectives. Technovation, 31(1), 2-9.
Huston, L. & Sakkab, N. (2006) Connect and Develop: Inside Procter & Gamble’s New Model for Innovation. Harvard Business Review, 84(3), 58-66.
Li, J., & Kozhikode, R.K. (2009). Developing New Innovation Models: Shifts in the Innovation Landscapes in Emerging Economies and Implications for Global R&D Management. Journal of International Management, 15(3), 328-339.