Chris Thoen on Open Innovation -Part II

By: Haydn Shaughnessy

Chris Thoen head of Procter and Gamble’s Open Innovation business has been talking with IM about what it takes to achieve excellence in Open Innovation. This week Chris touches on staffing and the culture of Open Innovation.

If you start in open innovation you need a special profile of people who are seasoned within the organization and know how the business is going and have a strong internal network to create the firm’s responsiveness. The best people have 3 profiles:

1. 1. What we call a T profile. This means breadth and depth fusing specialisation and generalisation. They are comfortable to talk today about genomics and tomorrow about nanotechnology and the next day about nuclear. They have the breadth that they need to get these subjects. They have sufficient depth to understand the topic and ask the difficult and dangerous questions and the intuition to know when to dig deeper. They have that ability to go deep enough to be dangerous.

They have sufficient depth to understand the topic and ask the difficult and dangerous questions and the intuition to know when to dig deeper.

1. The three legged stool. The technical mastery, the organizational mastery and the business mastery. The technical mastery is straightforward. The organizational mastery, understanding how decisions are made in your company and in other companies, the other company; to understand what drives the company on a business level and on a people level, who are the real decision makers,influencers and executors; how to drive the different audiences with a different message. The business mastery is to put opportunities into the context of a market in words that make sense to an audience through the elevator pitch, the two minutes to explain a technical solution to a commercial colleagues.
2. Balance. A balance between hard skills and soft skills. The soft skills are interpersonal. Ultimately all this is a people business and is all about relationships and building trusts between different cultures and people. You have to represent your company and the partner company within your company. Not everyone can set up these relationships. Talented technologists might be arrogant and could drive people away.

There is a need to understand who to put into these roles and who to keep out. We are looking for people with all three skill sets, at least people to a level to do this job. The one most difficult to train people in is the interpersonal. You have it or you don’t. On a scale of 1 – 9 you might be a three but that is as far as you will go. On other skills you can train people and move someone from a 3 to a 7. Ultimately though we are looking for people with all three profiles.

We are looking for people with all three skill sets, at least people to a level to do this job. The one most difficult to train people in is the interpersonal.

IM: Is the $3billion revenue increase your department’s target?

CT: This is the overall company’s Connect and Develop target. In Open Innovation we are a very big enabler of this but it is every business unit’s responsibility. It is not one business unit or one part of the business. What my part of the organizations role is, is annually to do the analysis, the metrics to show where are different units are on the journey. Where do they stand – and if needed we can help them to take the steps, to look at scale opportunities or at the business units that have a better approach that we can re-apply. We have a central role but an enabling and monitoring role.

IM: Are you part of the executive team?

CT: This position reports into the VPs and we have a dual reporting line into Finance and into the CTO. We did this on purpose. In order to be successful in open innovation you need the right technical foundation but also the commercial and financial side. You need the right balance so you don’t deliver against an innovation challenge in a way that is too expensive or not generating revenues.

In order to be successful in open innovation you need the right technical foundation but also the commercial and financial side.

We also have the ability to ask the C suite for budget in the case of an opportunity that does not fit the business units, for example new opportunities that could maybe create new product areas. We can provide internal proof of concept and we ask for budget for that. If a concept fits within a business unit they have budget also for initial proof of concept. So there are different channels to make sources of finance available.

IM: How important is the support of top management?

CT: The support of top management is absolutely essential and we have it on a daily basis. If top management don’t live it on a daily basis it is very difficult to convince other people. So our goal – our very public goal is one way we show this. And our CEO constantly asks his leadership team what are the opportunities for further external partnerships.

We have put out the goal and we refine it on a daily basis. It is critical to feel it on a daily basis. In P&G we can easily get help if we feel that a part of the organization is dragging its feet.

In our organisation the only way it works effectively is to matrix innovation with the business units. To make that work effectively we have single points of contacts – we call them SPOCs. A SPOC has been put in place for every business unit and they have direct contact with their VPs and their R&D directors.

Innovation within P&G is seen as the lifeblood. We believe future success is very tightly bound with how successful we are with innovation. But the consumer is boss. The CEO is very important and the CTO is very important but the real boss is the consumer. They put their money on the table. The best way to prosper through these daily elections with that customer is to provide something they can’t find with the products of our competitors. The consumer doesn’t care where my innovation is coming from. We can’t ask for more money because it is innovated by P&G.

The role of our organization is to find the innovation, be the best partner, bring the innovation into our products and be successful together and create win-win-win. Win for P&G, win for our partner and win for our customer.

We don’t want to set up our partnerships for a marriage but for the golden wedding anniversary. We set up the relationship for ongoing innovations and many deals.

I think the companies that will be the most successful are the ones who understand the consumer the best, and who surround themselves with the best partners so that consumers can get the magical performance.

By Haydn Shaughnessy