Re-blogged from Adam Arvidsson at the Actics blog:
For background on the concept of the General Intellect, see here.
“I’ve been away from the blog for a while. That’s because I’ve moved to Milan for my summer tenure as a visiting professor at the university there. Having unpacked books and boxes I’m going through backlogs of stuff to read and do, and run into this. From the semi-latest issue of the Harvard Business Review. It seems old corporate giant Procter & Gamble has discovered the General Intellect, now outsourcing its R&D to the wisdom of the crowds, and very succesfully so! As always Actics is right on spot!
‘For generations, Procter & Gamble generated most of its phenomenal growth by innovating form within- building global research facilities and hiring the best talent in the world. Back then when companies were smaller and the world was less competitive, that model worked just fine. But in 2000, newly appointed CEO A.G. Lafley saw that P&G couldn’t meet its growth objectives by spending greater and greater amounts on R&D for smaller and smaller payoffs. So he dispensed with the company’s age-old ‘invent it ourselves’ approach to innovation and instead embraced a ‘connect and develop’ model. By identifying promising ideas throughout the world and applying its own capabilities to them, P&G realized it could create better and cheaper products, faster. Now the company collaborates with suppliers, competitors, scientists, entrepreneurs, and others (that’s the connect part) , systematically scouring the world for proven technologies, packages, and products that P&G can improve, scale up, and market (in other words, develop), either on its own or in partnership with other companies. Thanks partly to this connect and develop approach, R&D productivity at Procter & Gamble has increased by nearly 60 %. ‘
The article is called ‘ Connect and Develop. Inside Procter & Gamble’s new model for innovation’ by Lary Huston and Nabil Sakkab, published by Harvard Business Review, March 2006 available (for a fee alas!) here- or at any decent research library.”