There was a time when P&G primarily relied on their own capabilities for generating new ideas, developing them into new products and delivering them but this was not enough as the company was very fast in out growing their innovation model. In 2000, CEO A. G. Lafley decided to do something about it. He introduced Connect & Develop. One of the rational was that the company had 7.5k R&D professionals whereas globally there were 1.5 million professionals who could be leveraged and that the company need not waste time and resources reinventing the wheel.

Connect & Develop: Accelerating internal R&D by leveraging the ideas, knowledge, expertise, Know-How of a network Individuals, Institutions and Businesses from around the world.

The Global Marketplace for Intellectual Property &

Innovationwww.zyrist.com

- Connect & Develop

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The Global Marketplace for Intellectual Property &

Innovationwww.zyrist.com

The Results- by 2006

- 35% of all P&G products have elements that originate from outside.

(15% in 2000)

- 45% of the initiatives have elements that were discovered externally.

- R&D productivity had increased by 60%

- Innovation success rate doubled

- Cost & Risks associated with Innovation fallen

- R&D investment as a percentage of sales was down from 4.8 percent in 2000 to 3.4 percent

today.

- In the last 2 years P&G has launched 100 new products that have elements that come from

outside.

- Significant impact on stock price and market capitalization.