The P&G Corporate Open Innovation Challenge sees NESTA, British Design Innovation and Oakland Innovation mediating between multinational Procter & Gamble and designers/entrepreneurs.
The ambition: to identify and develop breakthrough ideas while side-stepping traditional concerns over intellectual property. Here P&G's Mike Addison, Maxine Horn of BDI and Oakland's Michael Zeitlyn debate their aspirations for this radical initiative.
There used to be two types of toothbrush - cheap-as-chips manual toothbrushes and top-of-the-range electric with a price tag to match.
Then someone spotted the potential to transform a battery-operated spinning toy into a powered toothbrush. The innovation was to revolutionise the oral healthcare market, offering consumers an electric toothbrush for practically the same price as a manual.
Within 18 months, the Crest Spin Brush was on sale in 35 countries worldwide and heading towards annual sales of £200 million.
"The inventors had the idea and we had the muscle to take it to the global market, quickly," explains Mike Addison, Section Head of P&G's New Business Development.
Today, P&G expects that half of its research and development pipeline will have external innovation involvement. The speed of knowledge transfer in our hi-tech world is changing the nature of innovation, prompting companies to increasingly look beyond their own labs.
But such change brings challenges - not least convincing smaller companies that their ideas won't be stolen, and ensuring everyone gets their fair share of the rewards.
"Companies like P&G are already very good at incremental change. We don't need external people to say - 'try that in a different colour'," explains Mike.
"But we do recognise we don't have the monopoly on breakthrough thinking. So we are opening up the P&G world. We want to hear the truly new ideas, ones which seemingly come from nowhere but have the potential to disrupt a market."
To create another 'Spin Brush' is a tall order. But all agree that the Challenge may well produce ideas which go on to make money for someone, if not for P&G.
Michael Zeitlyn: "I think there'll be a few ideas capable of translating into £10 - £50 million businesses, and some of these, given time and the right incubation, might have the potential to scale up beyond that. Ideas which might otherwise have gone nowhere will get the support necessary to turn them into successful income-generating businesses."
Maxine Horn goes further: "It may set a trend for the future of the creative industry, one that sees it in a more equitable position with corporate firms - away from the straight fees-for-services supplier relationship."
Up to five businesses will eventually get the chance to pitch their idea to P&G, but only once their ideas are sufficiently developed and the designers hold IP. Until then, all contact is with NESTA, BDI and Oakland.
It's a novel attempt to break the stalemate which traditionally blocks relations between multinational Goliaths and design world Davids.
Mike Addison says: "We're reluctant to sign confidentiality agreements without knowing what we are dealing with, not least because it might transpire that it's an area in which we are already working. Equally, if the inventor does disclose without a confidentiality agreement, they can't go on to patent their idea because it's now in the public domain. It's a dilemma which stops the process before it starts.
"The open innovation solution brings risk as well as reward. We understand it's not for everyone. But for those who are intrigued, this challenge offers entrepreneurship with a safety net."
Maxine Horn adds: "The creative industries have been on the back foot for so long, many automatically expect that others are out to take their ideas and exploit them. We're dealing with cultural change as well as presenting the economic opportunities that open innovation can bring.
"The product design development community already knows the traditional fees-for-services business model is no longer sustainable. They need to use their skills and knowledge to build an asset base for their firms, and their future. This could be a turning point for the sector."
Michael Zeitlyn says: "The product life cycle is now so short that you have only a finite time to exploit an idea before another solution to the problem comes along anyway. Companies are necessarily finding an intelligent compromise, rather than insisting they always own the IP."
Mike Addison concurs: "In the world in which we do business, the currency of innovation is IP. We're happy to work with people who own it. There are tough barriers to securing IP - the idea has to be novel, non-obvious and useful. But if you can overcome those hurdles, then a lot of power resides with the person with the idea."
But Maxine Horn points out: "It is not always beneficial to own the IP if you have no means of exploiting, policing or protecting it world-wide. The cost of maintaining a patent ensures many a great idea never comes to market as the small company or inventor goes bust and/or loses faith in the investment and negotiation process.
"IP can be used as a divisive weapon and it can sometimes be the originators who are exploited first - not the idea. This is not advantageous to anyone.
"Open Innovation seeks to bring more honesty and transparency to the process, as well as more equitable relationships and deal-making between those with the ideas and those with the means to support bringing the ideas to market. If everyone feels they are being treated fairly, it increases the commitment of all parties."
Michael Zeitlyn concludes: "Large companies recognise they waste a lot of money developing ideas that never go anywhere. With this model, the risks are shared - but so are the rewards. The key is to structure the process so everyone feels comfortable."
Procter & Gamble provides branded products and services that improve the lives of the world's consumers.
British Design Innovation is a not-for-profit membership organisation whose services and professional membership reflect the increasing focus on open & collaborative innovation by designers, industry, universities and dealmakers.
Oakland Innovation is a specialist research consultancy that facilitates innovation, strategic planning and growth in global consumer and business-to-business markets.
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Nesta Operating Company, a company limited by guarantee registered in England and Wales with company number 7706036 and charity number 1144091. Registered as a charity in Scotland number SC042833.
