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Once a corporate culture takes root inside a big company, changing it becomes the ultimate management challenge. At Procter & Gamble, where you can't even get a job unless you're applying at the entry level, resistance to change manifested itself over the years in a severe mistrust of outsiders. Just how closed was P&G? Last year, Nabil Sakkab, senior vice president of R&D in the global fabric and home-care group, got up in front of his colleagues and declared that they had borrowed their approach to the outside world from "the halcyon days of the Kremlin and the CIA."

Today, P&G understands that no company -- not even one as vast as the Cincinnati-based consumer-products giant -- can stand on its own. That's especially true when it comes to innovation. To transform the insularity of its culture and to build more relationships with other companies, it has rewritten its entire rule book on how it controls its intellectual property. The company holds about 27,000 patents, but less than 10% are currently used in their products. Other big companies have similar ratios, so P&G is not singularly inefficient in this regard. But for many years, a small subset of those other large organizations have come to see their own know-how as an asset, something that other companies might be willing to rent. So far, computer-technology and pharmaceutical companies have been the leaders in finding ways to license their intellectual property. Outside of those industries, it's been much less common.

P&G has always seen itself as a technology company, so when it formed its own licensing group in 1996, no one there worried that it didn't have anything of value to offer. "Tide is as high-tech as a computer," Sakkab claims. "People just don't realize it, because we don't talk about it that way. But there's a lot of intricate science in a product like that." To the supporters of the licensing initiative, the biggest challenge was cultural: how to convince employees, who had worked for years hunched over a lab table, to help the new group lease the fruits of that labor out to other companies, competitors even.

That job fell to Jeff Weedman, who has run P&G's licensing group since its launch, and the lessons he's learned so far are applicable to any organization that is trying to make the same sort of changes. First, licensing won't amount to much if you're not willing to share your best ideas. Second, the innovators inside your organization need a direct incentive to share with others on the outside. Finally, and most important, sharing know-how with outsiders can actually work to a company's advantage by giving the people who work there a push to make faster decisions about what to use and then to replace the ideas and products that have become available to others.

The New Organization Man

Jeff Weedman is a man of considerable salesmanship skills. Walk into his office, and before you even sit down to address your own business with him, he's quizzed you about your family, teased you about your local sports teams, and offered you piles of a top-secret candy concoction that his group helped create.

Still, Weedman is quick to admit that he had little success early on convincing his bosses that the lessons he would learn could help his group alter the trajectory of the company's culture. In fact, when he launched the group, the company constrained it in ways that prevented it from serving as a catalyst. First of all, a large part of the P&G patent portfolio was off-limits to the group and couldn't be licensed to outsiders at all. "Our charter was to license stuff that we didn't really want anymore," Weedman says. "Well, guess what? The stuff we didn't want anymore wasn't worth a whole lot."