Sustaining Innovation at Unilever -Embracing Open Innovation in R&D
Miles Eddowes : HPC R&D Director for Open Innovation22nd June 2006
Outline
UnileverMissionProducts
Portfolio management processOpen Innovation
Unilever – Scope and ScaleOne in every two households in the world has a
Unilever brand in their home
247,000 employees worldwide
Brands on sale in over 150 countries
In 2005 turnover was £27Bn
Unilever - Our Mission
“Unilever’s mission is
to add vitality to life.
We meet everyday needs for nutrition, hygiene and personal
care with brands
that help people
feel good, look good and get more out of life.”
Product portfolioHome & Personal CareFoods
Savoury & Dressings Skin
World Number 1
World Number 2
Local strength
Spreads
Laundry - #1 in D&E
Deodorants
Weight Management
Tea Household Care
Daily Hair Care - #1 in D&E
Ice Cream Oral Care
Our €1bn brands
Commitment to R&D
Creating world class brand mixes and innovation that are born from
great science and technology!
Home & Personal Care R&D
LAUNDRY SKIN DEOORAL HAIRHHC
Sources of R&D - The Philosophy
Practical solutions for the consumer’s problems:• Personal care• Hygiene
As leading edge as it needs to beAs simple as possible
R&D The Fundamental Balance
An organisational structure to achieve:
Focus on the Customer, the Shopper
and the Consumer
Scale and Depth of the Science
Focused 4D model:Define, Discover, Design & Deploy
Define Discover Design Deploy
Managed in Stage Gates
What What shouldshouldwe do?we do?
Can weCan wedo it?do it?
How willHow willwe do we do
it?it?
LetLet’’ssdo it?do it?
Has it Has it been abeen a
success?success?
Can we Can we recommendrecommendto others?to others?
Home & Personal Care R&DInternal Skills
CORE SKILLS• Product• Process• Packaging• Safety/Health/Environment• Evaluation UNDERPINNING SCIENCE
• Physical Science
• Bioscience
• Process Science
• Consumer Science
Home & Personal Care R&D - Locations
Research GTC Port Sunlight (UK)
BangaloreTrumbull (USA)
Shanghai
Embracing Open Innovation
Want Find Get Manage
What is Open Innovation to Unilever?
Closed InnovationVertically integrated organisation that developed its technology in-house for its sole use
InternalTechnologyBase
UnileverProduct base
Open Innovation Other’sProducts
New Unilever Business Venture
Unilever Product base
Technology In sourcing
Out-Licensing
Technology Spin outsInternal TechnologyBase
ExternalTechnology Base
Commercialise internal and external ideas inside and outside of existing product/ channel base
One trend that’s driving Open Innovation
0102030405060708090
100
1981 1989 1999
25,000+10,000-24,9995,000-9,9991,000-4,999<1,000
Number of employees per organization
YearFrom Henry Chesbrough, “Open Innovation” Haas Business School, Berkeley
% of US R&D spend by size of the enterpriseThe rise of the Start-up and SME
Original source from National Science Foundation, Science Resource Studies, Survey of Industrial Research Development, 1991 and 1999
Our challenge
If we always do What we have always done,
We will always get What we have always got
More spaceto innovatewithin
Technologyoptions
ConsumerInsight
Businessmodels
doable
profitable
desirable
Technologyoptions
ConsumerInsight
Businessmodels
doable
profitable
Where to apply OI
1. Better, faster delivery of current benefit platformsBy leveraging OI to meet technical challenges in project plan
BrandStrategy
Projectplan Consider OI
2. Creating new benefit/product platformsBy integrating OI into the strategic innovation process
Integrate OI
BrandStrategy
Projectplan
Consumer Technology Matrix forbalancing the ambitions of a project portfolio
New Core Product New Benefit Improvement Variant
Radical
Next Generation
Incremental
Base
Consumer Value Perception
Enab
ling
Tec
hnolog
y
Shift internal skills
Technology Significance
Clear Leader : MARKET TREND
SETTER
Strong: IMPROVES
COMPETITIVENESS
Favourable: MAINTAINS
COMPETITIVENESS
Tenable: MARKET
FOLLOWER
Weak: LOOSING GROUND
ACTIONS
Technology CompetenceScience and Technology Significance and Competence:
Emerging: LOOKS PROMISING BUT NOT
YET PROVEN
Pacing: START TO APPEAR IN THE MARKET - HIGH
POTENTIAL
Key: CRUCIAL TO COMPETE
Base : CRUCIAL TO SURVIVE
Technology acquisition target lists
Tech need 1Tech need 2Tech need 3Tech need 4Tech need 5Tech need 6Tech need 7Tech need 8Tech need 9Tech need 10Tech need 11Tech need 12Tech need 13Tech need 14Tech need 15Tech need 16
OI project types
Ourmarket
Complementor
Unilever R&D
Authority& support
MutualGuidance
Liaison
Publications
Complementor’sTechnology
Unilever Brand
Complementor’scapability
Unilever’scapability
Re-badging Joint Capability Builds
Complementor’scapability
Unilever’sTechnology
Complementor’sTechnology
Unilever’scapability
Ourmarket
Othermarket
Favourable Cost structures
Ventures
Authority
Adopt and Adapt
Unilever’sTechnology
Complementor’sTechnology
Joint Development
Unilever’sTechnology
Complementor’sTechnology
Joint Research
Q&A