clorox confidential information focusing open innovation efforts to drive business impact navin...
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Clorox Confidential Information
Focusing Open Innovation Efforts to Drive Business Impact
Navin Kunde, Ph.D.
Open Innovation Networks
Clorox Growth Labs
30 October 2014
1. Focus on Fewer Partners who can Deliver Deeper, More Effective Relationships that Drive Business Results
2. Innovate with Partners who are Not the Usual Suspects
3. Invest in Tools and Processes which Build a Culture of Innovation throughout your Company
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Key Takeaways
Clorox Confidential
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Clorox is a 100 year old US-based CPG company
Founded as a bleach company in 1913 Went public in 1928 Acquired by Procter & Gamble in 1957 Independent again in 1969, making only liquid bleach Portfolio expanded through innovation, brand building & acquisition
Clorox Confidential
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International : 22%
2/3 emerging markets 1/3 developed markets
Cleaning : 32%
Household : 30%Lifestyle : 16%
Clorox has a Portfolio of Global Leading Brands (FY14 Sales: $5.6B)Nearly 90% of the Portfolio has #1 or #2 Share
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2,000
4,000
6,000
8,000
10,000
12,000
14,000
Clorox RB SCJ P&G CloroxPartners
Patents since 1990
Open Innovation ~Y2K: Technology Brokerage
Partnering offers access to broader universe of new ideas & technologies
Pat
ents
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Today: “We build cutting edge networks and partnerships that drive technical innovation and accelerate growth”
A network is a collection of people or entities, including external and internal partners, who have the knowledge, experience and connections to effectively educate and help execute current and future initiatives, while reducing risk.
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Internal PartnersSuppliersCo-PackersCustomersConsumersInventors
ConsultantsExpertsVC’s & Start-upsUniversitiesResearch LabsGovt. Agencies
Organize Network Partners for Competitive Advantage!
BU Network Map by Brand(Higher number = more activity)
Packaging Suppliers
Materials Suppliers
Co-Packers
Experts
ConsumersCustomers
Inventors
Universities
Other
0
5Brand 1Brand 2
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KT#1. Focus on Fewer Partners who can Deliver Deeper, More Effective Relationships that Drive Business Results
Packaging Suppliers
Materials Suppliers
Co-Packers
Experts
ConsumersCustomers
Inventors
Universities
Other
0
5Brand 1Brand 2
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CASE STUDY ONE: MATERIALS SUPPLIERS
Clorox Confidential
The Supply Base is Segmented into 3 Levels
Level 1Transactional Relationship
Level 2Preferred
Partnership
Level 3Strategic
Partnership
Increasing scale, value & engagement; decreasing number of partners
Deeply integrated teams (e.g. Glad JV), and Core innovation suppliers (e.g. win-balance, core fragrance)
Provides some innovation value, with proportional investment in relationship
Engage on innovation only when they bring significantly differentiated capabilities
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Win-Balance Goals & Tactics, Benefits to Clorox
The Win-Balance program applies the segmentation principles to Level 3 relationships of significant Innovation and Supply value
Tactics: Win-Balance is ultimately an exercise in strategic governance• Share deeper strategic insight with Win-Balance partners• Proactively engage at multiple levels of the Clorox organization, and across the
breadth of Clorox business units• Promote business growth with Win-Balance partners through preferential
engagement relative to non-Win-Balance suppliers
Innovation/R
&D
Supply/GSS
Win-Balance
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R&D Level 3 Supply Chain Level 3
Level 3 for Both
Clorox Benefits from:Strategic Clarity, Deeper Collaboration, Supply Base Consolidation
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Win Balance Benefits to Suppliers, by LevelBenefit Level 3 Level 2 Level 1 Definition
Executive access LimitedBy
Exception
Annual Conference, mid-year calls and other connection points with
VPs
Strategic Context & Needs Shareout
Mutual exposure to strategic growth and innovation plans
Steering team 6/yr 2/yr max Multi-functional steering team to drive relationship
CloroxConnects Portal
Project Specific
Private discussion forum between parties
At-bats (R&D, Supply)
By Exception
Opportunities to compete for innovation and sourcing wins
Develop Research Platforms
Ongoing technology collaboration expected to spawn multiple projects
Voice of Collaboration
Relationship health Survey enabling proactive/predictive management of
issues
Mutual Business Planning
A jointly developed & agreed Business Plan
Go
vern
ance
Bu
sin
ess
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KT#2. Innovate with Partners who are Not the Usual Suspects
Packaging Suppliers
Materials Suppliers
Co-Packers
Experts
ConsumersCustomers
Inventors
Universities
Other
0
5Brand 1Brand 2
Creative Coalition
CASE STUDY TWO:CONSUMERS
Employ-ees
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!NNOVENT. It’s like…
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But not as scary!
Lots of mentoring Real business impact
And a lot of fun!
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!NNOVENT
5 weeks– Post your idea for
growth (product, business model, etc.)
– Crowd votes on favorites – Top 30+ move to Round 2
3 months– Teams form around top 8
ideas (“you choose up to 5 other people”)
– Teams are given: 10% time, $3000 in funds, specialized training, mentor access…
– Teams create business plans – Teams pitch business plans to
Executive Committee (including CEO)
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3 weeks– Top 30+ ideas
from Round 1 are built into business cases
– Crowd/Business panel votes on favorites – Top ~8 move into Round 3
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Successes – Ideas launched from !NNOVENT
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Why did we develop the Creative Coalition?
The Creative Coalition allows Clorox to generate New High-Quality Ideas, Product Concepts, Functional & Emotional Needs: “On-Demand”, Quickly & Inexpensively
Creative Coalition
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WHO ARE THEY?Creative “thought partners” who generate unique and
rich ideas to meet our product innovation goals.
Sourced from a wide range of fields and screened for creativity, teamwork & articulation; trained on ideation
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How do they do that?
Help drive innovation across the 3 D’s• Ideating with speed and agility • Co-creating with Clorox teams• Providing empathetic lens
The Buzz among
Business Partners
“The Creative Coalition added emotional depth and evoked the experience we were going for. This enriched our hypotheses and insights to test and learn with.”
“The Creative Coalition looked at the same problem we did - but through a different lens. They generated unique solutions we did not think of.”
EMPATHY
Creative Coalition
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KT#3. Invest in Tools and Processes which Build a Culture of Innovation throughout your Company
Packaging Suppliers
Materials Suppliers
Co-Packers
Experts
ConsumersCustomers
Inventors
Universities
Other
0
5Brand 1Brand 2
CASE STUDY THREE:EXPERTS
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Tool #
Name Type Strategy A: On demand Database
B: Expert Sourcing
C: Consulting Services
D: Service Provider
1 Database 1 Self service Grow X X
2 Database 2 Supported by Open Innovation Team
Scale Down
X
3 Expert Service 1
Supported by Open Innovation Team
Grow X X X
4 Expert Service 2
Supported by Open Innovation Team
Cancel X
5 Primary Research Org 1
Supported by Open Innovation Team
Grow X
Etc.
Current state of category
Some areas stronger than others
Strong Expensive Inadequate
FY14 Strategy
Find gaps & Fill
Consolidate Reduce Costs
Find more/ Improve
Segment your Expert Network, then Optimize it
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Use Scorecards to Increase Impact of Each Network Tool
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Overall Health User base Activity Cost
Limited usage No growth in active users
Good usage by the existing user base
Will increase by 5% next Fiscal Year
2011 2012 20130
500
1000
1500
Example Metric : No. of searches
Mr. GGG, OINMr. JJJ, CorporateMs. DDD, BU-X
Super-users
• By taking the time to understand the power of each tool and who can, should and is using it, a clear engagement plan can be developed and executed
• Scorecards are helping us check progress on usage and value
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Engage Middle Managers to Gain Traction on Initiatives
2013 20140
10
20
30
40
50
60
70
80
90
100
Strongly Disagree
Somewhat Disagree
Neutral
Somewhat Agree
Strongly Agree
60%
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• More requests are now coming via manager recommendations• Networking Tools training sponsored by Managers provides traction• Manager support for Expert Panel Sessions leading to deeper engagement
KEY RESULT Over half of R&D managers now strongly support external networking, up from one-third a year ago!
Response to: My Manager supports my external networking efforts….
Clorox Confidential Feb 2013 vs. May 2014 Survey Results
Response to: Reaching out to suppliers is…
2013 20140
10
20
30
40
50
60
70
80
90
100
Extremely Valuable Somewhat ValuableLittle Value No Value
45%
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2013 20140
10
20
30
40
50
60
70
80
90
100
Extremely Valuable Somewhat ValuableLittle Value No Value
33%
• 200+ experts calls in the last 12 months, with ~30% repeat calls; 16 experts subsequently invited for on-site panels to drive learnings, decisions & strategic shifts on BU’s & adjacencies.
• Organizational clarity on strategic suppliers and how to engage them led to better choices of partners and better outcomes for users.
Response to: Reaching out to experts is….
Find Ways to Measure Network Interactions
KEY RESULT Significant Increase in Value from Interactions with External Experts and Suppliers (33% and 45% respectively)
Feb 2013 vs. May 2014 Survey Results Clorox Confidential
1. Focus on Fewer Partners who can Deliver Deeper, More Effective Relationships that Drive Business Results
2. Innovate with Partners who are Not the Usual Suspects
3. Invest in Tools and Processes which Build a Culture of Innovation throughout your Company
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Key Takeaways
Navin Kunde Ph.D.Business Networks LeaderOpen Innovation Networks
Clorox Growth LabsW:925.368.9139 M:925.523.1525