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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

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Page 1: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

Clorox Confidential Information

Focusing Open Innovation Efforts to Drive Business Impact

Navin Kunde, Ph.D.

Open Innovation Networks

Clorox Growth Labs

30 October 2014

Page 2: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

2

Key Takeaways

Clorox Confidential

Page 3: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

3

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

Page 5: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

0

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

5 Clorox Confidential

Page 6: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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.

6 Clorox Confidential

Internal PartnersSuppliersCo-PackersCustomersConsumersInventors

ConsultantsExpertsVC’s & Start-upsUniversitiesResearch LabsGovt. Agencies

Organize Network Partners for Competitive Advantage!

Page 7: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

BU Network Map by Brand(Higher number = more activity)

Packaging Suppliers

Materials Suppliers

Co-Packers

Experts

ConsumersCustomers

Inventors

Universities

Other

0

5Brand 1Brand 2

7 Clorox Confidential

Page 8: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

8

CASE STUDY ONE: MATERIALS SUPPLIERS

Clorox Confidential

Page 9: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

9 Clorox Confidential

Page 10: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

10

R&D Level 3 Supply Chain Level 3

Level 3 for Both

Clorox Benefits from:Strategic Clarity, Deeper Collaboration, Supply Base Consolidation

Clorox Confidential

Page 11: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

11 Clorox Confidential

Page 12: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

12 Clorox Confidential

Page 13: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

!NNOVENT. It’s like…

13

But not as scary!

Lots of mentoring Real business impact

And a lot of fun!

Clorox Confidential

Page 14: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

!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)

14

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

Clorox Confidential

Page 15: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

Successes – Ideas launched from !NNOVENT

15 Clorox Confidential

Page 16: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

16 Clorox Confidential

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

Page 17: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

17

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

Clorox Confidential

Page 18: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

18 Clorox Confidential

Page 19: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

19 Clorox Confidential

Page 20: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

Use Scorecards to Increase Impact of Each Network Tool

20

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

Clorox Confidential

Page 21: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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%

21

• 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

Page 22: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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%

22

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

Page 23: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

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

23 Clorox Confidential

Key Takeaways

Page 24: Clorox Confidential Information Focusing Open Innovation Efforts to Drive Business Impact Navin Kunde, Ph.D. Open Innovation Networks Clorox Growth Labs

Navin Kunde Ph.D.Business Networks LeaderOpen Innovation Networks

Clorox Growth LabsW:925.368.9139 M:925.523.1525

[email protected]