unilever innovation - three horses method

7/31/2019 Unilever Innovation - Three Horses Method

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Three Horses Method

of InnovationPracticed by Unilever


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Product Innovation is the Lifeblood ofUnilever

Bringing new and innovative products tomarket for Unilever is a must.

Even a successful products lifetime in marketcan be as little as 2 years before innovation isrequired.

New innovations can be complex to bring tomarket.


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Opportunity

Principle

Capable

Launch

Bringing a New Innovation To Market


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Launch


Marketing

ConsumerUnderstanding

R&D

Finance

Engineering

Safety, Legal,Environmental

SupplierLinks

Principle


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Capable

Launch


Marketing


R&D

Finance

Engineering


SupplierLinks

Sales

MouldMakers


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Launch


Marketing


R&D

Finance

Engineering


SupplierLinks

MouldMakers

AdvertisingAgency

Converter

SupplyManagement

Sales

Manufacturing

Trade/Customer


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Portfolio management

At any one time there could be many, manyinnovation projects underway

Resource must be used wisely

Unilever uses a gated decision process orfunnel to stop failing projects

Senior management assumesresponsibility and work in a team.


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Three Horses Method

Involves all functions - early

Teams considers the Possibility of how theNew product may fail

Explicit stopping rules

More unbiased recommendations for gatekeepers making stop/go decisions


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Three key questions to be addressedfor product innovation

Can we do it?

Is it technically possible to deliver thisopportunity?

Are the risks involved acceptable?

Safety of consumers, workers, environment

Reputation

Why do we want to do this?

Is this an activity that we would choose to do?Are the opportunities sufficiently attractive?

Commercial/Marketing

R&D/ Supply Chain

External relations


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Typical testing decision gates

Stage 1: What to put into lab testing?

No human contact, e.g. hair swatches

Stage 2: What to put into controlled testing? Products applied to panellists by trained technicians

who assess results

Stage 3: What to put into in-homes testing? Used by panellist members in their own homes,

supported by test centre

Stage 4: What to put into the market? Free use in market su orted b com an care-lines


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Preferable situation

If there are killer questions they should be answeredas quickly as possible

If the project is destined to fail, best to kill it quickly

and release resource for other opportunities

Each stream or horse must be kept in-synch

What are the decision gates?

What is the minimum which must be known about anystream before ALL can be approved for progressingfurther?


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Three Horses method

1. Identify the major areas of uncertainty which must beprogressed simultaneously to make robust go/no-godecisions

Are the opportunities great enough?

Is it technically possible to deliver the opportunity?

Are the risks involved acceptable?

2. What are the risks in each stream those risks whichwould stop the project

3. Arrange the risks onto a timeline where are answersneeded to feed into major go/no-go decisions?

4. Can any tasks to get the answers be scheduled earlier?

5. Draw up action plans to get the answers

6. Check resource implications for project and portfolio


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Process

1. What are the major areas of uncertainty, where

favourable results are essential before we canprogress any further?

What are the potential

side-effects?

Will the formulation fitwith potential tools /

appliances?

Is there an acceptablebusiness case?

Will consumers changetheir habits in order to

get the benefit?

How to have aconvincing marketing

strategy?

How to formulate into aproduct?

Whats theenvironmental impact?


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Process

2. What are the risks in each work stream?

Product/applianceinteraction causes

problems e.g. corrosion/clogging

Marketing strategy doesnt

match the technicalrequirements for the benefit

to be delivered

Formulation design rulesnot defined to ensureproduct performance

Consumers dont like the

concepts for technologyapproaches

Key opinion formers dontlike the technology

Evaluation framework notagreed

Safety package availableonly for product not tool

Do we want to doit?

Can we do it?Are the risks

involved acceptable?

Trade partners unwilling totake a risk on this class of

products

After repeated use thebenefit is no longer

consumer perceivable

New compound reacts withother ingredients to form

toxic by-products

Unexpected safety issuesfrom in-homes testing

Existing safety data givesbad prognosis for material

from literature review


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Process

3. Arrange risks onto testing decision making timeline

Stage 1. Priortesting

Existing safety datagives bad prognosisfor material from

literature review

Consumers dont

like the conceptsfor technologyapproaches

Evaluationframework not

agreed

?

Stage 2:Controlled Expt


problems e.g.corrosion/ clogging

Marketingstrategy doesnt

match technicalrequirements forthe benefit to be

delivered

New compoundreacts with other

ingredients to

form toxic by-products

?

Stage 3: Prior toIn-homes

Formulationdesign rules not

defined toensure productperformance

Key opinion

formers dontlike the

technology

Safety packageavailable onlyfor product not

tool

?

Trade partnersunwilling to

take a risk onthis class of

products

In repeated usethe benefit is no

longer

consumerperceivable

Unexpectedsafety issues

from in-homes

testing

Stage 4: Priorto Market

?


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4. Can any tasks be scheduled earlier?

Stage 1. Prior totesting

Existing safety datagives bad prognosisfor material fromliterature review

Consumers dont

like the concepts

for technologyapproaches


agreed

?

Stage 2:Controlled Expt


problems e.g.

corrosion/ clogging

Marketingstrategy doesnt

match technical

requirements forthe benefit to be

delivered

New compoundreacts with other

ingredients toform toxic by-

products

?

Stage 3: Prior toIn-homes

Formulationdesign rules not

defined toensure productperformance

Key opinionformers dont

like thetechnology

Safety packageavailable onlyfor product not

tool

?

Trade partnersunwilling to

take a risk on

this class ofproducts

In repeated usethe benefit is no

longerconsumer

perceivable

Unexpectedsafety issues

from in-homestesting

Stage 4: Priorto Market

?

Process


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Process

5. and 6. Action plans and resource implications

Stage 1. Prior toin-vitro testing

Existing safety datagives bad prognosis formaterial from literature

review

Consumers dont

like the concepts

for technologyapproaches


agreed

Decide on concepts

Check with early adopters

Consumer Research

Agree evaluation framework andaction standards from in-vitro

through to in-homes

Research & Development

Extensive literature search onsimilar materials

Safety and EnvironmentalAssurance Centre

What Who


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Advantages of this method

Focuses only on risks high level view

Involves all functions - early

Makes teams consider how the project can fail

Explicit stopping rules More unbiased recommendations for gate keepers

making stop/go decisions


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An End Result


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Thank you!

unilever innovation - three horses method

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