Open innovation in Saralee

Interacting with the world: open innovation in Saralee Johan Sanders Innovation director

Items • hat is open innovation W • aralee’s open innovation program S – Process to connect to the outside world – Activation • arriers for implementing open innovation B

What is ‘Open’ Innovation • “Rather than relying entirely on internal ideas to advance the business, an ‘open’ approach to innovation leverages internal AND external sources of ideas.” • and… • “Rather than restricting innovations to a single path to market, open innovation inspires companies to find the most appropriate business model to commercialize a new offering – whether that model exists within the firm or must be sought through external licensing, partnering or venturing” Henry Chesbrough; open innovation (HBS)

Closed’ vs ‘Open’ Innovation ‘ Powerful, proud organisation (‘all smart people work for us’)  Focus on control  Leadership to focus on R&D ROI  NIH syndrome prevalent  We create the best (and most) ideas in the industry  IP viewed as a powerful defensive tool  Conventional organisation structure  Highly confidential  Poor measurement system for potential of innovative ideas  ‘Pet’ projects kept alive for a long time  External connections are seen as ‘outsourcing R&D’  Only conventional business models are to be considered  In-licensing is a ‘last resort’ 

‘Closed’ vs ‘Open’ Innovation Externally facing organisation with strong internal resources for ‘innovation  realisation’ Focus on learning  External ‘connectedness’ is in the DNA of all people  R&D scorecard has ‘external connection’ as key score (incl. reward system)  Internally well connected organisation – external (and internal) ideas flow well  throughout the organisation Well defined technology needs  IP viewed as ‘innovation currency’  Innovation and business potential measurement processes to assess new  ideas (‘weed & feed’ culture) Confidential ‘openess’  Recognised presence at conference / exhibition / trade show arena  Open to JV, VC, angel investors, non-product opportunities (services,  insurance), etc. Bespoke individuals are appointed to lead external connection development  with appropriate funding Ability to quickly fill science, technology, facility and capability gaps  Highly dynamic in- and outlicensing activities 

Open Innovation in broader industry • collaborative research • Leading the way; • ; extensive venture activities • external partnerships • Take a P&G type approach • 40% of sales from products in last 3 yrs • Using Bluelab to invite • Trialling social networking • licensing, scouting, ideas internally venturing, collaborating etc. • seeking ideas from • Making extensive use of outside via a dedicated collaborative research • Widely recognised as a website leader in OI.

Open innovation program overview • Objective – To create open innovation foundational capabilities and execute a program for gathering ideas and posting needs. – Target audience includes: current strategic partners, new suppliers, consumers and employees Supplier Business s Partners Needs OpenInnovation Academia SaraLee.com Research Institutions Inventors Technologi Consumers cal Needs Marketing Competitors R&D Procurement Manufacturing Engineering Legal Finance HR

What we want to know from to the outside world ? • e want to connect to people W having technical solutions for needs we have – Needs are based on problems defined in technology roadmaps – Roadmaps are owned by the total innovation community (not only R&D) • e want to connect to any W body who can suggest new ideas for our brands – Suggestions on problems from the marketing directors of the respective brands

Process to connect to the outside world • Website as a portal : www.openinnovationsaralee.com – As a placeholder for needs – Methodology to manage traffic • Website set up – Partner pages – an area where we connect our integrated partners with our innovation needs – Open pages – an area where we connect with the wider world on our innovation needs – Brand pages – specific pages attached to brand sites to collect ideas relevant to the brand

Roadmaps leading to needs for open innovation Roadmaps as guidance Taking one project out to pose to the outside world

Items • hat is open innovation W • aralee’s open innovation program S – Process to connect to the outside world – Activation – Technical needs – Ideas • arriers for implementing open innovation B

Activation: involvement of key suppliers Relationship managed at CEO level Strategic Equity / risk & reward sharing Alliance Partnerships Relationship lead by sr. category Supplier Critical few manager Procurement integration Integrated supplier agreement Relationship lead by category managers Preferred Pricelist in place, Sara Lee terms & conditions Supplier relationships Relationship managed by procurement or local purchasing Transactional, tendering, Sara Lee terms Trivial Many & conditions 14

Activation: involvement of key suppliers : Global Supplier Integration Strategy • The Global Supplier Integration Program is a comprehensive approach to how we interface with critical suppliers to maximize the value of these relationships. • The program goal is to: A. Reduce total cost of ownership & continuously improve quality: operational excellence B. Create business growth, by faster and more innovation: innovation integration • The program uses the innovation portal as a tool for managing the interaction 15

Partner page – example Amcor 12 partner pages • wn partner O inbox • ssigned needs A • roject sharing P • artner idea box P

Activation needs Nine sigma & internal scout • ine sigma (or others) as activation N mechanism • ctivation started 1 April A – RFP on site of nine sigma – Mail to 8000 inventors / suppliers institutes etc • nternal scout (ex Kodak) I – Gain experience in scouting – Get answers on 5 needs

Our brands are very suitable (its expected) to connect:

Open innovation brandpages: • pecific pages attached to brand sites to collect S ideas relevant to the brand

Pilot Brand Pages with RedesignMe Example: Pickwick looking for new concepts

Pilot Brand Pages with RedesignMe Example: Pickwick looking for new concepts • Looking for a new brewing ritual – Linked with database of Pickwick.nl – >150 ideas / concepts of which 5 very promising – Linked with database of Pickwick.nl – Free publicity (including interviews in target group magazines !)

Douwe Egberts 55+ consumers • 55+ consumers drink less coffee • Although it is related to health claims clear insights are lacking • Invitation e-mail send to 35000 55+ people form the DE database • 1000 people have logged on to participate • 500 people have registered their coffee drinking habits on the first few days

Barriers • Need definition – Are we willing to share our real needs – Are we willing to accept alternative solutions / ideas • Process – Timing in follow up – Are consumers expecting too much ? • Legal documents – No clarity on IP strategy and exclusivity clauses • Not realizing this is a change process

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Open innovation in Saralee

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