Open Up! How Open Innovation Can Drive the New Win-Win Economy

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  • Thank you for that kind introduction. It’s great to be here….
  • My name Lital Asher Dotan and in the Past 7 years I have been part of P&G’s Open Innovation Group, now responsible for partnerships within the Boston and Israel Innovation Ecosystems
  • I want to stat our conversation by asking – if any of you know this product! Raise your hands..Anyone in the crowd love swimming?I like to start up today’s discussion not only because I love swimming and because swimming with music in my ears makes it an even better, more relaxing experience – but also because I think this product demonstrates Open Innovation at its best. This product is made by a small startup company called waterfi. They found a way to use a very good sealing material that they had to solve the problem of MP3 players for swimming that were cumbersome, and annoyingly did not work with iTunes that many users wanted to use. They took ipod Shuffle, an old Apple product that has a decreasing sales trend as technology matured and as for runners it does not provide the capabilities that a smartphone fulfills today, whereas in water there is no need for something that is better than an iPod Nano. For me this is a perfect win win – a technology solution, that delight a consumer and forms a business win win to all parties involved.
  • Today, I want to talk with you about P&G approach to Open Innovation and its evolution throughout more than a decade, so that you can either start building your company’s capabilities to Open Up, or enhance your already existing partnership and collaboration capabilities.
  • So first, let me start by introducing P&G in few numbers.
  • But we realized a long time ago that even if we strive to hire the best, we can’t think of everything….or be everywhere. So we started our OI program more than 10 years ago…..we named it and still call it C+D….Connect + Develop is P&G’s proven open innovation approach for innovating faster and better to deliver growth goals. Set in 2002, the goal for the first five years of C+D was to have 50% of initiatives involve at least one external collaboration partner. Goal achieved in only four years!C+D projects are delivering on average, 70% higher NPV!! Over the years… Grew categories, brand equities Increased productivityIncreased speed to marketIncreased overall valueTook our partners global Grew Billion $ Brands
  • And…..we believe in the win:win:win approach to OI…which starts with a commitment to open partnership….
  • ….. We have developed and delivered a series of breakthroughs with partnerships of all shapes and sizes… and from all over the world….. The relationship structure can be as creative as the innovation itself. : Acquisitions: Business / Brands / TechnologyIn-Licensing of: Technology / Materials / Packaging / Devices Trademark Licensing:In and Out Market-Ready Products Out-Licensing of: Proprietary Business Processes / Expertise / CapabilitiesJoint Ventures: Multiple variations Joint Development /Minority Investments / Franchising / Divestures / External Incubation / Contract ManufacturingAnd Others . . .
  • Acquisitions: Business / Brands / TechnologyIn-Licensing of: Technology / Materials / Packaging / Devices Trademark Licensing: In and Out Market-Ready Products Out-Licensing of: Proprietary Business Processes / Expertise / CapabilitiesJoint Ventures: Multiple variations Joint Development / Minority Investments / Franchising / Divestures / External Incubation / Contract ManufacturingAnd Others . . .
  • We build partners vs crafting contracts 40% of our partners have multiple deals with P&G Our deal structures are as creative as the innovations; No two partnerships are the same, so neither is the agreement If it’s not a fit for us, we’ll try to connect innovators with others, even our competitors
  • Many of our strategic needs stem from our TPTs:Transformative Platform Technologies Emerging technologies Innovations that can be applied across multiple brands and business Strategically focused on four areas
  • Strategic needs …..
  • Strategic needs …..
  • P&G Skin Care is seeking anti-wrinkle technology options for next-generation Olay products.  At a technical conference in Europe, P&G learns of a new peptide technology developed by Sederma working with burn and scar victims. In collaboration, P&G Beauty and Sederma develop Olay Regenerist.Regenerist becomes a global market leader, beating $350 boutique creams.In-licensing technology agreement with Sederma of France Category-changing breakthroughMore innovation underwayBrand website: http://www.olay.com/skin-care-products/Anti-AgingVideo -- P&G Regenerist Innovation Story: http://www.youtube.com/watch?v=Z_Vlfjt6yuk
  • Manufacturing and technology collaboration with Monosol of Indiana Delivers biggest innovation in laundry in 40 yearsWins 68% of market share in just monthsThrough a long-term collaboration, Monsol and P&G develop a unit-dose laundry detergent that proves a huge win with consumers in just months.P&G’s three cleaning solutions are wrapped in Monosol’s unique clear film that with stands wet hands but dissolves even in cold water. A complex project, it requires intense collaboration and team co-location. Introduced in 2012.Brand website: www.tide.com/tidepodsCommercial: http://www.youtube.com/watch?v=QsOEs74CmJ068% share of the unit dose segment in just months, growing Tide’s market share and category growth
  • Case study about Clairol Foam and its development: http://www.youtube.com/watch?v=ttOvUPcEDYM&feature=youtu.beTechnology and manufacturing collaboration with Competitive breakthrough in foam technologyWinner of several Beauty Industry awardsTeams from Taplast and P&G develop a proprietary bottle and pump that turns Clairol hair color into a non-drip foam. They then build custom manufacturing lines to meet anticipated consumer demand. Both companies, co-locate employees to accellerate work, delivering a breakthrough product on a highly competitive timeline.While foaming products were of increasing popularity with consumers, developing a foaming hair color was challenging. In partnership with Taplast of Italy, P&G teams developed a proprietary bottle and pump that dispensed Clairol hair color as a non-drip foam. They then worked together to build custom manufacturing lines to meet anticipated consumer demand. The collaboration included a series of consumer tests. Based on feedback from one day’s groups, Taplast quickly made design changes to present to groups the next morning. This flexibility and fast turn-around proved critical to delivering a breakthrough product on a highly competitive timeline.
  • The story starts in Japan, where a C+D scout discovers a multi-purpose sponge in the grocery store. The sponge turns out to be a melamine resin foam made by BASF for construction soundproofing and insulation. When wet, the foam becomes a powerful cleaning tool. P&G negotiates purchase of the foam from BASF with terms for further collaboration. Mr. Clean Magic Eraser now is sold globally; and has grown to include a variety of cleaning sponges and an award-winning floor mop. Collaborative purchase agreement with BASF of GermanyCategory-changing, global product Ongoing collaboration delivers break-through product extensions Brand site: http://www.mrclean.com/en_US/magic-eraser.doThe story starts in Japan, where a C+D scout discovers a multi-purpose sponge in the grocery store. The sponge turns out to be a melamine resin foam made by BASF for construction soundproofing and insulation. When wet, the foam becomes a powerful cleaning tool. Consumers raved. P&G negotiated purchase of the foam from BASF with terms for further collaboration. Mr. Clean Magic Eraser now is sold globally; the line has grown to include a variety of cleaning sponges and an award-winning floor mop.
  • Brand Commercial: http://www.youtube.com/watch?v=UaAIKhXu-LsWhile working with diapers and Crest White Strips, P&G researchers developed technologies that would deliver superior non-tear and adhesive properties for trash bags and food wrap. Neither market fit P&G’s strategic focus nor manufacturing capabilities, so P&G entered into a Joint Venture with Clorox. The result? Glad ForceFlex® and Press’nSeal, ® and a solid win-win for both companies. Glad sales doubled, making it Clorox’s second billion-dollar brand – and also a contributor to P&G’s bottom line. Innovation continues, helping both companies grow.
  • Art of Shaving Great example of both sides staying open to an evolving business model……. Two young entrepreneurs in NY started Art of Shaving, a line of high end shaving boutiques, and products. P&G became intrigued by the style, quality and appeal to the upper scale male consumer….a demographic we increasingly were trying to reach.We partnered First partnership was a trademark license agreement and a supply agreement for cartridges.They licensed the Gillette trademark and sold Gillette Cartridges. We got licensing royalties and sales of cartridges….plus an equity build with an emerging consumer and consumer understanding.They later developed an upscale version of Gillette razor, which they co-branded Art of Shaving and Gillette.Then acquired the line in 2009 We started with 36 stores in 2009. Today we have 100Growing brand…..growing sales…..growing consumer base……
  • And…..we believe in the win:win:win approach to OI…which starts with a commitment to open partnership….
  • Open Up! How Open Innovation Can Drive the New Win-Win Economy

    1. 1. Open Up! How Open Innovation Drives New Win-Win Economy 2013
    2. 2. Complex Marketing Communications. Simplified + Optimized. www.universalwilde.com
    3. 3. Direct Marketing Best Practices + Behavioral Science www.wildeagency.com
    4. 4. Innovatio n
    5. 5. Lital Asher – Dotan Procter & Gamble Global Business Development Connect+Develop Your photo here
    6. 6. About P&G
    7. 7. P&G at a Glance Number of Brands 300+ Countries of Operations ~75 Countries Where Our Brands Are Sold 180 Consumers Served by Our Brands ~4.6 billion Net Sales $83.7 billion Celebrating 175 years . . . The Largest CPG Company in the world
    8. 8. Our Promise To make everyday life just a little bit better, now and for generations to come.
    9. 9. Our Leadership Brands
    10. 10. Innovation is how we’ve grown . . . 1879 IVORY white soap equal in quality to imported castiles 1911 CRISCO all-vegetable shortening 1933 DREFT synthetic household detergent 1946 TIDE heavy-duty laundry detergent 1955 CREST toothpaste to prevent tooth decay 1960 DOWNY rinse add fabric softener 1961 HEAD & SHOULDERS anti dandruff shampoo 1961 PAMPERS affordable, mass-marketed disposable diaper 1983 ALWAYS with dry-weave top sheet 1998 SWIFFER electrostatic dusting cloth 1999 CHILDREN’S SAFE DRINKING WATER white power purifies water 2003 MR. CLEAN MAGIC ERASER unique scrubbing sponge 2005 TIDE COLD WATER superior cleaning in cold water 2007 BRAUN PULSONIC first self cleaning electric razor 2008 ALWAYS INFINITY absorbs 10X its weight 2012 TIDEPODS 3-in-1 laundry product
    11. 11. Strengthening Our Innovation Program and Pipeline To consistently win with consumers around the world across price tiers and preferences, and to consistently win versus our best competitors, each P&G product category must have a full portfolio of innovation. This is a top priority at P&G.
    12. 12. Roadmap: Open Innovation through Partnership 1. Global Network 2. Diverse Partners 3. Various Partnership Formats 4. Win-Win-Win Mindset 5. Defined Offering 6. Needs and Areas of Interest
    13. 13. Singapore Kobe, Japan Beijing, China Bangalore, India Rio de Janeiro, Brazil Caracas, Venezuela South Boston, MA Germany Crailsheim Darmstadt Kronberg Schwalbach Cincinnati Beckett Ridge Ivorydale Mason Miami valley Sharon Woods Winton Hill Hunt Valley, MD Bethel, CT Lewisburg, OH United Kingdom London Newcastle Reading Brussels, Belgium San Francisco Italy Pescara Pomezia Tel Aviv, Israel 16 Global Network • 11 Regional C+D Hubs • >70 C+D leaders NA, Europe, Israel, India, China, Japan • Networks • >20 Global Innovation Centers • Global university partners
    14. 14. Diverse Partners Startups SMEs VCs Private Equity Universities Research Institutes Global and local companies Government / NGOs Suppliers Competitors Garage Inventors ANYONE with the right idea
    15. 15. Partnership Formats Acquisitions In and Out-Licensing Trademark Market-Ready Products Joint Ventures Joint Development Joint Research External Incubation Minority Investments Franchising Divestures Contract Manufacturing
    16. 16. Win-Win-Win Mindset Partnership vs Contract Crafting Long Term, Multiple Projects Creative Deal Structure Refer to Others
    17. 17. Defined Offering: Our Contribution Consumer Understanding Brand-Building and Marketing Global Scale and Go-To-Market Innovation
    18. 18. Key P&G Needs
    19. 19. Chemistry Focus •Novel approaches to cleaning •Self cleaning, tough removal without damage •Surface Science •Removal/deposition breakthroughs, transformational feel & conditioning •Capture, protect & triggered release of actives •High value and/or sensitive actives •Renewable Materials •Matching & improving performance to petroleum alternatives
    20. 20. Life Sciences • Chronic Biology benefits Health, wellness and beauty • Sensorial Biology - “Designed” experiences regardless of base effects
    21. 21. Smart & Responsive Consumer Products • Making high volume consumer products intelligent • Democratizing biological data for health, wellness and beauty
    22. 22. Substrate & Material Physics Novel structures and properties through the intersection of Materials Science and Deformation Mechanics
    23. 23. Substrate & Material Physics Novel structures and properties through the intersection of Materials Science and Deformation Mechanics
    24. 24. Case Studies
    25. 25. of Israel
    26. 26. of Germany November 2012
    27. 27. of Indiana
    28. 28. of Italy Taplast of Italy
    29. 29. BASF of Germany November 2012 of Germany
    30. 30. Clorox US
    31. 31. of NY 2013
    32. 32. of Israel
    33. 33. Roadmap: Open Innovation through Partnership 1. Global Network 2. Diverse Partners 3. Various Partnership Formats 4. Win-Win-Win Mindset 5. Defined Offering 6. Needs and Areas of Interest
    34. 34. How we can partner? www.pgconnectdevelop.com
    35. 35. Thank you. asher.l@pg.com litalasher@gmail.com Linkedin / Facebook: Lital Asher – Dotan

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