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FEI 2010: Feb. 8, 2010 Sam Saguy Helmut Traitler – Nestlé  and  Sam Saguy – Hebrew University of Jerusalem [email_address]...
Outline <ul><li>Open innovation (OI) </li></ul><ul><li>Nestlé’s  Sharing-is-Winning  ( SiW ) model </li></ul><ul><li>Few e...
P&G OI model (&quot;Connect + Develop&quot;)  <ul><li>Target (2000): “ 50% of the innovation to be acquired outside of the...
OI – A Buzzword? <ul><li>Overexploited:  frequently utilized with no real base, or understanding, too many definitions (ex...
OI – A Buzzword (cont..)? <ul><li>Cost:  substantial upfront investment (sieving, assessing, selecting, and negotiating). ...
Nestlé Economic Data in the Nut Shell  <ul><li>Established in 1866 by Henri Nestlé. </li></ul><ul><li>Very successful, str...
Nestlé R&D (R&D: 3,700; Application:1,300) <ul><li>1-Central research center. </li></ul><ul><li>27-Global R&D and  P roduc...
R&D Spending (millions; CHF 1~ $0.97) FEI 2010: Feb. 8, 2010 Sam Saguy 1.2% 1.8% Nestlé: #2 in R&D spending within the con...
Booz Allen Hamilton Global Innovation 1000 Research  (Jaruzelski et al., 2005)  <ul><li>Excess resources may be counterpro...
Nestlé:  Sharing-is-Winning ( SiW )  Model <ul><li>A strategic decision and a paradigm shift was required.  </li></ul><ul>...
Nestlé Innovation Partnerships  ( Traitler and Saguy, 2009)  FEI 2010: Feb. 8, 2010 Sam Saguy Development stage Early Matu...
Nestlé  SiW  Model: 5-Pillars   <ul><li>Innovation Partnerships (INP ): partner selection. </li></ul><ul><li>IP : early st...
Nestlé  SiW  model: 5-Pillars  (cont..)  <ul><li>Implementation :  </li></ul><ul><ul><li>best practices  </li></ul></ul><u...
Nestlé  SiW  model FEI 2010: Feb. 8, 2010 Sam Saguy <ul><li>Alignment of all the  value chain  to consumer-centric innovat...
SiW  Main Benefits <ul><li>Accelerate innovation : reducing the burden of upfront-resources and time to market.  </li></ul...
Selected Key Nestlé INP Collaborations <ul><li>Barry Callebaut  </li></ul><ul><li>BASF  </li></ul><ul><li>Cargill  </li></...
Typical example: Nestlé- DuPont FEI 2010: Feb. 8, 2010 Sam Saguy Solllys® soy-based products a co-development with an inno...
Nestlé USA – DSM & Cognis: Glowelle Beauty Drink FEI 2010: Feb. 8, 2010 Sam Saguy Glowelle  - The ultimate beauty drink di...
swissnex San Francisco  Sharing is Winning: Innovation Partnerships with external networks. Birgit Coleman Initiative of t...
Novel collaborations for a  fast moving consumer goods industry: <ul><li>Global swissnex network,  www.swissnex.org   as a...
Examples for the  ‘Sharing is Winning’ Paradigm <ul><li>Nestlé moves among Top 50 ranks of “Top global 50 most innovative ...
FEI 2010: Feb. 8, 2010 Sam Saguy
FEI 2010: Feb. 8, 2010 Sam Saguy Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention Continuous evolving process
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 1. Leadership & Management...
Leadership & Management  <ul><li>SiW  doesn’t come easy    paradigm shift. </li></ul><ul><li>Vision/culture/tools embraci...
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 2. Strategy Continuous evo...
Strategy  <ul><li>Strategize  a roadmap for  SiW  utilization, emphasizing the importance of external co-development and p...
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 3. Metrics  Continuous evo...
Metrics <ul><li>Develop appropriate metrics for quantifying ‘innovativeness’ to overcome impediments. </li></ul><ul><li>Li...
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 4. The consumers and custo...
The consumers  <ul><li>Consumer-centric business model and innovation process.  </li></ul><ul><li>Personalization. </li></...
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 5. Internal experts and ch...
Internal Experts and Championships <ul><li>Market successes are due mainly to the people that drove them, and more so for ...
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 6. Partnerships Continuous...
Partnerships – A way of life <ul><li>‘ Partner or perish ’  is the new mantra.  </li></ul><ul><li>Random collisions/intera...
Reinventing R&D in OI Ecosystem:  SiW  roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 7. Passion Continuous evol...
Passion <ul><li>Innovation requires passionate and committed leaders, people  and organizations.  </li></ul><ul><li>“ Pass...
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    1. 1. FEI 2010: Feb. 8, 2010 Sam Saguy Helmut Traitler – Nestlé and Sam Saguy – Hebrew University of Jerusalem [email_address] and Brigit Coleman – swissnex San Francisco www.swissnex.org Sharing-is-Winning Paradigm for Reinventing R&D in Open Innovation Culture
    2. 2. Outline <ul><li>Open innovation (OI) </li></ul><ul><li>Nestlé’s Sharing-is-Winning ( SiW ) model </li></ul><ul><li>Few examples </li></ul><ul><li>Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    3. 3. P&G OI model (&quot;Connect + Develop&quot;) <ul><li>Target (2000): “ 50% of the innovation to be acquired outside of the company ”. </li></ul><ul><li>Very successful outcome </li></ul><ul><ul><li>1,500 external ideas, 5-7% were acted upon. </li></ul></ul><ul><ul><li>A dramatic increase in OI: From ~ 15 (2000)  ~47% (2008). </li></ul></ul><ul><li>Diversifying risks, sharing market and technological uncertainty. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    4. 4. OI – A Buzzword? <ul><li>Overexploited: frequently utilized with no real base, or understanding, too many definitions (excuses?) for (not?) OI. </li></ul><ul><li>Consumer driven: defined as &quot;open,” although practiced for decades. </li></ul><ul><li>SMEs: are struggling with implementation. </li></ul><ul><li>P&G’s OI model: prohibitively complex & expensive  a “perceived” impediment. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    5. 5. OI – A Buzzword (cont..)? <ul><li>Cost: substantial upfront investment (sieving, assessing, selecting, and negotiating). </li></ul><ul><li>Organizational changes: required for embracing and implementing OI, are only partially implemented. </li></ul><ul><li> Nestlé’s: Sharing-is-Winning ( SiW ) model </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    6. 6. Nestlé Economic Data in the Nut Shell <ul><li>Established in 1866 by Henri Nestlé. </li></ul><ul><li>Very successful, strong R&D, vertical integration innovation. </li></ul><ul><li>The largest global food company (2008): </li></ul><ul><ul><li>Revenues CHF 109.9 Bn </li></ul></ul><ul><ul><li>EBIT of 14.3% </li></ul></ul><ul><ul><li>2.8% Real Internal Growth (RIG) </li></ul></ul><ul><ul><li>Presence in 84 countries </li></ul></ul><ul><ul><li>283,000 employees </li></ul></ul><ul><ul><li>More than 1 Bn units of products sold daily. </li></ul></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    7. 7. Nestlé R&D (R&D: 3,700; Application:1,300) <ul><li>1-Central research center. </li></ul><ul><li>27-Global R&D and P roduct T echnology C enters ( PTC s). </li></ul><ul><li>Application Groups: 280, located in 456 Nestlé factories ensuring compliance with high quality and local requirements, and taste preferences. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    8. 8. R&D Spending (millions; CHF 1~ $0.97) FEI 2010: Feb. 8, 2010 Sam Saguy 1.2% 1.8% Nestlé: #2 in R&D spending within the consumer companies, following P&G (Jaruzelski, 2009) Nestlé Venture Capital (CHF 1.5 Bn, 10 years): focusing on start-up growth-phase food, NH&W companies.
    9. 9. Booz Allen Hamilton Global Innovation 1000 Research (Jaruzelski et al., 2005) <ul><li>Excess resources may be counterproductive impeding innovation. </li></ul><ul><li>Successful R&D requires much more! </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    10. 10. Nestlé: Sharing-is-Winning ( SiW ) Model <ul><li>A strategic decision and a paradigm shift was required. </li></ul><ul><li>In novation P artnerships ( INP ) created (2006). </li></ul><ul><li>Integration ( bigger, bolder, faster execution and implementation ). </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    11. 11. Nestlé Innovation Partnerships ( Traitler and Saguy, 2009) FEI 2010: Feb. 8, 2010 Sam Saguy Development stage Early Mature Focus Benefit Areas Business Needs Mid INP with Universities, Medical Centers & Start-Ups Monetary contributions Products Venture capital INP with SMEs & Inventors In-kind contributions (expert ressources) INP with Key Suppliers
    12. 12. Nestlé SiW Model: 5-Pillars <ul><li>Innovation Partnerships (INP ): partner selection. </li></ul><ul><li>IP : early stages joint co-creation. The guiding rule of thumb: </li></ul><ul><ul><li>physical solution is owned by the competency-providing partner, </li></ul></ul><ul><ul><li>smart application solutions is owned by the receiving partner. </li></ul></ul><ul><li>Joint creative problems-solving : bringing together many scientific disciplines and people with different skills and large knowledge base. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    13. 13. Nestlé SiW model: 5-Pillars (cont..) <ul><li>Implementation : </li></ul><ul><ul><li>best practices </li></ul></ul><ul><ul><li>nourishing the innovation process flow </li></ul></ul><ul><li>Continuous evolving process : </li></ul><ul><li>management, strategy, consumers-center, insights, partnerships, champions, internal experts, education, mindset, metrics, culture…. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    14. 14. Nestlé SiW model FEI 2010: Feb. 8, 2010 Sam Saguy <ul><li>Alignment of all the value chain to consumer-centric innovations. </li></ul><ul><li>Linking profit function (tangible/perceived) is key for catalyzing innovation. </li></ul>CREATE VALUE BUILD GOODWILL INDISPENSABLE DIALOG ESTABLISH TRUST Value creation: ultimate goal of the partnership
    15. 15. SiW Main Benefits <ul><li>Accelerate innovation : reducing the burden of upfront-resources and time to market. </li></ul><ul><li>Sharing of resources : postponing out of pocket investments to the point where the project is ready to be launched. </li></ul><ul><li>Gaining critical mass: motivated, talented and highly skilled human resources... </li></ul><ul><li>Embracing culture openness : networks, social impact… </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    16. 16. Selected Key Nestlé INP Collaborations <ul><li>Barry Callebaut </li></ul><ul><li>BASF </li></ul><ul><li>Cargill </li></ul><ul><li>Cognis </li></ul><ul><li>DSM </li></ul><ul><li>DuPont </li></ul><ul><li>Firmenich </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy <ul><li>Fonterra </li></ul><ul><li>Givaudan </li></ul><ul><li>IFF </li></ul><ul><li>Kerry </li></ul><ul><li>Mane </li></ul><ul><li>Symrise </li></ul><ul><li>Tetra Pak </li></ul>Results from collaborations with these innovation partners contributed more than $200 million in new businesses by the end of 2008.
    17. 17. Typical example: Nestlé- DuPont FEI 2010: Feb. 8, 2010 Sam Saguy Solllys® soy-based products a co-development with an innovation partnership
    18. 18. Nestlé USA – DSM & Cognis: Glowelle Beauty Drink FEI 2010: Feb. 8, 2010 Sam Saguy Glowelle - The ultimate beauty drink dietary supplement sold at high end US retail (Bergdorf Goodman, Neiman Marcus). Contains : antioxidants, vitamins, botanical & fruit extracts (cocoa, apple, grape seed, maritime pine bark, goji berry and white tea ) . Beauty from within – a new category
    19. 19. swissnex San Francisco Sharing is Winning: Innovation Partnerships with external networks. Birgit Coleman Initiative of the State Secretariat for Education and Research SER Annex of the Consulate General. Swiss Knowledge Network with outposts in Boston, San Francisco, Shanghai and Singapore
    20. 20. Novel collaborations for a fast moving consumer goods industry: <ul><li>Global swissnex network, www.swissnex.org as a match-maker to players across industries and disciplines </li></ul><ul><li>Doing business as ‘unusual’ - Partnerships with: </li></ul><ul><ul><li>unusual technology partners </li></ul></ul><ul><ul><li>e- and retailers </li></ul></ul><ul><ul><li>media </li></ul></ul>
    21. 21. Examples for the ‘Sharing is Winning’ Paradigm <ul><li>Nestlé moves among Top 50 ranks of “Top global 50 most innovative companies” thanks to its dynamic interactions with its global partners. </li></ul><ul><li>Nestlé shares with media trickle-up innovation stories. </li></ul><ul><li>Nestlé shares best practices and challenges among peers at public & private roundtable discussions such as: </li></ul><ul><ul><li>What is the Future of Doing Business? – How to innovate Business with a Strategy for Sustainability” </li></ul></ul><ul><ul><li>Does Design Matter? Roles and Interactions between Design, Technical Innovation and Business Relevance.” </li></ul></ul>
    22. 22. FEI 2010: Feb. 8, 2010 Sam Saguy
    23. 23. FEI 2010: Feb. 8, 2010 Sam Saguy Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention Continuous evolving process
    24. 24. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 1. Leadership & Management Continuous evolving process
    25. 25. Leadership & Management <ul><li>SiW doesn’t come easy  paradigm shift. </li></ul><ul><li>Vision/culture/tools embracing, promoting and sustaining innovation. </li></ul><ul><li>Quantifiable/crystal clear goals. </li></ul><ul><li>Reward mechanism(s). </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    26. 26. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 2. Strategy Continuous evolving process
    27. 27. Strategy <ul><li>Strategize a roadmap for SiW utilization, emphasizing the importance of external co-development and partnerships. </li></ul><ul><li>Create a sustainable platform for all the value chain participants to benefit from the innovation outcome. </li></ul><ul><li>Promote top-down, bottom-up, outside-in, and buys in. </li></ul><ul><li>Support structured/disruptive entrepreneurships. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    28. 28. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 3. Metrics Continuous evolving process
    29. 29. Metrics <ul><li>Develop appropriate metrics for quantifying ‘innovativeness’ to overcome impediments. </li></ul><ul><li>Link innovation metrics (qualitative, quantitative, base line) with KPI (Kew Performance Indicators) and reward. </li></ul><ul><li>Benchmarking – wide scope metrics. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    30. 30. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 4. The consumers and customers Continuous evolving process
    31. 31. The consumers <ul><li>Consumer-centric business model and innovation process. </li></ul><ul><li>Personalization. </li></ul><ul><li>The utmost importance of sharing, social network, crowdsourcing. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    32. 32. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 5. Internal experts and champions Continuous evolving process
    33. 33. Internal Experts and Championships <ul><li>Market successes are due mainly to the people that drove them, and more so for a successful SiW . </li></ul><ul><li>Finding the “ yellow brick road ” to attract, support, nourish, sustain, educate and reward. </li></ul><ul><li>Internal experts - networks (inside/outside). </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    34. 34. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 6. Partnerships Continuous evolving process
    35. 35. Partnerships – A way of life <ul><li>‘ Partner or perish ’ is the new mantra. </li></ul><ul><li>Random collisions/interactions not an option. </li></ul><ul><li>To survive/thrive, seek alliances/partnerships (downstream and upstream) based on compatible differences that are paramount for cross fertilization and synergism. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
    36. 36. Reinventing R&D in OI Ecosystem: SiW roadmap to co-invention FEI 2010: Feb. 8, 2010 Sam Saguy 7. Passion Continuous evolving process
    37. 37. Passion <ul><li>Innovation requires passionate and committed leaders, people and organizations. </li></ul><ul><li>“ Passion-based organizations stop at nothing to accomplish their goals and are able to attract people and resources to their causes. A passion economy can arise that unleashes both a new era of prosperity and solutions for the big issues of our time” (Saul Kaplan, 2009). </li></ul><ul><li>Join us in Sharing-is-Winning to co-innovate the future. </li></ul>FEI 2010: Feb. 8, 2010 Sam Saguy
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