Unilever

From feeding families to keeping homes clean and fresh, Unilever brands are part of everyday life

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As one of the world’s largest consumer goods companies, Unilever has the power to reach millions; approximately 160 million times a day, someone, somewhere in the world buys a Unilever brand.

From feeding families to keeping homes clean and fresh, Unilever brands are part of everyday life, and at the heart of the commitment Unilever has to consumers we aim to improve the quality of life for people everyday, everywhere.

This has been the vision of Unilever, right from its founding days at the end of the 19th century, but more recently Unilever has also committed to grow the business while reducing its environmental impact.

Here, Jon Hague, VP Open Innovation, explains why he believes open innovation will be indispensable in delivering this new Unilever mission and shares his top 10 open innovation tools.

There’s no question that an open approach to innovation is essential. It is clear that we will need to continue to build capabilities, and that we will need to build partnerships in new places in order to sustain growth and return, while delivering on our ambitious environmental targets. Outlined here are the top 10 open innovation tools used by Unilever.

Internal alignment linked to OI portfolio management and metrics seems so obvious, but open innovation activities must focus on supporting the corporate strategy, and it’s important to demonstrate the positive impact of OI through robust metrics. Many companies set metrics against the number or percentage of projects enabled through open innovation. Very quickly, we at Unilever realised that we could manufacture ways to make this number 100%, and so we are looking to set metrics based on value. This is far from easy, but it will allow us to determine more effectively the projects to prioritise, and where we will align our external spend to ensure maximum value creation.

One area of external spend is in the area of scouting. Unilever have a scouting community that first makes sure we don’t have the answer within Unilever, before going to a few selected scouting partners that we feel can cover the majority of our needs and challenges. The Unilever scouts have a wealth and breadth of experience backed by a robust scouting toolkit that Unilever has developed over the years. Having said that, Unilever is always open to adopting new ways of accessing solutions and are open- minded about where those solutions might come from.

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Of course, many leads or solutions come from our suppliers, where Unilever has strong innovation relationships and strategic supplier alliances. Building and maintaining strong partnerships with our suppliers based on trust takes time and effort, but is something that Unilever takes seriously. Differences of corporate culture and language cannot be under-estimated and Unilever puts considerable effort into understanding each other and have developed alliance frameworks that help us partner most effectively.

As well as alliances with suppliers, Unilever also has a number of academic research partnerships and, for example with the University of Liverpool Centre for Materials Discovery, we also have shared facilities, which Unilever has found to be an invaluable element in the mix. The collaboration with Liverpool came out of a shared grant funded by the EU and the North West (of England) Development Agency. Together, we have built a passionate team; Liverpool has a secure long-term strategic investment and Unilever has gained a molecular design capability, creating new functional molecules and a capacity to screen more ingredients and find the optimal mix more quickly.

The partnership with Liverpool serves to highlight another important aspect of our toolkit, which is intellectual property. One result of the Liverpool collaboration is that Unilever has a really deep understanding of the chemistry, and so are much better placed to strengthen the quality of our IP. The ability of Unilever to leverage IP into and out of Unilever is a great strength, and recognising this, both open innovation and patents are two of Unilever R&D’s critical functional capabilities.

Since 2001, with the creation of Unilever Corporate Ventures, we have built corporate venturing into an important open innovation tool and capability. Early failures in collaborative venturing were essentially lessons in incubating new businesses. It taught us that the capabilities we had in growing billion euro brands, of which Unilever currently has 13, are very different from what is needed to start up and incubate new businesses.

Salon Spa International is a classic example of this and, since its creation in 2007, it has become one of the leading five spa operators worldwide, highly respected and already creating strong financial returns. Importantly, the Spa businesses have kept strong links with the Skin Category at Unilever, providing both a means to experiment with new skincare technologies, as well as generating valuable consumer insights.

In another example of collaborative venturing, The Pepsi Lipton Tea Partnership (PLTP) North American joint venture was established back in 1991. This allowed Unilever brands to get to enter the ready-to-drink tea market through the business channels of its partner, Pepsi. This made Lipton the leading ready- to-drink tea brand in the US and, with further expansions across the globe in 2003 and 2008, it has enjoyed strong double-digit volume growth.

Externally, we have recently seen a number of Unilever brands running competitions for advertising ideas. However, arguably one of the earliest examples of this crowd-sourcing technique came from the founder of Unilever, William Hesketh Lever, who, in building the village of Port Sunlight, sought architectural designs from young local talent; the prize of winning not being financial, but the ability to showcase their talent.

In building Unilever capabilities in the area of collaborative innovation, it is important to master making the right connections. Unilever has started by harnessing the impressive collection of internal skills and capabilities that span a unique range of product categories as well as by defining which collaboration innovation tools work best for us. Unilever has updated our website, inviting ideas for innovation, and plan to upgrade again in 2010; as we learn we build.

Lever was a true entrepreneur and the entrepreneurial mindset is a crucial element in the open innovation toolbox. As well as encouraging this internally, we do have access to a number of external entrepreneurs with whom we have live projects. The Axe Bullet Bodyspray is just one example of where Unilever partnered with an entrepreneur, the result being an unconventional approach that saw the product launched in half the time we would normally have taken to get to market.

These are the top 10 tools we use in Unilever today, but there is no one best practice, and as we continue to learn so we will draw on different models and evolve to meet our strategic goals.