Open Innovation Bears Fruit (Bars) for General Mills
Open innovation -- or the concept of tapping external resources to fuel innovation within a company -- has become somewhat of a buzzword in the last several years.
Once used primarily within industries with steep innovation curves -- such as technology and pharmaceuticals -- the model of bringing outside thinking in has spread to other industries, as more companies have realized that the only way to keep pace in an increasingly competitive and dynamic marketplace is to challenge the traditional model of sourcing innovation internally.
After all, no one company has a monopoly on all the talent in the world, and any-sized company can be more effective at innovation if it leverages great minds outside the company.
Many companies, large and small, either have thought about or launched an open-innovation program over the past few years and might be wondering if it will work for them in the long term.
In my role overseeing open-innovation efforts at General Mills Inc. (IW 500/79), I've learned that when you start an open-innovation program, it's critically important to expect, address and embrace significant culture change within your organization in order to establish a successful program.
By anticipating common obstacles and navigating around them, you can promote open-innovation acceptance and success.
The following steps helped us build the General Mills Worldwide Innovation Network and have helped us evolve and adapt the program:
Benchmark Others.
Don't underestimate the challenge in beginning to shift your culture toward one of more connectedness. Look to other companies that already have done so, and learn from them.
When planning our open-innovation strategy, we sought insight from organizations both outside the consumer-goods industry as well as from our peers.
We talked to many best-in-class open-innovation practitioners, from Henry Chesbrough to Procter & Gamble Co. (IW 500/11), and the learning we gathered from them helped us jumpstart our program.
P&G even invited us to visit them in Cincinnati for a day. Jeff Weedman, P&G's vice president of global business development, told us during that visit, "You know, most companies don't have the tenacity to do open innovation."
He was absolutely right, in that there is a significant cultural aspect to successfully adopting open innovation, especially within a large company. If you go in expecting to make tremendous changes in a period of months, it's probably unrealistic.
To build an open-innovation program that delivers results, you must work consistently over a period of years because you have to move the company culture in a totally new direction.
Start at the Top.
Management support and involvement are central to the success of any open-innovation program.
In 2005, General Mills Senior Vice President of Innovation, Technology and Quality Peter Erickson came to me and asked me to take a job leading our open-innovation effort. He sensed a benefit in having General Mills more effectively connect with outside partners.
At the time, I was skeptical and initially turned him down.
With more than 20 years of food-industry experience, I knew how R&D was done -- with the best employees you could hire. Employees who focused on every aspect of the new-product development process and who, hopefully, created a patent that you could lock away and use to prevent others from duplicating your efforts.
Peter came back to my office a month later and began to tell me about how P&G was having success with open innovation. This second visit from Peter alone was enough to make me reconsider, but as I learned more about open innovation and all of its potential, the more willing I became to take the leap.
In the seven years that have now passed, I've learned that open innovation is not an abstract academic concept. In fact, at its core, it's common sense.
It's about finding smart people inside and outside the company who can positively impact your business.
It's tremendously exciting as you discover new technologies and partners that can drive your business forward.
And it's equally challenging as you push against a culture that was built doing things internally.
The cultural shift is really about encouraging, supporting and rewarding our folks to become more connected. That's something that can only be accomplished with the support and persistence of those in upper-management positions, like Peter in our case.
Tailor to Your Existing Culture.
There's no "one-size-fits-all" solution to open innovation. Rather, it's important to build an open-innovation program that works in your company's culture.
To start our open-innovation focus, we needed to ignite a cultural shift to transform from an internally focused to an externally focused organization.
What worked for us was creating a dedicated team, which we named "The X Squad," to facilitate the organization in finding and tapping into external innovation. The X Squad is charged to catalyze this new thinking; to help people think differently about their overall skill sets.
We are actually building on what we have done in the past. But today this full-time team travels around the globe looking for potential partners that have a product or technology solution that would fit within our existing businesses.
Remember that open innovation is asking scientists to play a different role in the innovation process. So rather than being the sole creator, you're now asking them to be an orchestrator, to find interesting pieces of technology that are on the outside, to work to bring them in and connect them with pieces on the inside.
In fact, we refer to open innovation as connected innovation, because at the heart of our effort, we are asking our scientists to shift from an invention model to a connection model.
They no longer need to be the only ones coming up with the "eureka" moments and the great technical breakthroughs -- instead, they need to be connecting with great innovators wherever they are and leveraging their "eureka" moments.
One obstacle that comes along with this shift is the great pride that inventors take in inventing.
When we asked our scientists, who were always our inventors, to leave the lab in search of outside ideas, it's not surprising that there was some reluctance on their part.
It has been interesting to observe a significant change in the mindset for many of our scientists as they have engaged external experts -- experts whose entire academic or professional careers had been dedicated to a narrowly focused science discipline, experts who have world-class facilities and technology.
Our scientists are realizing that by working through these external experts, we can participate in, and guide, basic research efforts that will be needed to unlock some of the very complex scientific challenges that face our business -- challenges that we could not possibly solve ourselves.
Go Where You're Wanted.
Not everyone is going to jump on board right away. So as an innovation group, you have to focus on the biggest potential opportunities, and also the biggest risks.
At General Mills, we have taken a hybrid approach to innovation.
The X Squad is our central group, and there are definite benefits to that. However, because we also want to make sure we have direct connections to the business, we assigned innovation entrepreneurs to work within all seven of the different businesses that make up General Mills.
Your open-innovation group, above all else, is a resource for your business teams. You're not there to launch your own new products, but to engage and support the various leaders in your business and get them committed to tapping open innovation as one way to meet their business needs.
Certain groups and certain leaders will be more enthusiastic about open innovation than others, and that's OK. Help the people who want your help, and don't waste time worrying about those who don't.
For example, our Snacks division at General Mills saw the value of open innovation early on.
The snacks category was rapidly growing, filled with many opportunities and pursued by a growing array of competitors. To be more nimble in responding to opportunities and to "play larger" than we were, our Snacks management team embraced the spirit of connected innovation and sponsored some of our early pilot projects.
We embraced the motto of "Think Big, Start Small, Scale Fast."
While our early projects weren't necessarily the biggest, they demonstrated the potential and, more importantly, allowed us to experiment and occasionally stumble early on, when the costs were low.
As we built on successes and scaled our initiative, we leveraged external partners who played critical roles in the development and manufacture of our very successful Fiber One bars and Fiber One 90-calorie brownies.
Appreciate and Communicate Early Wins.
When you have an early success, shout it from the rooftops to help build your case for open innovation.
One of the first wins for open innovation at General Mills was a natural fruit bar that we brought in from a partner in Canada. At that point, we had customers who were looking for more innovation in the fruit category, a very willing business partner, and a marketing manager who really wanted to demonstrate how nimble General Mills could be.
We ended up launching the Nature Valley fruit bar from that effort.
It only took about six months from the time we agreed on our approach to the time of launch. For us to develop the product from scratch internally could have required millions of dollars and potentially two years.
Even though the product is no longer on the market, we have continued to build the relationship with that partner, and they have been an ongoing source of new-product innovation for General Mills.
Another more recent success story is our Snacks division's new Fiber One 90-calorie brownies.
While the Fiber One team created the idea for the brownie, and our R&D department had the expertise to make the dough, we didn't have the existing internal expertise and baking manufacturing capabilities to bake it.
In order to quickly bring the product to market, we enlisted an open-innovation partner with the baking experience and pilot-plant facilities needed to test and perfect the baking process to our exact specifications.
That partnership saved an estimated nine to 12 months in terms of taking the product from concept to launch, and Fiber One 90-calorie brownies already have proven a terrific success, on track to reach $120 million in Year 1 retail sales.
When you have a significant open-innovation win like we did with Fiber One 90-calorie brownies, it's a good idea to make every effort to communicate it within the company and externally.
Write a case study for your employee newsletter. Blog about it. Tweet it. Share it with key industry media.
The more your employees, vendors, partners, potential partners, competitors and so on learn about the initial success of your open-innovation strategy, the better your chances for sustained success.
Ultimately, if you want to make open innovation work for your company, it will take a combination of resolve and flexibility.
You must be the unwavering champion of your program, yet be willing to adapt to overcome obstacles and ignite the necessary culture change at your organization.
To learn more about the General Mills Worldwide Innovation Network, visit www.generalmills.com/win.
