Another question that came up is: what if a researcher has a brilliant idea which really doesn't fit the business, what does Unilever do to support these ideas and maybe further develop then outside the company?

This comes back to the ventures area: one sort of business which could get funded through Unilever Ventures is internal people if they have ideas that don't fit Unilever strategy or brands. A nice example is Rituals, a brand set up by a senior marketer of Unilever. At the time he came up with the idea, it didn't fit with Unilever's strategic plans but Unilever agreed it was actually a great idea. And despite it being an external company, Unilever is still involved in it.

These kinds of things are however relatively unusual. This doesn't happen all the time because you have to maintain focus on executing the company strategy. But there are examples and this is one of them. Intrapreneurship is in that sense a fine balance, because in the end if you have your senior leadership design a strategy and then within that strategy design concrete plans for what you want to do, then the last thing you want to have happen is to have everybody working on something else. Consequently, there has to be a high level of discipline: at a certain level in the company we decide what we're going to do and others then have to do it. But that mustn't make the company blind to alternatives. I think the key point is to have an appropriate opportunity for people who want to bring ideas to the table and in case these ideas are seen as being very interesting, then to have enough space in the organization where a little bit of pre-work can be done, some initial assessment. I guess you can argue that strategy survives until somebody has a better idea. Don't forget that Nokia used to make rubber boots! (It probably wasn't in the strategy plans of the rubber boots company to move into telecom).

Sometimes seeing an opportunity changes your strategy. And you would not see a strategy change that is so radical in a company like Unilever, but might see a specific idea create a pocket of activity and that that one day grows out into a big business. And it might grow out into a business that doesn't fit Unilever and gets sold. That's no problem, but you need to maintain enough focus inside the company. In the areas that are synergistic, in the areas that benefit from each other.

What do you see as the critical success factors for open innovation?

1. Knowing what you want and aligning the key functions of marketing, supply chain and R&D around that.

There's a big world to search in, so if you don't know what you're looking for, you're going to have a pretty full day. I think there is a fundamental challenge in achieving a high degree of alignment inside your company across functions around what it is you think you're looking for. If that's not in place, then the rest is going to be noise. If you got that in place, and shared and understood, then I think you have got to hold on to it for a while. You can't switch strategies every two years in an open innovation environment, because the outside world won't know where you want to go. In fact you won't know it yourself either, but it will be even tougher for the outside world.

2. Be effectively networked.

You need to start to develop a culture internally which is appreciative of external capabilities. It needs to become almost a matter of pride to be the one who found something wonderful outside. Historically research labs were judged on the number of patents they delivered, which is very internally focused. Maybe now you have to judge a research lab on the number of patents it finds and manages to get access to. Some of the classical metrics were opposed to open innovation, pointing people towards doing experiments with their own hands in a small corner not telling everybody and patenting it.

3. Being professional in building deals.

In the end, what you're doing is taking something that somebody else owns and finding a way of getting to use it. In this case it all comes down to doing the right deal. I think within that, you need to start to become the partner of choice, the one that people do want to work with. That's important because they will come to you with ideas and keep coming, and the opposite is also true, if coming to you with an idea is a bad idea than you don't do it anymore. And you go to somebody else and that's a competitive disadvantage.

4. Senior commitment in the company around the things that you're looking for.

This is especially important when you actually find a potential partner. In that case, you find very quickly that Unilever being big and many of the partners being small, you can easily get a situation where relatively junior people within Unilever are dealing with the CEO of another company. And that's weird because the guy on one side of the table can decide everything on his own, because he's the CEO of the company. The guy on the Unilever side of the table might have several decision layers on top of him, whom he can actually only advise. Therefore it becomes really important if you're going to shake hands and do a deal that the guy inside the big company is extremely well aligned with his bosses above him.

5. Being able to build relationships that are able to survive the turbulence that is automatically created thought innovation.

A relationship exists of two parts, on a contractual level and on an emotional level, the latter of which is the more important in the case of innovation, where you don't know what is going to happen. This is not about straight forward procurement; this is about buying something which doesn't exist yet, and might never exist. For that reason, there's a different skill involved.

Within Unilever this process is managed through the Want Find Get Manage  (WFGM) approach, which comes originally from Hoffmann-La Roche and comes down to being clear about what you want, before you go out to find it and search for partners and before you get the deal or build the deal and then manage the consequences. The WFGM approach gives a great opportunity for a high level of internal alignment as you go through from your innovation strategy through to deciding the targets you aiming for and then bringing the capabilities into the company. Within that, good internal discipline is needed around how you build deals.

Website: www.unilever.com

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