1. Evolution from Orthodox Approaches to Open Innovation Study on Open Innovation Approaches in European Food & Drink Companies Dr Marian Garcia Kent Business School, University of Kent

2. Overview Background Reasons for OI How to execute OI OI partners Management challenges OI Value Future: OI mainstream approach?

3. Study Objectives

4. Study Methodology 1 st Stage: Case Studies  April – Dec 2010  UK, Spain and Italy ( Università Carlo Cattaneo – LIUC/ University of Pisa )  In-depth executive interviews with R&D/OI/Technical Team Purpose – Process – Partners – Performance - People Document an OI project 2 nd Stage: Pan-European survey  Launch in Jan 2011  Model relationships between OI and contextual & performance variables

5. Companies Participating in the Study UK SPAIN ITALY

6. Open Innovation: common sense? ‘Gone are the days when we had all the capabilities needed to innovate in the market’ ‘We all need "intellectual partners" to solve our technological problems / to satisfy our technological needs’ ‘Culturally our company has been very successful as a closed business. All major innovation developments were developed over 50 years ago with internal skills. However, there is an increasing realisation you do not have to originate knowledge and ideas to profit from them’ ‘We would like to do everything by ourselves, but it is not possible any longer’

7. Drivers: Molson Coors – The Talking Can Create brand value  Escape commoditisation trap Reinvigorate a declining category Thermochromic Ink Technology Retailers constantly wanting cheap deals Consumers switching in and out of promotions

8. Drivers: Milk Link – Grip Strip Consumer convenience  freshness and ease of use for the consumer Hook and loop technology to food packaging Milk Link's Innovation Centre worked in partnership with APLIX

9. Drivers: Mars – Colour Development

10. Drivers: Uren - Juice Creations – from Concept to Launch Development of new business models Outsource expertises New markets for juice ingredients - by turning knowledge and ideas into value

11. How to execute OI (l) Organisational Structures  Dedicated resource to manage OI vs. embedded within existing functions Brands, Marketing and Sales Team Brand Innovation Briefs Brands Innovation Team Commercial Innovation Team Supply Chain Technical Team Innovation Partners Knowledge Gaps Technology Roadmap Open Innovation Steering Committee In-house Technological Knowledge YES Internal Development NO

12. How to execute OI (II) Organisational Structures  OI implementation team Gatekeepers Knowledge management Knowledge transfer Technology scouting/techn ology intelligence Facilitating change Develop Open Innovation system (principles and tools) Training/skills development of business teams External innovation not a threat BUT an opportunity Project support Guiding teams through the OI process and solving emerging problems Scientists can focus on making technical discoveries rather than integrating external technologies Project execution Helps to increase the OI credential of the core team within the innovation structure IP management Cost of IP and contracts Disclosure of information Un-patentable IP The Open Innovation Team as a Culture Change Agent

13. How to execute OI (lll) Management Mechanisms  Need for an efficient process to identify, evaluate, value and contractual acquire external technology

14. Companies Who are companies working with? Suppliers/ Strategic Partnerships Suppliers/ Strategic Partnerships Universities Research Institutes Trusted suppliers New suppliers Competitive Innovation Marketplace COST VALUE CREATION CO-DEVELOPMENT Basic Research Long Term Strategy Applied Research Medium Term Strategy Scouting Networks FIND Learning Networks WANT NGOs WANT Consumers CO-CREATION WANT

15. Open Innovation Platform Introduction of mix into different food matrices Biscuits, ice-creams, confectionery, meat, dairy products, cereal products, chocolates... Food-mix profiling Funtionality evaluation in humans Pre-intervention study Interventiona study in humans Mix Production Raw materials selection Raw materials adequacy Storage Development of funcionality valiation tools (CV + AZ) in vitro no celular celular  -arrays omics- in vivo test in animals Profiling of Raw Materials Food-mix-matrix profiling Process effect Reformulation In silico Mechamims Biomarkers Bioactive principles In vitro Digestion bioavailability Methodologies for the design, evaluation and validation of functional products For the prevention of cardiovascular disease and Alzheimer

16. Management Challenges (I) Leading cultural change  Top management endorsement  Key stakeholders support  OI effective implementation - see the world as their technology base - external innovation are not seen as a threat BUT as a opportunity  Effective internal communication strategy  what open innovation means to the company and the impact of such a new direction (focus on results)  Human factors : culture, mindsets (more cooperative and less command and control), motivation, rewards

17. Management Challenges (II) Relationship Building  Identify proper business reasons for engaging with open innovation.  Relationship building and trust  requires time and commitment  Flexibility and openness  Working towards creating a true win-win scenario  Assigning key contacts to speed up initial assessment of opportunities  Alignment of cultures and expectations

18. Management Challenges (III) IP Rights  Openness and Flexibility  sharing the WANTS with partners Avoids working from different understandings on the purpose, terms and priorities  Focus on making money out of partnership rather than ownership

19. Is Open Innovation delivering to companies? YES! Metrics  Yes, need for metrics but...how to value trust, relationship development,.....

20. Future for Open Innovation Is Open Innovation another fad? ‘Wait six months and management will be spewing the next set of consulting buzz words ’ Open Innovation has moved from curiosity and academic discussion to the driving force in R&D/technological development Open Innovation a potent approach to increase innovation capacity BUT needs own innovation processes under control - Adding a partner will be a disappointment for both parties (need for a framework) Open Innovation is not restricted to large companies BUT SMEs might find implementation challenging

21. Thanks Want to participate in the study? Dr Marian Garcia m.garcia@kent.ac.uk