Creativity Central [Marty Baker]

This is less a story about teaching the elephant to dance than teaching the pachyderm how to collaborate.

Helmut Traitler is the Vice President of Innovation Partnerships at Nestlé and he is doing what many have failed to do: re-orient a behemoth multi-national corporation around the proposition that “sharing-is-winning.”

Traiter's resume is impressive. He has published more than 60 scientific papers and 25 International patents. He received an Honorary Professor for Chemistry from the University of York, UK (1999).  He is gifted at applying science to innovation models.

But the story begins at BIF4. Last year, David Yaun, V.P. of Corporate Communications at IBM  told us about the mercurial experience of spearheading the computing giant’s Global Innovation Outlook Program. 

The idea, backed by IBM’s CEO was for the company to take the unprecedented step of opening up their annual technology and business forecasting processes to the world.

Yaun said, “The GIO is rooted in the belief that the very nature of innovation has changed in the early days of the 21st century. It is increasingly open, collaborative, multi-disciplinary and global. This shift means that the truly revolutionary innovations of our time require participation across multiple silos and organizations.”

Despite a lot of pushback and “are you crazy?” comments internally, the GIO has been a success. 

Open innovation, like open source, seems counterintuitive to larger companies.  Their competitive advantage is often (Like Apple) is about holding intellectual property close to the vest.  Open innovation is he deceptively simple idea that companies integrate external ideas and capabilities into their internal innovation strategy.

According to BIF’s Melissa Withers, “Until a few years ago, Nestlé, like most organizations with fully developed R&D capability, depended almost entirely on its internal R&D capability to drive its innovation agenda. “The only area where external innovation was traditionally used was in packaging, where we probably had 70% of all innovation were coming from outside,” says Traitler.

All this changed in 2005 when the team deepened its focus on open innovation.  Nestlé set out to expand its network of global partnerships and fully embed the “sharing-is-winning” slogan in its corporate strategy.

Innovation is not an option for Nestlé , it’s a necessity, reports Withers.  Nestlé’s growth targets hinge on the company’s ability to create an additional $5 billion in growth each year. The immensity of this figure speaks for itself because a significant part of this growth must be generated through innovation.

This explains why even during the recent economical crisis, Nestlé continues to spend more than $2 billion annually on R&D.

Nestlé's size was both an advantage and a hurdle to building momentum for a truly open innovation framework. To overcome these barriers the team has adopted a few rules of the road. The first: move fast. Then move faster. It’s important to demonstrate results and successes quickly.  Beyond the organizational hurdles open innovation advocates must clear, he cites an organization’s authenticity as a major driver of whether an effort succeeds or fails.

Taking the stage with Bruce Nussbaum, Traitler said, “open innovation” is a buzzword – “when people don’t know what they’re talking about, they coin buzzwords.”  Then, he gave an example of a recent innovation initiative at Nestle.

ice cream without keeping it cold and solid throughout the process of making it and distributing it?  This is not an inconsequential problem if the cost of transportation in cold storage vehicles and maintaining it through the final sale is freezing most of it’s profitability.

His question. “Can we make a foam that can ship warm then be cooled before selling?  Nestlé’s approach to open innovation is not to invite the world to participate and show competitors their strategy, but to selectively invite outside experts to add enhance their process.  The problem is given to outside experts in a disguised way and then revealed as Nestlé collaborates with them.

What intrigued me is what I have continually discovered with innovation gurus like Gerald Haman and Arthur VanGundy. The core of innovation is asking the right questions and inviting answers from diverse sources.”

You could feel the BIF audience raise a collective eyebrow with the idea of foam-based ice cream. But for an innovator, the question is a fascinating one.  What if you could save billions by how you create the product?  What if the product actually tasted as well or better than the ice cream we have today?

Pringles asked a similar question about stackable, “unbreakable” potato chips. 

So we’ve seen two elephants dance and collaborate in the past two years.  Big isn’t always better but it’s getting a heck of a lot smarter.