Monday, September 18, 2006

Kimberly-Clark turns to outsiders on R&D

As more companies enter the Innovation Arms race, those with maturing Innovation Infrastructures are looking to increase their innovation capabilities. One such way that has been getting a lot of press recently has seen the promotion of open innovation with the likes of P&G, Kraft Foods and now Kimberly Clark openly reporting their capabilities.

This change has seen Kimberly Clark look outside its Research & Development (R&D) department for innovation by doing away with their vertically integrated model of product development with remarkable results. For example, by turning in part to people outside their organization, Kimberly Clark has managed to slash the time to bring new products to market by 30 percent.

One of the key reasons for the switch in strategy was due to the demand on the product pipeline that Kimberly-Clark’s senior vice president and Chief Innovation Officer (CIO), Cheryl Perkins, adopted three years ago when she began leading the company’s R&D operations. Like many companies, the demand for continual growth is leading to an increase in the Innovation Revenue Growth Gap, between known and unknown innovations, as companies struggle to find new sources for innovative ideas. Kimberly-Clark has overcome this by changing their focus and engaging with outside parties in the development and launch of products. Last year alone, Kimberly-Clark formed more than 30 partnerships. This has created some remarkable results, including; Huggies liquid baby powder, Huggies Cleanteam that hit the market shelves in 12 months instead of the typical 2-3 years and SunSignals, which have increased the sales of the Huggies swim pants whilst reaching a wider audience.

Crucially, Kimberly-Clark has not forgotten the importance of people in the process. They have assigned relationship managers for each of the partnerships and from a very early stage they agreed on who owns the intellectual property, before unresolved issues get a chance to erupt acrimoniously. Furthermore, whilst product and technology innovations have been the main focus, Kimberly-Clark have also looked at other Innovation Dimensions, including design. This has resulted in Kimberly-Clark planning to open a design studio in early September 2006. Such focus has created a more advanced, disciplined and successful innovation process. This is a great read. Open innovation is on the march….

No comments: