Selecting and Developing Talents in Innovation and R&D an example at Nestl

Marc DREYER Head, Training & Learning, Nestl Corporate Innovation, Technology and R&D

"Innovation is the process of turning ideas into manufacturable and marketable form."
Watts Humprey
Disclaimer: this presentation reflects the views of the presenter only, and not necessarily those of the company

Selecting and Developing Talents in Innovation and R&D:

What Innovation means to us? What are our challenges in R&D? How do we then address talents developments?

Innovation has to support our business model: RIG of +4%/y

Why is Innovation important? What is our Problem? How to address it?

Global Innovation, Technology and R&D network: 29 locations

2 Research Centers (700 people) NRC Nestl Institute of Health Sciences 27 Product Technology Centres & R&D Centres (3.100 people)

Local: more than 320 Application Groups in markets

2 Research Centers (700 people) NRC Nestl Institute of Health Sciences 27 Product Technology Centres & R&D Centres (3.100 people) > 320 Application Groups (1.650 people)

Business Diversity: Innovations in 2011

Why is Innovation important? What is our Problem? How to address it?

One Challenge: Adressing Diversity!!

Diversity of our R&D: 29 centres 6000 persons

Diversity of Functions, Products R&D, Regulatory, Patents, Manufacturing, Engineering Marketing, Sales CONSUMER GOOD: Consumers first!! Marketing is local, Technology is global

How we address it: Our Innovation/R&D Process

Why is Innovation important? What is our Problem? How to address it?

Variability Creativity

Stagegate

Concepts

Development

Execution

The fuzzy front-end

Discipline in Execution

The Polarity of Innovation: What Behavior?

R&D and Innovation
Fail often/Fail early Managing Risks Work based on Information Unbounded in Creative flexibility Driven by cycle-time

Why is Innovation important? What is our Problem? How to address it?

Deployment of Products
Reduce variability Eliminating Risks: Compliance Work based on physical objects Bounded in Fixed Requirements Driven by cost

Maximise opportunities or minimise risks?

# of consumer goods products launched1 Average sales within category, percent Ease & speed

Line extension

89

1.0

High

Incremental innovation
Breakthrough innovation

42

4.0
Low

25.9

1) Analysis of 261 products launched in US 2000-2004 in 18 high growth categories, ACV>5% Source: McKinsey Quarterly, November 2006

Stage-gate management
The dilemna:
- "The best way to have a good idea is to have a lot of ideas. Dr. Linus Pauling - The main thing is to keep the main thing the main thing. Larry James

Stage-gate management:
-The art of Portfolio Management! -The heart of R&D effectiveness!!
Stagegate Concepts Development Execution

How we address it: Our R&D Model

The Nestl Model 5-6% Organic Growth Sustainable increase in profitability
Consumer What are the benefits for our consumers?

Creating shared value & Sustainability Can we create value for society and Nestl?

Innovation Sweet-spot

Science & Technology Do we have new technologies to find solutions?

Commercial Do we have the commercial capabilities to do this?

Why is Innovation important? What is our Problem? How to address it?

Innovation is all about thinking differently & people leadership!

FRONTEND:
Foster an Innovative Environment
Creativity Break the rules Encourage a healthy disrespect for hierarchies and rules

STAGE GATES: Business Alignment

Acceptance of risks and failures Courage to stop non promising projects and flair to persist... Talent to build winning teams High conflict & high respect Passionate with + open to new ideas

INDUSTRIALIZATION: Ensuring Discipline in Execution

Discipline in execution Manuals / Documentation Process standardization Compliance Want to commercialize products

Search for non-activated customer needs

Our Training is mostly: Decentralized and Hands-on!

PRINCETON On the Job 70% LEARNING
Coaching, Feedback

MODEL Formal 10%

20%

Leadership

Functional

Why is Innovation important? What is our Problem? How to address it?

Training and Learning: Our 3 Pillars

LEADERSHIP INNOVATION FUNCTIONAL

SENIORS/EXPERTS

Leading Managers

Business Integration

Science/trend watching

SPECIALISTS

Managing Others

Do the right things

Optimize Value Chain

JUNIORS/ ASSOCIATES

Managing Self

Do the things right

Master Best Practices

Why is Innovation important? What is our Problem? How to address it?

Nestl Central Training Center

Why is Innovation important? What is our Problem? How to address it?

Mastering Innovation Process

Connect Leading Innovation Innovation Strategy Business Schools Portfolio Management Intellectual Assets Value Creation Science/Technology Watch Project Management Consumers Compliance

Do the right things

Do the things right

Why is Innovation important? What is our Problem? How to address it?

Core /Strategic Technologies

Why is Innovation important? What is our Problem? How to address it?

Functional Training
Transform Expert

Optimize Value Chain

Optimization Teams Projects Hands-on Training

Packaging
Engineering Product Technology Materials Processes Products

Master Best Practices

Selection and Recruitment

Define:
Job Description Job Success Profile Selection Process (Team, Criteria, Interviews)

Interviewing/Assessment day Screening, based on

Job Success Profile (i. Skills) Nestl Corporate Values

Selecting and Developing Talents in Innovation and R&D: An enabler of the Innovation Process!

Generate ideas

Screen Wisely

Implement Correctly

Summary of Mission of Training and Development in Innovation and R&D

Support mission of R&D as enabler to RIG => Business Understanding Alignment and collaboration is key for successful innovation. => Understanding of Corporate values and Common Practices Leadership and Thinking Differently => Leadership and Management training Product and Process Mastership: =>Functional Training Creating the Future: => Managing Technologies

Thank you