Why Unilever is betting on open innovation for sustainability

Two Steps Forward

Why Unilever is betting on open innovation for sustainability

What happens when global companies look outside their walls for sustainable innovation? They sometimes find it.

That’s the bet Unilever is making, based on its announcement last week that it was launching an online platform offering experts the opportunity to help the company find the technical solutions it needs to achieve its ambition of doubling the size of its business while reducing its environmental impact.

Open innovation isn’t exactly new, and Unilever -- which just this week was named No. 1 in corporate sustainability for the second consecutive year by a global survey -- isn’t the first to harness it in the quest for sustainability solutions. For example, I wrote recently about the design firm IDEO’s challenge to use open innovation and crowdsourcing as a means of rejuvenating cities. Unilever has been using open innovation for years, and in 2009 established an open innovation unit to work with outside partners.

But Unilever’s recent efforts go an extra step, perhaps unprecedented, by publishing a list of its “wants” -- a dozen key areas in which the company is seeking help. That strikes me as a bold move, broadcasting to the world the areas in which it wants to innovate. The list includes some broad topics -- better packaging, safe drinking water -- as well as some specifics -- sustainable washing, preserving food.

All of these efforts sync with Unilever’s Sustainable Living Plan, set in late 2010, which set ambitious goals, including sourcing 100 percent of agricultural raw materials sustainably by 2015; changing the hygiene habits of 1 billion people in Asia, Africa and Latin America to help reduce diarrhea, the word's second biggest cause of infant mortality; making drinking water safer in developing countries; and improving living standards by working with agencies such as Oxfam and the Rainforest Alliance to link 500,000 smallholders and small-scale distributors to the Unilever supply chain.

I recently caught up with Roger Leech, Open Innovation Portfolio & Scouting director at Unilever, to find out what was behind the company’s most recent announcement: Why it is harnessing open innovation, the rationale behind publishing its “wants,” and what the company is learning about innovation along the way.

I started by asking him what drove Unilever toward open innovation around sustainability: Has the company’s ambitions grown, is it having trouble finding solutions on its own, or has the nature of innovation simply changed?

Leech chose the last of those three. “Previously, many businesses used to internalize the research-and-development opportunity,” he explained. “Of course, now there are a lot more people outside individual companies to actually devise new technologies and new ideas. The targets that we have in the Sustainable Living Plan are quite challenging and we recognize that we need to look as much externally as we can to find solutions to those challenges. If we can find those in a timely fashion and get partnerships in place then we have a far better opportunity of actually delivering the plan.”

I told him I was struck by the company’s revelation of a dozen of the areas where it was seeking ideas -- that it seemed rather bold and perhaps risky.

“We had a lot of internal discussions about exactly that,” he said. “However, we do recognize that the only way we can really find the right solutions is to actually spend the time and effort defining what you want to find. One of the critical components is looking at the top priority requirements for the business, and then putting them out there so people can see them. And that’s probably a good thing because it shows how difficult some of these challenges are. It’s not easy to actually change consumer behavior to use less water or less energy. So we need creative people outside to help us succeed with some of these challenges. There are a lot of very bright people out there who have a lot of very good ideas.”

Of course, simply getting ideas from outsiders isn’t a key to success. In fact, it’s the first step in a longer journey. “The idea is the first and easiest part of the solution,” Leech explained. “What you need to do then is start a partnership to develop those ideas into the technologies that can actually be applied. It’s never a straightforward process to find an idea and turn it straight into an innovation in the market. It’s very much a case of looking at the right ideas and looking at the technologies and the capabilities needed to develop those into something that can be taken into the market.”

In some cases, it takes a village -- or, at least, a small bevy collaborators -- to bring innovations to market. Take PureIt, Unilever’s water purification system, sold in Bangladesh, India, Indonesia, and other countries. Creating a low-cost means to provide potable water involved partnerships with India’s National Institute of Design and National Environmental Engineering Research Institute, Tata Group’s Tata Elxsi engineering subsidiary and Ernst & Young. Ensuring its safety meant bringing in the London School of Hygiene and Tropical Medicine, and the Central Food Technological Research Institute in Mysore, India, as well as public health engineers in Kolkata and the Indian Public Health Association. “As you can see, there was a wide range of partners required,” says Leech.

It may sound like a long, messy, hit-or-miss process, but that’s innovation -- it’s rarely simple, quick or straightforward. For companies that get good at it -- that learn how to engage a diverse range of outside players in a targeted way -- the payoffs can be considerable. In Unilever’s case, fully 60 percent of the projects in its innovation pipeline came through its open innovation process.

Will the new sustainability portal yield a similarly rich lode of ideas and technologies? It’s only been one week, but the initial results are encouraging. “We’re very pleased at the response to date, both on the number and the quality," says Leech. "There have been some really good suggestions that we’ll definitely follow up on and look to for partnership agreements.”

Here’s hoping some of those ideas make Unilever’s shareholders very, very rich.