RA Revisited 270911 DSM Jaco Fok
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Transcript of RA Revisited 270911 DSM Jaco Fok
September 27, 2011
Open Innovation applied by DSMJaco Fok, VP Business Incubator
1Page
DSM 2010: a company to be proud of!
Employees 21.911
Annual Sales € 8.176 billion
EBITDA € 1.161 billionEBIT € 752 millionNet Profit € 507 million
Capital employed € 5.468 billion
Single A Credit Rating
Strong Corporate Governance
Global #1 or 2 DJSI (Chem. sector ’04 ~’11)
NutritionPerformance
Materials
IndustrialChemicals
31%
37%
9%6%
17%
PerformanceNutritionPharmaOtherPolymer Intermediates
2Page
DSM organization chart
Nutrition
DSM Nutritional Products- Human Nutrition andHealth- Animal Nutrition andHealth
DSM Food Specialties
Corporate Staff
Shared CompetencesBusiness Support
DSM Managing Board
DSM Innovation Center
Pharma
DSM PharmaceuticalProducts
DSM Anti-Infectives
PerformanceMaterials
DSM EngineeringPlastics
DSM Dyneema
DSM Resins
PolymerIntermediates
DSM Fibre Intermediates
Business and markets
3Page
Our world is facing serious challenges…
4Page
Global recession(s)
5Page
Climate Change….. ?
6Page
We cannot leave it up to the next generationto solve the problems
7Page
The chemical industry is ideally positioned toThe chemical industry is ideally positioned toaddress the real issuesaddress the real issues……..
8Page
Our history
Coal Mining CommodityChemicals
SpecialtyChemicals
Life Sciences &Materials Sciences
9PageSlide 9
2000 2005 2010*
PolymerIntermediates
PerformanceMaterials
Pharma
Nutrition
Brea
kdow
n D
SM s
ales
(%
)Others
Petrochemicals
EngineeringPlastic Products
Base Chemicals& Materials
Others
Base Chemicals& Materials
Others
* Excluding discontinued
DSM: Transformation completed
10Page
Our purpose is to create brighter lives forpeople today and generations to come.
We connect our unique competences in LifeSciences and Materials Sciences to createsolutions that nourish, protect and improveperformance.
11Page
DSM in motion: driving focused growth
People - Planet - Profit: creating value along three dimensions
12Page 12
Innovation
From building the machine to doubling the output
Proud to have achieved
• € 1bn sales from innovation• Increased speed of innovation• Setting up (4) EBAs• Setting up innovation
infrastructure/culture• External recognition as leading innovator
Next level aspiration
• Innovation sales 20% of total sales• EBA sales > € 1bn (2020)• Innovation focus on defined platforms• Value creation via best practices• Set up Innovation Centers in
China/India
13Page 13
1
2
3
4
5
6
7
8
9
Innovation Aspirations
Innovation Strategy
Idea Generation and Validation
Project Management
Commercialization and Launch
Portfolio Management
External Networks
Organization
Culture and Talent
2.0 2.5 3.0 3.5
Industryaverage
AverageDSM 2006
AverageDSM 2010
Monitoring Innovation Performance
Scale 1 - 4
14Page 14
Further boosting the innovation performance
1. Focused approach throughinnovation platforms
2. Balance radical andincremental innovation
3. Internationalize: RegionalCenters in China and India
4. Expand open innovation
5. Improving innovation practices:Excellence in Innovation
6. Supporting (corporate)Technology Platforms
ROPUFA® KhepriCoat™
Dyneema® Rovimix® OVN
DeSolite - supercoatings™
Palapreg® ECO
Achieving the next level of excellence in innovation
15Page
EBABiomedical
EBA AdvancedSurfaces
EBA Bio-basedProducts & Services
CTO Office
BusinessIncubator
Venturing
DSMInnovation Center
EnablersNew Business Development
Accelerating and supporting innovation
Excellence inInnovation
Licensing
Growth of the EastFrom reaching out to becoming truly global
17Page
Choose the right hunting areas!
18Page
Balance radical and incremental innovation
• Company wide insight intocomposition of portfolio
• Optimizing the mix between radicaland incremental innovation
• Allows comparison of innovationplatforms
• “Philips 4 x 4 approach”
Improvedoffering
Offering**new
to PMC
Offeringnew
to DSM
Offeringnew toworld
emerging
growth
mature
decline
Mar
ket l
ife c
ycle
Innovation type (proposition is….)
Introduction of portfolio management tool
Enabling company wide steering of innovation portfolio
ExistingPortfolio
RadicalRadicalPortfolioPortfolio
19Page
Prof. Henry Chesbrough
DSM
> 99 %of worldpopulationoutside us!
Openinnovation:networks !
Dare to have it proudly found elsewhere
Why do we need Open Innovation?
21Page
Contrasting principles of Innovation
• Closed Open
• All smart people work for us Most of the smart people do not work for us
• Invent, develop, produce yourself Add internal & external forces
• Discover and get to market as No1 We can profit from outside R&D
• Commercialize quickly Choose the best business model
• Create most and best idea’s to win Use internal and external idea’s to win
• Control your IP to defend positions Profit from other’s and combine with own IP
22Page
Value Creation by Open InnovationValue Creation by Open InnovationFu
zzy
Fron
t En
d
Wel
l def
ined
Rea
r En
d
Interaction/ Synthesis
Intellectual Asset Management
LicensingIn
VenturingSpin in
JointBusiness
Developments
Acquisitions
LicensingOut
Spin out/off
Divestments
R&D services
Market Scouting / Business Intelligence
Competence Development, Technology Intelligence
Open innovation is no longer a competitive advantageIt has become a competitive necessity!
23Page 23
How to mitigate risks?
24Page
Pros and Cons of Open Innovation
+ Shorter time to market - Info overflow+ Higher chance of success - Culture change is slow+ More funnel output - Many legal contracts+ Lower innovation costs - IP leakage (China)+ Mitigated risk (options) - Balance of power+ Reputation; recruitment - Upfront Investment+ Knowledge based economy - Less job rotation+ …… - …
25Page
Open the Chemical Park: creation of Chemelot
Maastricht
Ein
dhov
en
Bru
ssel
s
Aachen