Back End of Innovation Conference Keynote
Becoming a Partner of Choice through Supplier Enabled Innovation
By Janette Edelstein, Director External Innovation and Chris Ryan, Director Innovation Sourcing: Johnson & Johnson
Janette began by harkening to the company’s values: “Our goal is to be smart, focused, and purposeful, based on the J&J credo.”
Our global footprint requires that we go deeper than a supplier relationship. We prefer to call our suppliers partners.
Johnson and Johnson has a strong legacy of innovation—from band aids to baby shampoo.
The question for us was how to take this vital culture of internal innovation and expand it to our partners on the outside.
With brands such as Aveeno, Johnson’s Baby, Band-Aid, Tylenol, Neutrogenea, Visine, and others—we need to keep the innovation pipeline full—and there are many more solutions outside our organization than inside.
Being a large organization that has a Pharma bent, our consumer brands can speed us the access to market by looking externally.
How we do external innovation:
“We co-create with the world to accelerate new consumer solutions.”
Discover | Design | De-Risk| Deliver is the method J&J developed.
J&J has innovation centers handle the front end of Discover. Market screening and Learning Plan Validations help the Design end of the process. Partners/supplier-enabled innovation helps De-Risk and Deliver, how we execute and take the solutions to the market.
Advanced Sourcing & Innovation: here’s how we enhance the value creation of supplier-need innovation. We try to think through a Joint Value Creation to ensure world-class capabilities, build a collaborative and performance-based partnership model, and manage the relationship with key financial metrics with a 3-5 year view.
This way we can manage the pipeline while speeding up the timelines. Projects can move forward.
External Innovation Mythbusters:
1. Innovation business models founded on strategic areas and funded.
2. We need optimized resources based on capabilities of partners—so it is a blend of internal and external.
3. Synergy improves efficiency—and makes time-to-market faster.
Two case studies of this method are Band-Aid and Neutrogena.
These partnerships enable us to launch in a year. By leveraging partners’ capabilities and development processes, we can get to market faster. “I want our partners to feel like they own these equities as much as J&J does,” says Janette. The Neutrogena Light Therapy Acne Mask empowers consumers to pay $40 to perform a treatment for which they would have to pay much more and spend more time having this procedure performed at a dermatologist’s office. The Shower Care Band Aid meets a wound-care need for consumers—and is something we didn’t develop in house.
Partnerships aid our overall pipeline and pipeline development, creating platforms for sustained innovation.
Key Focus Areas for External Innovation Business Model:
1. Focused empowered teams (dedicated teams)
2. Quicker decision making
3. Process toolkit—clear expectations
4. Clear guidance on Strategy for External Innovation scope
5. Better defined agreements for partnerships (aids activation and efficiency)
Michael Graber is the managing partner of the Southern Growth Studio, an innovation and strategic growth firm based in Memphis, TN and the author of Going Electric. Visit www.southerngrowthstudio.com to learn more.