Innovating 4 DSM

Transcription

1 Innovating 4 DSM Lessons from 1995 ~ 2015 Rob Kirschbaum, CEO SakuragiConsult (former VP Open Innovation DSM) Micro MBA, Breukelen, October, 2017

2 Introduction to Royal DSM Strategy; Emerging Business Areas Innovation - Open Innovation model - DSM Innovation Center - The Balancing Act Breakthrough examples - Health - Sustainability Take aways Page

3 DSM understands change Coal Mining Commodity Chemicals Specialty Chemicals Life Sciences & Materials Sciences

4 Successful transformation track record Evolution Bioterials / Biologics Life Science Products Performance Materials Petrochemicals Fertilizers Coal Classical Biotechnology Technological competences Mechanical engineering Chemical engineering Polymer technology Materials Sciences Life Sciences Modern Biotechnology Page 4

5 Building on an impressive history Hoffman La Roche s Vitamins (1930s) Gist-Brocades (1869) DSM (1902) Chemical synthesis & biotechnology Life Sciences Biotechnology Materials Sciences Energy, chemistry & polymer technology Vitamins Omega s Carotenoids Premixes for food & feed Enzymes Minerals Cultures & Yeasts Nutraceuticals Pharmaceuticals Cellulosic bioethanol Biomedical materials Bio-plastics High Performance Plastics Polyamides and precursors Resins for coatings and composites Functional Materials Solar advanced surfaces Page 5

6 Significant transformation (Sales %)

7 DSM at a glance * Sales ~ 8 billion EBITDA ~ 1,3 billion Global presence ~ employees worldwide Listed at Euronext NYSE Share price quintupled in 25 years Sustainability leader Top ranking Dow Jones Sustainability Index DSM is a global Life Sciences and Materials Sciences company active in health, nutrition and materials DSM delivers innovative solutions that nourish, protect and improve performance in global markets such as food and dietary supplements, personal care, feed, medical devices, automotive, paints, electrical and electronics, life protection, alternative energy and bio-based materials ~6% of Turnover in R&D (~2000 Fte) * 2016 numbers total DSM

8 Mission Our purpose is to create brighter lives for people today and generations to come We connect our unique competences in Life Sciences and Materials Sciences to create solutions that nourish, protect and improve performance

9 We cannot be successful nor can we call ourselves successful in a society that fails Feike Sijbesma, CEO, Royal DSM

10 DSM in motion: driving focused growth Page

11 FOR INTERNAL USE ONLY Introduction to Royal DSM Strategy; Emerging Business Areas Innovation - Open Innovation model - DSM Innovation Center - The Balancing Act Breakthrough examples - Health - Sustainability Take aways

12 FOR INTERNAL USE ONLY DSM uses Corporate Strategy Dialogues since 1995

13 FOR INTERNAL USE ONLY Selection criteria for Emerging Business Areas Field driven by global mega and technology trends Building upon DSM capabilities: market and technology Perfect fit with the corporate portfolio priorities Generate multiple business opportunities Positive impact on DSM profile?

14 Societal trends FOR INTERNAL USE ONLY 2005: Four key Innovation Pockets identified Global networking Individualization Environment, health & safety awareness Age & World population growth A Healthcare & prevention, healthy food and cosmetics C Materials with advanced properties (lighter, B Renewable, sufficient & clean resources D Electronics, information & knowledge systems stronger, eco-friendly) Bio- Process Nano- Information technology technology technology technology Technology trends

15 FOR INTERNAL USE ONLY Chosen Emerging Business Areas dd Personalized Nutrition White Biotechnology Specialty Packaging Biomedical Materials

16 FOR INTERNAL USE ONLY M-T Synergies of Emerging Business Areas DSM Markets Pharma 1 4 Engineering materials Industrial Chemicals 3 2 Coatings Nutrition DSM Technologies Food & Feed Omics Technology Advanced Chemistry Materials Science Process Technology Emerging Business Areas 1. Biomedical Materials 2. Specialty Packaging 3. Personalized Nutrition 4. White Biotech

17 FOR INTERNAL USE ONLY ANSOFF Matrix for New Business Development

18 Introduction to Royal DSM Strategy; Emerging Business Areas Innovation - Open Innovation model - DSM Innovation Center - The Balancing Act Breakthrough examples - Health - Sustainability Take aways

19 FOR INTERNAL USE ONLY Page

20 Building an intrinsically innovative company 20% Belong to the Global Innovation Leaders (Benchmark 2012) Innovation Sales, ~5% higher Gross Margins 1B (with 30 ~ 40 Mln EBITDA) Disruptive Platforms, 2020 Page 25

21 work R & D Competences Technology Platforms Inventions Know-how IP Ideas Knowledge Business Models Market Solutions Innovation

22 Why do we need Open Innovation? DSM % of world population outside DSM! Networks needed! Page

23 Fuzzy Front End Networks make Open Innovation work Market Scouting / Business Intelligence Joint Business Developments Licensing in Venturing Spin in Acquisitions Interaction / Synthesis R&D services (Chemelot) Licensing Out Spin out/off Divestments Competence Development, Technology Intelligence Intellectual Asset Management Page

24 Partnership with student team Dutch universities Delft & Amsterdam Innovative DSM materials in 2013 Velox4 recumbent Km/hr.!

25 DSM Innovation Center New Business Development EBA Biomedical EBA Bio-based Products & Services EBA Advanced Surfaces Business Incubator Enablers / Accelerators Excellence in Innovation CTO Office Licensing Venturing Page

26 Collaboration is needed to make it happen

27 Many Projects: How to mitigate the risk? Page

28 DSM Venturing Mission Competence center for external (VC) participations aimed at boosting innovation & growth Window to the world Explore new emerging markets, technologies and products to enhance product portfolio, technology toolbox and business model(s) Strategic value Add value internally and externally Facilitate strategic co-operations with start-ups Financial return Portfolio approach Returns needed to pay for cost and capital and be a sustainable activity Page

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31 FOR INTERNAL USE ONLY Corporate Venturing A win-win situation is the objective 44

32 Recent Book on Corporate Venturing

33 Market life cycle Managing the Portfolio across Levels yr 3-5 yr 5-9 yr 1~1.5 yr Emerging Break-Away New Platforms Growth New Applications and Adjacencies Mature Decline Established Products and Business Lines 51 Improved Product Disruptiveness Product new to DSM Market new to DSM Adjacent Business New to The World

34 Breakthrough versus Incremental Innovation The Balancing Act Innovation Center Business Groups Long term Vision Entrepreneurship Agility Breakthrough Innovation Pilot plants Scaling-up Medium term Vision Operational Excellence Lower risk Sustainable, Profitable Innovations Page 52

35 Reducing Methane Emission from Cattle Identification and development of a feed additive(s) solution to: 1. reduce methane by 25-30% in vivo 2. with the potential for better performance (increased milk yield, increased daily weight gain, etc.). Eco+

36 Introduction to Royal DSM Strategy; Emerging Business Areas Innovation - Open Innovation model - DSM Innovation Center - The Balancing Act Breakthrough examples - Health - Sustainability Take aways

37 New exciting growth platforms established 3 Emerging Business Areas up and running DSM Bio-based Products & Services Advanced Enzymes and Yeast platforms: enabling Advanced Bio Energy and Bio-based chemicals DSM Biomedical Innovative materials that deliver more advanced clinical procedures and improved patient outcomes DSM Advanced Surfaces Smart coatings and surface technologies to boost performance in the solar industry Aspiration by 2020: sales up to 1bn at high EBITDA margin

38 Page DSM Biomedical

39 Materials evolution Treatment moves from repair to healing BIO-PASSIVE Medical coatings and polymers BIO-ACTIVE Resorbable polymers and Drug Delivery BIO-INTERACTIVE Therapeutic materials, Regenerative medicine Material stays in the body Highly durable Maintaining mechanical properties over years Controlled drug release Disappears after use Healing by stimulation and growth of patients own tissue Disappears over time Cardio Orthopedic CMF Ophthalmology Orthopedic Orthopedic Orthopedic Pacemaker leads Hip implants Bone cement Back-of-the-eye medication Resorbable screws tendon repair Cartilage repair Stimulation of Bone growth Page

40 Open Innovation in practice Licensing Mergers & Acquisitions (Joint) Venturing Internal Innovation Scientific Advisory Board Page & other Consultants R&D Alliances & Cooperations

41 Move Forward selectively in the Value Chain Materials Extended offering Assembly Biomedical Materials Medical Device Development Medical Device Manufacturing / Assembly Implant Surgery Patient Aftercare US$ 1.5bn Joint development US$ 150bn >US$ 150bn Royalties License agreements Materials Supply Agreement Component Supply Agreement Device Supply Agreements Page

42 Key Take Aways Venturing improves the power to select options Open Innovation : A tool to rejuvenate your business Partnerships mitigate innovation risks Partner with an open mind; dare to share! Construct Alliances based on complementarity Focus on the Grand Challenges

43 Market life cycle 1~1.5 yr yr 3-5 yr 5-9 yr Organizing Incremental vs. Radical Innovation Emerging Break-Away New Platforms Growth New Applications and Adjacencies Mature Decline Established Products and Business Lines Improved Product Disruptiveness Product new to DSM Market new to DSM Adjacent Business New to The World Page

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45 What worked for us. Sustainability and Innovation go hand-in hand Create enough breakthrough options in the pipeline Nominate and empower Intrapreneurs Protect Radical Innovation Platforms Strategic consistency; Stay the Course! Accept the Balancing Act (Business & People) Patience is needed for Culture changes