RECKITT BENCKISER Innovating to improve everyday lives Criticaleye speaks to Richard Ellis and Kevin McFarthing

Household, health and personal care product developer, Household, health and personal care products are, in essence, solutions to Benckiser is a proven leader in harnessing everyday problems and Reckitt Benckiser innovation, developing new products that continue to satisfy (RB) provides those solutions. You may not recognise the name but if you have ever consumers and challenge competitors. Here, in a candid used , , or Gaviscon you interview with Criticaleye, the fi rm’s Kevin McFarthing have used one of the company’s products. and Richard Ellis explain how innovative thinking has been A formidable giant in the FMCG industry, RB was formed in 2000 after a merger cultivated and why it’s central to the company’s success. of the British Reckitt & Colman and the www.criticaleye.net 01 You cannot run a company where everyone is going to be happy with every decision all the time, especially around something like innovation which is, in essence, charting a new path every time

German company, Benckiser. Their products and eight per cent when the categories Take the example of Finish Quantum, RB’s encapsulate the household, over the counter in which we operate have been growing recent dishwashing product that delivers a health care and personal care markets and between two and three per cent. That’s not “superior” shine to dishes fresh out of the they sit in the top 25 of the FTSE 100. just due to marketing. That’s also driven machine, especially glasses, compared to by innovation, as almost 40 per cent of competitors’ products. “When people give According to two members of the company’s the products that we sold in 2007 were a dinner party they want their glasses to be leadership, Richard Ellis and Kevin launched in the previous three years,” says clean and shining. They don’t want to have to McFarthing, one reason why it sits at the Kevin, who is Head of Strategic Alliance. polish them after they have been washed. That top of its field is innovation. Innovation is where the idea for the product came from.” within the company happens at not only RB’s rate of innovation is high, even a product level, but also a strategic one, in an industry which itself has a high Another example is the Air Wick FreshMatic with acquisitions that further product lines, innovation characteristic. “The categories Spray, a battery operated air-freshener that distribution and market access. In 2006 the in which we operate are fairly dynamic, releases fragrance on regular time intervals. organisation acquired Boots Healthcare therefore we have to innovate to “The insight for it came from the fact that International and in early 2008, Adams survive as well as grow,” says Kevin. people always want their home smelling Respiratory Therapeutics was purchased. fresh. They want to have the feeling and Kevin and Richard believe there are knowledge that the product is working,” RB has been a leader of innovation in its two routes for generating innovative says Richard. “What we’ve done with the market over the past three years according ideas – consumer insight and Air Wick FreshMatic Spray embodies the to Innovaro, an innovation consultancy, technological advances that deliver consumer need for having fragranced who contend it tops the list above great results to consumers. air in their home with the demonstration organisations such as Procter & Gamble, that the product is actually working.” Sara Lee and Unilever. In 2009, they won The company does this by engaging RB relies heavily on open innovation, The Economist’s Innovation Award in the consumers and studying usage, attitudes a paradigm that says that firms can category of Corporate use of Innovation and ethnographics. “We talk to consumers and should look externally for ideas which recognised their innovative and about how they live their lives, the problems to advance their technology. entrepreneurial corporate culture. they have and the solutions they need. “We get into people’s lives and then In fact, it has the lowest spend in research “We’ve had a compound annual growth, challenge ourselves to develop great and development when compared to other over the last nine years, of between seven solutions to their problems.” organisations, and the highest output. 02 www.criticaleye.net “This really focuses us down on making that’s successful financially and with sure the ideas that we have are ones we the consumer, they get a real buzz out really want to pursue.” says Richard. of it. It’s a great driver.” says Kevin.

One strength of RB’s R&D department is RB’s high rate of innovation can be its ability to work with people outside the chalked up to certain factors. The first company. According to Kevin, “somebody being that it is not a consensus-based out there probably has a solution that organisation. That is, RB operates under already works, so we say, ‘let’s go and the mantra of “70 per cent agreement find it!’ Let’s face it, the consumer doesn’t and 100 per cent implementation”. care whether the product was developed externally or internally,” says Kevin. Richard explains, “If 70 per cent of the people say, ‘yes, this is a good idea RB has created a worldwide network and a good direction to go’ then we that scouts technologies that may expect 100 per cent of our people to have an impact on the problems the get in the boat and start rowing. organisation believes need to be solved. “You cannot run a company where “We’ve also got a website that enables everyone is going to be happy with every inventors to submit ideas. We then decision all the time, especially around commit to an evaluation process on something like innovation which is, in a rapid timescale,” says Richard. essence, charting a new path every time.”

“We are presenting ourselves to the outside But in parallel, if people have a strongly world in a way that says, ‘Come talk to held alternative solution, they are given us; bring your technology and we might the chance - the challenge - to go off and make it happen within our products.’ It’s prove it could be and even better future about ensuring that when an inventor has innovation. The innovation train carries on, an idea he or she sees Reckitt Benckiser and potentially another train is started too. as a partner of choice and a company with which they want to work,” he continues. Secondly, staying close to consumers helps keep the culture of innovation alive. “In the development of Air Wick FreshMatic “Understanding the challenges consumers Mini,” adds Kevin, “we worked with five key face in their everyday lives is paramount. partners on three different continents. We We make sure we are the ones who knew what we wanted to do; we had talked to understand that better than anyone else and consumers and mapped out what we needed. are thus able to bring the solutions to the We soon realised we needed certain partners marketplace quicker than our competitors. and found them without hesitation.” If you have superior understanding coupled with a fast execution, then we With over 23,000 employees worldwide, should be able to maintain the kind of fostering a culture of innovation could be innovation rate that we have,” says Kevin. Kevin McFarthing seen as difficult. Kevin and Richard don’t Head, Innovation Fixer agree. “One of the reasons why we are To keep such a special culture of innovation innovative is because it is clearly a top it is important to hire the right people. “We priority for the organisation with everyone don’t want the culture to be diluted,” asserts Kevin spent 17 years at Reckitt Benckiser, as from the chief executive down to the people Kevin. “So we need to bring in the right head of R&D for Health & Personal Care, and at the bench fully engaged in it,” says Kevin. people, not only with the right competencies Global Director for Strategic Alliances. He now and skills but the right attitudes.” heads the consultancy, Innovation Fixer which “Our CEO, is really into the helps companies to improve innovation, with innovations that we are doing,” says Richard. Being innovative is about keeping close a particular focus on open innovation and “That helps drive the culture. Innovation to the end users and understanding how strategic alliances. is not just an executive missive that says they are evolving, what their problems are Richard Ellis ‘be innovative today’, it’s something that and how your company can solve them. Senior VP, Global Research and people are living and breathing each day.” Because, at the end of the day, at least for Development, Reckitt Benckiser Reckitt Benckiser, the ultimate goal is to Kevin asserts that their success comes add value to the consumer’s life, when a Richard has held his current position since from the ‘perceptible passion’ that product does that it is considered successful. 2001. Prior to that he was with Unilever and the staff have for the products they are has worked in Australia, the Netherlands, the developing. “The depth and rigour that “To sum up, for us a successful innovation is USA, and the UK. He graduated in chemistry we bring to our innovations couldn’t one where we deliver consumers a solution from the University of Manchester and holds come from a passing interest,” he says. to a problem and do that in a sustainable a PhD from there. business way,” the pair concluded. Contact Kevin and Richard “Results are a great inspiration. If staff through www.criticaleye.net members see a product go to market © Criticaleye 2009 www.criticaleye.net 03