General Mills Innovates From the Outside In

The history of innovation at General Mills predates its incorporation in 1928, as its predecessor companies demonstrated a knack for understanding consumers and provided them with inventive new products. One approach was clear from the start and continues to be at the core of General Mills' innovation strategy -- great ideas can come from various and sometimes unexpected sources.

Wheaties cereal, for example, was discovered by accident when a health clinician spilled bran gruel on a hot stove. The mixture crackled and sizzled into a crisp flake that actually tasted great. The clinician brought the idea to the Washburn Crosby Company, a forerunner of General Mills, in 1924, and the company launched the cereal that later became "The Breakfast of Champions."

Another first came in 1931 when a General Mills salesman questioned the chef on a train about how he mixed, baked and served fresh biscuits so quickly. The chef showed the salesman his special biscuit mixture, which the salesman then brought to a company chemist who worked to develop and launch the unique baking mix we know as Bisquick.

Some other early innovations include the development of the package tear strip in 1956; the launch of "boil-in-bag" vegetables from the Green Giant brand in 1961; the introduction of Hamburger Helper as an entirely new grocery category in 1971; and the creation of Fruit Roll-Ups fruit snack in 1979. 

"Innovation, in all of its forms, is one of General Mills' key growth drivers," says Peter Erickson, senior vice president, Innovation, Technology and Quality, General Mills. And in continuing to meet the demands of the marketplace, the company realizes the need to constantly evolve and expand its innovation strategies.

Thus, in 2005, General Mills identified a corporate focus on open innovation as a key strategic priority. This led to the 2007 launch of General Mills' Worldwide Innovation Network (G-WIN), which was designed to accelerate the innovation advances that were already underway inside the company.

"As a company, we're not new at innovation by any means, but the corporate focus on open innovation is new," says Erickson, who is responsible for product innovation strategy and oversees the invention and commercialization of new food products and technologies. "To continue to deliver category-leading innovation, we will need to build the capabilities to tap into the tremendous amount of creativity and technical genius that exists outside our company. By becoming a world-class open innovator, we can distance ourselves from our peers and continue to deliver significant innovation in taste, health and convenience."

Formalizing a Process

Though open innovation is a newer concept in the consumer goods industry, and the formal emphasis on this is new to General Mills, it has been an informal strategy practiced by the company for years. For example, in 1977, it acquired the U.S. licensing rights to the Yoplait brand from Sodima, a dairy cooperative in Paris. It has since expanded the Yoplait line, adding several types of yogurt and dozens of different flavors. It even revolutionized the yogurt category with the first yogurt-in-a-tube, Go-GURT, in 1999.

In 1991, the company partnered with Nestle, a major competitor, when it formed the Cereal Partners Worldwide (CPW) joint venture. CPW, with well-known brands such as Cheerios, is now the second-largest cereal company outside North America, with approximately $1.4 billion in sales and business in more than 130 countries.

But as mentioned earlier, General Mills determined that its informal approach to open innovation needed focus. In the planning phase, the company sought insight from organizations both outside the consumer goods industry as well as from its peers. Erickson says that they talked to Henry Chesbrough, renowned open innovation expert and author of "Open Innovation: The New Imperative for Creating and Profiting from Technology" and "Open Innovation: Researching a New Paradigm." General Mills executives also visited Merck & Co. to witness the pharmaceutical industry's approach to open innovation. They even obtained insight from a small woodworking company in Canada, named Lee Valley Tools, about how to better tap the consumer as a source of new ideas.

The organization that was most helpful, according to Erickson, was The Procter & Gamble Company (P&G), which reemphasized the importance of focus for General Mills. Erickson recalls a key piece of advice shared by former P&G executive Larry Huston; "If you go out and look for everything, you'll probably find nothing. But if you go out and look for one specific thing, you'll find hundreds of ways to deliver it."

Armed with fresh knowledge and insight gleaned from other companies, General Mills was ready to formalize its open innovation processes. To start, the company needed to ignite a cultural shift to transform from an internally-focused to externally-focused organization. Albeit, Erickson believes that this shift was probably less of a challenge for General Mills than for other companies pursuing an open innovation model. This mindset was already embedded in the culture because it has a history of looking outside for new opportunities.

Still, one approach was to create a dedicated team to facilitate the organization in finding and tapping into external innovation. The team was  appropriately named the "The X Squad" wherein the "X" stands for "external." The X Squad is comprised of long-tenured, highly credible, well-networked employees who display a passion for open innovation.

"In the last several years, we have tried to focus the broader technical organization on 'finding skills' rather than 'inventing skills,'" says Erickson. "The X Squad was charged to catalyze this new thinking; to help people think differently about their overall skill sets."

Today, The X Squad is responsible for creating the programs and processes needed to effectively identify and engage external partners. "We have a full-time team in place, traveling around the world, looking for potential partners who have a product or technology solution that fits within our existing businesses," says Erickson.

Another critical piece to building an effective open innovation strategy was to create a short list of external innovation needs for each one of General Mills' businesses: a shopping list of sorts that identifies the top needs that -- once fulfilled -- can have the greatest impact on company growth.

"Once we established these shopping lists and mapped out the world according to where opportunities are most likely to be, we started the hard work of going out and traveling the world to make connections, build relationships and have discussions around how we can take technology and truly create a win-win between General Mills and the company that created the innovation to begin with," explains Erickson.

He notes that The X Squad is now instrumental in helping product developers, scientists and engineers with the process of finding, evaluating and integrating new ideas into the organization.

All planning aside, Erickson points out that General Mills does not lose sight of the power of serendipity. "While we are very focused, on occasion we'll see something -- from an individual, at a trade show or from a small company -- that really sparks a new interest for us even though it's not on our priority list," he says.

One recent example is the development of Yoplait Go-Gurt Fizzix with Brigham Young University. This product -- detailed later in this article -- illustrates how unexpected ideas can lead to valuable collaborative opportunities. Even so, Erickson affirms that -- if given a choice -- focused efforts are more important than serendipitous occurrences.

Striking a Balance

Finding the right balance between internal and external innovation was also an important consideration on the road to launching G-WIN.

"We spent time reinforcing within our organization the importance of looking for great innovations outside that can be further leveraged by our internal capabilities and scale," Erickson explains. "We found that 'ready-to-go' innovation is rarely possible. However, we also discovered that we can improve or enhance 'nearly ready-to-go' innovation using internal capabilities to deliver more value to the inventor and the consumer."

The presentation of Bell Achievement Awards each year within General Mills is further proof that the balancing act between external and internal innovation is in effect. Named after General Mills Founder James Ford Bell, the Bell Achievement Awards have recognized innovative contributions made by company employees for the past 11 years. In the last few years, a shift has occurred in the approach to recognition, with General Mills awarding employees for ideas and opportunities that were found externally in addition to those invented inside the company.
"It's a more balanced approach now," says Erickson. "We recognize all of our great ideas no matter where they are found; ideas that we can grab a hold of and integrate into something that's meaningful to our consumer and our businesses."

The Launch of G-WIN

In its efforts to become more externally-focused, General Mills opened its organization to the brain-power of literally thousands of great inventors around the world, and this achievement was celebrated with the formal launch of G-WIN in the spring of 2007. Through G-WIN, the company seeks patent or patent-pending product, packaging and process ideas from an array of external partners, including entrepreneurs, inventors, universities and other food companies.

Also, through partnerships with companies, like NineSigma, a provider of open innovation solutions, and YourEncore, a network of retired scientists and engineers who share proven experience in innovation, General Mills can tap into expertise beyond that of its existing suppliers, as well as resources outside of the consumer goods industry.

In fact, at YourEncore, General Mills helped to create a new food innovation division. "We were instrumental in bringing in a number of our peers to join the network, from Kraft Foods, the Coca-Cola Company and Schwan's," says Erickson. "They share the same source of retirees that we do, and we think that's a healthy thing -- we're all tapping into this broad pool of innovators on the outside that can help all of our organizations grow and prosper."

General Mills evaluates potential partnerships based on several criteria, including the "fit" for a particular brand or product line, uniqueness and expansion or growth potential. "We're constantly on a quest to deliver on improved health, taste, convenience and value for our products," says Erickson, who believes that innovation should also deliver mutual benefit to the company, its partners and the consumer. "Partners who help us achieve our innovation goals will benefit from General Mills' resources, scale and credibility in the marketplace to advance their own business," he says.

Another critical innovation practice that the company has brought on board in recent years is "in-market experimentation" -- the practice by which General Mills can make a new product on a small scale and observe consumer reactions to it in a select group of stores in a given region.

"At the end of the day, the debate between what two executives think of a product is interesting, but not as important as getting a few of our retail partners to take the product out to the marketplace to quickly see what our consumers really think," says Erickson.

G-WIN Successes

In its first year, just recently marked, G-WIN results include more than 200 technology and product proposals for General Mills. This represents a 300 percent increase in the number of innovation concepts submitted to the company since launch.

Collaboration opportunities cover a wide spectrum: everything from more effectively applying existing technologies internally to partnering more closely with key suppliers to finding potential new partners in entirely different industries.

The company has developed joint ventures, engaged in technology and equity licensing and sourced finished products. In addition, General Mills has worked to solve technical problems with experts applying concepts to further accelerate its own internal innovation efforts.

"We are tremendously encouraged by the success and industry interest we've seen from our G-WIN open innovation program," says Erickson, who also notes that the company has been seeing a higher percentage of high-quality, potentially game-changing technologies with broad application across its businesses.

General Mills' efforts to proactively solicit and foster new methods of innovation and collaboration to fulfill top business needs can be seen in the success of Progresso Light. In this case, the business need was to generate big ideas for new consumer solutions in the area of weight management.

A cross-functional team -- comprised of technical, marketing, finance and quality management executives -- was formed to leverage research and expertise from across the company. The team suggested that Progresso develop a "light" soup that could qualify for a 0 POINTS value per serving with Weight Watchers. Progresso tested the idea, developed the product and then leveraged the General Mills' strategic sourcing team to build the external partnership with Weight Watchers.

In collaboration, the two companies then launched Progresso Light, the first consumer packaged product in any grocery category to carry the Weight Watchers endorsement with 0 POINTS value per serving. All five flavors of Progresso Light deliver just 60 calories, 4 grams of fiber and a full serving of vegetables per serving. All five flavors quickly moved into the top 20 of the best-selling products in the ready-to-serve soup category.

Another successful open innovation at General Mills married two seemingly incompatible things -- yogurt and carbonation. Go-Gurt Fizzix, the first-ever carbonated yogurt, was launched late last summer. An example of serendipity, Erickson says that Brigham Young University (BYU) brought its carbonation technology to General Mills without solicitation. After determining that the technology could potentially drive growth in its kids' yogurt business, General Mills exclusively licensed the product and process patent from BYU.

"We combined their intellectual property with our deep expertise in yogurt development and manufacturing to introduce a first-of-its-kind carbonated yogurt," says Erickson. He explains that while BYU had invented a valuable product, its access to scale was limited. BYU made the product in a small pilot plant and packaged it in a traditional cup format for its consumers on campus. Once a partnership was formed, General Mills was able to contribute the capability to manufacture the product on a much larger scale and provide the insight to package the product in a tubular format -- a shape that speaks loudly to the children's demographic.

Additional G-WIN innovations include:

> Fiber One Chewy Bars: General Mills teamed with an exclusive partner to develop a snack bar with 9 grams of fiber per bar while providing an indulgent taste experience. Fiber One Chewy Bars far exceeded performance expectations. Within months of the product launch, Fiber One bars were among the top 10 best-selling grain bars on the market.

> Progresso Reduced Sodium soups: Through a proprietary partnership with an external company with considerable expertise in healthy foods, General Mills was able to source a great-tasting new lower-sodium ingredient for its Progresso Reduced Sodium soups. In the first year on the market, sales of Progresso Reduced Sodium soups ranked in the top third of the ready-to-serve soup category. And 50 percent of sales for lower-sodium Progresso soups introduced in 2007 came from consumers who weren't previously buying Progresso. Based on this success, additional soup flavors were added to the line later in 2007.

> The Pillsbury Cooler: An environmentally-friendly mobile cooler technology was created through a partnership with a refrigeration company. This cooler technology allows retailers to offer refrigerated products in locations throughout their stores that were previously difficult or cumbersome to access and manage.

Continuous Improvement

In the short time that G-WIN has been in place, General Mills has seen tremendous results and realizes the vast potential that is yet to be leveraged. Erickson reveals that General Mills will continue to refine the focus of G-WIN.

"Our goal is to broaden this program so that we are connecting best-in-class external innovators with our best-in-class internal innovators to create even greater market momentum," he says. "I believe the next big advance that will reshape our industry has already been invented by someone outside of General Mills. Our goal is to find the invention first and apply it to our business ahead of our competition."