OPERATIONAL EXCELLENCE IN INNOVATION DAVE MADIGAN
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OPERATIONAL EXCELLENCE IN INNOVATIONDAVE MADIGAN
DIAGEO AT A GLANCE
34,300 Diageo employees
£12bn NSV
6.5 billion litres of drinks
180Markets worldwide
200,000+ customers
30,000+ suppliers
15,000 Supply
employees worldwide
£
OUR PURPOSE: CELEBRATE LIFE EVERY DAY EVERYWHERE
OUR AMBITION: BE THE BEST PERFORMING, MOST TRUSTED ANDRESPECTED CONSUMER PRODUCTS COMPANY IN THE WORLD
SOME OF OUR BRANDS
Can we apply operational excellence practices to improve our innovation
performance?
THE CHALLENGE
Standard KPI’s &
benchmarks
Standard, Codified Ways of Workingfor all Supply Chain Activities
Capabilities built in all our teams to drive performanceRoles and organisation optimised
Standard systems
Standard Performance Management - run the business
&improve the business
Verification to global best practice
OPEX FRAMEWORK
CREATIVITY VERSUS CONTROL
CREATIVITY VERSUS CONTROL
CONCEPT DEVELOPMENT• Consumer centric• Highest standards of
product• No constraints
COMMERCIALISATION• Codified, fast and
efficient• Focus on quality,
speed, productivity
‘4C’ OPEX APPROACH TO INNOVATION
Creativity – lay the R&D groundwork for future product innovations
Codification – one, simple, consistent and fast way of doing things
Control – understanding performance and improving it
Capability – everyone has the tools and capability to do their job brilliantly
‘4C’ OPEX APPROACH TO INNOVATION
Creativity – lay the R&D groundwork for future product innovations
Codification – one, simple, consistent and fast way of doing things
Control – understanding performance and improving it
Capability – everyone has the tools and capability to do their job brilliantly
R&D GROWTH MODEL
R&D GROWTH MODEL
R&D GROWTH MODEL
R&D GROWTH MODEL
R&D GROWTH MODEL - APPLICATIONS
Fermentation Science
Wood Science
‘4C’ OPEX APPROACH TO INNOVATION
Creativity – lay the R&D groundwork for future product innovations
Codification – one, simple, consistent and fast way of doing things
Control – understanding performance and improving it
Capability – everyone has the tools and capability to do their job brilliantly
INNOVATION STAGE GATE PROCESS
Opportunities
Idea and
concept
exploration
Product
concept
development
Commercial
developmentLaunch
Gate 1Idea
Approval
Gate 2Project Scope/Concept Idea
Gate 3Concept Approval
Gate 4Test Market
Approval
Gate 5Launch
Approval
Gate 6Quarterly
Innovation Review
Life cycle
Stage
0Stage
1Stage
2Stage
3Stage
4Stage
5Stage
6
Test
market
BEST PRACTICE IN PLANNING & EXECUTION
Pipeline
Planning
Prioritization
3P WCC
#SIMPLIFY
‘4C’ OPEX APPROACH TO INNOVATION
Creativity – lay the R&D groundwork for future product innovations
Codification – one, simple, consistent and fast way of doing things
Control – understanding performance and improving it
Capability – everyone has the tools and capability to do their job brilliantly
GARTNER HIERARCHY OF NPI METRICS
GARTNER HIERARCHY OF NPI METRICS
INNOVATION AND BRAND CHANGE KPIS
Business Performance
NSVProject ScaleGrowthSustainability
Operational Excellence
Perfect Project Delivery
Speed to marketProductivity / ROIProject Scale
KPI EVOLUTION – RAISING THE BAR
Perfect Project Delivery vs Gate 5
commitments
Perfect Project Delivery vs Gate 3
commitments
Innovation misses (absolute)
Innovation misses (absolute) enhanced definition*
TimeCostQualityBudgetCase fill 3 mthsQuality 3 mthsExpeditionReworkCost absorption
TimeCostQuality
TIERED PERFORMANCE MANAGEMENT
VISUAL MANAGEMENT
‘4C’ OPEX APPROACH TO INNOVATION
Creativity – lay the R&D groundwork for future product innovations
Codification – one, simple, consistent and fast way of doing thins
Control – understanding performance and improving it
Capability – everyone has the tools and capability to do their job brilliantly
CAPABILITY: E-LEARNING
CAPABILITY: DIAGEO TV
CAPABILITY: R&D LEADERS PROGRAMME
R&D Leaders Master Classes
Focused development of key R&D Leadership skills
Planned Experiential Learning
Combining training, responsibility and exposure
Strong baseline Technical / Management
Embedding the core technical / management skills
‘4C’ OPEX APPROACH TO INNOVATION
Creativity – lay the R&D groundwork for future product innovations
Codification – one, simple, consistent and fast way of doing things
Control – understanding performance and improving it
Capability – everyone has the tools and capability to do their job brilliantly
CASE STUDIES
• Text or graphic
AGILE MANUFACTURING – THE CUBE
RAPID TESTING – OPEN GATE BREWERY
THANK YOU
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