Long-term success — thriving, not just surviving — in the global chemical industry requires ongoing innovation. So, major manufacturers including Dow Chemical, Midland, Mich., Eli Lilly, Indianopolis, Ind., Eastman Chemical, Kingsport, Tenn., and AkzoNobel, Chicago, Ill., are adopting novel strategies to ensure good ideas become good business as quickly as possible.
Dow, which employs 6,000 research and development (R&D) personnel overall — 20% at the corporate level and 80% in different business units — has high expectations for idea generation across its entire R&D organization.
"Generating ideas and then supporting them onwards is key to the culture here at Dow; we are always looking for ideas for continuous development and 15–20% of a researcher's time is really spent on ideation. Typical examples of such new ideas include new control schemes, improved gas-phase modeling, new product solutions for customers, and new process solutions such as those delivered from the Dow Water & Process Solutions business," says Billy B. Bardin, R&D director for the Feedstocks and Energy Division, Freeport, Tex.
New ideas typically start with proofs of concepts. "There are funds set aside for these. Dow then uses a stage gate process to move proof[s] of concepts forward into development. To begin, a very informal, unbureaucratic process is initiated whereby the engineer/scientist concerned presents an overview of the idea to a small group of senior technologists and fellows. He or she would typically explain why they think the idea is worth pursuing and how they want to develop it. For ideas that are approved there is a budget set aside. The early steps are intentionally not very intensive because it is essential that we keep the curiosity of the team going. Again, it is our expectation that they continue to be curious in their work and identify new ideas," adds Florian Schattenmann, global R&D director, Core Research & Development, Midland.
Once it becomes clear that a project will be resource-intensive, the company follows a well organized path forward. "For example, determining the potential market value of a new technology needs to be well understood for it to be worth pursuing. Also, a clear technical approach has to be established and risk assessments have to be carried out. Based on these data, a resource plan is developed. As the project moves through the stage gates, other functions critical to success such as manufacturing and EH&S [environmental, health and safety] get increasingly involved," notes Schattenmann (Figure 1).
"Funding is based on research prioritization. If a particular idea has greater impact then it is much more likely to be funded," says Bardin.
This strategy yields thousands of ideas every year across the company's technology and manufacturing sites. "In that sense, it is a little bit like the classic example of drug development in the pharmaceuticals industry; a large number of drug candidates lead to the one that reaches the consumer. Similarly, here at Dow, we have thousands of ideas screened on a yearly basis to reach those that are successfully implemented," he explains.
"The businesses have so many ideas that they have to be screened very, very quickly so we can optimize resource utilization on those items that are most promising. We want a lot of options in the idea hopper," adds Schattenmann.
That such a strategy produces game-changers is amply illustrated in the company's chlorine chemistry operations. A couple of years ago, a researcher had an idea about the application of fundamental kinetic gas-phase modeling. Using 20,000 novel chemical reactions and detailed quantum-mechanical calculations for chlorination and cracking chemistry, a model was developed that could simulate five different processes used in nine different manufacturing plants. The first application of the model involved optimization of a novel reactor for allyl chloride production. The commercial reactor, designed based on the calculations and constructed without going through a pilot-testing phase, provided a 6–8% yield increase, just as the model predicted. The model also has led to the development of a liquid feed injection system that doubled the company's capacity for chloroform production.
"That single idea is now a critical part of our chlorination organics business and Dow is now the world leader in this kind of modeling," notes Bardin.
Eli Lilly views its Innovation Days as a critical source of new ideas. "This is an informal day and provides teams the chance to present a proposal and then run a project on a subject of interest. If ideas emerge from this short-term event that might take months or even years to investigate, then the company uses one of many more-formal programs to get the teams and investment together to further develop the project forward. As the project continues to progress, our management group is engaged for continued capital approval," explains Kenneth Savin, advisor for innovation and technology, small molecule design and development.
The latest Innovation Day took place in September, with the next slated for February 2014. "The preparation involved for some projects is quite extensive and we have found that six to nine months apart is about the ideal time," says Savin.
Lilly choses a number of themes for each Innovation Day, but staff are enouraged to come up with their own proposals, too. For example, a theme like process analytical technology typically might account for 30% of the projects suggested, but others would focus on disparate topics that employees see as interesting and valuable.
"It's also a way of better connecting different departments within the organization. For example, one department routinely uses imaging of automation and the development department may also have a similar interest. We have suggested that they team up and present a project on the next Innovation Day," notes Savin.
Innovation Day also teaches the basics of running a good experiment, he adds, because the members of each team must develop a hypothesis and experiment plan as a proposal to the organizers. They then have to run the experiment and present and explain both successes and failures to the entire group that participated in the event. This can be done either by a short presentation or by a poster paper.
"It's important to note that the Innovation Day is intentionally celebratory: there is food and drink and the company's executives are there, too," Savin emphasizes.
Some of the experiments carried out for Innovation Day he terms "quite odd in nature." One in particular has changed the way the Lilly thinks about chemical structures. Here, a team took a chemical structure that was in development, got the C13 spectrum of it, and then converted it to log base 2 — the same as the scale used in music. The team then played and recorded the corresponding musical notes and sent the music to a local symphony and other local musicians, asking them if they could improve the sound.
"With their responses, we reversed the process back through the spectrum and used it [to] modify our chemical structures. Ideas were produced that would never had occurred to organic chemists because the musicians weren't bound by the rules of organic chemistry as we know them. It has changed the way we perceive modeling and we are still running small projects with local musicians. Shell has collaborated with us on this and on other projects after hearing about this work," explains Savin.
Other successes have involved a project that has hugely changed how employees think about the design of processes and products, together with several that have solved complex process challenges.
Lilly provides a loose budget for projects and imposes very few rules, other than some restrictions on travel. So, for example, it gave the go-ahead to a group wanting to visit a whiskey manufacturer not too far away in Kentucky to observe how it manufactures and bottles products in the same facility — something that Lilly doesn't do and wanted to find out more about. The cost to the company was just the day out of the office of the people involved.
"The cost of the whole Innovation Day including materials would be perhaps $30,000–$50,000. However, the real cost to the company is in having 200 of its best people doing other than their normal portfolio work. The question we should be asking is, 'How can we afford not to do this?,' because, as management is fully aware, this where the game-changers come from."
Eastman Chemical runs an annual Innovation Event that operates in a similar fashion to the television program Shark Tank.
"We recognized the need for a mechanism by which individual contributors, especially those earlier in their career, could propose new technical and business ideas to upper management (VP level) without going through the long and arduous process of moving an idea up the ladder. The idea also coincided with our Worldwide Technical Conference, which provided an excellent forum for the first Innovation Event in 2011," explains Jason Jenkins, group leader with the company's Transformational Technology Research Lab.
Corporate technology VP Cari Parker champions the event, for which all staff are welcome to submit one-page proposals. The top six to eight of these are chosen by a group of senior scientists for presentation to a team of coaches in a public forum during the Worldwide Technology Conference. These coaches, typically five VPs, then make the final decisions on which projects get funded.
"There is no specified budget. If an idea is good enough, there will almost always be money available to pursue it," notes Jenkins. Four projects were funded in 2011 and five in 2012. The coaches still are deliberating about this year's offerings, which were presented at the conference in late September.
"In the first year, we saw more technology focused, process improvement or alternative feedstock proposals, but the emphasis has been changing to more market-facing proposals with clearly defined value propositions. This is in line with our transformation from a diversified to a specialty chemical company," he adds.
Already the company is seeing benefits from the Innovation Events. The projects have helped foster an atmosphere where novel ideas are welcomed and encouraged from all levels of the organization — and this has resulted in new internal capabilities. "We have also begun to explore new commercial opportunities, but given the timelines generally involved, we have not made it to market with any of the 'winning' ideas," says Jenkins.
Eastman values the willingness of a project proposer to "put yourself out there," which it regards as a key quality for its up-and-coming technologists. The company also may confer some small monetary rewards, but Jenkins describes these as "very modest at best."
AkzoNobel encourages entrepreneurial thinking for making better products than its competition by organizing Innovation Events. These bring together enthusiastic employee communities for a day of brainstorming to address challenges.
"We believe that 'none of us is as smart as all of us;' these events are therefore designed to benefit from our people's collective brainpower and a diversity of science, technologies, nationalities, backgrounds and businesses present — inspired by the energy, enthusiasm and willingness to help each other," says a spokesman.
The company also focuses on recognizing those who excel in incorporating innovation in their daily jobs (Figure 2). The main platform for this is the annual AkzoNobel RD&I (Research, Development & Implementation) Innovation Excellence Award, which honors teams that have turned creative ideas into significant business successes, displayed openness in achieving business goals and driven innovation throughout the company. The teams that submit entries are global and cross-functional in composition and involve members in marketing and production as well as research, reflecting the fact that innovation isn't just about research but involves many steps and different functional inputs.
The criteria used for judging entries are: the originality of the idea and the quality of the R&D involved in turning it into a sustainable product, process or service; proof of successful commercialization or the likelihood of significant impact; the extent of third-party involvement; and the potential for creating further opportunities.
Past winners have included the company's Asia Pacific pulp and paper chemicals business with Compozil Fx, a state-of-the-art, complete, interactive wet-end management system that has saved one user alone 200,000 tonne/yr of virgin cellulose fibers. A team of scientists and engineers from the U.K., Ireland and South Africa also won with Ecosure Matt, a high-opacity, durable, zero volatile organic compound, and low-odor wall paint that has 35% less embodied carbon than comparable matte paints.