Unilever Israel is making waves in the innovation landscape with its dynamic approach to driving global impact through strategic partnerships with startups. In an exclusive interview* with Liat Lavee, Communication, External Affairs & Sustainable Business Development Manager, and Yael Brandt, Digital Transformation, Customer Development Manager, they shed light on the innovative activities happening at Unilever Israel and how the company leverages open innovation to solve challenges both internally and externally. Discover how Unilever Israel's collaboration with startups is transforming local grocery stores, fostering digital transformation, and creating a platform for scalable growth in the consumer goods industry.
- Tell us about innovation activities that are currently taking place at Unilever Israel
- We work closely with Earthbound, which is Unilever’s Open Innovation Port, based in Israel. This Port is seeking solutions for various needs that we have at Unilever, globally as well as in Israel. We also actively find solutions for different challenges that we have outside the company and across Unilever worldwide. We have ties with Academia and hi-tech companies to generate value for the company. The most recent element, for instance, was internal innovation driven by a Global Idea Hackathon that engaged employees across the world to come up with innovative ideas. After the contest, a bunch of chosen employees received time and resources to develop their ideas further.
- Can you give an example of a challenge the organization had, which was solved by an idea that involved a startup or had an internal source?
- Three years ago, we thought about local grocery stores, which are part of our business ecosystem, and their challenge of having an online presence. Marketing is challenging for such local stores due to limited time and resources, making it even harder to handle digital realms.
We started scouting for startups that could accelerate the ability of our customers to have an online presence while integrating into their various systems, like the cash register. We eventually partnered with Self Point, a digital e-commerce startup, to develop a digital platform solution and offer these grocery stores an onboarding experience to digital, which only takes a couple of weeks, mostly subsidized along with the needed training and support. For this initiative called “Shopo,” we have a dedicated program manager who creates marketing campaigns and sells this to stores, supports them with achieving their online goals. It is Unilever’s innovative non-product brand that grew out of an internal idea in Israel. “Shopo” had its budget, resources, and, most importantly, the license to try and fail. It is a big deal for such a global corporation.
- What do startups gain from working with Unilever compared to other corporations?
- Unilever is one of the world’s largest consumer goods companies. By working with Unilever, Israeli startups can gain an opportunity to scale up globally. Second, based on the stage they’re in, startups need access to real markets to test their assumptions and see if their products get traction and generate value. Our knowledge, experience, and crucial channels are essential to their ability to improve products on the go.
- Do you have a central function working with startups? Members of the business units? A combination of both?
- It is a combination. We don’t have an official innovation management function but rather a digital and innovation forum, chaired by Unilever Israel’s CEO. One of the priorities of this forum is open innovation. Members of this forum went through a process of defining organizational challenges and are often part of identifying solutions and following through. Therefore, the relevant sections from the units are directly involved with the startups. We also have business functions as part of this forum, like regulatory affairs and legal, that are traditionally resistant to innovation and being part of the change.
- At what point is a decision made that a startup related project will become part of the work plans?
- The head of the relevant unit makes the decision, but the link to that unit starts from the beginning of the project. When we identify a startup that has potential benefits, we involve the relevant professionals from that unit and consult with them. If they are interested, then we can guide them on the correct way of working with startups and connect them to key functions within Unilever. The driving force to such a project, however, must come from those professionals within the units since they have the clearest understanding of the potential benefits and the best chances of overcoming the possible implementation obstacles. Those project leaders get the required support internally from expert functions such as Information Technology.
- What would you say are currently the most significant challenges of this process?
- One of the biggest challenges is to understand the startup world. Unilever is a corporation with its own culture and pace. Startups are often more energetic in their availability, mood, and focus areas. We are required to work with the internal teams that are startup facing and guide them in dealing with those startups. It is our responsibility to coach the internal teams that this is a normal part of working with such young companies. One thing that works in our favor is that the participants of these internal teams have realized that working with startups contributes to their skills and professionalism, assist them in becoming more flexible, being more daring and starting to think outside the box.
- For readers who are taking their first steps in setting up corporate innovation activities, what would be your advice for them?
- It is crucial to involve the company leadership to have outcomes in the form of startup-related projects becoming part of organizational work plans. Hence, engaging the broader teams is vital because, as we stated earlier, by having people from the units driving the projects forward, we can have much higher quality outcomes. This engagement can be achieved by making sure they understand what the personal benefits are. Employees have much to gain from working with startups. Identify those who are passionate about driving change and innovation and engage them early in the journey.
Lastly, understanding the world of those startups in terms of their needs, and how they function and think is essential since it is very different from corporations. As innovation managers dealing with startups, having this skill is critical because you spend a lot of time and effort with these young companies, and you must understand and appreciate their world to be successful.
Technically speaking, this manifests itself in the form of a payment schedule, rapidly onboarding startups via the procurement process, etc.
* Interview conducted in 2021