Anders OhmannProject Management, Business Development

2

The challenge we have been given

“We have to increase the

organic growth that originates from innovation

by 50%.

Peder Holk Nielsen, CEO

”We need to bring more significant

innovations faster to the market.

“We need to fail faster.”

Sources: www.b.dk

Is about aligning the way we prioritize our efforts according to our strategy.

For example

� A scoring model guides on corporateimportance

� Prioritization is based on the right insight

� Option of accelerating projects while others mature

The outcome

We focus our efforts on the right projects at the right time.

Risk scoring

Risk score

Time to money

Peak delta sales

Project score

Attractiveness reflected in the project score

Business case

Project: [Project name] Score by x-mark Scored by: [Initials]

Parameter High risk 3 2 1 0 Low Risk Reason for scoring Guiding comments

Strength of value

proposition

Customer benefit is intangible and/or difficult to

measure.

Difficult value capture.

Clear and significant customer benefit.

No competing technologies.

Easy to capture value.

[Comments]

Customer benefits could be cost savings, strong

differentiation opportunity etc. High risk would cover intro of a 2nd generation product, where the customer needs to

spend time/resources to prove same benefit as 1st

generation product.

Market and customer

understanding

No close contact to specific relevant customers.

Contract signed with partner having good end-customer

insight

[Comments]

How well do we understand the value for the customers,

and how well is this documented. A high score on this parameter should give increased confidence in the

assessment of the value proposition strenght

Sales channels A completely new route-to-

market needed.

We can use existing sales

organization and sales

channels.

[Comments]Consider if distributors have conflicting interests in NZ

product vs. Other products

Customer

feasability

High CAPEX required.

Significant product testing.

New regulatory approving

(at customer).

Easy to implement in

customers production and

sales processes at no cost &

risk

[Comments]

Include consideration of conservatism within

industry/customers.

Be aware that the scoring should not be a weighted

average; a single "showstopper" is sufficient for a low

score.

Competitor

barriers

It will be easy for

competitors to fast present

a similar product.

We will be able to build IP

or other very solid barriers

preventing competitors

entering

[Comments]Be aware that the enzyme might be unique, but there could

be future other competing technologies

Customer

application

knowledge

No NZ experience with

application.

Established application where our testing

capabilities mirror those of

our customers

[Comments]

It should be considered if we understand the full production

process at the customer and understand any adverse effects

of our products

Technical

feasabilty

Large technical gap, which

we are not sure we can fill.

Minor modification of

existing technology[Comments] Can we find the molecule? Can we develop an application?

Production

feasability

(profitability)

Not confident that we can

produce at an acceptable

cost (no experience in this

field or low yields)

We are confident that we

can produce economically

feasible based on solid

experience

[Comments]

Licence to operate

(regulatory, IP

and safety)

Significant constraints.

Existing competitor IPNo expected constraints [Comments]

Be aware that the scoring should not be a weighted average; a single "showstopper" is sufficient for a low

score.

Strategic fit Outside scope of IS. High priority area in IS [Comments]

Importance to

Novozymes

(top mgt. Support)

Limited application.

Single opportunity only

Potential blockbuster; Key

element in building platform

for future growth

[Comments]

Importance to NZ; Top management support/interest. The

product/project might be important in the Industry Strategy

without having significant impact on Novozymes

Competencies

and production

capabilities

We need new competencies

and/or new production

technology.

Building on existing

competencies and known

production technology

[Comments]

Resources availability

No capacity available.Sufficient resources

available[Comments]

Will depend on the project prioritization, but for a number

of projects, it might be obvious up-front that the project might suffer from lack of resources

Market

Technical

Organizatio

nResources

Time to Money

Peak sales

Is about allocating the right resources to the right projects at the right time.

For example

� Projects manned with cross-functional resources from start to end

� Fixed resource allocation pulse

The outcome

One transparent and structured approach to handle the growing task of allocating the right resources to the right projects.

Is about strengthening cooperation across teams, functions and industries, integrating our technical and commercial expertise.

For example

� One common New Product Development process

� At any stage in the process both commercial and technical perspectives are applied

� New stages and activities to ensure that new products reach the market right

Outcome

We unite our efforts even better to bring more innovation faster to market.

What is new in the New Product Development process?

SCOPING LAUNCHDISCOVERY DEVELOPMENTFEASIBILITY

10

SCOPING LAUNCHDISCOVERY DEVELOPMENT

DEVGate

LCHGate

DISGate

FSBGate

IPGGate

SCPGate

FEASIBILITY

FULL VERSION1

IDEA

MATURE FOR DISCOVERY2

LAUNCHDISCOVERY DEVELOPMENT

DEVGate

LCHGate

DISGate

IPGGate

SCOPING

SCPGate

MATURE FOR DEVELOPMENT3

LAUNCHDEVELOPMENT

DEVGate

LCHGate

IPGGate

SCOPING

SCPGate

Scoping of new projects

Fast tracking

SCOPING LAUNCHDISCOVERY DEVELOPMENT

DEVGate

LCHGate

DISGate

FSBGate

IPGGate

SCPGate

FEASIBILITY

STANDARD PROCESS: NORMAL RESOURCE ALLOCATION1

FAST TRACK PROCESS: INTENSIVE RESOURCE ALLOCATION2

DEVGate

LCHGate

DISGate

FSBGate

IPGGate

SCPGate

SCOPING LAUNCHDISCOV-ERY

FEASIBILITYDEVELOP-MENT

1) Identify key decisions and knowledge gaps

2) Make a visual plan together

3) Follow up in the team

4) Take decisions based on learnings

Integration event

Learning cycles

We use Rapid learning cycles to mature our ideas as fast as possible

Is about creating and using the right information, at the right time.

For example

� More specific requirements at each stage

� Clear guidelines on how to work with data

� New IT system for ease and transparency

Outcome

We improve decision making and increase empowerment to operate once requirements are met.

What were our challenges before we started?

Market

Data

Historical

Tracking

Sales Forecast

Periods

Market Definition

One single business case fitting all industries

What should we do with all those different business cases?

Those guys are all goodbut so different!

We need to find a way to incorporate all those good ideas

into one place

and it needs to be simple, transparent

and trustworthy

Portfolio views prepared to guide decisionsPortfolio views will ensure transparency and guide

What could happen to a business case

Time

Sales forecast

Sales seeds, leads and opportunities

Gaps

?

?

LAUNCHDISCOVERY DEVELOPMENTFEASIBILITY

The futureWhat does it look like when we get there?

Excited customers

Our customers find our products suit their exact needs and help them grow their business

Stronger products

Together we develop new products that hit the market right, every time

Clearer priorities

Decisions and priorities are transparent and logical to everybody in Novozymes

Cooperative mindset

We cooperate smoothly across teams, functions and industries, integrating our technical and commercial expertise

What key tools are being introduced or strengthened?

• Project scoring tool* Scoring of risk

• Resource allocation process

• New stage-gate NPD process* Fast tracking* Rapid learning cycles

• Standardized business case tool

• Portfolio reporting

Thank you!