Nov 29, 2021

How to Build an Innovation Strategy

Land O’Lakes Animal Nutrition business transforms its innovation efforts with an eye to the future

When David Bravo took over two years ago as Director of Innovation and Technology Scouting at Land O’Lakes Inc.’s Animal Nutrition business, he found a traditional organization relying on internal research and development to drive innovation.

The R&D group was staffed with scores of talented scientists pursuing various promising technologies, but the division lacked an innovation strategy to drive sustainable growth.

This recognition was the start of an immense effort to overhaul the division’s innovation system to one that capitalized not only on Land O’Lakes’ internal R&D but also incorporated valuable opportunities from the external ecosystem.

The changes made in the past two years have turned Land O’Lakes into an innovation powerhouse, a transformation of its strategy and approach that contains lessons for other organizations struggling to create a well-oiled innovation machine.

Understanding the company’s existing innovation strategy and underlying processes was the first step in revolutionizing Animal Nutrition’s innovation structure.

“If you are not able to articulate your innovation strategy, then you don’t have innovation strategy in your company,” Bravo says.

This requires the company to have a long-term perspective and understand the challenges it might expect over a five- to 10-year horizon.

Successful innovation efforts look beyond internal R&D to leverage the host of opportunities available from outside sources. An innovative company will also have processes for developing new ideas into viable products, with a system of governance that allows a dynamic monitoring of the innovation portfolio as well as measurable metrics to keep everything moving along.

If any of those components are missing, it is time to rethink the innovation strategy.

Building a process

While an organization might occasionally get lucky with a combination of random opportunities that crosses its radar, and some lucky breaks, winning at the innovation game requires a system.

After securing the support of the leadership across the Animal Nutrition business unit, the task of building an innovation system started. The company adopted a four-phase structure – the scouting process, the innovation process, the product development process, and postlaunch R&D.

At the front end, a scouting team brings into the funnel new opportunities, partnership or acquisition candidates and technology licensing opportunities.

As opportunities advance through the front-end funnel, they can transition into the next phase, the innovation (incubation) process, and then the product development process. Opportunities can also enter the process in the mid and late stages of the pipeline, but those opportunities would need to be lower risk than those entering the pipeline earlier.

“In the last couple years, our business and innovation leadership team revisited and refocused our innovation strategy and priorities,” says Adam DeRosier, general manager of Land O’Lakes feed additives business.

“In hindsight, that was the most important and easiest portion of our journey. We had established a newfound clarity by developing distinct innovation platforms with well-defined narratives on where we would play and how we will win.”

The bigger challenge, says DeRosier, was delivering on these strategies through innovation management and governance.

As Land O’Lakes has discovered, innovation is a not necessarily a linear process. It can take years to generate value, and it can be hard to measure definitively.

Many companies fail when pursuing innovation because they do not have the patience to wait for the results. Instead of letting innovation set the pace, an organization’s leaders may be tempted to rush the process. But that rarely ends well.

Measuring the progress of projects in the innovation pipeline with an objective scoring system provides measurable results that can stave off the urge to hurry up the completion of a project.

Acquiring the right tools

When Land O’Lakes feed additive business began its quest to remake the innovation system, it did not worry too much about selecting an innovation software platform. Its innovation system was simply too immature to need the robust tools an innovation platform would provide.

Today, however, Land O’Lakes uses Wellspring’s end-to-end innovation platform because it lets it have a single “source of truth” for all innovation activities across the entire pipeline.

Wellspring is a provider of Innovation Ops software and solutions for corporations, universities and government agencies. It helps clients succeed in today's innovation economy by coordinating global R&D and innovation programs – managing development portfolios, researching technology trends, finding innovation partners, identifying startups, and commercializing inventions.

“Today’s global innovation landscape – specifically in the world of agribusiness – is incredibly complex and competitive,” says Vinny Kaimal, vice president of Customer Success, Wellspring.

“Yet, many businesses lack the tools, know-how and expertise to operationalize innovation ops efforts so it can generate tangible and sustainable innovation success.”

A key goal for Land O’Lakes was to overhaul its innovation approach in one of its emerging, high-growth business segments.

“Corporations often misunderstand how innovation works in large companies,” says Kaimal. “Without a well-defined system, processes, accountability and performance metrics, innovation is doomed to be ineffective."

Wellspring’s end-to-end innovation software enabled Land O’Lakes to embed its innovation processes into a platform that coordinates activities company-wide, provides visibility to all stakeholders and serves as the “single source of knowledge” for all innovation related activities.

In addition, the powerful Scout platform enables Technology Scouts to access the latest research, IP and investment information via a single source.

“Prior to implementing Wellspring’s innovation platform, we lacked a centralized and consistent approach to track and manage our innovation scouting and projects,” says DeRosier.

“With the Wellspring platform, we found a great balance of customization and standardization to quickly set up an innovation platform to meet our specific approach.”

Wellspring’s innovation platform shines light on a company’s innovation activities and brings transparency and accountability. This, in turn, helps the company truly understand what it is they are doing, and how well that aligns with the company strategy.

“By understanding what they actually do, vis-a-vis innovation, they are able to better optimize their innovation system, better manage their portfolio and make adjustments, and execute their innovation strategy,” says Kaimal.

Looking to the future

Building an innovation system requires patience and a willingness to adjust, but the dividends can be great.

For that reason, it’s important to monitor the health of the innovation system and to make sure it’s working as intended.

The key to an enduring innovation system is to create a culture that values innovation throughout the company. The Animal Nutrition Business unit of Land O’Lakes expects the new innovation system to start delivering real value over the next two to three years as some of the transformational opportunities enter the market.

“Stay tuned,” says DeRosier. “We are excited on the progress of our pipeline of new feed additive products derived from phytogenic, or plant, molecules. The operational capabilities of Wellspring and the Patent/IP landscape function (SCOUT) was a great enhancement to these innovation projects.”

Lisa Cleaver

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