Webinar: KLM Royal Dutch Airlines: A Lean Approach to Open Innovation

1. Webinar: KLM Royal Dutch Airlines: A Lean Approach to Open Innovation Innovation Masters Series October 21, 2014 Rogier van Beugen, KLM Geoff Carss, Imaginatik

2. Why the Innovation Masters Series? • Hear about innovation best practices from real-world practitioners • Advance the state of the art of innovation discipline • Share your perspectives and learn in a “community” setting

3. The Age of Innovation Today’s leading companies excel at both Operations and Innovation

4. Innovation Programs Imaginatik works with clients to build Innovation Programs that unlock new levels of innovation maturity. Innovation Maturity Framework

5. Sustainable Innovation Competence The core elements of a mature enterprise-wide sustainable innovation competence

6. Today’s speaker Rogier van BeugenDirector of Innovation, KLM Royal Dutch Airlines Rogier is the Director of Innovation at KLM Royal Dutch Airlines. Over the past decade, Rogier has held a number of leadership roles at KLM Royal Dutch Airlines. The focus of the past three years has been organizational change, including innovation. Rogier is responsible for stimulating employees to be innovative and optimizing innovation by bringing in external ideas and inspiration.

7. KLM’s innovation strategy & the Green Aruba Challenge • Introduction to Air France KLM and the aviation industry • Innovation Strategy @ KLM • Open Innovation endeavors

8. Air France-KLM is a global leader in air transport with more than 77 million passengers and €25.5 billion in revenues in 2014 KNOW HOW FLEET MODERN, FUEL EFFICIENT NETWORK & HUBS BRANDS

9. Airline traffic will double in the coming 20 years

10. Industry characteristics Core business unchanged since foundation in 1919 All Competitors have access to same suppliers (OEM’s) Highly cyclical, commoditized industry

11. Competition = Battlefield Compete where all competitors have the same ‘hardware’ Where costs are everything Where all competitors share (roughly) the same business model

12. The world around us is changing rapidly with many potential game changers impacting our industry… Urbanization / Megacities Emerging economies/Rise of middle class Aging population Migration Imbalanced population growth Personalization& Choice Transparency & Trust Generation X,Y,Z Digital Natives Automation & Robotics Digitization & Internet of Things Environmental concerns Big data analytics 3D Printing Globalization & State Capitalism Changing workforce Exponential Change Networked organization Re-shoring Energy game changers Security

14. Sources of innovation • Use knowledge & Capabilities • Enhance products & services • Improve processes • Develop skills • Find value outside • Other industries • Technology Developments • Startups

15. Key elements of KLM’s innovation strategy

16. KLM is a leader in sustainability, which is recognized by its unique WWF partnership & 8 year consecutive number 1 position in the DJSI 8 times #1 sector leader, 4 times #1 super sector leader • KLM targets and measures: • Climate action Plan follow up: • From 2007 carbon neutral growth with enablers on low, mid and high impact level, including offsetting. • Partnership WWF 2008- 2012 and renewed to 2015, including biofuels: • 20% CO2 savings in 2020 and 1% biofuel in 2015.

17. Open Innovation plays a key role in KLM’s innovation approach Reducing Costs & Adding New Revenues Connecting Knowledge & Resources Our main OI challenges KLM Engagement Strategy & frameworks Culture Specific competencies Internal Open Innovation Technology Scouting Corporate Venturing

18. KLM’s Green Aruba Challenge • Why did we do it / why Aruba? • The partnership KLM-ARUBA • What did we do? • What was the response? • Selecting the winner

19. Why Aruba? But we wanted to do more… biofuel flights can go anywhere

20. Green Aruba: world-wide recognized ambition Mike Eman, Prime Minister of Aruba about Green ARUBA: ” We looked for a development where we could connect growth and progress to wellbeing of our society” Richard Branson: “Aruba will set the lead for all other Caribbean islands” Source: TedXBinnenhof 31 march 2014 - Global challenges Dutch solutions

21. The objective: help Aruba reach their goals through entrepreneurship • The prize: launch of their business on Aruba (parallel to launch of biofuel flights) • Activating the Dutch and Aruban ‘green’ startups to contribute • Using the combined KLM and Aruba networks • Finding the best innovations and supporting them Building an entrepreneurship challenge

22. Dividing the effort • Feet in both continents • KLM main organizer of the challenge • Aruba facilitator of the prize (launch of 2 x 2 weeks, stay on Aruba) • Commitment from Aruba to help bring the winner but also other submissions forward The partnership Aruba - KLM

23. Using Innovation Central as the platform

24. Winner takes off The selection process 50 + solutions e.g. 10 good idea’s Top 5 concepts Challenge Jury on Bonaire Dutch Jury KLM Team 3 weeks 2 wkn 2 wkn April 28th May 2nd May 17th April 7th Online Offline Offline

25. 1st selection will be done online by expert team comparing pairs of concepts

26. Semi finals; Dutch expert jury

27. High profile jury in the finals

28. And the winner is…

29. The results • 50 (proper) submissions • Strong top 20 • Excellent top 5 • Great reception on Aruba, in media but also among relevant partners both in NL and on Aruba (government, airport etc.) • 3 from top 5 have started business • Very positive perception; internal and external

30. The winner has successfully launched!