ISSUE 1 -11CINO ISSUE - CINO
CHIEF INNOVATION OFFICER Magazine “
innovation at 30,000 feet We talk to Yann Barbaux, CINO at Airbus
Also:
Carie A Davis from The Coca-Cola Company talks us through her role as Global Director of Innovation and Entrepreneurship at the drinks giant and we talk to Marie Zhang, CINO at Long John Silver’s
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LETTER FROM THE EDITOR Welcome to the first issue of Chief Innovation Officer. We are very excited to be able to bring you this brand new magazine at a very exciting time for corporate innovation and CINOs in general. More companies are adopting Chief Innovation Officers every day and we wanted to bring you stories from some of the most important and influential CINOs in the world today. This is why the magazine and websites were created, to spread new ideas within innovation as a business function. With Innovation Enterprise running the best known Chief Innovation Officer summits in the world, we have unique access to the keenest minds currently working at the top of the function. This issue is testament to that; we have brought together some of the most revolutionary and powerful companies in the world to discuss their innovation programmes. We hear from Coca Cola, Airbus and General Motors as well as many others in this issue, each
Chief Innovation Officer
looking at different elements of innovation within their companies. We hope you enjoy the magazine, it has been created to help spread new ideas within innovation and Chief Innovation Officers, so if you have any feedback please get in touch with me at ghill@theiegroup.com. Also, if you like the magazine, please share it.
George Hill Managing Editor
Managing Editor: George Hill Assistant Editors Simon Barton Art Director: Joe Sanderson Cover Design: Chelsea Carpenter Advertising: Hannah Sturgess hsturgess@theiegroup.com
Contributors: Carie A Davis Are you are looking to put your products in front of key decision makers? For Advertising contact Hannah at hsturgess@theiegroup.com
Yulia Ivanova Richard Angus General Enquiries: ghill@theiegroup.com
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CONTENTS
5 HOW ARE COCA-COLA INNOVATING? Carie A Davis from The Coca-Cola Company talks us through her role as Global Director of Innovation and Entrepreneurship at the drinks giant
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INNOVATION IN HEALTHCARE
INNOVATION AND FAST FOOD
We talk to CINO at Boston Children’s Hospital, Naomi Fried.
How are Long John Silver’s innovating within food, social spaces and fried fish?
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INNOVATION AS AN INVESTMENT AT UNILEVER Andy Donner, from Unilever Ventures, discusses innovation in investments
WANT TO SEE YOUR ARTICLE HERE? CONTACT GEORGE AT ghill@theiegroup.com
INNOVATION AT 30,000 FEET
ARE YOU KEEPING UP?
As Air Travel has become more popular, we talk to Yann Barbaux, CINO at Airbus
GM have a base in Silicon Valley. We discuss the relevance of this with Frankie James.
FOR MORE DETAILS
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Chief Innovation Officer Summit
#CINONY
December 2—3 New York | 2014
For more information contact Emma Pawlowski +1 415 670 9814 epawlowski@theiegroup.com http://theinnovationenterprise.com/ summits/cino-summit-new-york-2014
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HOW ARE COCA-COLA INNOVATING? Carie A Davis Global Director of Innovation & Entrepreneurship at The Coca-Cola Company
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How many times have you heard the word innovation today? It’s a lofty word; something often discussed but rarely achieved. It’s probably someone else’s job, right? The truth is that Coca-Cola relies on innovation in every area of the business in order to grow – and there are teams and resources throughout the system dedicated to driving innovation. Throughout our history we’ve proven that innovation can come from anywhere. It’s rooted in a good idea, and realized when that idea is brought to life. At Coca-Cola, we don’t suffer from a shortage of good ideas. What we often lack, however, are the skills to make those ideas real.
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BIG DATA: HELPING YOU WALK HOME AT NIGHT
Fortunately, the Innovation and Entrepreneurship team has spent the past year learning these skills and testing ways to apply them to our core business. The team has been partnering with startup communities and successful entrepreneurs who have mastered the art and science of launching businesses from nothing. They’ve become experts in the “lean startup method” – a deliberate approach used by entrepreneurs to explore ideas using limited resources. And the team is eager to help you learn and apply these methods towards the pursuit of new ideas and emerging opportunities every day. Entrepreneurs are only successful if they can create things that people really need or want. They take smart risks to explore opportunities and experiment their way to real solutions. They have limited resources, but they use their fuel efficiently to minimize risk before executing ideas. They practice a few simple methods that we can learn and apply across the system. The most important aspect of working like an entrepreneur is the willingness and ability to take risks. More specifically, small-scale calculated risks. This means making decisions to move forward with 80%
certainty. It means acting like an owner. It means not asking permission, since everyone has the authority to say no but very few feel empowered to say yes. In a large organization where risk-taking is seldom celebrated or rewarded, we must all make a deliberate effort to increase our risk tolerance. When did we forget how to talk to people? Entrepreneurs begin initiatives with a customer need, not a product idea. This requires validating the problem before designing a product or service for the market. It means talking to customers (e.g. users, consumers, partners, internal teams, stakeholders) early and often to collect evidence, make observations, and build context, then being willing to change course based on what you find. Building products based on assumptions about the market embeds risk into the initiative. Customer development is critical to determine if solutions have a
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Entrepreneurs are only successful if they can create things that people really need or want.
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BIG DATA: HELPING YOU WALK HOME AT NIGHT
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Anybody can be an entrepreneur - lean startup methods aren’t right for every challenge.
market before entering into stages and gates to execute and scale. It’s important to learn and iterate with quick, small-scale tests. Entrepreneurs don’t like uncertainty - so they minimize it through iterative cycles of building, measuring and learning. They work in quick sprints and regularly evaluate when to move forward, when to pivot and when to stop. Through this process, they reveal if there is a “product + market fit” – and only after they validate the fit do they put resources against execution. Now Feels Like a Good Time to Start. Here are a few things you can do today to start working differently as you pursue new ideas and emerging opportunities.
But what can people do to actually make a start when pursuing ideas and emerging opportunities - First of all, you should plan a day to go out and talk to customers (e.g. users, consumers, partners, internal teams, stakeholders) with your team. Don’t pitch your ideas too soon. Just listen, observe and learn. Ask them what bothers them, how they solve problems, and how they behave in certain situations. Don’t show them your idea and ask for their opinion. People lie. And these lies can harm innovation because they lead us to believe that people will behave in a certain way – but they probably won’t. Don’t base decisions on future assumptions. Focus instead on current facts. Design your first experiment. What are you currently working on? Challenge yourself to identify the biggest assumption built into that project. What must be true in order for this initiative to be a success? Now run an experiment to test that assumption. It’s also important to not break your own rules - think about something you’ve been hesitant to pursue. Maybe you don’t have time, or resources, or permission. Now imagine
– what’s the worst that can happen if you go after it? Take a risk. Take action. Demonstrate leadership. Act like an owner. Don’t attack it the typical way. Challenge yourself to spend less time, and no money. Extreme constraints breed entrepreneurial behaviors. You’ll surprise yourself with the results. Perpetuate a culture of entrepreneurship and make it resonate with your staff. Whether you’re a senior leader or it’s your first day at the company, there are things you can do to promote entrepreneurial thought and action. Take calculated risks, and praise others for doing the same. Celebrate failures as learning opportunities, and remain open to the idea of killing projects that aren’t working. Challenge
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assumptions and encourage your teams and peers to validate problems before building solutions. Additionally, learning to work differently is a process that must be practiced. The Innovation + Entrepreneurship team regularly hosts engaging, hands-on events to help accelerate the pace at which we learn. Anybody can be an entrepreneur - lean startup methods aren’t right for every challenge. They are best applied where the problem is unclear and the solution is unknown. Even then, we find that entrepreneurial
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innovation methods are challenging to implement because of existing processes that are focused on efficient execution. And this is critical, and cannot be ignored. But meeting growth goals in the current environment of limited resources and fast moving new market entrants requires more. We need to create the conditions to allow entrepreneurial innovation to thrive and deliver results. It starts by establishing a group of forward-thinking doers with the skills and motivation to attack emerging opportunities very differently. If not you, then who?
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IS IT POSSIBLE TO INNOVATE IN HEALTHCARE?
IS IT POSSIBLE TO INNOVATE IN HEALTHCARE? We ask Naomi Fried, Chief Innovation Officer at Boston Children’s Hospital
Yulia Ivanova
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IS IT POSSIBLE TO INNOVATE IN HEALTHCARE?
Healthcare is one of the most highly regulated industries in the world. A single mistake doesn’t just cost a company money, but it can mean life or death for thousands of people. It is for this reason that innovations within healthcare are often seen as being incremental changes, adaptations of processes rather than fully formed new ideas and breakthroughs. We wanted to discuss this with somebody who knows all about the importance of innovation within healthcare, so we were lucky enough to be given the opportunity to talk to Naomi Fried, Chief Innovation Officer at Boston Children’s Hospital. Naomi has held a number of senior positions in the healthcare industry for over a decade and has implemented some of the most important and forward thinking innovation projects at Boston Children’s Hospital. As I mentioned before, many within innovation are under the belief that healthcare is one of the tightest regulated industries in which to innovate and implement new ideas. I
wanted to get Naomi’s opinion on this, having managed to innovate so impressively within the industry.
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She says, ’I think that healthcare is a very complex industry and therefore difficult to innovate’, yet it seems that she is managing well. According to Naomi, it is essential to think about three separate parties within the innovation process, ‘The patients, the piers and the providers’. Each new idea can have a profound effect on each of the three, meaning that all decisions and new implementations needs to have a thorough process of deliberation with each party considered.
The complexity of innovation due to the number of partners is actually an opportunity within itself. Naomi explains that ‘there is actually a lot of opportunity because of product, service and payment model innovation’. So despite each individual innovation having a butterfly effect for the other partners, the reality is that with three separate aspects, the areas where innovations can take place are significantly increased compared to the traditional innovation models. Therefore, Naomi is of the belief that healthcare is ’ripe
for innovation and a huge opportunity’.
We want to know the story in the picture and the story behind the video. With this in mind I was curious to see what Naomi’s opinion is of the formalising of an innovation role within the C-suite and executive levels of companies. This was particularly relevant for Naomi as she was the first Chief Innovation Officer at Boston Children’s hospital. She was keen to explain how she believed that having a Chief Innovation Officer and a team dedicated to new innovations was incredibly helpful to an overall innovation goal. She does point out that, ‘It doesn’t mean that the group is solely tasked with innovation, the way we are set up within our innovation creation program, is to capture and encourage innovation and support others in innovating’. Therefore, despite having a role based in innovation, the job is
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increasingly becoming about spreading innovation throughout an organisation, allowing others to innovate and creating situations where it is possible to do so. This spread of innovation throughout the organisation brought us into the realm of the actual roles of a Chief Innovation Officer in today’s company. It is something that has been discussed extensively, as even though it is now a well recognised role, the actual responsibilities involved in it are not universally known or shared. Often these are dependent on the individual, company or industry, something that Naomi points out - ‘I think that chief innovation officers come in different forms, flavours or types and they have they tend to have a different series of responsibility’. One of the key elements of this is that many do not know what role and responsibilities of CINOs within a particular company consists of, it varies considerably between industries and expectations within individual businesses.
Chief Innovation Officer
IS IT POSSIBLE TO INNOVATE IN HEALTHCARE?
Rather than formalizing this, Naomi believes that flexibility could be embraced for each individual, ‘there are many roles that chief innovation officers can play. Each organisation has to figure out what type of innovation capability can best benefit their organisation’. One element that Boston Children’s Hospital has done to see which innovation capabilities can best benefit their organisation is through ‘Innovestment’ a fund that allows ‘innovators at Boston Children’s Hospital [to] construct prototypes, collect data and test solutions’. It is an example of effective support of innovation at the company not only through support of ideas, but through backing these ideas with capital. The program has been successful with several examples of success, Naomi says, ‘We have done 33 projects since we started the program about three and a half years ago and we are having direct successes in terms of helping clinicians develop new ideas. For example one of our nurses developed a thermal hat for rewarming babies after they have been cooled during cardiac surgery and that is now available to be licensed’. It seems that Boston Children’s Hospital has a genuine drive to innovate, bringing together both
the passion from Naomi for new innovations, combined with funding for ideas and support for them. It is a good process that is creating great results. With an industry like
healthcare, innovations go beyond simply changing the fortunes of a company or making a process simpler, it can increase life expectancy or the quality of their very existence. The fact that it is so highly regulated is vital in maintaining the safety of patients and doctors, but it does make innovations more difficult in general. What Naomi and her team over at Boston Children’s Hospital have shown is that it does not make it impossible. Having this kind of individual drive and structural support is clearly creating major success.
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HOW INNOVATION AFFECTS THE FAST FOOD INDUSTRY
Simon Barton Assistant Editor
HOW INNOVATION EFFECTS THE FAST FOOD INDUSTRY
In 1969, Jim Patterson came back from his coastal holiday having developed a real taste for Fish and Chips. In fact, his love for the dish became so strong that he decided to bring it to the rest of America. Today, Long John Silver’s (LJS) is the world’s largest quick service seafood brand in the world with over 1,200 restaurants. They recently celebrated their 45th anniversary, inviting their customers to indulge in a community fish fry for the day. In order to get where they are today LJS’s has had to keep abreast of the innovations affecting the fast food industry. We spoke to Marie Zhang, Chief Food Innovation Officer at LJS, who informed us that there are three types of food innovations that LJS look at. When all is said and done, LJS’s success has been built on their food and because of this, they are always looking at ways to both attract new customers and keep their current ones coming back. Marie says, ‘[we want to] introduce or create a new product that gives more people more reasons to incorporate LJS in their weekly meal planning’. The quality and taste of their fish is also impacted by their process innovation. Marie says,
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‘For instance, our core seafood protein was Alaska sustainable Pollock shim portion, which was initially developed for a rapid changing and mass production. Now we utilize the exactly same Alaska sustainable Pollock and apply a very natural process: a hand-cut Pollock filet to deliver the natural fish texture and eating experience.’ At LJS they see this kind of endeavor as a way of guaranteeing that their
past, some of Long John Silver’s customers felt guilty to come to our restaurants and eat fried fish. Currently we are in the process of position-based innovation to change the way people view a fried fish.’ The hope is that LJS will not be a haven for guilty pleasures, but instead a place where people can connect with friends and family. Marie encapsulates this vision by saying; “Instead of
customers are compelled to come back to the store. The fast food market is inundated with competitors vying for the little space that is left after McDonalds, KFC and Subway have had their pickings. Due to this, any unique selling point that elevates them above the chasing pack must be developed as quickly as possible.
feeling guilty of eating fries fish, our customers can appreciate a meal time at LJS as a way to come together with friends and family!”
Market positioning is also an area where innovation plays a critical role. Marie says, ‘in the
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Many organizations’ have a pool of ideas for innovation but more often than not they don’t have a process for it.
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HOW INNOVATION EFFECTS THE FAST FOOD INDUSTRY
The quality and taste of their fish is also impacted by their process innovation Many organizations have a pool of ideas for innovation but more often than not, they don’t have a process for it. This continues to be a wall that stands between an idea being implemented and it being left to stagnate. At LJS their process of innovation consists of six steps, define, explore, develop, validation, implementation and measure. At the ‘explore’ stage, Marie says, ‘we explore new product pipelines based upon brand initiatives, industry trends, and competitive analysis and supplier recommendations. We conduct product concept screens after it has been reviewed with our stakeholders and leadership’. Once the process has gone past the implementation phase, there is a process of measurement where management can
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decipher whether there has been a spike in sales or consumer involvement. We are currently seeing a significant shift towards the use of data in order to help develop new innovations and at LJS this is something that they have fully embraced. Marie says; ‘We are using data to conduct competitive analysis, analyze economics, customer behavior and market localization to help us focus on specific new product innovation’. Incorporating Big Data into customer analysis is an advancement that customer service centric companies are really tapping into at the moment and LJS are taking advantage of this so that they can better profile their customers. Commercialization remains the biggest challenge for LJS – they have 1,200 restaurants worldwide now and implementing the same quality throughout all of them is a significant hurdle, Marie says; ‘This year, we put a significant effort in commercialization for any new product innovation implementation; I have seen a great result with this focus.’ LJS feel that it’s their duty to educate their customers about the messages behind their products and the ingredients that they are adding to their fish and chips. What matters
most is that their food is consistent across their restaurants. Marie has overseen a lot of innovative processes in her time at LJS, but the thing she is most proud of is their healthier range, she says; ‘Last year we improved our premium baked cod, July this year we implemented varieties of our premium sandwich, better-for-you salads, and soup line, later this year we will introduce 4 great-tasting proteins at an affordable, everyday value.’ Marie is clearly proud that despite LJS having a strong national brand, they’re still agile enough to move quickly in the face of market challenges. Marie ends the interview by saying; ‘We are proud to serve America’s delicious seafood every day.’ One thing is for certain, if LJS are to continue connecting friends and families together through their food, they will need to use innovation to their advantage.
INNOVATION AS AN INVESTMENT AT UNILEVER Simon Barton | Assistant Editor
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INNOVATION AS AN INVESTMENT AT UNILEVER
Unilever operates out of 180 countries and employs over 167,000 people – its aim is to provide consumers with products that are environmentally friendly and positive for society. Another arm of its business, Unilever Ventures, concentrates on the acquirement of early stage companies that fit in with Unilever’s objectives. They work across four sectors – personal care, digital marketing, refreshments and sustainable technology, to help Unilever. By scouring the market for these innovative start-ups, Unilever hopes to develop companies and teams that will help them from a strategic standpoint.
that Unilever has the best partners going forward. Andy says, ‘I lead our digital practice in North America focussing on digital marketing, ad-tech and e-commerce sectors and we invest in companies that are of strategic relevance to Unilever’ Andy also states that ‘Unilever Ventures exists to be a component of Unilever and to drive its innovation efforts’. Andy’s team at UV utilise a number of different strategies to inspire innovation at Unilever including open innovation, mergers & acquisitions and business development. He also includes venture capital as ‘one of the key tiles in the innovation mosaic’
I spoke to Andy Donner, Director at Unilever Ventures, about his role in guaranteeing
Unilever Ventures has three main tasks to undertake - the first is to scout the business landscape for new technological innovations. The second is to help identify companies that would be suitable for a partnership with Unilever, which in itself demonstrates the importance of business development acumen at the company. They also pay strict attention to companies that are demonstrating an innovative approach to strategy and technology. With Unilever’s considerable financial clout
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and strategic know-how, they want to act as if they are one of the ‘dragons’ – offering guidance in exchange for a say in how these innovative new companies’ are going to develop in the future. ‘When
By scouring the market for these innovative start-ups, Unilever hopes to develop companies and teams that will help them from a strategic standpoint. there’s a great opportunity to be collaborative, we will invest across the four sectors that I have mentioned’ Business Incubators have been picking up a lot of steam recently, with their implementation being seen as a way of stimulating company growth. Andy is keen to accentuate that Unilever Ventures is not an incubator, ‘we’re not an incubator in any way, in fact, we are focusing on companies that have a product that is on the market in early growth’. As a company they have a division within their organisational structure called ‘The Foundry’ which is somewhere close to being
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INNOVATION AS AN INVESTMENT AT UNILEVER
an incubator, but Andy states unequivocally that ‘unilever is not an incubator and unilever ventures is definitely not an incubator’
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There has been a lot of press around large corporations investing in smaller companies in order to leverage competitive advantages through IP real estate and patents – this has been something that Google and Apple have done successfully in the past. Both Unilever and Unilever Ventures do not see this as a way forward for their strategic partnering – Andy says; ‘this is something which is far removed from the way Unilever and Unilever Ventures looks at the business world’. They only look at companies that have an innovative product and management team in place, he says, ‘they have growth, they have market share – IP acquisition is pretty far afield from what Unilever is interested in’. I get the
Business Incubators have been picking up a lot of steam recently, with their implementation be touted as a way of stimulating company growth.
to this is that through the acquirement of new portfolio companies, Unilever can run test pilots, giving Andy and his team the opportunity to see whether they have the potential to be scaled-up and incorporated into Unilever’s overall business.
impression that Unilever are quite traditional in that regard, but for them, it guarantees that they are investing in the best, most innovative companies. That’s not to say that Andy doesn’t see this trend continuing – ‘it’s a trend I definitely see continuing in certain industries – if you look at the tech giants, they’re all competing for talent and data scientists – so the acquisition of IP real-estate is something they’d look for’ . Unilever’s portfolio, and their ability to innovate within that, requires making high capital risk investments. For every Google and Facebook there are countless others that fall short of the required standard. But for Andy it’s about giving these high-risk companies the best chance to grow, especially when there’s a chance that a company’s growth will bring competitive advantages to Unilever going forward. Another interesting aspect
Unilever continue to be one of the world’s most innovative companies, operating in numerous spaces throughout the globe. Andy’s team at Unilever Venture’s is without doubt an important arm in their operations and allows them to remain knowledgeable of technological innovations. With this mindset, it’s clear that Unilever are investing in the best way and helping to nurture strong companies to help them in the future.
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INNOVATION AT 30,000 FEET Richard Angus
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INNOVATION AT 30,000 FEET
When we think of innovation we think about new ideas and bringing new concepts that people thought were not previously possibly, to existing ideas. Bringing something truly awe inspiring rather than just an incremental change to a product. The iPhone for instance brought an entirely new idea to the world of connectivity, the car brought a totally new way to travel and the Airbus A380 has seen the largest commercial plane to ever exist. Therefore, when we were given the opportunity to talk to the person who was in charge of their innovation programmes we jumped at the chance.
Airbus remains one of the most innovative companies in the aviation space - it has a strong vision that remains uncompromised whilst adhering to stringent industry regulations and an ever pressing need to become more economically efficient. They see innovation as an imperative tool in their long-term development and have been exploring a multitude of channels to guarantee that they’re on the edge of the most innovative products and strategies. We spoke to Yann Barbaux, Chief Innovation Officer at Airbus, not only about innovation at his company, but also his thoughts on the
general concept of innovation and how it should be fostered. I did this with particular importance placed upon open innovation and how collaboration with outside stakeholders can be the difference between-long term success and short-term failure. This is particularly relevant in an industry that relies so heavily on intuition as a way of creating innovation. ‘Innovation is important for the general competitiveness of a company - the competition in all domains is increasing and this means that businesses have to be more flexible to catch all these innovations’. Yann’s point here is fundamental, and shows
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how innovation has become a fully integrated function within progressive companies, instead of just a sidelined ‘project’ that contributes little to overall processes. CEOs are now also putting the entire organisation under pressure to create innovation outside just the Research and Development department. Yann says, ‘it’s clear that research and development is a major component of innovation but it’s not the only one understanding of the market is something that’s important - if you want to be impactful with innovation it should not be confined to the R&D domain but ingrained in the complete organisation’. Yann also feels that it’s important to have a specific innovation function with someone at the head of it. This allows people from separate functions to know that someone is ready to listen to their ideas and research and support it adequately.
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As the Chief Innovation Officer at Airbus, Yann, has achieved
The car brought a totally new way to travel and the Airbus A380 has seen the largest commercial plane to ever exist.
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a lot, even his shortened highlight reel is very impressive. He sees the creation of an innovation network at Airbus as one of his biggest achievements, Yann says, ‘every function now has its own innovation focal point with direct reporting to the Head of Function so people have decision capabilities’ . The company also has looked to create innovation catalysts across the organisational structure and as Yann says, ‘it’s a pre-requisite to embark on a cultural change program’. Within this network, innovation is at its most prevelant - ‘the creation of such a network which is lively is where people are exchanging info - this is something which is crucial for the sector and what we do’ Open Innovation is a process that Yann and the Innovation function at Airbus use to collaborate better with their suppliers. As a concept, Airbus have been using it as a way of improving their operations by working with universities and think-tanks in order to create collaborative, pre-competitive research, that puts the company in the best position when innovating and creating new products. Airbus use an open innovation process when
Open Innovation is a process that Yann and the Innovation function at Airbus use as a way of collaborating better with their suppliers.
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With Airbus recently announcing that they’re set to up their 20 year forecast for jet demand this week, it’s clear that their innovation attempts are having the desired effect. interacting with suppliers - Yann states, ‘in the case of the supplier, we’ve been performing collaborative research for a long time and there are frameworks which are existing to support collaborative research’. For
many of us, this doesn’t necessarily constitute the normal definition of what Open Innovation is, but Yann qualifies that by saying; ‘It’s different from what people normally say open innovation is - but it’s a part of it’ With the Chief Innovation Officer (CINO) still a relatively new job title, I was interested to hear Yann’s opinion on the role and what he thinks the primary function of the CINO actually is. Yann’s views are clear, he says, ‘it’s about getting products as rapidly as possible to the market’. This reflects what many feel about the role, time is always of the essence now, so it’s essential to have a person
close to the CEO acting as a catalyst for innovation and new products. Yann’s role clearly reflects this need and shows how much impetus Airbus put on being proactive, rather than reactive, in the market. With Airbus recently announcing that they’re set to increase their 20 year forecast for jet demand this week, it’s clear that their innovation attempts are having the desired effect. It will be imperative for Yann and the innovation function at Airbus to keep up with demand so that they can guarantee that they’re leading the way in the aviation industry moving forward.
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DOES IT MATTER WHERE YOU INNOVATE?
ARE YOU KEEPING UP? HOW GM ARE KEEPING UP TO DATE WITH THEIR INNOVATIONS George Hill
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DOES IT MATTER WHERE YOU INNOVATE?
General Motors (GM) is a company that evokes memories stretching back decades, from one of the first real production cars to the huge Detroit factories used to make millions of new cars each year. The fact that they are still the second most prolific car manufacturer in the world, only 900,000 behind Toyota shows that they are mainly making the correct decisions. It led global vehicle sales from 1931 to 2007, a 76 year winning streak that has hardly let up and the drop to second has been driven mainly by the Asian market’s preference for Toyota. I was therefore excited to talk with Frankie James, Managing Director of GM's Advanced Technology in Silicon Valley. Having worked at the company for nearly 7 years, Frankie started only 5 months after arguably the biggest technological innovation of the past 20 years, when the iPhone was released. Since then she has overseen many of the most important and imperative technological innovations within the automotive industry. Despite the daunting task, Frankie seems to appreciate the challenge ‘Smartphones and tablets innovate and improve
on a much shorter time scale than we're accustomed to in automotive, but we know that we have to be ready’. They have been ready despite the unprecedented pace of change that has been seen in the past few years, and they seem to have a firm future proofing strategy ‘Consumers are not going to be happy buying a new car that can't work with their new phone, or that won't work with their upgraded phone 1-2 years from now’. One of the biggest challenges is that the manufacture of automotives takes considerably longer than electronics, but they are expected to be fully compatible despite this. ‘We've needed to face the challenges of anticipating what consumer needs and wants are going to be when a car first hits the showrooms, and considering what we can do over the vehicle's lifetime to avoid obsolescence’. Before 2007 having a car that could receive directions, music or calls from a smartphone, was not only unheard of, but would have been impossible to comprehend. Beyond a simple hands free kit, this kind of innovation was not needed, but from June 29 2007, it became imperative. This has meant that the focus of GM has had to shift, not just in terms of driving, but searching
what other industries are doing and adapting to this, ‘the speed of innovation has been forced to increase: there's an eagerness to understand what's happening and what's trending in industries adjacent to automotive so that we're ready to act and anticipate our customers' needs and desires for upcoming products’. That Frankie and her team are based in Silicon valley is no coincidence. Many would ask why a company like GM is placing themselves amongst the Googles and Facebooks of this world, but Frankie’s role goes beyond just thinking up new ideas, she needs to communicate new developments back to GM headquarters in Detroit. ‘My team plays a big part in that: we're in Silicon Valley to take advantage of the startup community and the early adopter culture, so that we can try to pull out the important new ideas and communicate them back to the rest of GM’. Having an innovative team in the the most innovative business centre of the world has it’s advantages and kicking it with the early adopters is chief amongst them. This communication goes beyond just talking to the board in Detroit though, GM has manufacturing operations in 37 countries and as such I wanted
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to know how Frankie managed to communicate new innovations across a company that employs 212,000 employees worldwide. ‘The experience of driving and using a car varies a lot depending on culture, geography, and other factors. New innovations are not ‘one size fits all’, and may not be relevant in every country or region’. This isn’t even just a inter-country or continent difference, but ‘Even just looking within the US, GM has different market segments that we are trying to address with our different vehicles and brands’. The differences between segments is also significant, with Chevrolet Sonic targeting young drivers who want to play as
Chief Innovation Officer
DOES IT MATTER WHERE YOU INNOVATE?
much as possible through smart devices whilst Cadillac drivers tend to be older and less likely to use smart devices, but still wanting effective infotainment in their cars. This provides an interesting challenge for the team, but one that they are no doubt prepared for. One of the main ways that they are meeting this is through the use of data. As society has become more data driven, it has provided GM with a significant advantage over traditional assumptions or small focus groups, but according to Frankie ‘looking at consumer data gets you closer to the truth of what's really needed’. A prime example is the Volt, where data showed
that people generally tended to travel less the 40 miles per day: ‘There were plenty of people who were convinced that 40 miles would not be enough, as they wanted to drive electric all the time and not consume any gas. But our data showed that most consumers traveled less than 40 miles per day. We also found that cars are like cats - they spend 90% of their time "asleep" (or rather, parked). We know that a car is usually parked at home at night, and second most common parking situation is at an office during the day. That caused us to focus our efforts on charging infrastructure around home charging and commercial charging stations
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DOES IT MATTER WHERE YOU INNOVATE?
for businesses, so that drivers could be confident about their ability to charge up during a typical night or day. Since the Volt has come out, data from actual owners has shown that our assumptions were valid. Volt customers drive primarily on electric power about 2/3 of all Volt miles are electric. And, on average, drivers are going 900 miles between fill-ups, so the 40 mile range
seems to be working. To be sure, we are looking at longerrange batteries and all-electric powertrains, but we were able in this case to use data to make some assumptions for this particular vehicle, the Volt, and then collect usage data to prove out our assumptions after the fact as well’. This kind of data driven approach, combined with the innovative approach to working
with early adopters in Silicon Valley are the kind of activities that are keeping GM on top of new innovations and managing the production time difference that could have been a disaster if not properly managed. ‘If we wait to make a move until one of our competitors embraces a new trend, we run the risk of falling even further behind just trying to catch up’.
Chief Innovation Officer
Email dwatts@theiegroup.com for more information