Ep. 26 - Inside the CampX model

I think trust is very important. So even though we are a big company, we always make with everyone who is engaged, and this is a big group activity internally. So legal is absolutely critical for making this work with simpler contracts and, you know, negotiations with purchasing, equally important to negotiate in a fair way. You cannot treat startups the same way you do big suppliers, but to be mindful about that and bring in fairness in the discussion and also in the agreements. And then so you build trust and credibility. And for us, the key has really been to be close to the product and business owners.

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Today we will deep dive into Volvo Group. Volvo has been one of the pioneers in innovation. Actually, they started corporate venture capital activities some time ago. And in 2020, they introduced a very interesting concept. They originally call it an accelerator. The format is called CampEx, but I believe it's a bit more than accelerator, probably something between acceleration and venture client. And down the way, they also added a venture builder and they also added an incubator. So I think a very, very interesting a model that is scattered in between multiple locations, obviously headquarters in Sweden, in Gothenburg, but also in France, Lyon, in the US, and in Bangalore, India. So again, there is again an intersection between location and innovation. This is another very interesting topic. And since the topic is very fascinating and interesting, I think it's very, very important to to go deeper into that, and no one better than Helene Niklasson can help us to understand how this CAmpEx model works. So, Helene, welcome.

Thank you very much.

So Helene is the Head of CAmpEx, BiondV VP Innovation, Ecosystem, and Partnership. So, Helene, I think first immediate question also for Removing the, the doubt that my, some audience might understand we're talking about Volvo, we're talking about Volvo Group. That is not Volvo. So first of all, let's focus on what Volvo Group does, what it does not.

Thank you for that. Yeah, that's good to clear that out from already from the start. So Volvo Group, it is, um, what we do, it's transport solutions and We do it in the area of trucks. Many have seen Volvo Trucks, but we have many brands. Renault Trucks in France, we have Mack Trucks in the US, and we have a lot of joint ventures. And then we also have Volvo Buses. And we have construction equipment, which is diggers and dumpers, excavators. And we have also Volvo Penta with marine and industrial applications. So that's what we do, but we are a truly global company, like you said, headquartered in Sweden but with many, many hubs, and we are present on 190 markets, and we are around 100,000 employees globally.

So a relevant group with a pretty, I would say, global footprint. So let's deep dive into again our topic of election, that is innovation, specifically open innovation. I think might be important to, first of all, to understand what kind of innovation tools Volvo Group uses beyond the traditional R&D. That is no longer traditional because it's evolving. There is this new CampEx model that is actually pretty quite close and integrated with the R&D. If I can remember, the CampEx is typically co-located close to your R&D center, and then there is the CBC, the corporate venture capital arm, that is independent. Also, again, organically, from an organizational standpoint, these two branches, CampEx and CBC, are reporting to, to different C-levels. So there's also that, there is a certain separation despite there is a lot of synergies and collaborations.

Yeah, it's very strong collaborations between the toolbox CampEx and also with the venture capital arm. So we are following each other all the time. But the story behind CampEx, it is interesting. Like you so rightfully mentioned, you know, the industry is in a great transformation. And in order to be able to manage everything, you need to have a lot of partnerships. So you need to work in that manner to bring everybody on board, and the in-house development era needs to be complemented because we have a very strong and very good industrial process internally, but you need to complement it in order to, to be able to manage everything that needs to be managed in a transformation. So innovation tool, I would say You know, there, there is so much innovation going on in everyday life in all these R&D centers and with pretty much everyone, and new ways of doing things. And we are in this transformation going towards zero emission, towards much more efficiency, safety, etc. So we need to onboard a lot of new solutions and technologies. And the idea about how to— how CampX could complement was really to accelerate innovation through partnerships with one type of partners where we have not worked so structured. We have worked with, but not so structured, and that was startups. So if we could, you know, bring in something that a startup is working on, a good solution, and integrate it and bring to market, it's a good win. But the core, it's really to use the, the people who are responsible internally, Volvo Group, for the transformation. We call them product business owners. Persons inside who are responsible for an area. And it can be battery management, for example, big, big chunk of work. And you have your roadmap and you have so many things that you need to deliver. You can, you can decide, should we develop it in-house? Should we develop it through partnerships, maybe with suppliers? We have a long tradition of working closely with our suppliers. Or is there someone in the ecosystem with startups who are working on this? And if it's successful, can we bring it in? So what is CAmpEx in this? It's a testing tool, you could say. So it's a validation machine, if you would say. So the one piece, one important stakeholder, it is the product business owner who sits on the challenge and the need. And then outside of Volvo Group, in the innovation ecosystem, we have a couple of startups hopefully working on that challenge. And if CampX team can marry that and see that happen, you know, and if it's successful, we see it and we try it in a short project. We call it proof of value project. If it's successful, then we can actually integrate it. And that is the main goal with CampX. To integrate either in a tech platform or in a solution, a service, and bring to market.

Question: I think CampEx is running since 2020, so again, 3+ years. How many external solutions coming from the startup world? It was the part that was a bit novel to the innovation equation above the group has been brought into collectively? How many what we call proof of value has been realized? How many of them are moving to the integration phase? So can you give us some numbers at least?

Sure, be happy to. Since we started, and we started actually when we started, we We thought that one requirement would be to have the startup here with us, but then 2020, do you remember?

Yeah, I remember. I spoke with business exactly on those days.

COVID hit. So, so, but it worked really well. So since then, we have done more than 80 projects with 80 different startups. And the first year we said, okay, let's put the target to, I think we managed to do maybe 15 or so. And then now with the, with the hubs joining, and we are not necessarily so much many more people, but we are able to scale it, it's easier to use the toolbox, you know, we refine it constantly. So now we, our target is to actually always have around 50 ongoing projects with 50 different startups. That's the target for, for this coming year.

Your KPI, operational.

It's, it's, yeah, we are, you know, it's measuring activity. So we are, but what we want to bring is actually how much, like you rightfully pointed out, how much is actually going somewhere. So out of these 80, and it's in very focused areas, so, you know, we started with electromobility, then it's a lot around battery management and to use the data and look at patterns and predictions, etc. Then we went to self-driving automation and safety system, ADAS, and then it was a lot around sensors, sensor fusion, etc. Now we are focusing a lot around— we are still focusing on that, but sustainability is a huge area as well as how we can apply AI to different solutions, to different challenges. Anyway, after these 80, you asked me how many have actually gone anywhere. I would say like 10-15% have been integrated, but that is what we are now looking at, how we can make most impact. So impact is that we want to be a real value generator so that we actually make a lot of impact. In our solutions and bring it to market.

That's a very good point. So going back is the 80 project, the 80 proof of value substantially, and then again 10-15% is a good ratio. Essentially is something between 8 and a dozen of solutions are currently in the implementation phase. Then you say that it's important to measure impact. Agreed. The problem is how do you measure it? Because again, it's something probably, again, also in providing numbers, providing figures, also your tricky job because, you know, integrating solution in your industry is not something that happens overnight unless you're talking about, again, the more there is industry. Again, if I Again, probably you are integrating solution that will go into the market by 2030, because again, this is the typical— again, there are 5 years for putting a new solution on the market in your industry, as far as I know. So substantially the plan up to 2025 is already written. I don't know what is your timeline, but probably you're working for the next one. So substantially we need to wait to measure the impact probably 5, 6, 7 years. And in the, in the meantime, how you value the potential impact of the solution?

Of course, it's, it is a little bit case by case, but sometimes, you know, we can actually bring it to market quicker if it's not, you know, if it's more of a standalone addition that doesn't need to be integrated into the big industrial machine. But you're right, It has to be integrated and brought through the big industrialization process. But I think what we, we under— have understood now is that the important part that makes this quicker is that the product owners who are also driving, you know, the whole industrial process is there from the start. So then you can actually find ways to bring it to market quicker, even in the industry process. So, so, you know, you can upgrade things and you can make a big impact if you figure out, you know, if we try application of AI for making something easier or making it more efficient, then it has a huge impact. So that is actually what we are looking at now. We are building portfolios. We talked about AI now. So we have a lot of, you know, we look at different mapping of our initiatives and what is actually going to make the most positive impact or when we launch it, you know, what will be the biggest impact in a positive way. But then you can have other, you know, we can have internal ways of working that also helps us a lot. Which doesn't need to wait for market introduction. So it's a wide, wide case-by-case portfolio. We have a lot of different proof-of-value projects targeting different challenges, but we try to keep focus as well because there is so much to do. So, you know, we go with different areas, and now with sustainability, for example. There is so much going on in the startup ecosystem around materials, for example. So how can we look at that and what can actually be, be something where we can replace plastics or whatever it can be? That could be fairly quick if, if we are successful.

Yeah. Can you point out a couple of concrete examples of these proof of values that's been turned into integration? Just to have a sense, or maybe a couple of stories that you can refer of collaboration?

I have one. I cannot go into details, but I can tell one interesting story. We had one challenge where we— it's just, it's actually the way of working, but how you can do things a bit quick. We had one challenge from the team in development. And then we targeted a startup where, where we saw, okay, that could be a good match. Then the startup was acquired by another company, but the IP was up for sale. So then, you know, we actually acquired the IP and that saved us a lot of time because, you know, we can choose, we can develop it in-house, but it was already there. So then we could bring it in quickly, but I cannot go into any details.

Yeah, I understand, understand.

But there are different ways of doing it. And I think that has brought, if we talk about the softer values, you know, ways of working to the organization, it's also, wow, this is a toolbox that I can use to, it supports me. If I'm a product owner, I can look at that and say, okay, this is something that supports me and help me populate, you know, my deliverables, but also my learnings. Because even if we don't go further with the ones who we didn't decide to integrate or to bring to market, it's a lot of learnings in that. And we understand, you know, this decision, no, it will not work. I thought it might. So this testing engine, I think it's an important piece, you know, test before you invest. We can make quick— it's a decision helper in a way for the product owners.

Yeah, I think this is a good point. And going back to impact, are you able to associate any dollar value to each of the projects? Meaning when you want to integrate—

yeah, if you, if you take the IP acquisition there, you could actually say, okay, If I was the product owner, so how many full-time equivalent employees would you need to bring you to this stage approximately? And then, okay, what is the value? Then you can really compare it. So I think that's what we try to do, but also, and here the CTO is very specific, the learnings. And here I have used academia, actually some thesis workers. To look at that. How do you measure the culture impact to a large organization? That's very interesting. And they have also— so we have implemented, um, that into our way of working to bring the learnings. So we have internal digital sessions with the specific proof of value projects. It's, uh, 5 times a year, half an hour each project 10 minutes each, where the product owner says, this was the learnings from this project, this was my challenge, this is what's happened, this is the learnings, and this is my plan forward with the business case. And then we broadcast that out to the entire Volvo Group organization. And then we also have open house 2 times a year, you know, where we invite also externals to share. What we have learned. Of course, then it's pretty competitive learnings, but anyway, it's an important aspect of this is to share the learnings in an efficient way.

And you share to the rest of the company. Because this is another, my next immediate question is how you measure the cultural impact? Because I think one of the problems that we are facing today talking about open innovation that I think Today there is no doubt that what you guys have been doing is very useful. The problem is how to measure the value that has been created. And the problem is that most of the value is intangible. Innovation, most of the cases, yes, there might be a business case for each of the solutions. You can start planning what could be the The extra revenue or the cost savings associated with the time savings, the increase of productivity. Again, something can be estimated, but most of the value will happen down the way in the next incoming year. So it's already difficult to estimate this stream. And then there is other, let's say, collateral benefits, say cultural change, branding, strategic impact. Again, you are helping the company to look into the future, so substantially to reshaping the strategy. So you're helping a company to survive, if we want to be a bit more drastic in my way of saying. So, and then all this stuff, for sure you are delivering, but it's very difficult to measure. And then that's sometimes create when there is a governance change at a certain point, people say, what you've done? We've done this, this, and that. Okay, but concretely, difficult to measure. And then difficult to measure in the corporate world sometimes is there is no value. That's the problem that most of the companies face.

Yeah, and here, if I may also complement our innovation agency in Sweden here, I think we are collaborating a lot with them as well. So if I would say these 80 projects they have been very little cost. So I think that is also because they are short, but we always pay the startups to do the projects, obviously. But here our innovation agency, they also see that, well, in their task, it is to support large corporations working with smaller startups and to support the start, you know, to get the big corporations as a client. So they are supporting, you know, we have a program together with our innovation agency here in Sweden called Vinnova. That's the innovation agency name. And we are doing it together with other automotive players in Sweden, which is Volvo Cars and Scania, our competitors. But what we share there is not the content. We share the way of working. So with that program, you know, we share the learnings also. How can we as a large corporation collaborate in an efficient way and co-create together with startups? So then we share the risks with the innovation agency. Even though the projects are not costly, it's still, you know, it's a message also that we believe in it and we are doing it together. And in Volvo Group overall, you know, there is a strong belief in this way of working because we need to add partners into our normal way. You know, the partnership is the new leadership. That's usually what our chief executive officer is stating in many, many different occasions. And we strongly believe in it. It is a way to, you know, create this win-win way of working, and that we are responsible for the toolbox to make the collaboration with startups as efficient and as valuable for both of us. So it has to be fair, and I think that is also an important aspect, that it's fair to both us and the startups.

You also, again, the original CAMPEX project, we say something between accelerator and venture client, pre-industrialization. Again, we understood what it is, and but you added down the way to other tools. One is what is called incubator, that is, I think, is led by Robert van, Jan van Boogt. And, and then there is also the Venture Builder. Can you help us to understand what needs these two additional tools are covering?

Sure, I'll be happy to. So the Accelerator, that's where we started, and that's where we actually, when we saw it worked, we started to inaugurate the hubs, as you mentioned already, India, France, and North America. And they are—

CAMPEX as is working across the 4 hubs currently, right?

Sorry?

CAMPEX as is, the accelerator component is currently deployed in Gothenburg, in Lyon, in Bangalore, in the US, right?

Exactly. So, and that is the main activity in CAMPEX. But when, so when we saw the accelerator, it works, you know, and we can bring in more and more and we can do more, we can scale this. So it really brings value. But we also saw that there is untapped value in the earlier stage startups, but then it's more to make the sustainable transport ecosystem more powerful in a way and make that strong for us to collaborate with. So it's early stage, it's not targeting the challenges here and now, you know. But it's opportunistic, so it's more long-term value that we invest in, you could say. And here I also lean on the product owners, but not so much to stand behind the initiative in terms of the challenge and have a plan for implementation if it's successful. It's more a belief. So they have to believe that this is important for the future in the sustainable transport innovation ecosystem. So it's actually to to develop the innovation ecosystem together. So what happens in the incubator is that we have a product business owner who believes and thinks this is an important area for the future. We target and scout for early-stage startups, whereas in the accelerator it's more mature, obviously, if they should have always a client. But here is early stage, so the deal flow is very often from university incubators towards the world. What they have to stay here, uh, for now it's in Gothenburg behind me here, uh, and here they have, uh, it's like a greenhouse. So we support them in scaling, and we— what we bring, which is hard for industry incubator to bring, is industry relevance and expertise. So, you know, if you get in here, you're with all the people who work here and you, of course, sign all the documents and contracts and things. But you are here together with the product owners, the business owners, but also with other areas of expertise that we have in a large corporation. You know, just HR, it's a big piece. Legal, it's huge. So for a small startup who maybe have an idea or a prototype when they come here, how, how do we support them in scaling and becoming successful on the market? So that is the whole idea, to just support and strengthen the ecosystem around. It's of course in Gothenburg, then it becomes the local ecosystem, but we are bringing in startups from who are willing to move here if they are not already here. So Northern Europe, I would say, is probably more the target area. But if it's successful, it's a pilot now for 2 years. If it's successful, we will of course bring it.

Are you taking equity for the startup that you incubate or no? You just host them.

Not as a starting point, but you know, you can ask me in 2 years and we'll see.

No, it makes sense.

We learn as we go, but, but that's not the idea.

I'm always scared by people that say that's the way that you're probably not going to change because I think this is the only recipe for doing something that won't work. Because again, the world is changing so fast that doing something that doesn't change is, is not a good idea, never and ever, but not today. So that was the incubator piece. Yeah, we got it. And then there is the Venture Builder.

Exactly. And that is led by Corinne Falk. Uh, and here we are looking at, you know, we want to be a landing point for an internal ideas and IP that we have that maybe it's a little bit out of core for Volvo, but still we, we want to use the CampX toolbox to validate. Is there maybe not so much around the tech but more about the business value? Is there a market potential for this? And in that case, how do we bring it to market? So it's a lot around that, and the whole idea is to generate new revenue streams for Volvo, and it can be done through our normal, you know, market channels, through, for example, Volvo Trucks or construction equipment towards their customers, or we spin it out and it becomes a venture of its own where Volvo is co-owner, like a joint venture. So there are many tracks here to actually bring it to market case by case.

Really? Yes. And the origination comes from internal employees. Do you have a structured program like an entrepreneurship program, or is it an open format when someone has an idea, just ring the—

Yeah, well, it's a little bit of different things, but we are working together with the ones who are responsible for the internal innovation. It's not CampX, we are the toolbox. But we work with them and if we find something that is promising, solving a real problem, you know, I'm an engineer myself and I worked in development and I love tech. So I have done a lot of things just because it's, wow, look at this, it's an interesting tech solution. But what is the value? Sometimes we need to guide a lot in this. What is the business potential in this? So if, if there is a value that is being identified through the, the proof of value project, because we run that in, in the Venture Builder as well, and there is proven that, wow, there is a potential here, then we can bring it to market. So there, we don't keep the structure on how, how these ideas are being brought, but we are vetting it through some iterations with the IP team, for example, you know, working with them. And then if there is something that is promising— and here I can actually take a clear example if you want. Yeah, sure. Yeah, so we had— there is a legislation in Europe coming now where you have to declare your tire pressure because it has such an impact on the emissions. And with that, you need to calibrate what tire is on what axle. So if you could automate this, you save some time in the assembly plant. So the assembly plants said, we would like to have a solution here to automate this. Okay, we have one guy in the R&D, who said, I want to do this, but you know, how— who is willing to develop this? Should we bring it to the— yeah, you know, the whole thing. And, uh, the decision was to say, okay, let's see if Campex can check if it's possible. So we brought in a startup. The tech was not that tricky actually, so realized with some sensors— but I should not say it was not that difficult, but of course it was complicated, but they managed. In a good way. But then the question was, so who is— who— how should we bring this to market? Should we bring it to market through our arm for factories, operations arm? They don't sell things like that normally. Should it be Volvo Trucks? It's not really their core, you know. So instead, the value was identified, there was a market potential an opening. There was no competition there. So instead of just letting that IP being developed and then, okay, nothing happened, we brought it to market through, um, a spin-out called Filcon, so which is now on the market. So that is how it can happen. And then we have another which was an IP for a smart solution for the headlights And that is very, um, the market need or the market demand was for the Nordic countries because it's quite dark and then you drive, you know, there is forests and animals and things. So there is an intelligent way to, when you have animals but also when you meet other traffic, how to be intelligent about, you know, the lighting. So that was also brought to market quickly through the Nordic, the market company Nordic for Volvo Trucks. So that's a truck solutions on the market. That's another example.

But then it was another— or been developed?

That's done through Volvo Trucks.

That's internally. So substantially out of the venture building, some solution span out in a joint venture between you and the originators, while others are developed and handed over to the business unit and to the brand as needed.

Yes, exactly, through partnerships. In this case, it was also a partnership here, but to bring it to market quickly, that's the idea in this case. So you have the IP, it was Volvo-owned, but you could generate revenue streams in a quick away and bring value to market. If no one was interested, I would not buy it, but here was a big interest.

Final question for you to close our discussion is, if you have to provide some tips, some learning, or share some learnings with your peers, what have been your top 3, top 2, top 1, whatever you prefer?

So Yeah, that's a very good question. I think I talked a little bit about being fair, and I think trust is very important. So even though we are a big company, we always make with everyone who is engaged, and this is a big group activity internally, so it's Legal is absolutely critical for making this work with simpler contracts and, you know, negotiations with purchasing. Equally important to negotiate in a fair way. You cannot treat startups the same way you do big suppliers, but to be mindful about that and bring in fairness in the discussion and also in the agreements. And then so you build trust. And credibility, but also internally with the product and business owners as well as with leadership. So, you know, they really trust that, you know, we are bringing in value. You can trust that we will do our utmost to use our toolbox that we have developed, we are developing together. So trust is one big piece to work on that and be transparent and open internally around what you do. So I think that, that is very important. And for us, the key has really been to be close to the product and business owners. That's a good point that you stress a lot of times. Yeah, to be close to the strategy and also to be this even stronger strategic tool. So you can test things before you invest, you know, and like I mentioned before, as a decision engine. To quickly be able to actually try out new things and accelerate innovation in that manner.

Yeah, I think it's a good point. I think also the, the model that has been deployed, I think, is, is a clear sign that you are trying to walking the talk again and being close with the business product owners. And so I think that is a good way to, to go. So thank you so much for this conversation. And, uh, in a while to understand what new tool has been implemented, what has been changed, and some interesting progress that you have done with some of these credit issues. Thank you so much.

Would be happy to. Thanks. Bye.

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