How Corporates Can Innovate: Insights from Ingeborg Gasser-Kriss & Sandy Gomez & Misha de Sterke

So what are the metrics that you use to justify the investment in innovation? Ha! That only works if your innovation addresses a problem or solves a problem or addresses an opportunity that the core business cannot. So like I said, you need to ask the right questions before you start innovating. And the question why do we innovate? What for? What's, what's the purpose? What's the problem we solve? Is so critical, and I think it should inform the metrics and the KPIs.

Hey everyone, how's it going? Uh, my name is Eon Isaacs. I'm the head of partnerships at the Founder Institute. Thank you so much for joining us today for this corporate innovation panel. Uh, we had about 100 people or so sign up. We're expecting hopefully 20-30% to show up. Let's see. We have people trickling in right now. I'm really excited for today's panel. I'm going to introduce Misha shortly, but before I do that, I just want to go over some very high-level housekeeping. This platform is called Airmeet. As you can see, if you're joining from a laptop or tablet, on the right-hand side, there's some icons there. You can— there's a chat button, so feel free to let us know in the chat where you're dialing in from. I'll also be sharing everyone's LinkedIn profiles here shortly. And just use that for just general communications. I'm based out of Dubai, UAE, if anyone wants to know. And then underneath that, there's a Q&A button. Please feel free to use that or the chat to feed us questions, and then we'll try to do Q&A towards the end. The way these events are structured is we have about, you know, 40-50 minutes of content, 10 minutes of Q&A from the audience, and then we break out for networking for whoever wants to stick around. Networking is completely optional. And obviously at the bottom of the screen there's some icons there. Feel free to, you know, if somebody's saying something interesting, give them a thumbs up or so. Okay, let's get started because I want to be respectful of everyone's time. I know it's a little bit— it's different time zones across the world on a Thursday, so appreciate everyone joining in. First off, let me introduce you to Misha. If you've not met Misha before, he's done a few of our corporate innovation events at the Founder Institute. Misha is the founder of 10x Growth. He's also the author of Innovating Against the Odds. He's been in corporate innovation, I would say, what, 20 years, if I remember from the bio?

That's how it feels, but it's like 15.

Yeah, no, no, no. Yeah, okay, so, so yeah, Misha is overall a great guy. He's going to be hosting today's panel on corporate innovation with some of our other colleagues, Sandy and Ingeborg, which he will introduce. But yeah, really looking forward to this. I'm going to remove myself off on screen, and I'll come up towards the end. But yeah, Misha, I kick it over to you.

Hey, super. Hey, thanks everybody, thanks for having me. I said Misha de Sterker, I will be the host today, and we're going to talk about, let's say, corporate innovation, the good, the bad, the ugly, the challenges, the learnings, with two very interesting ladies who I will introduce first. We start with Ingeborg. Ingeborg, welcome. Ingeborg has an extensive career within large companies leading innovation, but also helping startups, mentoring different types of startups, and being present in multiple advisory board seats. And Sandy, also welcome that you can join us. Sandy has also a different and interesting background. You started as a financial consultant, as I have learned, and you basically applied that financial knowledge in your actual work that you're now leading, a consulting firm where you help valuation of businesses. And, and you also told me that you were leading an incubator focusing on social impact entrepreneurs, uh, somewhere in between those career paths. Um, so there's enough to talk about, um, and we're going to start with a couple of broad questions. So, Ingeborg, let's— if that's okay, let's start with you. And looking at your career working in a large corporation, for example, like Mondelēz, if you think about those years that you were leading innovation, what are, let's say, key challenges that you have encountered, um, and, and what are your learnings from, from those that you could share with the audience?

Oh my, that's one big question, isn't it?

Yes.

And I really wish that it would, it would be possible to to, uh, answer that in 5 minutes, because then nobody in corporate innovation would have to worry anymore about why 85% of all innovation fails, right?

That's true. Yes.

But, um, I mean, there's— there is a number of reasons, uh, or a number of challenges that I encountered, obviously, in, in my life as a corporate innovator, uh, but I think The biggest one, the root cause of so many of the challenges is that we can only think one way in corporate. We can only think big. And there is a very dearly held belief that only big is good. What we don't realize is that the path to big begins with small. And then, you know, goes over medium towards big. That's not something that in corporate innovation is generally understood. There is still this metaphor of a rocket launch, which is used a lot, by the way, the rocket launch, which you can't start it small, right? You can't start a small rocket launch. It's once and it fails or it works, as we have seen in our own lifetimes with several rocket launches. And I think that notion of approaching innovation like a rocket launch is at the root cause of many of the challenges we face.

Hey, and Ingeborg, one step further on that, because I absolutely recognize this, and I think Sandy also, and we'll come back to you also on this particular point. This rocket launch metaphor, what do you think is the driving Um, what are the drivers behind this, this, this thinking, right, that everything should be big? What is, from your perspective, the, yeah, the reasons?

Well, big sounds good. And, um, see, I come from the food industry, right? And the food industry is an asset-heavy industry. It's very difficult to do things small. If you want to do them, let's say, effectively and efficiently. So scaling is always a challenge with food. And the way you do— like these companies, almost all food companies that I work with, even today as an innovation strategy advisor, most of them are 100 years old. Or more. And they have grown and they have learned to do things extremely well at a huge scale. It's, it's a mind-boggling scale in those, you know, factories.

It's a great accomplishment, which is also a great accomplishment.

It's fantastic. It's fantastic. Absolutely. Absolutely. But I think the world has changed, right? With the, like, these companies, many of these companies are children of the Industrial Revolution, and we have a different revolution going on now. Competition is coming from different places. Consumers, as we like to call them, are in a different place, and innovation needs to change. It needs to become faster, needs to become nimble, and that does not work with the rocket launch.

Yeah, very clear. Thanks, Ingeborg. Sandy, from your background, which is diverse, right, from education to financial perspective and analysis, if you would reflect on what Ingeborg has said in terms of how I summarize it, that we need to go big fast, um, there's no patience for growth, basically. How do you view that from your expertise? Can you sort of reflect on that?

Yes, I was about to point something very similar in my own words, but very similar and aligned with what Ingeborg just said. It's the opportunity to work with the startups when you come from a big corporation, I say in my case and your case, guys, is the change in scale. The change in scale is in itself a challenge, right? And it's very related to what you just said. And what I have tried to, what I have tried to help my ecosystem with is resizing the expectations in order to move forward. And that's why I was thinking about this notion of what we call MVP in an entrepreneurial ecosystem innovation ecosystem, it's very different what to what they call, might call MVP because of the difference in the scale. So for them, it's always riskier to try new things, so they need more time, they need more money, they need more people. And you know, when you belong to an entrepreneurial ecosystem as a founder institute, you understand like the value of scarcity of resources is also a new way of— is the opportunity to find new ways to be efficient. But when you are in certain industries in which there are significant sunk costs, such as assets in your balance sheet or things like that, for them, if this is not big enough, it won't justify the cost, right? So that kind of mindset, that kind of approach, is something that we always, at least as innovation partners or allies or partners of this other institutions is you need to reframe the message, right? We need to start with one first iteration that we can financially support in order to make innovation a reality. Because it's just what you said, is there is no patient, but it's patient in their terms. Because this will— if you find something that works it can eventually scale very fast, but you need a starting point, right? And that's where our biggest— that's where I see our biggest value as innovation partners.

Yeah, so you basically help also to sort of reshape the expectations in terms of moving from small to big. Is that correct?

That's correct. With a very entrepreneurial mindset, you know, it's like, let's try a first iteration. This might fail. Yes, this might fail. That's the thing. We are very aware that this might fail. We are very aware that this may end up being different than what you're expecting. That's why we need to reconsider the resources engaged in the experiment.

Yeah.

And Ingeborg, let's say this going from small to big and let's say, and we stick to that rocket launch for a moment, how did you manage the conversations with your peers within the large company about this topic? How did you, yeah, how did you navigate, right? Because you still need to deal with it. Anything that you can share with us?

Yes. Well, I think one of the big ahas that corporate innovators often have is when I help them look at risk, not just from a likelihood of failure point of view, but from a cost of failure point of view. So obviously, you know, everybody always says big corporates are risk-averse. I think it's a little bit unfair, right? Because after all, they are handling our money, not their own. So yes, risk-averse. What they do want to avoid at all costs is failure. And that makes sense. So that's why they have to develop and validate internally for years before they can expose their innovation to the actual world out there. And that's what makes everything into a rocket launch, right? It cannot fail. But if you look at the cost of failure, which is so much smaller When you start many small things, you light a lot of little fires at the same time, which, by the way, startups cannot do, right? Startups start one thing small, and then they refine and pivot and iterate and so on. Big companies with, with the resources they have, they are perfectly capable of starting many small things resource-wise. And Even though the likelihood of failure of those small things is huge, like 1 out of 10 will fail, the cost of failure is so minimal that you could start doing that. So that's, that's one thing that I often find helps them take that step into looking at innovation in a very different way.

Yeah. Yeah. And what I find interesting also, um, because I'm also quite familiar with the food and beverage industry, as you know, is that there is this, this thing of we need to avoid failure. But at the same time, if you look at the success rate of launches of new products, it's gigantic. I know. And what I try to understand, and maybe you can help me also, Sandy, maybe from your perspective also where the finance potential comes in. Um, so if we all try to avoid failure, but at the same time there is still a lot of failure when it comes to new product launches, how do we then justify, let's say, this, this paradox, right? So what's happening, uh, in the boardroom, or what type of conversations, um, uh, are having— are, are taking place there? Maybe you can, can help us with, with framing this?

I could go.

Go.

I think, and, and, you know, I'm not pointing fingers here, or I would point it at myself as well. Um, I think we kill them. We kill innovations. We allow them to fail. And I think the Two main reasons for that are: number one is we're using the wrong KPIs. I think that, and that goes to the whole conversation of why do we innovate at all, right? I think that the question, why do we innovate as a big company at all, and which KPIs do we use to track innovation, should be intimately connected, but are not. They're not. We say we innovate because Let's say we need to expand our portfolio to appeal to a new target group. But what we actually track is revenues. So, you know, it's— I simplify, but there is a big disconnect here between KPIs and actual goals. But the second, I think the second killer of innovation is, and it's almost nobody's fault. Is the core business, the core operations, the existing operations. And it's good to remember that this is a problem that startups don't have. Yeah, right. But big companies have so much to lose, so much to lose, and the core operations will always be bigger than the innovation. Again, I'm talking about food and similar industries. It doesn't work the same way when you, for example, talk about, I don't know, smartphones, where one new generation obliterates the existing core business and becomes the new core business, right? That's a different— it's a different— my, my point would not apply there. But, but the thing is that your innovation competes with your core operations for the same pool of resources.

Yeah, yeah, yeah.

And that is a battle to the death, and the corporations usually win.

Exactly. The small opportunities, they, they can't survive within the, the pressure, right, of the core, the core machine, basically. Yeah, yeah. Hey, Sandy, with your background in business valuation and, and also a financial perspective on how to invest, right, and what type of KPIs How do you help, let's say, young companies but also large companies with this dilemma or whatever you call it?

Yes, I have been lucky enough at some point that when I have joined this innovation or corporate innovation initiative, there's someone who did a relatively good job planning the desired outcome. But this has been very useful because this provides a lot of direction, right? So we all know at least this part of negotiating what are the goals is already done. That's good because you already have everyone on board on what we are trying to achieve. But I have faced some of the pitfalls that we already mentioned, like maybe people is not totally aligned about the times and the total resource that this will require, or the feasible timeline. So what we do to help them perform at their best, because this is what we are trying, right? It's like we understand that If this is your first experience or this is a new project, there are a lot of things, a lot of things that are going to be broke or they are going to be broken during the process, right? That is very common if you have worked with startups because we understand speed would be preferable to perfection, let's say, or being totally ready. We try to balance that. Always doing this disclosure, right? Like, you want the fastest result or you want the perfect result? And we always say, you know, the perfect result does not exist until you go through a process of a perfection of the processes themselves. So this is something that we try to balance in the way that we, that we help understand, because also something that I feel it's a good, it's a good thing. I have been lucky enough to work with the most innovation people within corporations. So you need— sometimes I feel some friction with them, but also is helping them sell the innovation, you know, because they are the champions. So they need to sell the innovation to the, to other stakeholders. So providing them with the, with the best reasons or assumptions to move forward with their projects is something that always is valuable for people who need to push in the inside of the organization to make innovation work, or at least to push these boundaries until— because it's just what Ingeborg said, this struggle for resources is very asymmetric. So they are always in disadvantage, or most of the time they are in disadvantage. I have also been in some places where the leadership, you know, they may favor some perspectives. Yes, this, this. And I recognize that from a high— from the higher positions, from the leadership, they will always say that they want innovation. They will always say that, but implementation is really hard. So when you need to negotiate how this is going to be implemented, you will need help from different kinds of teams. But yes, most of my approach for this is always reminding them that our trade-off is between speed and perfection. And As I have been involved in many innovation projects that are related to international cooperation, we usually have deadlines. So, you know, the deadline is a deadline. I understand that you will always desire better outcomes and whatever, but you have a deadline, so you need to accomplish that. And I have found that this is a very good incentive to make people agree on something and deliver. At the best possible, you know, at the best. Yeah.

Are those hard deadlines, like hard deadlines, or are they negotiable?

At the end, we can always negotiate, uh, and I can say from the ecosystem that I live in, that is Venezuela, you know, we can always provide very good reasons when we need to negotiate a deadline. But of course, that as As good entrepreneur advocates, we try to do that in the best, at our best, right? But this can happen, this can happen, and we can always negotiate also with them. Yeah, yeah.

And ladies, and coming back to the, the, what I find a fascinating topic is the resource allocation, right? And, uh, and let's say the, how do we make decisions around what to invest, what not to invest? Also sticks a bit together, also relates a bit to the point where, or where innovation is organized. So you see, we had, um, a time where we had these in-house incubators where teams were developing new brands or new products or new technology-driven type of innovations. We have seen open innovation, accelerators, acquisitions. Um, from your perspective, Ingeborg, what should be the focus of a large company when it comes to the type of innovation, and where should that be sitting in the organization? Where should it be organized in the organization? Is that a separate thing or should it actually be within the core? What's your, your view and experience there?

You mean, should a certain type of innovation be inside or out?

Or—

yeah, it's like if you want to have, like, a brand within the company that you work with, and they need to innovate, and they can innovate on the shorter term. So you make a product extension, like a new flavor or a new pack. Yeah, I mean, make a whole new channel and try to recruit new generations, but they're very different, right? In getting the return on investment, etc. So how do you see that? Where should it be placed?

This is what, what I actually did, right? Like I answered that question as part of my job. And like you suggest, Misha, there are different types of innovation. And I think those, it's really very simple. It's sometimes even hard for me to say because it's so simple. Where your existing capabilities and resources and systems and, you know, are best set to deliver that kind of innovation, like for example, an extension of your existing portfolio, why would you, why would you do that anywhere else but in-house? So that type of innovation should definitely be done internally and in-house and so on, because that's what you're good at. Now, the curious thing is, and it's almost lovable, right, that good teams, good innovation teams, they really want to be good at everything. And they would love to be good at the ways of doing innovation that you need when you do breakout, you know, like I said, light a lot of little fires, lots of little fires, and see what works. And iterate and pivot, which is what they're not good at. So our reaction to when we need a capability that we don't have, our normal reaction is we have to develop that capability. Let's make it our new signature capability, you know, and I think that's probably not the best path to take. I would definitely recommend working with an external ecosystem when you do the type of innovation that you're, that you're not good at.

And then you also referred to, because there, there's a lot of, um, there's a lot of thinking and money invested in building internal capabilities and to innovate in new, newer ways. And what you say, many different fires, test and learn, etc. Do you say that they actually should not do this internally and find the right people outside?

Yes, that's what I'm saying.

Yeah.

And I mean, it's also really, really hard.

It's quite different than what they do. So therefore I'm just pointing this a bit out.

Well, many big companies have tried to build external units, units specialized units that work with an external ecosystem, right?

Yeah.

The question then is, who do you put there? Like, do you put people there who come from the same culture? And again, do you measure them against the same set of KPIs, which is not a good idea. But yeah, I would definitely say invest that money into an external ecosystem. And not into capability building.

It's also much faster, much faster. And there we also see, of course, a role for startups. Sandy Ingeborg, how do you, how do you look at the role of startups and entrepreneurs working together with corporations? Where do you, what's your experience in this field? Let's, let's start with Sandy now.

Yes, uh, in emerging ecosystems, some— something that I would like to highlight to complement my, my answer is that, uh, in emerging ecosystems you face, uh, also two facts, let's say opportunities to build instead of challenges, but definitely challenges, uh, and ecosystems are not well integrated and entrepreneurial culture is not well understood. Probably. So trying to put this together in the same, in the same, doing, you know, onboarding or something, is, is hard because you also need to, uh, standardize what is the possible outcome for this, you know, partnership, collaboration, joint venture, or whatever. But this is something that I find fascinating and, and exciting in emerging ecosystem because I see a lot of of upside here. For example, in emerging ecosystems, or where you have, let's say, in the case of my country, you have a lot of industries that are going through, uh, very hard moments because of the economic downturn, but also it's going to happen because of the natural cycle of innovation of the world. So for this kind of companies, you will have, you will need to rebalance your portfolio of assets and find a new use, or liquidate them, you know, or write them off. And I have seen this in, in my country. It's like, if you already have some assets that is there and there's still some way to get profit from those assets, going through an alternative use— that can mean going through an innovation process, maybe, maybe not This is something that we need to see case by case, but it's a way to get more return of the existing assets if you already have them unused, or if your capacity— if your, um, if your full capacity is not being achieved at this moment. So you can put those assets in favor of innovation or any alternative use. So that's, that's, that's one space that I see or for corporate innovation oriented to potential partnerships in which you might need— I see this a lot, it's like we have a building of offices. I'm going to offer this as the simplest example I can think about right now. Let's say I have a building with a lot of offices and I go for a coworking space, you know, and I can try to source a few initiatives that are compatible with what my company do or with my interests, and start investing in mentorship. You don't need a lot of money. It's what I, what I see, what I'm trying to, to tell you is if you already have some assets and some experience, maybe trying to put this, uh, to work with the ecosystem of emerging startups can be a good starting point for you to understanding innovation from an open innovation perspective.

So coming back to Ingeborg's point, I mean, large companies have so many assets. Um, is that completely utilized? That's sort of question number one. What can we do with everything that we have? Um, and sort of trying to squeeze everything out of that we can do, bring that to new areas, serve maybe new consumer segments, whatever is possible there. Um, And then when you move beyond, when you, when you don't have the assets, when you start to work on beyond the core innovations or break whatever you call it— they have different terms for it— um, interested to, to listen and to understand, can start— should startups play a role, or is it acquisitions that would lead that game? How do you That's because it's a different— they're both different things, but, um, yeah, curious how you look at this.

They're very different, right? The price tag of an acquisition is just sometimes makes it very, very, very, very large. Yeah, not such a great deal compared to what you buy. But yes, of course, I mean Honestly, acquisition is normally what big companies are hopefully good at.

Yeah.

Integration, not always so much, but acquisition, yes. So, you know, I always say stick to what you're good at and leave the stuff that you're not good at to others. But startups, right? I think it's really touching how hard everybody tries, right? It's really touching how hard big companies try working with startups and startups try working with big companies and there's no marriage. Well, it's very, very hard. It's very hard because I mean, I have been on both sides now, but who else? The people that come to work together, the startups and the big corporates, most of them have not been on the other side. Actually working. And it is so hard to understand each other. I remember when, you know, I think this must be 2018 or so, when we first started working with startups while I was a vice president of innovation. You have, you know, yes, you get in touch with them. And what is the way that you get in touch with them is you see them pitch. And then what you take away is, oh my God, these wonderful people, they are so passionate and so innovative and they move so fast and they are so brave and oh my God, and they make do with so little. So there is a lot of love, there is a lot of admiration, and there is very little understanding as to how startups actually operate, how they actually work. And right. And Sandy, you're smiling big time.

Yeah.

It's like, yeah, because if we understood that startups have a runway of, I don't know, 100 days while we have a history of 125 years, if we truly understood that, then we would not give them contracts with payment terms of 90 days.

I would just say almost the same thing. Yeah.

Yeah.

Yeah. Yeah. Yeah, so, and is there— to understand each other means that we need to be curious and open and investigative. So what does this tell us about the, the, um, let's say the nature, but this also says something about the people, right? Maybe on both sides. What's your experience there? Are they actually interested in each other, or what's, what's your experience there? Ingeborg or Sandy, both of you, eh?

Yes, like I said, it's touching how hard they try. I think it's not a lack of curiosity, but these worlds are so different, and I don't think curiosity is enough to bridge the gap. I think so.

If— what is needed? What do you think is needed?

Experience on the other side. If you really want to understand each other, I think, you know, I would probably start, if I had to do a corporate, you know, innovation breakthrough innovation unit today, I would probably start with people who have had at least a foot in entrepreneurship. And many entrepreneurs are former corporates, aren't they? So at least, yeah, not a majority maybe, but a significant number. So yeah, but I mean, look at what Founder Institute does, right? For example, Founder Institute can help bring that experience in. In a way that understands both sides of the leaf. So that's one of the examples for why I'm saying bring in external people who have been there, who have done that, who know how it works. Don't try to figure it all out bravely by yourself. Yeah, but before I repeat myself, I would like to hear from Sandy.

Yes, I, I, this, this, I find this question very interesting because I have heard, like, you know, I have received this feedback a few times during my time working with the ecosystem. It's like, I would love to learn from this person, but what's their business? They are just trainers or professors, or, you know, it's like gaining that, just what Ingeborg said, is gaining that authority from, I was there and I built this solution or this company. It's something that can lead to, uh, good empathy, high levels of empathy, and also commitment. And that's exactly what we try to do at Foundry Institute. And regarding, uh, the, the transition, right, from corporate to startup or startup to corporate, That's a very challenging personal transformation. I have been seeing a few senior corporates that are now retired from their corporate roles and trying to start their own ventures, and I see how they struggle because it's a lot. It has a lot to do with access to certain resources that you don't have when you are a startup and they lack, you know, it was like, I had this in my previous role, but now I'm the owner, so I don't have that. I need to build that. And it's great to have this sense of someone can understand me on the other side. That is essential for good collaboration and partnership on the long term, right? So that's one of the things that I would say from a startup perspective. From a corporate perspective, what I have seen, it's very, very related to what we were talking at the beginning of the session about the patient and reasonable timelines. Because one of the accelerators, private accelerators I work with in, in my country is like, you know, we have this cohort that finished our program. One year ago and they are not raising capital yet, they are not going to raise capital yet. In that moment I say like, hey, you need to give them time, they are still iterating, they need a lot of support, you know. That's also a reality even in, in all ecosystems is like that, but also in emerging ecosystem is like all resources you have left of everything. So it's also being patient enough to provide certain support until the milestones are achieved. But also being very— I think the experience is going to lead you to this, but also being very, very aware of what are the suggested milestones regarding the stage of the startup and the stage of the ecosystem.

Yeah, yeah, yeah. And what type of, Sandy, what type of methods or frameworks do you use to create this common language, right, that we understand, that we both look at the same thing in terms of, hey, we have, we have looked at the startup, it looks interesting, but how do I know for sure where it is in its maturity? So sort of, how do you, how do you bridge and create this language between the two?

Yes, this is, this is a very good Also a very good question because I don't know if you guys have gone through this or some of our people in our audience, but when you spend some time working with innovation or entrepreneurial systems, you tend to believe that everyone is able to understand what you're saying. When you use acronyms or when you use a word in a different language than the local language, that is very common in my case. Latin America is the same, right? It's like I can say MVP here and everyone is going to understand. As MVP acronym is not the same in Spanish, I'm going to have a hard time explaining what is an MVP, or at least if I, if I talk too fast, they are not going to catch it. But what I try to do, that my, my common framework is, is let's try with the simplest collaboration possible. So we have a space of volunteer for certain pitch practice, you know, but it's just what Ingeborg said. People tend to, they, they tend to leave the pitch practice, the corporates, like amazed with what everyone is doing. And I try to tell them, like, come back next week or come back in a few weeks and let's to see how they are progressing, because this is something that is going to take time. I want you to understand the processes, you know, both ways. That's what I tell them. It's like, if you follow up on these startups— and this is something that, thinking about my desire still for my ecosystem, right— if you were an investor, you are not going to sign a check and come back in one year or two. You are going to do some kind of follow-up. That's what I would expect. So this is— I try to do the same with these volunteers that participate. These volunteers are all related to the corporate world, so I try to get them on the, on the, on these spaces, do some follow-up, and then what I say is, can you mentor this person on this specific topic for certain sessions? You know, some All, everything that I ask for, and I tend to get some good feedback, is with specific time frames and specific outcomes. Because if I let them imagine all the possibilities, something is going to go wrong, something not good is going to happen in terms of expectations, right? So if I want to keep them all engaged, It's like, I know how this process can work, but we need to go step by step. And people tend to— some, some, some, some partners, it's like, this is very slow, right? Well, you are building something. It's not going to happen as fast as you would like. But if you want to, to have a, let's say, a process to collaborate with your local ecosystem, or if you want to have the chance to access a specific pipeline or deal flow So you need to have this kind of practices, right? And understand and being able to understand their language and their situation.

Yeah. Okay, cool. Here and there, and it's already, I think we go to the last question before we go to the Q&A. It goes fast. But I still want to touch upon with you both because I think you both have an interesting experience within this topic. Because here and there we talked about the risk of failure, uh, here and there slightly the word of culture, uh, personal transformation. Um, but I would like to sort of— what I always find a fascinating topic is innovation culture, right? And I give you an example. Um, and we also do work with larger companies, and, and at one moment in time, um, they were, they were interested in how we did it, of course great, let's have a conversation. And they started to ask me, but what did you do in week 3? And what did you do in week 4? And what did you do? And I was thinking, yeah, that's a good question. But then I was thinking, well, why are you asking this question actually? To figure out later that they actually processed, uh, in a sort of chart what they actually need to do in week 3, 4, and 5. And for me, that was sort of an eye-opening thing because I figured that out later. It's like, ah, now I see my own words in a slide somewhere in a company floating around. So they tried to institutionalize it as this process almost, right? Um, how, from your expectation, from your experience, Ingeborg, how can a large company work, um, to sort of start to foster develop a culture of innovation? Yeah, what is your experience? What is your advice? Where do you start?

Well, I mean, there— it depends on whether you're talking about that innovation that should stay in-house or that innovation that you should do outside. When it's outside, you simply, you have to remove them from your premises. You have to remove those people from your premises so that they can develop their own culture. When it comes to innovation culture, and you know, that stays within the company, a company that has a large core business, a company that has 125 years of history, right? But innovation culture is super difficult to implement. Honestly, I think it starts It starts only by framing the problem right. Sandy, you said in your interviews with the leadership level, right, like the CEO and their direct reports, and I have the same experience, they want innovation. Yeah. But when I ask them why, they usually cannot answer the question. Because I mean, I will not take a bad answer for an answer, right? A bad answer like, "Because we need to grow." So, the reason why we innovate if we have a big core operation and innovation is just, you know, second most important thing we do. What we need to have is we need to innovate for a reason and with a goal that cannot be addressed by the core operations. If we say, okay, we innovate for growth, well, you can grow with the core business, right?

And then we separate it, as you said, and then you provoke it to separate it. And then my follow-up question on that, as Sandy can also chip in, how do you bring that back once you separate it?

Do you bring it back, or what's your Do you bring the, the external team back into the—

let's say you have an external team, they're working on an innovation that can't be solved with what you currently have in terms of brands or channels, etc., assets. We need to develop something new outside. But then at one point, well, maybe you are successful, right? That would be great. And then at one point you bring it to a particular maturity. Is it then a completely spin-out, or what's your point of view there, because there's always this conversation, right? What point do you bring it back? Do you bring it back?

Honestly, I mean, I would love to hear what your experience is with this. I've seen it fail more often than not if we try to bring it back in.

Yeah.

So under, you know, in most cases, I would say keep it separate, just like you do with acquisitions. I find this fascinating when you acquire a business, that has, I don't know, €50 million annual revenue. Many big corporates had no issue keeping it separate. Standalone.

Yeah. Like a standalone.

Yes, standalone. Exactly. It doesn't matter about the reporting lines, right? But their systems as a, you know, blanket word, they can be kept standalone. So Why can we not do for our own breakout innovations what we do with acquisitions? In fact, I remember there was once the idea of creating a business unit that encompasses all of the small acquisitions and the internal breakout innovations. So it would almost be like a, you know, new inc, you know, like the new kids.

Okay.

Yeah. They would behave in a similar way.

They would use similar tools.

They would have similar KPIs. Maybe, maybe that's something you can do.

Yeah.

Interesting. Like a family office, but for a corporation, right? Like this is my unit for new things.

Yeah. And kill none of them.

No, so yeah, I, I can share that experience. I, what I see, I think a corporate, a core, a large company should focus on its core and maximize its core, build a culture that sort of makes people accountable to drive sales, to make it better, uh, and, and, uh, and, and empower these people to make decisions, not completely be controlled and processed but if you still want to innovate within the core, you also need to create strategic thinking, creativity, and a sense of autonomy. If you don't have the assets, don't do it internally. Look for smart companies outside. I always think, why don't you start make small investments, right? I mean, the companies that are now relevant but still small but in a couple of years might be the new brand for Gen Z, right, in the F&B or whatever it is. Um, and indeed, to your point, Ingeborg, keep it then outside, right? Um, because bringing it back, even all the, the success rate of M&A is, is, it's actually, uh, low.

Is it?

Yeah, it's super low. And I saw a study recently that a large F&B company who bought like 10 acquisitions, 8 are losing money. And these numbers were gigantic, and it's like, it's unbelievable.

And they were not losing money before?

Uh, no, no, no, no, not all. Some of them, which is already interesting, right? Like, yes, what happened there? But that's, that's a different story, maybe. But also a couple were starting to lose money. So that's also, um, so I, yeah, we could, I think we could even talk for another hour, um, but, um, we can't. Maybe that's a good reason for having another session. But I would like to ask Ayan to have a look at, um, well, what type of questions does the audience have that we can still tap into, um, and and then, and then later then, if that's possible.

Yeah, thanks. Honestly, I'm hearing the three of you talk like this is like a Netflix TV series. Like, I'm just like, wow, just think thoughts there, right?

Um, anyway, yeah, the family office for, uh, lost MVPs and small acquisitions.

I like it.

Yeah, this is super cool. So, um, folks, if you have questions, throw it in the chat. Um, I've been taking questions from the chat and putting in the Q&A. So there's two questions, um, I'm gonna bring up the first one because it's what you were just talking about. So maybe if you guys want to think it again. So Rick was asking of this, and you briefly touched upon it, is it important to have R&D department to innovate outside of the product teams? So maybe if you are in the same building, let's see, how do you structure this? Are there in different floors? Do they share a wall? Like, uh, maybe tapping into your experience. Um, so I don't know, whoever wants to go.

Um, I can, I can start if you would like. Um, so, um, one more time the question, uh, because there is a nuance in it which I would like to highlight, if you can. Yeah, just Now, so let's say to the R&D. So I think also to Ingeborg's point, of course R&D is fascinating because while I had a lot of work done with R&D departments, and always if you ask, hey, do you already have a technology for this, or consumer benefit is it, then already somebody in the R&D team, yeah, we can do that, yeah, we have already something that. So my experience with R&D is they already have everything, basically, but the, the challenge is how to commercialize this in a way that this is appealing to a business, to say, wow, this is interesting, I would like to take this and bring it in my brand and then make it big. Um, but then it should be focused on solving a core business problem. Um, and what you sometimes see within the innovation, or let's say the R&D department is that they are working on things, but the bridge to, okay, but what can my consumer, my most profitable consumer group do with this, then it's sort of, yeah, um, too technical or too— so yes, you need to innovate outside product teams, but then still I would say solve a core business problem if you want to make it work. Otherwise you get maybe another family office for R&D patents, you know. But at least that's my perspective.

Yes, I would agree with you, Misha. It's like if there's no natural link between the innovation and a business, a kind of business goal, it's going to be very hard to move forward with any initiative. Because what I see is, I don't know if the person who ask— have this in mind, but many technology transfer offices at universities work like that, you know. It's like, let's build something, but it's not commercial, it's not commercially feasible, so you cannot build a business with that. It's good someone very intelligent provided you with that idea, but it's not enough if you want to provide additional value to stakeholders or equity holders or whatever.

Now, that's also like, if you are a business owner and you have a brand and you need to double or triple your brand in revenue within 3 to 4 years, well, make it then super clear how can this help. Yeah, bridge that gap. What's— and I always miss sort of that, yeah, commercial or whatever you call it, uh, sanity, a business goal at some point, at some Yeah, exactly, exactly. Yeah, yeah, yeah, yeah, yeah.

Okay, um, I just, for conscious of time, um, I'm gonna ask the next question and then maybe Ingeborg, this is really up your alley as well, so maybe you can start with it. Uh, from Joel: having the buy-in of the board is very important. What are the metrics that you use to justify the investment in innovation? Failing is part of it, so money's at risk, but failing can be seen as a win. So I guess—

Oh wow, this is not one question, Joel. These are many questions. Yes, having the buy-in of the board is super, super important. Um, the metrics— oh my God, that is maybe one of my favorites. That's what I said about KPIs, right? Um, oh yeah, thank God I can still see the question in the chat. So what are the metrics that you use to justify the investment in innovation. That only works if your innovation addresses a problem or solves a problem or addresses an opportunity that the core business cannot. So like I said, you need to ask the right questions before you start innovating. And the question, why do we innovate? What for? What's the purpose? What's the problem we solve? Is so critical. And I think it just should inform the metrics and the KPIs. So if you say, let's say we innovate because we want to bring our brand or, you know, our products, our portfolio to people with a very low disposable income. Let's say that it's a real life example. So then how do you measure success? Well, obviously you measure it by whether or not you have achieved, you know, as people, people call it penetration, usually reach in those consumer groups that you, that you had the intent to, to serve, right? Have you actually been capable of serving them? Those are the only metrics that I think make sense to justify the investment innovation. Now, Do you need the economics, the unit and overall economics to work? Yes, of course. And you know, that's a given, otherwise you don't launch. And then finally, failing is part of it. Really though? Can failing be seen as a win? I know it's very popular to say that failing is amazing, but failing is not amazing at all. For nobody.

Yeah.

I think what we mean when we say failing can be good is it's good to learn early what doesn't work. Oh, so now we learned what doesn't work. That's good. But that's only good when the cost of failure is minimal, which brings me right back to what I said at the beginning. A rocket launch that fails is always a catastrophe. A little fire that fails can be seen as, "Oh, we dodged that bullet. We learned early what doesn't work." That is the only way that I can look at failure as a win. But those are three different questions, Joel, so I'm not sure I answered all of them.

Awesome. I guess just before we wrap up, Sandy, Misha, anything you want to add to that? Or—

I think it's what I find always fascinating indeed is that innovation, all— so it's a learning process basically, right? So if you want to learn, it's when you grew up as a kid, you not immediately jumped on your bike and then it went Fluently, right? So you fall and then you hurt your knee, you get back up again, but you enjoyed it actually. And what I think that is something that we lost somewhere, that we not enjoy the, the dark part of learning, right? So learning doesn't feel comfortable, but so if we are pushing that away, you can't innovate basically, right? And, and as a kid you are very natural in that You do many crazy things and you learn a lot, and everywhere you have Band-Aids, etc., but you actually smile about it. And sort of, that's something I would wish for corporations to get back a bit and start to foster that. This is actually quite very interesting to learn. And completely agree with Ingeborg, failing is not the goal, but let's do it a bit faster and a bit cheaper and have some fun with it, because it doesn't have to be this huge tensionful thing constantly, which I think is a problem or is a challenge, let's say, for large companies.

Yes, just to add on an idea that can be helpful for someone who needs to sell this internally is that, just as Micha said, the learning curve. If you can financially support your learning curve, then you can start like taking the steps upward, right? But it's not always with certain bets, like a rocket launch. Maybe it's not. Maybe it's something that you cannot afford at that moment, and that's okay.

Sandy, that's interesting. What if the goal is learning?

If the goal is learning, it's financially different than— financially different, exactly.

So if the goal is learning, then, you know, you answer, you, you ask and answer the question right from the start. We innovate because we want to learn how to innovate. So then what are your metrics, right? And how do you justify the investment? Well, you make sure that it's very small. Yeah, correct.

I think we got to speak on how Ingeborg structures these in the boardroom. But, uh, this is— no, this has been awesome, everyone. Uh, Unfortunately, we have to cut it short. I know Misha has to run and everyone's got their other affairs, but I'm definitely going to take this recording. I know a lot of people want to listen to this recording. We had over 100 people sign up. A few were able to join, around 40, 45 joined. So I'm going to be distributing this out. Thank you so much for taking the time. We're looking forward to the next one whenever we host it. We have to figure that out. But yeah, I'll let that be. But the way I like to end this is quick, any tidbits of advice, one sentence. You know, Sandy will give it to you, then Misha, then Ingeborg. So Sandy, any last bits of advice before we wrap up?

I would— my recommendation for all people that is, you know, interested in innovation from a corporate perspective is you need to start walking upward in this learning curve, as you— as we just said. And, uh, Understanding what is the outlook for getting involved with your ecosystem or development or develop an internal ecosystem requires also doing some benchmark with the resources that you can access in your local community or via internet. So it's great that you attended today's session to start seeing what are the, you know, the most important topics to start learning from and hopefully help your company stay innovative and competitive in the future.

Cool, thank you, Sandy. Michel, last bit of advice for the audience?

Well, yeah, if you want to start with corporate innovation or if you're into it, what I find is important is that come a bit the point of Ingeborg is that understand why you are doing it, then be very clear, uh, how we're going to execute, who, when it's successful. But then also give the people some mandate, right, some autonomy, um, to then actually be close to the consumer, to make decisions themselves, and, and not have the tendency to, to look at too many details, uh, right, as a senior manager. So yeah, be clear and give freedom, and that's sometimes a bit of a contradiction, but yeah, that's how I think how it should work.

Thank you, Mischa. Now, Ingeborg, your last bit of advice for the audience, please.

Yes, I'll give a piece of advice that I haven't mentioned yet today. In whichever innovation role you are, remember that the times when you could plan and predict are over. Planning and predicting no longer works the way it used to work. You just have to go out there and try. And while this is amazingly scary for someone who spends their life planning and predicting, it is also quite liberating.

Exactly. Yeah.

Ingeborg, you're so philosophical as well. It's very, very fascinating with the, how you approach this world of corporate innovation from other people I've spoken to. Um, I really wish this lasted another hour, but I know that all three of you have commitments. I'm gonna wrap this up. Thank you so much. It's been a pleasure listening to the three of you, and we'll wrap it here. Thanks, everyone.

Thank you.

Thank you.

Thank you.