From March 17 to March 19, over 300 executives gathered in Boston for the 10th annual Lux Executive Summit Americas, networking and presenting their experiences seeking new business opportunties from emerging technologies. For those clients who weren't able to join us for the event, this edition of the Lux Quarterly provides a glimpse into the proceedings – Chris Hartshorn's article "Solving the Innovation Information Problem to Enable Long-Term New Business Success" provides some of the highlights from his opening keynote address, while Cosmin Laslau's piece on "The Underappreciated Key to the Cars of the Future: Safety" is adapted from one of the best-received Lux Research keynotes from the themed track sessions. Meanwhile, this article reviews some of the top external speakers.
Two of the top-rated external keynotes (ranked by attendees) bookended the event – Rob van Leen, Chief Innovation Officer at DSM spoke right after Chris's opening keynote, and Mehmood Khan, Vice Chairman, Executive VP and Chief Scientific Officer at PepsiCo, closed the event. Both told stories of companies transformed by a dedication to innovation and to exploring new paths, and their tales had many elements in common.
First, each had ambitious topline goals. Rob described how DSM appointed him Chief Innovation Officer in 2006 with an ambitious goal of reaching at least €1 billion in new sales from innovation – a goal it met with €1.3 billion in innovation sales in 2010, prompting it to aim higher for 20% of all sales at the €9.2 billion company by this year. Mehmood said his mandate, also starting in 2006, was to accelerate innovation and boost its innovation-driven revenues from the company's then-benchmark of 4% to 5%. By 2012, he said it had reached 7% before hitting 8% in 2013 and over 9% in 2014.
What drove this success? At both firms there was an inspirational mission to rally the team around, rooted in sustainability – DSM's "triple P" of people, planet, and profit, and PepsiCo's "performance with purpose" aimed at human sustainability, talent sustainability, and environmental sustainability. However, both executives also noted the importance of bringing in ideas from outside the firm by hiring individuals with new perspectives and expertise as well as through outside alliances. Mehmood touted the fact that in his tenure, PepsiCo has signed over 50 contracts with outside technology developers, suppliers, and partnerships, including DSM. He also emphasized willingness to entertain ideas from unconventional sources, telling the story of having lunch with a bold junior engineer in Brazil who pushed him to consider more localized manufacturing, given the challenges of transporting product into congested urban centers like São Paulo. The result was an innovative miniaturized manufacturing line, able to fit on the back of an 18-wheeler truck, complete with a quality lab, that has produced snacks within hundreds of meters of retail facilities in the Detroit city center.
Meanwhile, Rob emphasized the role of looking outside through corporate venturing, enjoying the scouting benefit of 500 to 600 start-ups annually. He noted that five venturing investments, a JV with DuPont, and two acquisitions have helped build its biomedical business from a five-person team in 2006 to a 700-person budding business unit.
Finally, both touted the role of bold leadership. Rob credited the willingness of DSM to continue investing in innovation through the dark days of the global recession in 2008 and 2009 with laying the foundation for its current success. He noted that in tough financial times it's important to avoid "cheese slicing" – doing a little less of everything – and instead pick projects to cut entirely, in order to ensure that the things you keep doing, you do well. Mehmood emphasized having the "courage to challenge the norm" and held up his own career – first leaving an appointment at the prestigious Mayo Clinic to lead the R&D organization at Takeda Pharmaceuticals, then departing Takeda for an entirely new industry at PepsiCo – as an example.
Both executives positioned their stories as rebukes to the view that large companies can't be innovative or see innovation organizations drive successful transformations. In addition, Chris Hartshorn discussed during his presentation, rich data and rigorous analysis are needed to sustain this innovation and ensure it’s focused in the right areas.
For further insight on where the best opportunities might lie, consider the nine "Growth Pitches" developed by Lux Research analysts for the Lux Executive Summit. These presentations showcase unmet needs ripe for innovation in fields from agriculture to plug-in vehicles to waste – the best places to look for the chance to emulate the successes of PepsiCo and DSM.
For more on Lux's research on corporate venturing, contact Michael at firstname.lastname@example.org.