The Funnel Magazine | Spring 2021

spring 2021

israel’s corporate innovation magazine

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Spring 2021 04 DELIGHT VENTURES: FOSTERING INTERNAL INNOVATION IN JAPAN

BY SILICON FOUNDRY 08 10 DISASTROUS CORPORATE INNOVATION MISTAKES YOU’RE ABOUT TO MAKE 20 NESTLÉ SHARES ADVICE FROM ITS GLOBAL HUNT FOR BIG IDEAS 28 THE POWER OF A SUPPORTING NETWORK INNOVATION AT ELBIT SYSTEMS

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DELIGHT VENTURES: FOSTERING INTERNAL INNOVATION IN JAPAN

BY SILICON FOUNDRY

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CORPORATE INNOVATION 10 DISASTROUS MISTAKES YOU ARE ABOUT TO MAKE

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STOP INNOVATION SUPERHERO SYNDROME

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NESTLÉ SHARES ADVICE FROM ITS GLOBAL HUNT FOR BIG IDEAS

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FROM PORT TO PORTAL PORT OF ASHDOD INNOVATION IN 60 SECONDS

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GROUP GENIUS INTRAPRENEURSHIP IMPACTING TANGIBLE OUTCOMES AT ORBIA

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THE POWER OF A SUPPORTING NETWORK - INNOVATION AT ELBIT SYSTEMS

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DRIVING INNOVATION

BY THINKING MORE CREATIVELY TOGETHER

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SIX MISTAKES ORGANIZATIONS MAKE WHEN TRYING TO IMPLEMENT TRANSFORMATION AND HOW TO AVOID THEM EDITED

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EDITOR’S NOTES Dear reader, Spring is a time of renewal and bloom. As the world is beginning to emerge from the global challenges of 2020, companies must figure out how to deal with the new threats and opportunities they are facing in what is now a very different environment.

The ability to evaluate, test and scale innovative opportunities constantly and in massive quantities is turning from a SHOULD into a MUST. Organizations that acquire this skill will be able to leverage it as a competitive advantage in this new reality.

In this issue, we will also be renewing ourselves.

We are delighted to announce that Silicon Foundry has now joined The Funnel’s global network as our US partner. It is a great opportunity to reach a vast US readership through Silicon Foundry’s audience and get access to the knowledge and experience of its network - all to the benefit of our readers.

In addition, Innovation Leader, a great publication on the topic of innovation, will now be contributing content to the magazine with fresh and fascinating perspectives. We want our readers to get access to the best and latest information on innovation management and this is another source we’ll be making available to you.

And speaking of innovation leaders, this issue includes interviews with three excellent examples of such leaders. The director of intrapreneurship at Orbia, a global company of more than 20,000 employees; the Corporate Chief Innovation Officer at Elbit Systems, a company that deals with the bleeding edge of defense and homeland security; and finally the driver of an innovation-led renewal effort at Israel’s largest port.

I invite you to dive into this bounty of knowledge to experience and see what you can learn from these great sources.

We at The Funnel would like to wish you the best of health, and may you stay focused on your goals and get the opportunity to pursue them unencumbered in 2021.

All the best, Ahi Gvirtsman

Chief Editor & Spyre Global Partner

DELIGHT VENTURES: FOSTERING INTERNAL INNOVATION IN JAPAN

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BY SILICON FOUNDRY

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DAI WATANABE MANAGING PARTNER AT DELIGHT VENTURES

INTERNAL INNOVATION CAN BE CHALLENGING FOR LEGACY COMPANIES—ESPECIALLY IN JAPAN, WHERE THE BUSINESS ENVIRONMENT IS DOMINATED BY INTERCONNECTED CORPORATIONS KNOWN AS KEIRETSUS AND WORKPLACE CULTURE HAS HISTORICALLY ENCOURAGED CAREER-LONG ALLEGIANCE TO A SINGLE EMPLOYER.

“JAPAN IS THE ONLY COUNTRY IN THE WORLD WHERE THE VAST MAJORITY OF LARGE COMPANIES SYSTEMATICALLY AND SIMULTANEOUSLY HIRE BATCHES OF COLLEGE GRADS EN MASSE EVERY YEAR AND HAVE THEM GO THROUGH ELABORATE TRAINING PROGRAMS, ASSUMING THEY WILL STICK WITH THE COMPANY UNTIL THEY RETIRE,” EXPLAINED DAI WATANABE, CO-FOUNDER AND MANAGING PARTNER OF DELIGHT VENTURES. “THIS YEARLY SYSTEM, AND THE SOCIAL EXPECTATIONS IT CREATES, MAKES THE JAPANESE TALENT MARKET IMMOBILE, WHICH IN TURN DISCOURAGES ENTREPRENEURSHIP AND HEALTHY STARTUP GROWTH.”

WATANABE AND HIS COLLEAGUES AT DELIGHT VENTURES ARE WORKING TO CHANGE THAT.

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DELIGHT VENTURES IS A JPY10B (USD100M) VENTURE FUND THAT INVESTS IN AND INCUBATES EARLY-STAGE BUSINESSES. IT WAS STARTED IN 2019 BY DENA, A JAPANESE TECHNOLOGY CONGLOMERATE THAT DEVELOPS AND OPERATES A BROAD RANGE OF MOBILE AND ONLINE SERVICES INCLUDING MOBILE GAMES, E-COMMERCE, AND ENTERTAINMENT CONTENT DISTRIBUTION. DENA HAS EVEN DIVERSIFIED ITS HOLDINGS INTO LIFE SCIENCES APPLICATIONS AND OWNS PROFESSIONAL BASEBALL AND BASKETBALL SPORTS TEAMS. DELIGHT VENTURES IS STRUCTURED AS AN INDEPENDENT IDENTITY SO THAT STARTUPS CAN BE CONFIDENT THERE WON’T BE ANY CONFLICTS OF INTEREST WITH DENA’S EXISTING BUSINESS LINES.

Delight Ventures takes minority shares in its portfolio companies, Watanabe explained, which can then operate with the degrees of freedom that any other stand-alone start-up would enjoy, including seeking future funding from other external sources.

The decision to keep Delight Ventures independent is in keeping with DeNA’s well-known legacy of entrepreneurship and history of fostering an environment of internal innovation. DeNA was founded in 1999 by Tomoko Namba, a former McKinsey consultant and Harvard Business School graduate who saw an opportunity in online auctions.

“Very few consultants from McKinsey started companies at that time. And there are very few women entrepreneurs. I thought I would be able to do well because I was giving advice to CEOs,” Namba told the BBC in a 2013 interview. “I thought I would be able to do far better. But…I made every single mistake I could think of.”

It took four years for DeNA to become profitable.

Dai Watanabe was along for the ride. He joined the company shortly after its founding, when it was a pre-IPO startup growing its team from a headcount of thirty to one hundred. Watanabe was involved in launching and monetizing its online and mobile e-commerce businesses.

“Although these various initiatives are no longer what DeNA is known for, their success eventually led the company to go public in 2005,” he explained.

Watanabe worked in numerous roles across DeNA: in 2006, he started a team in China designed to replicate DeNA’s success in Japan. It was a challenging task, even as DeNA secured a leading position in Japan’s mobile internet market with Mobage, its mobile gaming and social networking service. In 2008, Watanabe moved to the Bay Area to bring Mobage to the U.S. market and launch a game development business.

“Although DeNA invested hundreds of millions of dollars into our U.S. expansion, the rise of the iOS and Android platforms ultimately disrupted our business,” he explained.

In 2016, DeNA closed its studios in North and South America. Though the same disruption happened in Japan, DeNA was able to successfully diversify its portfolio and maintain its position as a leading Japanese company.

“I’ve been part of several initiatives that ultimately had to be shut down,” Watanabe reflected. “I am proud of having contributed to the company’s early success

and for my role in helping our recently launched businesses learn from our previous failures.”

After the closure of DeNA’s North American studio, Watanabe remained in the Bay Area, supporting multiple business units in identifying and exploring partnerships, research, and investment in the West.

He helped DeNA’s teams in Japan stay abreast of new trends and innovations and supported key initiatives by building relationships with U.S. startups, corporates, investors, and service providers.

As part of that work, DeNA partnered with Silicon Foundry, an innovation advisory platform that builds bridges between leading multinational corporations and global startup ecosystems, to facilitate digital transformation initiatives for its various business lines.

In 2019, Silicon Foundry supported and served as a thought partner to Dai in designing Delight Ventures’ business model, ensuring it mirrored best practices based on the teams’ own experience and representative venture studios from around the world.

Today, Silicon Foundry works with Delight Ventures to explore new investment opportunities, support current portfolio company activities, continue to advise on best practices in venture studio operations, and provide insights into the political and regulatory environment that facilitates entrepreneurship growth in the U.S. “DeNA’s spirit of innovation made Delight Ventures possible—and now Dai and his colleagues are inspiring a new generation of Japanese entrepreneurs,” said Neal Hansch, Silicon Foundry CEO. “We’re honored to do our part to help build that ecosystem and forge bidirectional connections with Silicon Valley.”

Delight Ventures’ portfolio companies include IoT home devices company Nature, enterprise collaboration platform BeaTrust, snack subscription service snaq.me, and artwork rental platform Casie, among others. Watanabe is excited to help the ecosystem continue to grow.

“I am 100% certain that we will see an explosion of entrepreneurship as our society evolves, much as we saw it happen in France, Germany, and many other countries,” Watanabe reflected.

“There is no reason to think that Japan’s native entrepreneurial talent is lacking compared to other countries; there just isn’t enough resources or support in place to make aspiring founders comfortable enough to take the risk! Hopefully, Delight Ventures will be able to make progress on this front and help lead the charge on growing our innovation ecosystem.”

TO LEARN MORE ABOUT DELIGHT VENTURES, VISIT DELIGHT-VENTURES.COM. TO LEARN MORE ABOUT SILICON FOUNDRY, VISIT SIFOUNDRY.COM.

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“Delight Ventures’ key deal source is from DeNA, as one of our priorities is to encourage innovation from our existing and former employees,” Watanabe said.

“DeNA encourages its top talent and those employees with entrepreneurial aspirations to test out their ideas with the company’s support and eventually spin them out as separate companies (not as new business lines owned by DeNA).”

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AHI GVIRTSMAN IS THE FORMER VICE PRESIDENT AND GLOBAL HEAD OF INNOVATION OF HP’S SOFTWARE DIVISION, THE AUTHOR OF THE BOOK “THE PEAK INNOVATION PRINCIPLES” AND CHIEF KNOWLEDGE OFFICER AT SPYRE. HE IS CONSIDERED A GURU OF ORGANIZATIONAL INNOVATION AND HIS METHODS ARE BEING APPLIED IN VARIOUS ORGANIZATIONS INCLUDING VODAFONE GERMANY, ORBIA, AND THE MUNICIPALITIES OF TEL-AVIV AND JERUSALEM

DISASTROUS MISTAKES

YOU ARE ABOUT TO MAKE

N ALL SECTORS, AN INCREASING NUMBER OF LARGE ORGANIZATIONS TODAY ARE IN THE PROCESS OF EXAMINING, PLANNING, OR ESTABLISHING AN INNOVATION PROGRAM. AS IN ANY YOUNG DISCIPLINE, IT IS VERY EASY TO MAKE MISTAKES WHEN GOING THROUGH SUCH A PROCESS. AS A MANAGER WHO HAS LED SUCH A MOVE DIRECTLY IN AN INTERNATIONAL COMPANY FROM THE FORTUNE 50 LIST AND WHO ACCOMPANIES OTHER ORGANIZATIONS THROUGH SIMILAR MOVES, I CAN POINT TO A NUMBER OF SUCH RECURRING MISTAKES IN MOST OF THE ORGANIZATIONS TO WHICH I HAVE BEEN EXPOSED. SOME ARE SIMPLY DUE TO LACK OF EXPERIENCE, SOME TO THE FACT THAT THE ORGANIZATION IS USED TO DOING THINGS IN A CERTAIN WAY, AND SOME ARE DUE TO A LACK OF UNDERSTANDING THAT INNOVATION IN AN EXISTING ORGANIZATION REQUIRES THE CREATION OF NEW RULES OF CONDUCT. WHY SHOULD YOU CARE? MAKING SUCH MISTAKES CAN BE DISASTROUS FOR ANY EFFORTS OF ESTABLISHING SYSTEMATIC INNOVATION. WORSE THAN THAT, IT HAS A LINGERING EFFECT WITH MANAGEMENT TEAMS WHERE SUCH MISTAKES OCCUR IN THE FORM OF DISENCHANTMENT AND VERY LOW INTEREST IN PURSUING THE MATTER FURTHER. THE BOTTOM LINE IS THAT THESE MISTAKES KILL INNOVATION.

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CORPORATE INNOVATION

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Mistake#

OVER-FOCUSING ON IDEAS/CREATIVITY

People tend to think that once the best ideas are identified and given management’s blessing then good things will automatically happen. If there is one thing that is completely clear to me after more than fifteen years of activity as an intrapreneur, the VP of a global innovation program and an expert who has seen hundreds of organizations from up close, it is that good ideas are a dime a dozen. The technique you will use to generate ideas is of minor importance. In the end, what matters more than one technique or another is what happens the day after the idea. How many ideas can actually reach fruition? It only takes once or twice of having “ideation days” before people start asking “but what about the winning ideas from the previous events?”. Coming up with quality ideas is the easy part. Making those ideas happen is much harder. The good news is that many organizations are doing so consistently in ways that are replicable.

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LOW COOPERATION BETWEEN THE INNOVATION TEAM AND THE BUSINESS UNITS

There’s a popular notion that most of the organization consists of people who only interfere with innovation and that with enough determination, energy and audacity, individuals can will the organization into innovating. The reality is that you cannot deliver any innovative idea at scale without the full cooperation and engagement of the business units. I like to say that innovation is an extreme team sport. Trying to promote innovation in ways that do not engage the business units and have them take ownership of innovative opportunities is simply doomed to fail.

TOO MUCH EMPHASIS ON TECHNOLOGY

APPLY STANDARD PROJECT MANAGEMENT TOOLS

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Innovative ideas naturally make us feel uncomfortable because they contain many elements of risk and uncertainty. One of the things that is taught in every business school is to identify risks and neutralize them.

This is essential for the proper conduct of the existing organization but extremely deadly for many opportunities that could take your organization to the next level. What happens is that such selected ideas eventually reach well-intentioned managers in the business units that wish to reduce them into something they are able to contain and control through widespread project management and risk management practices. This way managers can show a willingness to encourage innovation but at the same time, they are not endangering too much of the existing business which is the main measure of their success. Unfortunately, applying common risk management practices to innovative opportunities without understanding the nature of entrepreneurship usually drains their potential impact as well. Staying in the comfort zone means that while innovative ideas will seem to have great potential, this potential will evaporate as part of their attempt at implementation.

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MAKING BIG UNFOUNDED BETS

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Many organizations make the mistake of assuming that innovation Many organizations make the mistake of assuming that innovation must be based on technology, and to that end, place the innovation group under the CIO, the CTO or appoint a manager with technological background to the position. Innovation can be based on technology but it is much broader than that. Innovation is about taking opportunities, some of which may be technology-based and turning them into value delivered to customers. An approach of focusing on technology eliminates the potential contribution of many employees in the organization who are well acquainted with the current organization’s activities, customers, distribution mechanisms, sales, etc. Their contribution and leadership is essential to the effective transformation of any technology into customer value. In other words, we really want the technologists inside the metaphorical innovation vehicle, but we shouldn’t let them take the wheel.

EVALUATING IDEAS IN THEIR RAW FORM

A typical scenario in many organizations is the corporate Hackathon or ideation workshop where ideas are submitted, prototypes are created, a pitch is prepared and management teams are invited to select the winners.

Unfortunately, innovative far-reaching ideas tend to sound as requiring more thought at best and bordering on absurd at worst when they are first created. Since these sort of events do not allow enough time nor do they provide the right tools for idea development what is pitched to management teams is a very early and raw version of those ideas.

This causes the ideas with the most potential to be left behind and as a result, the impact of innovation activities is very limited.

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Large organizations are how should we say it, large. The definition of success is relative to the size and scope of the existing business. This means that when managers are interested in promoting innovation, their inclination is to achieve results of a similar scale quickly. There are industries where the average tenure of senior executives is 3-4 years, a significantly shorter time period than the time it takes for startups that have managed to reach a turnover that can be of interest to a large organization.

This pressure for significant results brings, in the absence of appropriate working methods for large and unfounded bets. A manager looks around and thinks that if the organization is able to manage the existing business so well then it will also be able to set up a new activity from scratch faster than startups “if we just throw more money and resources at the problem”. This is a wrong assumption unless organizational strengths are leveraged while the weaknesses are properly managed.

It is very common to think in established organizations that there is a point during the life of an innovative idea where the team has “made it” since management is engaged and provides funding and support. It is tempting for innovation managers to believe that it is a point where they can simply step back and allow things to take their natural course. Unfortunately, the reality is different. Even when a promising innovative opportunity receives the blessing of the management team, it still has to deliver its value successfully while navigating an organization that treats it like the body does a life-saving organ. It will encounter resistance every step of the way because by its nature innovation remains outside the comfort zone of the various stakeholders across the organization that are necessary to make it work (see extreme team sports). Existing units see the venture as something that robs them of resources at best and as a factor that may impair their ability to perform their tasks and reach goals at worst. Organizational gatekeepers such as legal departments, brand, revenue recognition, etc. will pile up various and odd difficulties and the frustrated venture team will find itself struggling with obstacles at every step. The moment of management approval is only the beginning.

FOCUSING ON CULTURE ONLY

DISREGARD FOR INCREMENTAL INNOVATION AND FIXATION ON THE PURSUIT OF DISRUPTIVE INNOVATION

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I have often heard during my career a remark such as “Yes, these are nice ideas, but they will mostly lead to incremental innovation - not something really groundbreaking,” or people giving me the Henry Ford quote about faster horses. It is as if achieving significant progress in existing organizational activities is somehow inferior. I like to use the analogy of a person who is overweight by fifty pounds and decides to participate in a triathlon with only a week’s notice. This person will probably end up in a hospital and with a lot of frustration. If a good friend were to come to me with such a plan, I would have told him to get out of the house and walk to the end of the block, the next day walk two blocks, start running gradually and so on. Organizational innovation is an acquired organizational skill. Before you can have management even consider a disruptive innovation idea I recommended that it starts by testing the organization’s capabilities to innovate with what the organization is already doing. Kodak had the digital photography technology before everyone else. Nokia engineers knew how to build a smartphone before Apple. The expectation of identifying ideas of disruptive innovation and implementing them early on is impractical.

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If only I had a dollar for every time I heard the belief that innovation is primarily cultural change and that the rest would work itself out once the cultural change is achieved.

This belief shows a deep misunderstanding of the difference between the nature of entrepreneurship and the nature of the daily routine. Culture is indeed a necessary element but it cannot be changed without massive action. Culture needs to change while taking entrepreneurial action and applying entrepreneurial tools. Focusing on culture alone through events, speeches, workshops and so on will lead to a lot of talk with no tangible business outcomes and as a result to cynicism that will develop among the employees of the organization. You can talk about athleticism as much as you want, but at the end of the day, if you remain in poor shape and overweight, no one will take your statements seriously.

TREATING INNOVATION ACTIVITIES AS A TEMPORARY OR ONE-TIME ACT

“Yes, we once did a brainstorming session with employees and an award-winning competition for the best idea but nothing came of it.” Developing the organizational skill to conceive, test and execute innovative ideas takes time, experience, failure and learning. It is possible to reduce the amount of failures and their cost significantly when you know how to operate but there is a constant investment here that the organization needs to make through budget allocation and employee work time to generate a flow of ventures that can significantly and frequently advance its strategic metrics. Innovation is not a one-time experience.

It is an organizational ecosystem in which an iterative process is carried out regularly, in parallel with the routine activities of the organization while keeping coordination and cooperation with its existing units.

SO NOW THAT YOU KNOW ABOUT THESE POTENTIALLY DISASTROUS MISTAKES, THE GOOD NEWS IS THAT THERE ARE MANY ORGANIZATIONS OF MULTIPLE TYPES THAT HAVE ESTABLISHED THRIVING INNOVATION ECOSYSTEMS WHILE AVOIDING THESE MISTAKES. JUST LIKE YOU WOULDN’T FLY AN AIRPLANE WITHOUT BEING TRAINED AS A PILOT, I ADVISE YOU TO EDUCATE YOURSELF THROUGH LITERATURE, PEERS, AND COMMUNITIES ABOUT THE ROLE OF AN INNOVATION MANAGER BEFORE TAKING YOUR FIRST STEP.

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THINKING THAT ONCE RESOURCES AND MANAGEMENT APPROVAL ARE SECURED EVERYTHING ELSE WILL FALL INTO PLACE

By Alex Slawsby Founder and CEO at Derisk.us; Strategic Advisor at Innovation Leader

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Stop Innovation

In many large organizations, innovation leaders and teams glorify the idea of the intrapreneur who beats incredible odds to shape the future of the organization. Making change happen and getting people to think differently is hard, and there’s a natural assumption that you need people who are crazy and passionate. You need people who will fight through wind, snow, sleet, and the dark of night to get a breakthrough initiative across the finish line.

You need superheroes. And maybe they even need their own superhero lair — a lab or studio insulated from the rest of the organization, complete with its own special mystique.

But in most companies, the superhero approach just doesn’t work. The further from the core you are, and the more reliant on a special relationship with a C-level leader, the more likely it is that you’ll be seen as someone who can somehow operate outside the normal rules. The more special or “chosen” you seem, the more likely it is that others in the organization will be hunting around for the kryptonite that will kill your project — or at least rooting for you to be brought down to earth.

Corporate innovation leaders, and their teams, need to move away from “Superhero Syndrome.” They need to instead approach their work like someone scouting talent for a football team, or perhaps putting together an orchestra. As an innovation leader, you need to be involved in identifying people throughout the organization that can help you achieve something great, with a diverse range of skills, knowledge, and political connections.

Rather than recruiting wide receivers or bassoonists, you may need:

• Colleagues in legal and compliance who can help you navigate the complexities of contracts and regulations • Colleagues in IT who can help set up sandboxes in which you can test new technologies • Colleagues in marketing or sales who can help you get feedback from customers • Colleagues in finance who can help realitycheck financial models (and allocate resources) • Colleagues in business units who can provide input on what it will take to operationalize a concept and take on new offerings when they’re ready to be launched.

These people all need to understand what’s in it for them and why they should be involved. Giving people visibility and time with board members or C-suite leaders can do that — so can helping them develop new skills or capabilities. Sometimes, something as simple as a fleece or a coffee mug can make people feel like they’re part of an important movement in the organization. In normal times, traveling together to a conference or trade show — perhaps to show an early concept to a partner or retailer — can do that. Most importantly, there needs to be the possibility of chalking up a win, eventually.

Not everyone you involve will always feel like they are helping put wind in your sails. Some may point out a technical flaw, or highlight an important distribution issue. But the goal of any innovation team is to figure out as quickly and cheaply as possible if a given idea is good or bad, and then act accordingly. That’s how you achieve the optimal outcome for the organization.

Make sure you have lots of ways to give people kudos and recognition, regardless of whether they helped kill a suboptimal idea or sign the first customer contract for one with huge potential.

It’s time to acknowledge that Superhero Syndrome just doesn’t fly. Cultivating great ideas, testing them, and getting them to market takes a broad collective of colleagues from around the organization — all playing different parts, but playing from the same sheet music.

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This featured article is brought to you courtesy of innovation leader www.innovationleader.com

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By Scott Kirsner CEO at Innovation Leader & Boston Globe Columnist

Nestlé Shares Advice from its Global Hunt

for Big Ideas

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This featured article is brought to you courtesy of innovation leader www.innovationleader.com

It’s nearly impossible to go a day without consuming something made by Nestlé, the largest food and beverage producer in the world: from Nespresso to Häagen-Dazs to Pellegrino to DiGiorno to Toll House to Purina (if you’re a dog or cat.) Twenty-nine of Nestlé’s brands have sales that top $1 billion annually.

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But the Swiss company has experienced a slowdown in its sales growth, at the same time as it tries to transform itself from a company best known for sweet treats—like KitKat bars—into a business more focused on nutrition and wellness. In 2017, Nestlé paid $2.3 billion to acquire Atrium Innovations, a Canadian producer of nutritional supplements like Omega-3 fish oil and organic multivitamins.

A key part of that pivot—and of making Nestlé more open to great outside ideas—is its HENRi initiative, launched in July 2016. The launch marked the company’s 150th year in business, and the initiative was named after Henri Nestlé, a pharmacist who started the company in 1867 after inventing a baby formula.

“HENRi is all about taking on projects that matter,” explains Gerardo Mazzeo, Global Innovation Director at Nestlé. “That’s the way we want to differentiate HENRi from other open innovation systems that already exist out there. It’s about creating a healthier future for consumers and families, and contributing to more of a sustainable future. It links beautifully with the core of what Nestlé is all about.”

And HENRi was set up with a clear mechanism for funding an initial pilot test with one of Nestlé’s 8,500 brands.

Mazzeo, who took on his role in 2012, recently explained how HENRi is structured, and how he spreads the word inside and outside of Nestlé.

“What we say is that HENRi is a bit like a matchmaker, where creativity meets scale,” Mazzeo says. “We’re looking to bring together the ingenuity of startups—their creative spirit, the passion for what they do—with the scale, geographic reach, and breadth that Nestlé can

provide, in terms of marketing, R&D, or mentorship.”

A first set of innovation “challenges” launched in 2016 focused on forging collaborations between Nestlé brands and startups working in fields like mobile apps, augmented reality, and data analytics. One example: working with Boston startup Crowdly to help the Nestlé Purina pet food division understand who its most influential social media followers are, and improve wordof-mouth marketing.

More recent challenges posted to the HENRi site deal with topics like encouraging kids to exercise; diagnosing micronutrient deficiencies; or helping support a new class of “agripreneuers”—next-generation farmers— around the world.

“We’re very demanding of the quality of the challenge that goes onto HENRi,” Mazzeo says. “It really is about purposeful innovation. It has to be linked to our core purpose and values, and how we’re going to enhance the quality of our consumers’ lives. I’m not after short-term tactical projects. Those we can do internally, with our existing networks and agency partners.”

Building on What You Have The HENRi platform itself was designed, built, and launched in about five months, Mazzeo says. “The back end already existed—there was already an existing platform internally within digital services and global IT— so we were able to just focus on the front end, design, look and feel, registration, and data collection. That made the launch less costly.” Mazzeo describes the initial project as “a lean startup—it was ‘me, myself, and I’ from Nestlé, along with an agency team of two or three people.”

Established Funding and Business Needs For each challenge posted to the HENRi site, there is already an internal brand sponsor at Nestlé, and $50,000 in funding allocated to get a pilot test underway. “The challenge and funding needs to be signed off by a senior executive in [a specific Nestlé] business,” Mazzeo says.

And the funding, while small, helps “to lubricate the beginning of that partner-pilot proof of concept phase.

It shows true commitment that they’re deadly serious about this particular challenge.”

Mazzeo views one of his roles as an editor or curator of challenges. He says being selective is crucial.

“I’d rather have disappointed internal people than have the dilution of having lots of challenges on the HENRi website,” he says. “Fewer challenges of higher quality is better.”

Sourcing those challenges requires lots of internal legwork. “Getting the traction, getting the awareness, getting the amplification—we’ve learned to do that in a much more creative way since we started,” Mazzeo says.

“Any initiative that comes out of the global headquarters is always going to be met with some resistance.” But getting a first wave of “good quality challenges,” he says, really helped to “wake people up to the idea that, if we engage with HENRi, they can really have impact.”

And participating in many business unit committee meetings, he adds, is part of what it takes to build support for something new in a large organization. “I’ve had to spend a lot of time internally with our different strategic business units, presenting HENRi—what we’re doing, how they can get involved.”

But Mazzeo says he emphasizes that his team will handle much of the heavy lifting of running a challenge. He explained that business unit leaders will only help define the challenge itself, along with the selection criteria, or “filter” that will help to weed out irrelevant startups. Once five startups have been chosen, the business unit leader will listen to pitches from five different companies— either in person or via Skype. Following the pitch session, “the business owner will select a startup that they best feel meets their challenge,” Mazzeo says.

Simplify Everything To make it more appealing for startups to work on projects with Nestlé—and limit frustration on both sides of the equation—Mazzeo says it’s important to reduce the number of steps and the pages of paperwork required to run a pilot test.

Mazzeo has representatives of legal, procurement, and finance who work closely with his team, and, he explains, “We have significantly reduced our NDA [non-disclosure agreement] and scope-of-work documents to two pages.

I said [to colleagues in the legal department], ‘How can we make the process easier and simpler for startups?’ I asked a controller, ‘Who is the best person I should speak to in order to help our brand teams when it comes to payment terms? How can we turn this thing upside-down to get payment terms down to the absolute minimum?’”

Even after more than a year of running HENRi, Mazzeo says he is “learning every single day about how to best manage our peer-to-peer relationship with startups.”

Just as speedy payment is important, so is a speedy decision about whether Nestlé is interested in a partnership. “Startups want to hear the word yes, but if you tell them no, they can move on,” Mazzeo adds. “The word we don’t want to use is ‘maybe.’”

“Startups are not suppliers,” he continues. “They are our future partners on the challenges. Within 24 hours, we’ll get back to every startup and every inquiry so we do not keep them waiting.”

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Mazzeo, who reports to Nestlé’s Global Head of Marketing and Consumer Communication, says he is the only person who works on HENRi full-time. But he adds that a handful of others in the company, and at the advertising agency McCann, provide support “when their subject matter expertise is needed.”

Communicating Externally

One of the key learnings from getting HENRi up and running, Mazzeo says, is that the best startups don’t just flock to a big company because it has unveiled a new website. “Amplification and awareness” are essential, Mazzeo explains.

“We didn’t realize how impactful being on a panel would be, or being a keynote speaker, or having a booth at a trade show where we talk about HENRi,” he says. “You meet people with similar shared ambitions to what you want to do at a global level; you meet partners that want to work with you. The event schedule has been really important. We go to food and beverage events; we went to an agritech event where I was on a panel. Establishing thought leadership at the events is really important.” In recent years, that has included events like the Festival of Marketing in London, ad:tech, and a New York City panel discussion on “The Future of Food, and Who Will Feed Us.”

How HENRi is Different from Silicon Valley

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Since 2013, Nestlé has operated an outpost in Silicon Valley, run

by Mark Brodeur, the company’s Vice President and Global Head of Digital Innovation. Like HENRi, it reports in to the company’s marketing organization.

Brodeur and his California-based team look at different emerging technologies, like the Internet of Things, chatbots, and augmented reality, and work to identify the important players in those areas. “The aim,” Mazzeo explains, “is having three or four really good startups in a particular vertical.” Then, he says, “startups are invited to talk to senior leaders at Nestlé about how their technology might impact our business, and how collaboration or co-creation can work.”

The difference between that work and how HENRi is set up, Mazzeo continues, is that “I’m already starting with a business opportunity or challenge posted on the HENRi website,” as opposed to identifying a promising startup and then working to find the spot where it might best “plug in”to Nestlé’s business.

If a startup wants to engage with Nestlé, but doesn’t have an offering that is relevant to a specific challenge, it can still register on the platform. “When we have appropriate challenges, we will contact them directly,” Mazzeo says.

“We’re opening ourselves up for business.” HENRi is intended to be, in Mazzeo’s words, “the entry point for global startups” that want to collaborate with Nestlé.

As a result, Mazzeo says, “our database of great startups is improving. We had over 160 applications to the first six challenges, and three of those [pilots] are now in field.”

In total, he adds that nine projects have come through the HENRi matchmaking process and are either being piloted, or heading toward a pilot test.

What’s Next

The next phase for HENRi may involve running challenges specific to Asia, South America, and other non-English speaking regions. And in 2018, Mazzeo says his team will be “ramping up the event schedule” to promote HENRi to startups around the world. And he’s also continuing to meet with colleagues at Nestlé, “playing Sherlock Holmes,” as he puts it, “and finding more great challenges to run.”

One thing is definitively not on the roadmap for HENRi’s future, according to Mazzeo. “From the very beginning, we were clear that HENRi will never become an idea suggestion box” for collecting ideas from Nestlé’s 330,000 employees. “They never work,” he clarifies. “You don’t open yourself up to the outside world, and it doesn’t link to strategy.”

Mazzeo says he’s gratified to see that Nestlé’s CEO, Mark Schneider, has been touting the company’s new emphasis on open innovation in recent talks. But Mazzeo says he knows that, before long, the collaborations that HENRi is spawning will need to deliver tangible returns to the company.

“My CMO is soon going to be asking, ‘Show me the impact, show me the rate of return—which are very valid KPIs,’” Mazzeo says. “But the learning and the collaboration have been incredible. And the fact that an organization of our size and complexity can do this—we’re Swiss, we can be risk-averse and conservative—I think it shows that the culture of experimentation is beginning to build.”

Examples of Projects Posted to the HENRi Website Every project on Nestlé’s HENRi website has already received funding approval of $50,000 to pilot test a proof of concept with customers.

ustainable Pouches:

“Many young parents cook and puree at home to make sure their baby is eating healthily. But this isn’t always convenient, especially when they’re out and about.

That’s when soft food pouches offer the perfect solution: nutritious food in a convenient and portable package.

Soft food pouches are lighter and more space-efficient than glass jars, which makes them more environmentally friendly when we take transportation economies into account. But the material required to keep the food fresh and safe is non-recyclable and non-biodegradable, so we want to go one step further and find a way to make pouches even more sustainable. Our ambition is to make them the best option not only for convenience, but also for the environment.

We want to work together to create a solution that leads to even greater sustainability gains in the baby food market, to help parents reduce their environmental impact.

The solution could be anything from a biodegradable material to a way to further improve efficiency in the supply chain, or even an enabler of behavioural change.

But it should offer a tangible sustainability gain, without compromising the nutritional quality or freshness of the food.”

The Future of Bottled Water: “The PET plastic that we use for the majority of our packaging today is the best solution, but it’s not without challenges. Conventional plastic is not seen as a credible biodegradable material, as it requires fossil fuels and recycling rates are still far from being what they need to be.

Meanwhile, carton-based packaging is not a viable alternative as consumers want to be able to see the water through the packaging. But there are innovations in packaging and delivery systems that we might not yet have considered or tested. That’s why we want to work with the right partner to scout for new, complementary alternatives and to find new, additional ways to make tasty, quality drinking water available to our consumers.

We’ll source and test solutions that companies of all sizes (from start-ups to established groups) might have already in the market or plan to launch—for mineral water, spring water and purified water. The chosen solution will need to be see-through, allow for branding, protect water quality and not require any municipal works (such as hundreds of kilometers of new pipework). It also needs to be credible in the eyes of eco-conscious consumers if we’re going to make a genuine difference to how we access water. This is a long-term challenge. The sooner it is met the better. Once we have selected the most promising solutions, we’ll pilot them and afterwards look to roll them out to the wider Nestlé Waters organization.”

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A Way for Everyone to Register

ROY AVRAHAMI, HEAD OF STAFF AT ASHDOD PORT COMPANY, ISRAEL’S LARGEST PORT, HAS BEEN DRIVING AN OPEN INNOVATION INITIATIVE AT THE PORT OVER THE LAST COUPLE OF YEARS. WE GOT THE CHANCE FOR A QUICK INTERVIEW TO LEARN MORE ABOUT PROMOTING INNOVATION IN COMPLEX ENVIRONMENTS.

From port

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Port of Ashdod innov

t to portal

vation in 60 seconds

The port of Ashdod has been Israel’s largest port for many years, its main point of entry for goods. What sparked the decision to innovate?

The Israeli port authority is currently undergoing significant changes with the entry of two international port operators, both private and competitive players. The Port of Ashdod Board of Directors has decided that if until now the Port of Ashdod was the largest port in Israel, it will now become the smartest port in Israel mostly in its customer service.

What is the impact you expect innovation to have on the port of Ashdod? What is your innovation strategy; i.e. the way you intend to achieve this?

Innovation will streamline port work, increase productivity and most importantly transfer employees to a mindset of innovation and competitiveness. In addition, innovation will be an additional source of income for the port, in that the port will invest in startup companies for partial ownership while helping to distribute them among the various world ports. The goal is for the port of Ashdod to become a technological hub of seaports. The port will establish innovative embassies in all the world’s ports and through them it will be able to export and import startups.

What was the factor that engaged the management team and directorate in supporting innovation efforts?

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The realization that if you do not change, innovate, streamline and reinvent yourself according to the changing reality in a competitive world, you become an irrelevant player.

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What outcomes have you been able to achieve over the 18-24 months since innovation activities began?

We currently have over 30 startups operating across the port.

In addition, we established an accelerator with an international operator who will locate and train startup companies from the seed phase and help them develop to the sales phase. At the same time, we have created strategic collaborations with Israel’s national cyber directorate, the Ministry of Energy, and the applications and technology department within Israel’s ministry of defense. The vote of confidence demonstrated by the international accelerators is the key indicator for us that we are going in the right direction.

One of the toughest things about working with startups is usually integrating their technology into existing processes and team habits having to accommodate existing skills and motivations. How do you manage to get the cooperation of people in the field?

The main idea is not to go around the existing knowledge and experience, but to involve it in the process, allow the port’s existing experts to test the technology for themselves, ask questions and even be the leaders of change. The sense of control and empowerment among these innovation agents makes them the best ambassadors of such new technology.

Moreover, the knowledge gained so far has great value in future implementations of any externally sourced system and even identifies additional needs that the startup company was not initially aware of.

What advice can you offer to those who are just starting to drive innovation in their organization?

My approach is to take action, establish bridgeheads in the field and figure things out along the way. In practice, you are driving the assimilation of innovation yourself and must act with a lot of audacity, courage, and convey that you know what the final picture is (even if this isn’t necessarily the case). It is important to find your key partners and work closely with them. This doesn’t necessarily mean you do what they say, but it is very important to listen and work in coordination.

What is the vision for innovation at the Port of Ashdod? How does management see innovation affecting it 5-10 years from now?

The Port of Ashdod will be a significant player in the startup community that specializes in seaports, logistics, cyber, energy, etc. The port will be transformed from a port into a portal of technologies. The port will establish innovation embassies in various ports around the world and will be a magnet for knowledge, a sandbox for innovative technologies and initiative, and will extend a blue ocean of opportunities for startups.

An interview with Avi Zooaretz, Director of intrapreneurship at Orbia, a global corporation of more than 20,000 employees.

Group genius

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intrapreneurship impacting tangible outcomes at Orbia

Please describe the main goals of the intrapreneurship program at Orbia.

When I look at an internal organizational innovation program I always focus on two main goals: 1. Creating an internal organizational culture of innovation.

Thanks to the fact that over a long period of time the innovation program is implemented in the organization and thousands of employees experience it, a very special opportunity is created for employees to create and adopt an understanding of innovation.

2. Creating a financial effect through ideas that come from the employees . This is actually the most important goal in my opinion because creating a culture is nice but once you also produce sustainable projects that are embedded in the organization and produce a financial impact you actually get a boost from the management team to continue. In addition, the morale of the active teams lowers the potential opposition of employees who may not believe in innovation that much and most importantly you create a buzz of success that will eventually affect the culture as well.

In summary, the creation of the innovative culture in the organization is an important thing (and difficult to measure) but the financial impact and creation of new ventures (embedded in the organization) is in my opinion the main goal of the program.

How do you provide the executive teams at Orbia’s various companies with high-quality innovative opportunities to impact their results?

At first, I try to understand what the strategy of each organization is and in what fields of innovation the company wants to play. After understanding and analyzing the different needs and the strategic front of each organization, I begin to produce a list of potential challenges that I present to management and in collaboration with them we make a decision on what issues we want to address in the challenges we produce. These challenges are then what we use to solicit innovative ideas from our employees.

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By connecting the needs and the organizational strategy to the innovation program, we actually get a result that allows us to get very high-quality products and in addition connects the employees to the organizational strategy.

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What would you say was the main bottleneck you were able to eliminate so far in terms of getting to tangible results?

To my delight there were not many bottlenecks due to the fact that from the first moment the field of innovation was part of the strategic planning of the then-CEO of the company Mr. Daniel Martinez. This was part of the organizational transformation he was trying to instill. At the same time, still as in any innovation program there are the usual difficulties of budget, resources, time of employees etc. However, the program we developed with the support of Spyre - Innovation ecosystem design, that included hundreds of innovation volunteers (we call them champions) a tight budget and a structured process helped us beat any bottlenecks we encountered.

One of the challenges of innovation project teams is the access that is required to various experts at the right time. How do you overcome this challenge?

From day one as I mentioned above, we recruited innovation managers at each of Orbia’s companies. In addition, we recruited and trained innovation champions who help us push the program forward, and we have recruited subject matter experts who help us in the later stages of the process. In fact, subject matter experts are a critical component of our success since they are the ones who open the most complex doors for us.

For those who are taking their first steps as innovation managers, what would be your main advice?

• Patience • A stubborn belief that in the end, if you persevere, it will succeed • Recruit a team of people who share the same enthusiasm • Work hard and fast!

The goal is as I said is to produce impact, just having nice ideas is not enough and here your job as the director of innovation is to control the projects, ideas and processes and do what you can to implement them.

And one last thing: Remember to enjoy the road :-)

What has been the most gratifying part of your role?

There are two things that come to mind.

The first is to hear an exciting story about employees who for the first time in their lives did something that excited them so much or something they have never done before. As an example, in our last project we had an employee who went through all the selection stages and the day before the presentation to the management he sent us a strange email and asked what to wear to the management presentation. We told him he should not dress specifically for the meeting but still we were curious and asked him about the source of the question. The employee answered that he has been working for the company for over 20 years and this was the first time in his life that he had a presentation!!! He simply did not know how to behave in such a situation.

The second thing that always excites me is the fact that an idea you see at the beginning of its journey appears as a few lines of text on the platform and transforms six months later into a mature idea, assimilated into official work plans that can produce a multimillion-dollar impact on a company.

What steps can innovation managers take in order to show tangible results in relatively short periods of time?

It very much depends on the organization.

If it is an operations-driven organization then one can focus on continuous improvement and thus achieve a relatively quick financial impact in the form of cost savings. At the same time, I think the right and most accurate combination is to issue employee challenges that combine innovative projects that have a long-term potential impact with challenges that can bring about a very quick effect, such as operations-based ones.

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THE POWER OF A SUPPORTING NETWORK INNOVATION AT ELBIT SYSTEMS

29 THE FUNNEL

AN INTERVIEW WITH GIL BENESH, CORPORATE CHIEF INNOVATION OFFICER AT ELBIT SYSTEMS LTD

PLEASE SHARE SOME INFORMATION ABOUT YOUR ORGANIZATION AND WHAT PART OF IT YOU ARE CURRENTLY ENGAGING WITH TO PROMOTE ORGANIC INNOVATION. ELBIT ID - A MULTIDISCIPLINARY GLOBAL COMPANY, BASED IN HAIFA ISRAEL, CONSTRUCTED FROM FOUR MAIN DIVISIONS, VARIETY OF TECHNOLOGIES, AND OVERALL ~18,000 EMPLOYEES AROUND THE GLOBE. ELBIT’S MAJOR ACTIVITIES INCLUDE: MILITARY AIRCRAFT AND HELICOPTER SYSTEMS COMMERCIAL AVIATION SYSTEMS AND AERO STRUCTURES UNMANNED AIRCRAFT SYSTEMS AND UNMANNED SURFACE VESSELS ELECTRO-OPTIC, NIGHT VISION AND COUNTERMEASURES SYSTEMS LAND VEHICLE SYSTEMS MUNITIONS COMMAND, CONTROL, COMMUNICATIONS, COMPUTER, INTELLIGENCE, SURVEILLANCE AND RECONNAISSANCE (C4ISR) AND CYBER SYSTEMS ELECTRONIC WARFARE AND SIGNAL INTELLIGENCE SYSTEMS AND OTHER COMMERCIAL ACTIVITIES…

FOLLOWING ITS TECHNOLOGIES SUPERIORITY, ELBIT LEADS SEVERAL MARKETS, ONE OF THEM IS THE HMD (HEAD MOUNTED DISPLAY), AND WITH OVER 38 YEARS OF AR EXPERIENCE IT HAS PROTECTED AND EXPANDED ITS POSITION OVER THE YEARS TO NOW HOLD OVER 85% OF THIS MARKET, INCLUDING THE FIRST IN THE WORLD CERTIFIED HEAD-WORN AR SYSTEM FOR COMMERCIAL AVIATION PLATFORMS, SKYLENSTM. ELBIT DNA IS TO CONFRONT AND REACH THE TECHNOLOGY LIMITATIONS IN ANY OF ITS VERTICALS. REGARDLESS OF THIS INNOVATIVE DNA AND PARALLEL TO INCUBIT (THE TECHNOLOGICAL INCUBATOR OF ELBIT SYSTEMS THAT INVEST IN EARLY STAGE DEEP TECH STARTUPS OPEN INNOVATION PLATFORM) WE AT ELBIT, FELT THAT WE HAVE TO TAKE THE COMPANY EVEN HIGHER THAN THIS AND FOUR YEARS AGO ESTABLISHED OUR INTRAINNOVATION STRATEGY AND ITS EXECUTION.

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WE STARTED PROMOTING ORGANIC INNOVATION ALL OVER THE COMPANY, FROM BUILDING A VAST INFRASTRUCTURE OF INNOVATION LEADERS (ILEADERS) AND TECH SCOUTERS (MEERKATS). ILEADERS’ MAIN ROLE IS TO ESCORT AND SUPPORT INTRAPRENEURS (INTRA – FOR LARGE COMPANIES) IN THEIR JOURNEY FROM CREATIVE IDEAS ALL THE WAY TO IMPLEMENTATION IN LIVE PROJECTS AND SPREAD THE NEWS OF INNOVATION IN THE COMPANY. THE ILEADERS GO THROUGH EIGHT FULL DAYS OF TRAINING THAT INCLUDES LECTURES AND WORKSHOPS FROM THE BASICS OF ‘WHAT IS INNOVATION IN LARGE COMPANIES?’ AND ‘INTRAPRENEURSHIP’ THROUGH COACHING AND FACILITATION SKILLS, INNOVATION TOOLS AND METHODS, AND ALL THE WAY TO TRAINING PRACTICALLY IN HACKATHONS, CHALLENGE DAYS AND OTHER INNOVATION EVENTS IN THE COMPANY. TECH SCOUTERS’ (MEERKATS) MAIN ROLE IS TO COMBINE OPPORTUNISTIC AND DEDICATED FOCUS SCOUTING ACTIVITIES AND ESTABLISH THE DISRUPTION YEARLY MAP FOR ENGINEERING AND BUSINESS LINES. THE MEERKATS GO THROUGH TWO DAYS OF DEDICATED LECTURES, PRACTICAL TRAINING AND MASTER CLASSES OF SCOUTING TOOLS/PLATFORMS AND VCs.

What stages does an employee’s idea go through from inception to implementation?

We call it the “Ideation Journey” or “Innovation Cycle”.

In the beginning, we thought that when we would create the iLeaders support platform and communicate it, most of the employees would initially use this platform.

Nowadays, we’ve already acknowledged that the first gate is the direct manager. We understood that this is due to a combination of psychological and comfort-level issues. Employees want to make an impact and wish to be perceived as innovative by their managers first.

As part of our organic innovation matrix, we train our managers as well to encourage that.

When employees have creative ideas the journey usually begins with their direct manager (there are some cases where it starts directly with the closest iLeader).

Managers explore ideas with the employees and place it on the right horizon (1- Impact on mature business, 2 – Impact on rapidly growing business, 3- Emerging business) to decide on the right track to proceed in. The second stage is where managers and employees reach out to the nearest iLeader and together explore the idea further towards clarification on whether the idea could create business value (usually filling up the ‘Value proposition canvas’ or the ‘Lean mission canvas’ to finetune the value behind the idea). The third stage is where employees (with or without the iLeader) start meeting business lines to find their early adopters and initial sponsors for the first MVP. In the fourth stage, there’s a first interaction where employees design and build a 1st MVP, and after a measure and learning stage, some perform the next iteration which is a 2nd MVP.

In terms of work time and budget, what are the resources that the organization allows you to utilize during this process?

Every 6 months, all employees go through a performance assessment process. In this process, each manager could choose to evaluate their employee based on innovation activities. The iLeaders usually have ~15% measurable innovation performances (15% of their time) for facilitating inner processes, in the organic surroundings or for ideation journeys of other employees.

The iLeaders are gathered in a professional community called Winnovation. Community events occur every month for general sync, company updates, a platform for iLeaders to present processes they were involved in or initiated, for extra practice and masterclasses with guests for other perspectives.

The first spirals and two initial MVPs are executed under the innovation umbrella in most of the divisions as part of the innovation culture. There are some cases that the intrapreneurs succeed to get an additional budget from their early adopters during this process.

A key bottleneck that innovation managers must deal with is the lack of executive engagement which in turn causes a very low adoption of innovative opportunities as part of official work plans. How do you deal with this challenge?

In my opinion, this is one of the main issues of implementing an innovation culture. We deal with it through a two-pronged approach. The initial direction is bottom-up, meaning, building the infrastructure of innovators, mentors, facilitators of innovation methods, tools and processes. On the other hand, we expose the managers -- mid-level as the first stage -- to those processes and case studies to emphasize the value they could gain from this infrastructure.

We understood a crucial point that sounds very reasonable but companies not always implemented it, and the point is: you could lecture, send newsletters, do aggressive marketing of how managers could gain from innovation processes or tools. The best way, however, is to have them experience it themselves. Be in unknown situations that you have no way to clarify; confront challenges that you have no clue how to tackle and then use innovation infrastructure that will navigate you to the most correct/fastest/cheapest initial direction.

To be practical and to help us with the engagement issue (managers and employees), manager’s exposure, and valuable ideation, we established a series of Hackathons or ideation sprints. We start every event process by meeting with the local managers from engineering and business lines; we ask them about their challenges and objectives and from that stage, we have them with us all the way until the actual event and ideas are executed.

After this final step, we introduce the outcomes of all those events in annual innovation demo days that expose the ideas and first MVPs to vast audiences (business and Engineering).

While the term “innovation coaches” is well-known and often misused, you were able to define it more accurately and create a thriving community that is driven by coaches. Please share the key elements of the innovation community.

I think the main achievement made when the process was established was that the community was constructed together with the iLeaders, Meerkats and other innovators. We walked our talk as we keep saying in the innovation ecosystem: “Design with your customers and not for them”. We kept asking them how they see their community in terms of vision, structure, main goals, strength, and the upcoming stages.

We gave several motivated innovators critical responsibilities and let the impact spread inside the community, not only by me and the community manager.

Another important move we did was to find several opportunities to add certain community members into initiatives in the company and publish this in a newsletter to create additional leads and connections, which created an important impact for community members and for the community as a platform.

An additional step we took was to ask the community members to help establish local innovation practices towards day-to-day innovation following our mentoring.

For innovation managers taking their first steps, what is your advice? Where should their focus be?

Innovation managers should start at their strongest field, and initial habitat. They have to start with small-scale processes and scale-up from this point.

The innovation manager should have a long-term vision (wishful goals) in the initial stage, and from that stage he/she should create short-term steps and execute them one by one to create quick wins.

Another piece of advice is to begin from the bottomup, find the right employees or teams that are open to trying new methods or processes and further up the road acquire broader buy-in to add the top-down engagement.

Parallel to the internal steps that I listed, innovation managers taking their first steps should use other companies and innovation managers’ experience and know-how. As I see it, the Innovation and Intrapreneurship ecosystem should be ‘Open Source’ i.e. sharing knowledge and experience to support this huge community.

What are your next steps? Where do you see Elbit innovation 5 years from now?

My vision is to connect the dots between People – Process – Initiatives Execution and add innovation as part of the DNA in each division by exposure to the impact and value gained from it and then execute it.

As I see it, there are two main goals to execute our vision:

1. Transform from mainly focusing on ideation to real innovation culture in all parts of the company, from vision, through search, development, design, fabrication and marketing, and all the way to our customer’s feedback.

2. Establish an accelerator platform for earlystage intra-division innovation that will be running parallel to the divisions’ innovation platforms and accelerate breakthrough ideas that have the potential to scale to significant business value for Elbit.

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Driving Innovation

by Thinking More Creatively Together

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Interview with Christopher Chapman, co-founder of Chop Wood Carry Balloons, former Director of Innovation & Creativity at Disney

Q: I’d like to start by asking what this role of Innovation and Creative at Disney entailed.

A: There are two large pillars under creativity and innovation. The first is training the workforce in innovation and creativity techniques in order to enhance its proficiency around these skills. We all know that large companies change and so it is about retaining what Walt intended the company to be essentially while changing. The second pillar is about inventing ways of generating customer value through what I call “Return on imagination” vs. return on investment. Both of these integrate as the training activities also generate innovation projects that push the organization forward.

Q: Is innovation a teachable skill?

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A: My answer is an emphatic YES! I will use an analogy to demonstrate. Think of major league baseball. If you wish to teach someone how to bat and you put them in the batting cage, they can get very frustrated swinging at a 95mph fastball. That’s very different from playing baseball with your uncle as a child which is completely teachable. Today one can go to an academic institution and get a Master’s degree in creativity, but for the vast majority of people, the challenges of creativity require a simple pitch and catch in the park and not a professional level batting cage. Therefore, I think we should take a step back and discuss how we define creativity and what is its utility for most of us. CREATIVITY IS WHEN YOU COME UP WITH SOMETHING NEW THAT IS ALSO USEFUL. IF IT’S A PURE EXPRESSION OF SELF THEN IT IS ART. IF IT IS NEW, USEFUL AND ALSO GENERATES A RETURN ON YOUR INVESTMENT THEN IT IS INNOVATION. In the United States, there was a report released that discussed something called “The fourth grade slump”. They noticed there’s a great dip in the creativity of children and that, as they get older, it is taught out of them because they are told that they’re not creative. Tests become standardized and reward them for basic skills they are good at, basically causing people to associate creativity with arts and crafts. Finance is one of the most creative fields there are but people who reach this discipline have had years of associating creativity with other things - not math or financial management. Basic creativity is inherent in almost everyone and simply needs to be awakened.

Q: There are two schools of thought around creativity. One is a Western approach which is about structured processes leading to creativity step-by-step, like a recipe. The other is an Eastern approach (e.g. “The artist’s way”) which talks about summoning creativity and not trying to control it.

What school do you see yourself belonging to?

A: I would say that both and that’s what I believe has brought to the success of my approach. What lead to my recruitment to this position at Disney was my dual ability to express the curious, dreamy side while, at the same time, being able to add a very clear business side to such dreams. The reticular activating system is an area of your brain which becomes more active when you are relaxed and so our system for generating creativity includes means of having participants feel relaxed. Our methods allow you to choose the type of creative thinker you’d like to be and the place where the two approaches meet and collaborate is where great things happen.

Q: If I attend one of your workshops as a Disney employee, or today, as an attendee at your workshops, what would my experience be?

A: In our workshops, you would learn how to THINK MORE CREATIVELY TOGETHER. This has three key pillars: • Framework - We like calling it creative problem solving.

Some call it design thinking or an innovation process.

This is about acquiring a skill set.

• Mindset - Here we focus on daily behaviors that enhance creative abilities for people. I perceive creativity as a habit, an approach which sometimes surprises people because they think it is something you keep in a drawer and pull out when you need it.

Mindfulness, intuition, bravery, how to show up, how to make sure you aren’t stomping on others’ ideas - this is what we teach at this stage.

• Toolset - This allows us to create systems to do it faster. We can look at great ideas, how they came to be and how we may facilitate ourselves and others using tools in order to gain insights to new ideas and refine ideas with feedback.

The entire experience is very hands-on, where people jump in and create while working with one another, learning from each other.

a sense of security and safety so they may thrive. This is very related to creativity because it is such a fragile place to be when you are creating.

A: Exactly. The power alley, if you will, is when people come together. Many corporations that we work with have silos and a separate “creative team,” already implying to everyone else that they’re not creative because only that one team have “creative” in their title. The more traditional teams, like Finance and R&D, are all in silos. We bring them together and everybody is shocked because, WHEN TITLES DISAPPEAR AND THEIR HUMANITY IS ELEVATED, THEY CAN SOLVE ANYTHING. There’s incredible power when someone from Finance sits with someone from R&D and from the “Creative” team and there’s this moment when they start saying “Oh my goodness this is so amazing - I think we should build it and start our own company!”. We are very passionate about the things that bring us happiness.

This co-creation causes our brains to produce Oxytocin and Serotonin because it involves human interaction.

We don’t have tables at our workshops and, when we break into groups, people sit facing each other. We just completed a two-day, 16-hour workshop and one of the participants came up to me and said, “Sometimes when you finish these workshops you feel as if you ran a marathon. I feel right now as though I could run a marathon!” This is because this experience leaves you with a sense that you are filling your cup as you rediscover what it feels like to create as a tribe, together.

Q: Since most leaders reading this aren’t going to perform open-heart surgery on their organizations tomorrow morning based on this interview, what advice would you give such leaders in order to enhance their ability to create this “safe” environment for creativity?

Q: What you are telling me is that even at Disney, which the average person perceives as highly innovative, the same corporate maladies that an average organization is afflicted with exist as well?

A: That is true. It is rather comforting to know if you work for a corporation. It is a bit sad, actually, but comforting at the same time. When I was at Disney, I trained people everywhere - Hong-Kong, Europe, South America, North America - and the barriers to creativity, this approach of “I am not creative,” is universal. It is true for various corporate cultures as well. Even at a company like Netflix, where creation permeates through everything, one still encounters this at an individual employee level. I believe that the ability to create together well is a central tenet of leadership. If you are a greatest designer in your organization, that still doesn’t mean you will be a great manager of other designers. Leaders have to give others

A: Let me demonstrate this through examples of what not to do. Corporations tend to survey their employees, analyze the data and then come up with some sort of acronym such as BRAVE: Boldness, Respect, Agility, Values, Essential outcomes or something of that nature.

Acronyms are great but there has to be proof that is measurable in some form or sense. They simply release this acronym and say: “Everyone is now going to behave according to this approach. GO!” There has to be a way to measure this and hold leaders and employees accountable to this. When you don’t do this and leave this at a platitude level then you cause people to leave and start companies that will disrupt you. A leader declares that there will be no meetings on Fridays in order to allow employees to be more creative but doesn’t set any ground rules as to how this will be enforced. She could, for example, set some sort of playful accountability such as having to buy a bag of cookies for everyone if one does hold a Friday meeting. When this isn’t done guess what, two weeks later, everyone is back to holding meetings on Friday.

Another great element of leadership in this sense is basically showing up. As a leader, if you are sitting in your ivory tower, shooting down employees’ ideas while not being accessible to them, you will not generate the trust that is so essential for innovation and creativity to thrive. I had a person telling me that while he was at Hulu, the door to the CEO office was open to him and he was an intern. He now works as a designer for another well-known corporation and can’t even get a meeting with a VP. A final example is simply how Pixar was started by a Disney employee who got fired for thinking differently and promoting computer animation at a company that considered that as blasphemous thinking. He sold his idea to Lucasfilm and later became the executive producer of Pixar. Disney acquired Pixar eventually for over $7B and it was essentially started by its own employee. The talent was inside the company.

There’s no way around the fact that transforming your organization into being creative and innovative requires both grassroots activity but it also mandates leadership. Leadership not in the sense of professional management but rather in the sense of leading your people through this transformation, by actually showing up and holding everyone accountable to it, thereby, supporting the grassroots movement that is making it happen.

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Q: I hear you using the word “together” many times. So your approach is focused on the ability of people to be more creative together?

6

Mistakes s n o i t a Organiz Make

When Trying

to Implement

n o i t a m r o f s Tran

and How to Avoid Them 36 THE FUNNEL

by Keren Levy, Formerly Innovation & Tech Scouting Manager at Philip Morris

37 THE FUNNEL

For the past seven years, I’ve been working in the fields of Digital Innovation and Business Transformation for both local and global companies, as well as SMBs and multinational organizations.

Recently, I’ve begun to notice that there is one thing they all have in common, no matter the size, geolocation or industry they operate in: they’re all pursuing transformation makeovers and organizing “Innovation Festivals”. And they’re all getting it wrong.

So, instead of writing about the best ways, musthaves on how to implement transformation correctly, I chose to highlight six common mistakes that companies make when implementing transformation and innovation methods, and suggestions on how to avoid them.

Let’s begin.

Mistake #2:

Acting like a start-up.

Mistake #1

Talking the talk.

Dear CEOs & Senior Management - transformation won’t happen by simply repeating buzzwords such as ‘agility’, ‘transparency’, ‘design-thinking’ and ‘open innovation’ over and over again - this is not some rain chant to the gods. Transformation, when done right, will be the most challenging task in your career; you will not only need to change the way you think and act, but also the way your company thinks and acts. You will not reap its fruits by simply talking the talk. You need to start moving, learning, sweating and believing.

Win your employees’ trust, make them believe that you are a true leader, and that although you may not know the best (or proper) way to reach your goals, you are confident and motivated to make REAL change at your company.

Instead

Walk the talk. Pull up your sleeves and lead by example. Become a hands-on manager. Start from the small things; talk to your employees and try to understand their daily challenges; try and change the way you have meetings and team updates. Can you shorten the decision-making process? Which red tape can be eliminated,and which is untouchable? What (and maybe who) are the obstacles preventing projects and tasks from moving forward? Go out into the field, talk to your customers, and LISTEN.

Guys, you are NOT startups. The foundation of a startup is made of a couple of individuals that chose to pursue a great idea and make it a reality with few resources, surrounded by skeptics, in a competitive environment, trying to live another day. This not your foundation, at least not in the last couple of decades.

Don’t think that happy hours, cool posters on the walls and giving your office an open-space makeover , will make you a startup.

Try to act like a well-established organization that looks into the future, maybe foreseeing a change in its market share. A company that is looking to change, to be more relevant to its consumers, address their needs and have a competitive advantage that will help it retain a long term competitive edge and sustain as much as it can.

Remember, you are an aircraft carrier, not a rowboat, and you need to maneuver accordingly.

Instead

Size does matter. Be proud of all the great things you can do because you are a well-established company (vast knowledge, resources and reputation); which legacy activities can you improve? How can you contribute to the category? What kind of positive mark or influence can you make? Be open and collaborate with your competitors, promote regulatory and social agendas, remove category barriers and invest in infrastructures that can advance the category. Remember: long-term strategies are made for long-term companies.

Mistake #3:

It’s never ‘transformation-o’clock’.

Somehow, it seems that people don’t have time to implement new ways of working, stimulate their ‘out-of-the-box’ thinking or prepare transformation workshops. Daily tasks and ‘firefighting’ are more urgent. Let’s be honest; they are easier to tackle because you already know the drill, and although you might not like to admit it, it is your “auto-pilot”, and that’s where you feel safe. New ways of working and thinking are, well, new, and require a new learning cycle, and we all know where those types of tasks end up – to the same place all your other ‘I’ll do it later’ tasks go. Right next to mailbox sorting and starting a diet.

38 THE FUNNEL

Instead:

Switch to project mode. Startups are quick and agile because they work in ‘project mode’. They have a ‘beginning-middleend’ phase progression , and that helps them sprint through their day with quick decision making, ad-hoc problem solving and great motivation to reach the end of the project. Enterprises, however, work in ‘functional mode’: they have processes for every action, rigorous documentation and endless meetings. Most of their work consists of meetings, presentations and conference calls, leaving less time to make progress on existing tasks.

The top management should start by defining some tasks as projects, appointing a project manager that will follow a project roadmap with a deadline to stick to. The project manager should address those kinds of tasks (projects) first thing in the morning, with all of the team’s energy devoted to non-automatic tasks that require more focus and structure as they go through the learning curve.

Carrying anti-innovation naysayers.

You might be surprised, but some people are not all that interested in this ‘innovation nonsense’. They believe that the old way is the best way, and that sooner than later, ‘transformation’ will be replaced by the next organizational buzzword or trend. Maybe they are right, but if your company’s vision and objective is pursuing transformation, you should only have committed employees who genuinely believe in the idea and are willing to make a real change on board. Everyone else should not continue to work for the company, as they might become internal blockers that will interfere with the process and hold you back.

Instead

Naysayers not welcome. Make sure that all employees are connected to the company’s new vision, and clarify that whoever isn’t is welcome to leave, with an exit package as appreciation for his/her work and honorable decision to withdraw from the company.

It won’t be pleasant, but it will unite the remaining employees and motivate them to achieve those goals together.

Mistake #5:

Thinking outside the box, inside the box.

When approaching Design Thinking or other innovation strategy tools, there is a tendency to keep the general wireframe pretty similar to that of the existing business – same product, same marketing proposition and usually the same customer. The ‘out-of-the-box’ elements that usually (wrongly) arise from those methods are more focused on a new ‘look & feel’, new slogans, buzzy events or, my favorite: limited editions. This is the type of creative thinking that should be happening anyway, and it is certainly not revolutionary.

Instead

Get the box out of your system. Define what that ‘box’ is, and then make a conscious decision not to include any of said ‘box elements’ into your new ideas. What you need to do is actually go outside of your comfort zone: the farther you go, the better it will develop your ‘outside-the-box thinking’ muscles. So go crazy! Market your product to aliens! Add a weird feature or invent an insane service proposition.

An exercise that I like to do to kick off a design-thinking workshop is dividing little paper notes into two groups: different target audiences, and different products and services. Each team draws one note from each group, and has to create a marketing plan for the service to that target audience. The sometimes weird resulting combinations teach participants that anything can be sold to anyone, you just need to find the right insight about their needs and define a proper value proposition.

Mistake #6:

Pretending to be ‘picture perfect’.

In corporate life, it seems like all employees are perfect. They don’t make mistakes. They never fail. No one talks about it, no one admits it, and that makes our organizational life picture perfect. The corporate culture usually discriminates against failures and tags people who make mistakes as losers on the verge of being kicked out of the company. Even if they formally encourage employees to fail and learn from those failures, what usually happens is that they get fired and the replacement ‘learns’ from their mistakes. This creates gossip, anger, negative competitiveness and mainly fake news in meeting rooms, presentations and e-mails.

Instead

Endorse failures - failing is beautiful.

Newsflash: we are all humans. We all make mistakes, lots of them, and with the right approach, we can use them to make us better, wiser and more efficient. In corporate life, you should encourage people to speak about their mistakes and what they have learned from them. Remove the plastic facade when presenting a business plan, talk about past mistakes and how you can avoid them. When someone is sharing a mistake, celebrate it, and think how you can make lemonade from those lemons. Encourage higher management to speak openly about their misjudgments and mistakes. Do, fail, learn, and do it better next time.

Remember that all of the above can be implemented in teams of all sizes; you don’t have to start big.

Try out this approach with just one function or one project team to begin with. Create hype around that function or project team, and encourage the people involved to share their experience from the pilot. Encourage them to share their challenges and mistakes, too, and always look toward that ‘North Star’ to guide you through this process. Rome was not built in a day, and your company won’t be either. With patience and persistence, you will win in the end.

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Mistake #4:

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