Taking things that work differently, mixing them and combining them to create something new. That's the recipe for innovation potion, according to the president of the Spanish Association of Digital Economy (Adigital), co-founder of the venture capital fund K Fund and independent director of Abanca, Grifols and Melià, Carina Szpilka.
The person in charge affirms: “There are several definitions of innovation, but the one I like the most is the one that refers to connecting what is disconnected”. To do this, she explains that elements such as employee training, collaboration between large companies and start-ups and diversity must be combined. He acknowledges that there is still a lot to be done on this last point. “The diversity of profiles must be pursued: gender, culture, age and training”. And all these elements must be aligned: “innovation must have a commercial sense and a purpose, which indicates what to do and for what purpose. If it is not done in this way, it would simply be created. Although creating is a wonderful process, it is not the same as innovating,” he says.
What role does technology play in innovation?
It is an exponential facilitator and an axis of brutal transformation. However, it must always be at the service of the human being, since the creators of that innovation are always going to be people.
Since K Fund is in contact with entrepreneurs who bet on the latest technologies, do you think there is one capable of revolutionizing the planet?
All technologies have that capacity. Sometimes, I think that everything has been invented. I reflect on how we did things five years ago and I realise that five years ago we also believed that nothing more could be invented. However, new things have not stopped being born and new business models have emerged. You realize that maybe we are in the first minute of the year one of the digital transformation.
Now many topics related to artificial intelligence, augmented reality, virtual reality and blockchain are addressed. However, there are technologies, such as quantum computing, that are still not so much talked about and perhaps that is what will change everything.
How is it possible to identify if a technology is generating too many expectations or if it is going to be really useful?
It is crucial that the CEO knows where the company is in the market and how it will generate value for customers. It is also important that you surround yourself with a team that knows a lot about technology. While the CEO should always be curious, he or she has to differentiate what fits his or her purpose. Purpose aligns teams and allows autonomy. In turn, autonomy brings speed and adaptability.
This period of transformation has also seen the implementation of a platform economy that has brought with it a series of regulatory challenges. How are institutions reacting?
Regulation in Europe needs to be rethought. European companies are staying halfway between American and Asian companies, you only have to see how many European companies are relevant right now. In many cases, this is linked to regulation and the difficulty of our market. Although we are talking about a single digital market, the fact is that we are operating with different regulations. In the case of Spain, these are 17 regulations. In addition, the autonomous communities sometimes delegate their powers to the city councils. This makes it difficult to scale up businesses and create truly large companies.
Regulation has to set up a framework of action in which companies can move and which protects the consumer. This protection is logical and necessary, but within a measure because we can not suffocate companies.
“Regulation must protect the consumer without stifling business.
What internal challenges must companies overcome in order to drive this innovation?
Within a company there can be several types of innovation. There is incremental innovation, which consists of introducing improvements in order to be more cost-efficient and achieve a higher quality result. This is relatively easy and is achieved, for example, through the new agile work methodologies.
Another thing is disruptive innovation, which is more difficult and is true innovation. This innovation often involves cannibalising your own products and services. You have to keep it a little separate from the day-to-day of the company so that it doesn't end up abducting the business. Generally, people are trained to repeat processes that have led the company to where it is now. One of the main challenges is skipping those procedures to achieve this type of innovation, and this is something that is very scary.
Would you say that the fear of failure within the team is one of the brakes for that innovation?
The fear of failure can make people not want to undertake, but I don't think it's the problem of organizations. The pending issue for companies is that they are ambidextrous. On the one hand, they have to maintain their focus on producing and generating value so that they continue to meet their objectives. On the other hand, they must develop new skills, do different things and try them out quickly. They should not worry if they fail at something, but they should detect the failure immediately.
We live in a very uncertain world, so it is important that companies generate predictable environments to innovate. The risk is not in the fear of failure, but in the fact that companies do not generate environments that generate confidence for the team to propose new ideas. The problem is not to fail, but to live in environments where failure is not seen as something natural.
What are the drivers of innovation within a company?
A great activator is that the CEO creates this process and incorporates innovation in his discourse. He must be in what he communicates to the world, to his clients and investors. It must also include innovation in the variable retribution systems of the year and promote that people have some ownership over the projects. This works when employees create a spin-off from their ideas within their company. Companies give them the freedom to execute their proposal and demonstrate results. If the idea does not succeed, these professionals can return to work.
Do you think the CEO should have an active role in innovation?
He doesn't have to be in the lab, but he should be the one who worries about things happening in the lab. I was once told that a CEO should not be enthusiastic, but be enthusiastic. Here, the CEO should not be innovating, but being innovative.
How do you get workers involved in these processes?
There are many methodologies for thinking differently and people have to put their batteries in, but workers will only get involved if they are recognized for it. This is a matter of responsibility for the company itself. If a company's talent does not know something, it must be provided with the appropriate training.
In some organisations it is the board of directors itself that limits innovation, what should new boards look like?
The role of the board is to support the CEO and not to restrict him when he wants to move forward. If, on the other hand, the CEO is not supporting the transformation, he should be asked to explain how he believes a company that does not innovate is going to be sustainable. To this end, the councils are also beginning to include people who think differently. In the end, their mission is to look after the future of the organisation. For example, cyber-attacks are a big risk and cybersecurity is on the agenda of practically all the councils.
“Cybersecurity is already on the agenda of almost all the councils.
You mentioned that innovation is achieved by thinking differently. For this, it is also necessary that in the company there are different profiles in the organizations. As a woman, do you think this diversity is being promoted?
The participation of women in the boards of directors is being promoted through the code of good governance. For me, however, the most important position is that of CEO. You have to ask yourself why there aren't more women CEOs. That is the responsibility of the directors since they appoint the CEOs. Here's a reflection on why women don't get to that position: how many cases they are because they can't and how many because they don't want to.
Many companies say that this digital transformation must revolve around customers, how have they changed in recent years and what role do they play when it comes to boosting innovation?
Anthropologically, human beings have always needed the same things. However, technology has changed the way those basic needs are met. Organizations must respond to the needs of always, taking into account current habits. In general, we have become more demanding. In the past, the customer was satisfied with an e-commerce order arriving in ten days. Now we no longer understand that an e-commerce takes a week to send us an order. The bar is getting higher and higher and that means that companies have to constantly reinvent themselves.
“You have to wonder why there aren't more women CEOs.”
Is it a matter of money to accomplish all this?
No, but it helps like everything else in life. For example, the budget that Amazon allocates each year to innovation puts this company on a differential site and there are many companies that can't spend that. In fact, one of the great dramas in Spain is that we are a country of SMEs and SMEs find the digital transformation more difficult because they often do not have the resources. If we don't put in place the measures to solve this, we could lose digital competitiveness compared to other countries.
Finally, what advice would you give to other CEOs to bet on innovation?
The key is that they want to carry out this process, that they enjoy it and that they remove their fear. If they do it out of obligation, it is bad. This is a path in which one learns and transforms oneself. Evidently, he must surround himself with people who like innovation, who are better than he is and from whom he can learn.
The CEO must be convinced of what he is doing, as this will allow him to be brave and resist the low moments. There will always be someone who questions you. In the digital transformation, there is a very important point of courage and the companies that have been brave are the ones that are transforming best.
Published by OPINNO © 2022 MIT TECHNOLOGY REVIEW spanish edition