In a society of knowledge in which the number of patents filed is a measure of future wealth, the currency of companies lies in their ability to generate innovation. Not only in terms of technology, but also from an organizational and managerial point of view.
In this interview, Emily Reichert, the CEO of Greentown Labs; and Laurent Auguste, Veolia Executive Vice President of Innovation & Markets, help take a closer look into the "generation of innovation."
In your view and taking into account your experience, what is your definition of innovation?
Emily Reichert: Innovation creates a solution that does not exist. It requires a completely new way of looking at the problem. An innovator moves beyond the traditional status quo and today’s perceived boundaries; he/she sees a solution that we haven’t imagined yet.
At Greentown Labs, I see entrepreneurs going into the unknown, pioneering approaches to address the world’s most significant energy and environmental challenges. Altaeros Energies is a start-up in our labs developing high altitude wind turbines – turbines encased in helium balloons that float 1 km above the earth’s surface – to provide reliable and inexpensive power to island nations and remote locations that currently rely entirely on diesel fuel.
Laurent Auguste: Innovation is above all about making possible something that seemed impossible. Starting with the needs on the ground, it’s about discovering solutions that will allow you to overcome or get round obstacles. In the world in which we live, these obstacles are, for example, the challenge of population growth and the decline in natural resources. Innovation is essential in fulfilling our mission of “resourcing the world.”
What do we mean when we say something is innovative or that a company or individual is innovative?
Emily Reichert: The entrepreneurs I see around me every day at Greentown Labs embody innovation – they embody a near child-like curiosity and do not see or accept boundaries. Rather they borrow ideas and adapt them from other fields. Innovative companies re-invent themselves constantly, which is a very hard thing to do, since they are disrupting a current product or service and risk complete failure. As companies grow from start-ups to mature organizations, it becomes important to preserve some of the startup mentality, the risk-taking that occurs when founders are starting out and have little to lose.
Laurent Auguste: For a company, it means being completely open to the world, having a free spirit. It also means being driven by a passion, an energy, a long-term determination to find new solutions for the world. You must also accept mistakes and failures, because they are part of the discovery process. However, innovation doesn’t stop at coming up with good ideas. To innovate, it is not enough to have the best technologies. Through industrialization and distribution know-how, you must be able to transform them into tangible accomplishments that work and have an impact.
A great deal of the innovation that counts is found in the smart use of technologies along with the ability to cause change. Innovative Internet companies’ success was very much based on the possibilities offered by the technological leaps achieved. In Veolia’s sectors of activity, we must also be attentive to paradigm shifts in behavior and business models — such as the service economy, which champions a different use of resources.
What are the right ingredients for innovation?
Emily Reichert: Openness is key to innovation. From an infrastructure perspective, this means openness of physical space to encourage and maximize advantageous “collisions.” From a cultural perspective, it means openness in the work environment to encourage collaboration and new ideas. Finally, an openness to the possibility of failure must be part of the mix as well.
Laurent Auguste: To find new ideas and new ways of doing things, you must first of all have a certain humility to try to see the changing world. You must then be willing to move away from a silo mentality and break free from the technical or structural constraints in which we are often trapped. New areas of innovation and the highest potential are found in the interface between environments (industry, cities, organizations, etc.) and sectors of activity. We have to try them out in order to bring them to light. This is why at Veolia we initially encourage extremely well-defined projects restricted to a small scope, where they can be tested up against the reality on the ground before being validated and rolled out on a wider scale.
Innovation is traditionally viewed as the major engine for growth. In spite of the numerous Silicon Valley success stories, some experts like Peter Thiel or Max Levchin, co-founders of PayPal, think innovation in the world today is actually “between dire straits and dead.” What do you think of this provocative assertion?
Emily Reichert: What concerns me most is the lack of focus on the big problems of our day, where innovation is needed most critically. We need to incentivize our best and brightest science, engineering, and business graduates to take this tougher, but more rewarding path. At Greentown Labs, we have created a supportive, collaborative environment to enable like-minded, passionate entrepreneurs to innovate on a scale that truly has a global impact.
One of our member companies, Promethean Power Systems, is a start-up that created the world’s first milk chilling system for reliable use in intermittent power situations, such as in rural villages in India. This system is now installed in nearly 100 Indian villages, enabling farmers to decrease harmful bacteria and increase milk sales. It is just one of many examples of what can be achieved.
Laurent Auguste: I agree with Emily that we need to focus on the big problems and big opportunities. And I’m glad Thiel and Levchin argued their point. Our world often needs a wake-up call and I think that was their goal… to issue a challenge, to get people to stop and think.
Why are innovation efforts sometimes sluggish or ineffective? (What stops them and why?)
Emily Reichert: At Greentown Labs, we work with many large corporations seeking to become involved with open innovation and learn from the culture created by our start-up community. Resistance to change, lack of openness, and an inability to take risks are key barriers to innovation that we encounter. While there is currently a trend toward open innovation at the C-level, the not-invented-here mentality continues to be a challenge on the frontlines.
In my career, I have worked with many large companies in which new ideas were routinely shot down because they were “tried 20 years ago.” Other issues include not having the right infrastructure in place to support, nurture, and test new ideas; often incentives and rewards are tied to existing products or services.
Laurent Auguste: The most complicated thing in terms of innovation is managing the emergence of ideas phases, in which you are sowing so to speak, and the harvest phases, which require you to choose between projects. At Veolia, which has a decentralized organization in touch with local realities, we must do all we can to bring the best practices and the best ideas to light, both internally and externally.
This spirit of openness governs our Open Innovation program, the Veolia Innovation Accelerator (see page 48). Likewise, we have launched – initially in Lyon and Mexico – social enterprise incubators that, we hope, will spread worldwide, using the unique network represented by Veolia as a springboard. We are taking a long-term view, adopting a consistent, persevering approach.
What is the importance of management, leadership and strategy in innovative processes?
Emily Reichert: I don’t believe innovation can be managed; by nature, creating a process and deliverables necessarily sets boundaries on what is possible. Leadership that creates innovation allows the space and time for it to occur; it requires getting out of the way and enabling risk-taking to happen. And being accepting, as a leader, of a certain amount of failure, is essential. I believe leadership in innovation should define desired outcomes and enable employees to get there with support and guidance. Innovation is also a “human resource question” and a question of motivation.
What kind of incentives can be put in place in order to retain the most productive researchers / innovators?
Laurent Auguste: Of course, there must be incentives for innovators, but to my mind an inventor’s greatest satisfaction comes from the pleasure of seeing their ideas transformed into a tangible reality. What could be better than seeing one of your ideas coming to the fore and making a significant impact?
Emily Reichert: Generally, the most productive innovators need the space, support and flexibility in their work environment to innovate. Among other things, this means being able to: offer opportunities to interact with other innovators in an unconstrained way; compensate employees for the risks they take, in addition to the milestones they hit; create an environment where failure is acceptable, and is expected as an outcome; place employees in alternative environments to the cubicle, such as within startup incubators, as a reward or incentive for outof-the box thinking; offer “Google time” a specific carve-out of time to work on new ideas without punishment or pushback.
What do you think will be the biggest innovation in the next 10, or even 50 years?
Emily Reichert: Our relationship with energy is going to change over the next 50 years. We are already moving toward a much better understanding of energy use in our homes and businesses, and today energy efficiency is the low-hanging fruit. I truly feel the biggest, most impactful innovations of the future will be how we create, distribute, use, and store energy. It is an exciting field to be working in, with nearly limitless opportunities for both incremental and truly disruptive innovation. At Greentown Labs, we are building a global innovation center to be an active part of creating this future and defining the conversation.
Laurent Auguste: I really believe in the power of interactions between different environments and areas of activity outside the traditional boundaries. There are vast resources to be found in these in-between spaces and emerging areas. In this respect, there are obvious interactions between the water, energy and raw materials sectors. This perspective sheds light on Veolia’s reorganization with a view to moving beyond each of its traditional business areas through cross-sector interaction.
A graduate of the Ecole Centrale de Lyon engineering school, he began his career with Veolia as an area manager in Béthune (France), and opened an office in Shanghai, before overseeing the North America business. At the head of the Innovation and Markets division since 2013, his role is to develop the Group’s marketing and steer R&D to accelerate the development of Veolia’s activities and business models.
An MIT graduate and a 2014 winner of the “Women to Watch” award (Boston Business Journal), in 2011 she founded what she calls “the largest cleantech incubator in the United States” in Cambridge, MA. Now located in Somerville, Greentown Labs has grown to host 46 enterprises, with the equivalent of 170 full-time posts and 95 interns.