“There is no one right way to manage innovation, it’s about organising the menagerie!”

Your book “The Innov­a­tion Jungle” (La Jungle d’Innovation) talks about a ‘mena­ger­ie’ of dif­fer­ent types of innov­a­tion in com­pan­ies. Can you explain this metaphor? 

Rémi Maniak. What we point out in the book, and in light of the hun­dreds of com­pany cases and pro­jects we have sup­por­ted over the last 20 years, is that the way innov­a­tion in busi­ness is more excit­ing than a simple dog-eat-dog men­tal­ity. In real­ity, there is room for a sort of biod­iversity, with com­pan­ies man­aging their innov­a­tion accord­ing to dif­fer­ent per­form­ance logics. The meta­phor we use in the book is indeed that of the jungle, which con­tains dif­fer­ent spe­cies, each with its own way of behav­ing. For example, in the innov­a­tion jungle, there are gazelles whose ulti­mate goal is to come up with cut­ting-edge offers with a rap­id fre­quency of renew­al. There are also lions that are stat­ic and sure of their strength, but­ter­flies that con­stantly mutate or pivot around their assets, boa con­strict­ors that lock cus­tom­ers into offers and so on. These are dif­fer­ent strategies, with dif­fer­ent ways of steer­ing innov­a­tion strategies.

In the innov­a­tion jungle, there are gazelles, rap­idly chan­ging their cut­ting-edge offers; lions that are stat­ic and sure of their strength; or but­ter­flies that con­stantly mutate or pivot around their assets.

Nic­olas Mot­tis. At the com­pany level, as we point out in our book, research has shown that there is no cor­rel­a­tion between R&D expendit­ure and the company’s per­form­ance in terms of innov­a­tion. As such, we know that innov­a­tion per­form­ance is due to more than the budget. Even if R&D spend­ing is still sig­ni­fic­antly lower in France than in Ger­many, for example (2% vs. 3% of GDP) and the gap should clearly be reduced, our point of view is that to suc­cess­fully innov­a­tion, we must focus on the artic­u­la­tion between stra­tegic choices, organ­isa­tion­al factors and oper­a­tion­al steer­ing tools that could be man­aged differently. 

There have been many reports on the sub­ject in the past, which show that there is a prob­lem of trans­fer­ring innov­a­tions to lar­ger mar­kets in France. We can talk about eco­sys­tems here, because a lot of innov­a­tion is sys­tem­ic (5G, smart cit­ies, energy trans­ition, etc.) and there­fore requires align­ment between loc­al author­it­ies, large com­pan­ies, and research institutes. 

The Ger­man cul­ture of cooper­a­tion between the vari­ous play­ers in the same sec­tor or ter­rit­ory is par­tic­u­larly bene­fi­cial in this respect. On the oth­er hand, a struc­tur­al weak­ness in some European coun­tries is still the lack of investors cap­able of inject­ing the 100 mil­lion euros or so needed to scale up pro­jects at an early stage. The start-up seg­ment is boom­ing, and the num­ber of uni­corns is increas­ing rap­idly, but there is still a long way to go to cre­ate the glob­al tech­no­logy lead­ers our eco­nomy needs.

What can there­fore be done to improve the chances of a suc­cess­ful scale-up?

NM. It’s a ques­tion of align­ment between strategy, organ­isa­tion­al choices, and resource man­age­ment. In the Sil­ic­on Val­ley, there is a huge loc­al eco­sys­tem, with play­ers inter­act­ing amongst them­selves, whilst know­ing each oth­er well. In Europe, much of the demand is frag­men­ted, which makes life very dif­fi­cult for innov­at­ors.  There is also a gen­er­a­tion­al gap, although that is clos­ing. The United States has benefited greatly from two or three gen­er­a­tions of entre­pren­eurs with exper­i­ence in start-ups, which is some­thing we lack in Europe. This gap is now being closed with renowned entre­pren­eurs such as Xavi­er Niel, founder of Free or Jean-Bap­tiste Rudelle, founder of Criteo (advert­ising tech­no­logy), who are now sup­port­ing new gen­er­a­tions of entre­pren­eurs, effect­ive start-up incub­at­ors in research insti­tu­tions and increas­ing sup­port from ven­ture cap­it­al funds. 

RM. In addi­tion to the factors men­tioned by Nic­olas, I would add that gov­ern­ments can be very good cata­lysts for com­pan­ies to reach this crit­ic­al mass. In China, Hua­wei was able to bene­fit from large state orders in the early days to deploy tele­com­mu­nic­a­tion net­works over a large part of China, which gave them a con­sid­er­able lead, par­tic­u­larly in terms of tech­no­logy. The United States is also play­ing this game, with gov­ern­ment agen­cies (NASA, CIA, NSA, DARPA, etc.) hav­ing played a fun­da­ment­al role in the scale-up of com­pan­ies such as SpaceX (space launch­ers) or Palantir (data analysis).

This is all the more neces­sary as most of the chal­lenges that com­pan­ies face today are partly pub­lic chal­lenges. For example, the driver­less vehicle must help reduce road deaths, and invest­ments in eco-design, recyc­ling, renew­able energy should help pre­serve the plan­et. It would be absurd to place the bur­den of innov­a­tion solely on private com­pan­ies, or solely on the pub­lic author­it­ies. There is a real need for pub­lic-private co-invest­ment to bring out nation­al and even European champions.

Without appro­pri­ate meas­ures, how can we meas­ure the fail­ure of an innov­a­tion project? 

RM. I think we need to shift our focus from the P&L [oper­at­ing account] of a com­pany to the main­ten­ance or cre­ation of assets in the eco­nom­ic and social eco­sys­tem. A pro­ject can be a com­mer­cial suc­cess but neg­lect the recon­sti­t­u­tion of the company’s stra­tegic assets and, at the level of the eco­sys­tem, des­troy the jungle and its bal­ance. Of course, this requires shak­ing up the cal­cu­la­tion con­ven­tions of cor­por­ate and mar­ket fin­ance, but on this point it seems that the machine is finally in motion.

NM. Indeed, today almost all investors are inter­ested in ESG (envir­on­ment­al, social and gov­ernance) per­form­ance factors. The impact on the plan­et is becom­ing a real con­cern for many fin­an­cial play­ers. And that is not all. As we show, there is no one right way to man­age innov­a­tion, it’s more about pre­serving a vari­ety of spe­cies and organ­ising the menagerie!

Interview by James Bowers