“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