Open Innovation That Actually Scales | Vibha Gaba, Benjamin N. Haddad, Giacomo Silvestri

We have an exciting sort of a discussion ahead for you, joining me today in for the topic, you

know,

open innovation that actually scales is Giacomo Silvestri, who is the executive chairman of ENI-Verse Ventures and head of tech, open innovation and technology and intellectual property at ENI. We have Benjamin Haddad,

who

is the managing director of technology strategy at Accenture. My name is Vipha Gaba. I'm a professor of entrepreneurship at ENI-CEAD. We're going to get started very soon. And before we get started, Giacomo and Benjamin, I'd like to invite you to just quickly introduce yourself to our audience.

So,

good morning or good afternoon to everyone and good morning to you, Vipha, and thank you very much for the opportunity. I'm currently leading the, sorry for my voice, I have a little bit cough. I'm currently leading the innovation within a

big

energy company, ENI. I was a former responsible for the digital transformation within ENI and going back, I worked for an insurance company and I was partnered before for the Boston Consulting Group.

Thank

you again, Vipha, for the opportunity.

Welcome, Giacomo. Benjamin?

Yes.

Hi, everybody. It's a pleasure to be with you. Thanks for Giacomo as well to join us. I have a slightly different track.

I

started as an entrepreneur as I was completing my master's degree.

I

had that entrepreneurial knack and did an exit for a video gaming company when I was still way too young. And then entered the more corporate trajectory for the reminder of my career. I've been always in technology in different capacity from product-oriented roles to more corporate strategy ones, but always connected in a way or another to innovation. And at Accenture, I've joined first in 2016 to run the fund

in

cybersecurity out of Israel and expanded the role to manage the entire portfolio of emerging partners.

and

then technology strategy, innovation, working with amazing minds such as Giacomo. And it's a pleasure to be with you. Thank you, guys.

Thank

you both. So let's get started. And before we sort of get into the discussion, I thought I would do like a quick overview of the topic. It's an exciting topic. It's an important topic, not just in the academic world, in the policy circles, but also within the business world. And so I'll get started on that. So really, you know, innovation in some way has always been very, very important across industries. When we think of, you know, Henry Ford's moving assembly line to today, Amazon's robotic warehouses, innovation has always been there, an important element of the business world. And it's all really about, you know, doing things better, faster, cheaper. The methods have evolved over time.

And what we realize is for the last few decades, the old traditional model of doing innovation through internal R&D labs. So creating the best lab, hiring the best scientist and really vertically integrating the entire process from discovery to market has not been very effective in the recent years and companies have been exploring other models and mechanisms to to pursue innovation and especially in today's world. So next slide, please, Sandra. In a world where we are, you can imagine today, you know, we are facing yet another technological revolution. You know, you

know,

AI technologies, digital technologies, concerns about our planet, you know, innovation. And again, open innovation is becoming the key mechanisms through which companies adapt and renew their competitive advantage. Open innovation is an interesting term. It was really sort of popularized in 2003. Sandra, can we go to the next slide? And this was one of the things that by Henry Chesborough, he wrote a book called Open Innovation. And really, the idea here is you realize the company suddenly realized that not all smart people work for the same company. There are a lot of ideas, a lot of, you know, innovations that happening external to the company.

And we wanted and the companies wanted some ways and methods to actually leverage those and benefit from those. The definition of open innovation has evolved over time and it means different things to different people. But just as a baseline, I thought I would sort of put it all over here. It's really about thinking about R&D about in a very different way. It's breaking the traditional model and recognizing that valuable ideas exist beyond the boundaries of the company. And it is, and you see a lot of companies today, if you ask about 90% of the companies across different industries would say they're involved in some ways and means of open innovation. Next slide, please.

The

core, the fundamental shift underlying the idea, the concept of open innovation is really moving from close to open. So from guarded internal labs to sort of really thinking about innovation in a more collaborative sense, collaborating with a wider innovation ecosystem that comprises customers of the company, but also startups and universities and even competitors, it's about a belief that these kind of external collaborations enable faster, more diverse and more effective sort of innovation cycles. It's also about thinking,

well,

ideas can come from anywhere, not just internal to the company, from the internal R&D, but it's really about tapping the global intelligence in some ways rather than relying on a single internal R&D team. Next slide, please. What is the promise of open innovation? It is about accelerating the innovation processes across industries and companies in some way. This is about, you know, also spreading risks. So across the broader ecosystems of partners and ideas, and it is really about tapping the global creativity of entrepreneurs and individuals, both internal and external, to the company, right?

So it is about accelerating innovation, de-risking it, and tapping into the global sort of, you know, idea, global sort of marketplace for ideas.

Next

slide, please. Now, there are companies who have engaged with open innovation, and I want to make this clear right at the outset, this is not something which is specific to the high tech industry. And I'm sure Giacomo and Benjamin will also talk about this later. We see companies across different industries sort of engaging in open innovation practices and, in fact, doing quite well. For example, you know, Cisco has, for a while now, for a few decades, used a method of acquiring external technologies and startups rather than relying on internal R&D. Pfizer has been using open collaboration models to accelerate, you know, drug discovery pipelines for them.

Even companies like Lego and Philips, they engage with their customers, with the users, and try to come up with new ideas, breakthrough ideas for products, new products, and so forth. And, of course, Netflix, you know, using open innovation to refine their algorithms for recommendations, et cetera. And these are just a few examples here. Next slide, please. So, what we are seeing is, in one sense, there has been a lot of experimentation in the business world. There are different models and mechanisms and methods to support open innovation practices. And some of these ones, you know, I can show in the next slide, please. Sandra, next slide. Yeah.

And I'm sure you've heard of some of them, corporate venture capital units, you know, incubators, accelerators, venture client models, new business development units. There are different models here. In fact, there is a menu of options, different methods that corporations can use to engage with open innovation. But, of course, you know, there is no perfect method here. There is no one size fit all in one sense. Sandra, next slide, please.

So,

everyone, you know, every company sort of creates their own ways in which it leverages this idea or concept of open innovation, depending on what their goals, the strategic goals are. And, again, I'm sure you'll also hear about this from Giacomo and Benjamin later on. Let's sort of go to the next slide at this point. But before I sort of get, you know, without any further ado, get into a nice conversation with Giacomo and Benjamin, I'd like to do a poll. And I'd like to ask you, in your experience, what is the challenge of sort of really scaling these open innovation initiatives? They're very popular, of course. Some companies have been very successful.

But quite a few of the companies sort of also struggle with scaling these open innovation initiatives. From your experience, you know, what are the core reasons for it? Why do, where do most of the open innovation initiatives stall?

Okay,

so we've got a great response rate. And what it basically says is that about 12% of you think that the open innovation initiatives stall at the pilot stage. But a majority is really, you know, at the stage when you have to integrate these initiatives with the core business of the firm. One of the issues, of course, is you're talking about is lack of well-defined governance structures, inability to measure performance outcomes. So, you know, you've rated a lot of them, and the top one is integration with core business, and all of the above is the second most voted one. So, at this point, Giacomo and Benjamin, I would invite you to quickly sort of react to the poll, the poll that we just saw.

But before we get there, I think what I would like to hear from you is that how do you think about open innovation? As I was mentioning, the definition of open innovation has evolved. Different people think about it differently. What does open innovation mean for you, Giacomo? And Benjamin, then, you know, we'll get to you.

Thank

you very much, Viva. So, let me start saying that, first of all, I think it's important to say that energy industry now

is

facing an unprecedented time of transformation.

Me,

as a, even a former consulting in the Boston Consulting Group, honestly, I haven't, I've never seen

such

a huge transformation that is strategic, is technological, it's industrial, and even more, it's cultural.

So,

I start from this, just to clarify, that open innovation, or generally speaking, innovation for us, it's not a choice. We simply cannot do it alone. We cannot embrace in this transformation, we cannot achieve our goal, if we think, as probably we were thinking culturally in the past, that we can do it, we can manage, we can fix it.

It's

not like that. So, we definitely need to cooperate,

if

we want to success in this transformation. So, therefore, open innovation, or

we,

let me say, we talk about innovation, we establish what we call a dual innovation model, and then maybe later I will come back to this. We don't distinguish open innovation and innovation, now open innovation is innovation, and innovation cannot be done without open innovation. So, it's a very broad concept,

and

a very broad concept, as you said, Liva, before, that need, or might need, different levels and different models to be applied. But, again, I will come back to that, maybe later on.

Yeah. Yeah. Thank you, Jeff. Exactly. It's very interesting to hear from you that you tend to think of innovation as open innovation. You're not making that distinction anymore, and I think, Benjamin, does that reflect your experience? Do you relate to that as well in your experience, just working with companies across industries, but also within Accenture, when you think about your own innovation, open innovation approaches?

Yeah,

thank you, Viva, and yes, what Giacomo just described, I think, is a level of maturity that is really at the forefront, and in a way, had to arrive at this earlier than many other clients, because of the nature, as Giacomo was saying, of their industry, where the capital cycle is different, very specific, and the toleration for

more

random exploration of innovative ideas for the sake of exploration is different. The model of Giacomo and any of innovation is industrialized, I think, to a large extent because of necessity, and this is exactly where the market across the industry, it's what we're observing. It's a move away from

sub

-scale, pointed initiatives, and a much larger approach to innovation, where, as Giacomo just described, there is no longer a distinction between open innovation and innovation.

But

stepping back, I would say that we ourselves have gone through a journey. The answers to the poll very much resonate with that journey. Open innovation, broadly speaking, used to mean stay close to startups. It used to be an open-door party, and sometimes really good parties, but with fake outcomes at best, very undifferentiated. And you could say sometimes pretty random. And back then, if I go 10, 15 years ago, essentially, if you were providing

ecosystem

access and some expertise around a specific category, you already had an unfair advantage.

Anything

that was new and worse venturing into, as if the label of innovation was enough, would get you a seat at the table. And it ended up in, I think, a cycle that destroyed more value than created. You had lots of nastiness for startups, very frustrated entrepreneurs participating to those open innovation programs.

And

enterprises questioning the value of those open innovation programs because of the so-called death valley out of the POC, POC death valley, i.e. you get maybe a proof of concept with a large enterprise

and

nothing happened. But again and again, when this is repeated, has created, I think, less value than expected, to say the least, today. Open innovation, if not entirely merged as innovation, just like Giacomo was describing,

what

we observe is that it has become a lot more

austere, a

lot more frugal. It's a lot more about, you know, being strategy led, getting market intelligence fast into the cycle with a controlled scale objective means a lot more governance. It's less shiny. The parties are less around, definitely less parties. But we've evolved into a factory model ourselves. We've evolved into this approach where we want every integration of platforms, every problems of clients that we help solve not to be, you know, incubator innovation PR type model where, you know, we bring startups for the sake of it. But we want the value to factor in

innovation

and so we created a real factory that turns every solution from startups that's relevant into a production grade solution that we can deploy at the client.

We

call that the AI refinery and we've made governance and audit and fallback logic all part of the of the of the of the of

the approach

from the start. We don't even call it innovation anymore. We call it an AI refinery closer to the concept of a factory.

Yeah.

Yeah. Yeah. Thank you. I think both your point is really well taken, not making a distinction between innovation and open innovation. Innovation is open innovation in today's world. But I think, Benjamin, you made an important point as well. But you can't think of innovation, open innovation as open ended for the lack of better word. Right.

So

they have to impose some sort of discipline onto it. So it's not just exploration for the sake of exploration. You have to bring some sort of a structure to these practices or methods so that you can actually create some value. Right. So so Giacomo, what is your experience in terms of, you know, hearing from Benjamin and saying, well, we are not going to explore for the sake of exploring. That gets I guess it gets us nowhere. But as as a company, I imagine you are in some way flooded with lots of new ideas right through from both external and internal sources. Now, there is a tension here, right, because in some ways you want these ideas to come in.

But but how do you create the boundaries here in terms of, you know, making sure you're getting what you want through these approaches?

Let

me let me say, first of all, Viva, that

large

organization as the organization that I serve

are

floated by everything.

I mean, not

only start up and ideas. I mean, so let me let me joke and say, I mean, somehow we are used to be floated. So we have a hard skill for that. Besides joking, I mean, back to your question.

I

think we have if I have to summarize, I mean, there is not a single solution

because

every time you don't look at something for the ones that work in innovation or for my colleagues that work in the R&D,

you

feel bad

because

maybe you are missing something.

I

mean, you are missing an idea,

you

are missing

a

solution. But if I have to summarize, I would say that we have a sort of free north star.

The

first one is business priority and business case connect to business priority. We are fully aware that not all the innovation might have a business case, but we try to force it in any case that this doesn't mean that then we decide

for

the one that had a better business case. But forcing to develop, help us to put into perspective, the idea that we are searching for

the

second

north

star

is

that

and

this I

let

me say

it's 25

% of my job within my team

to

create the consciousness that we are strongly resource based.

I

spend majority of the time receiving 20 idea or 20 process and prioritizing them and bring back to the ground saying, you're sure this is fantastic, John, Martha, whoever, you're sure you have the forces, the resources to do it because there is nothing worse than give a promise and then don't deliver.

The

third

is we

run a sort of time to impact analysis

and

we tend to create a balanced portfolio between

based

on, I mean, a percentage of quick wins, but also percentage on long haul shots.

So

probably these are the three major perspectives that we use to reduce, I mean, all the, let me call noise that we, that we received or were floated by internally and externally, because it's the same, it's not just outside in, it's also internally when you meet the business and they open up with 30 opportunities or problems. So that is even harder, the job.

Yeah.

Yeah. There's no, I, I think what you say makes, makes a lot of sense, right? So part of it is if you're searching for ideas, they have to be linked to the business priorities, the strategic priorities, or more broadly, the innovation agenda that you set for the company. Right. And,

and,

and Benjamin, do you see this as a common sort of way in

way

to sort of screen through the ideas that that companies get as well?

Yeah,

yeah, absolutely. I'll go even further, maybe be a bit bold and say that openness becomes a liability.

The

moment that you lose the discipline of routing.

Mm-hmm.

And owning.

Totally

agree. And owning, right? Most enterprises are flooded with vendors and pilots and, and not just that also other types of things as Jack, Giacomo was, was reminding, we are no different. We are the largest system integrator in the world, about 60% of our revenue comes from business done with the technology partners. Every enterprise startups I met, and it's in the

tens

of thousands,

wants

to work with us, wants to work with us because they want to access a client like any, for example. And they need that discipline around integrating the solution in a very complex enterprise architecture, typically very complex. The orchestration function, the intake at the right moment with the right other solution so that you combine them and project manage everything with the right owners as well. And metrics has become more critical simply because the innovation ecosystem has become even bigger. And it's a good thing.

Mm

-hmm. At the same time, the signal to noise ratio needs to become better. If you take,

you

know, the agentic AI reality that everybody speaks about these days all the time, you have about 60% of

agentic

AI initiatives that stall before production.

A

good chunk of those initiatives are

with

startups, just because of the nature of the space. It's a very frontier, new space. Many of the innovators are not

large

incumbents, but small new entrance startups. And yet the vast majority of projects fail not because of technology, because of the architecture wasn't built to absorb it, because the integration wasn't thought through in the right way, because the governance was either naive or non-existent, et cetera, et cetera. There are exceptions.

There

are exceptions across sectors in AI, in cyber, in other areas, but I think overall, the big lesson is yes, absolutely. This resonates. The openness can become a liability if you don't sell magic. If you don't, if you are focused on execution and ownership, then meaningful transformation of architecture can absolutely happen. It's just very complex reality. Yeah. Yeah.

Thank

you. So, you know, listening to you, I said, well, okay, you know, we have, we have become very good. The companies, my sense has become really good in terms of funneling ideas to, you know, and prioritize them in terms of what they would invest in going forward. But there is still a lot of uncertainty, as you're saying, Benjamin, around those ideas, will they really scale up in the future, right? Now, how do you, Giacomo, how do you sort of, you know, how do you assess that? How do you say, well, this is, this was a great idea, but it didn't pan out as we thought it would, and it's time to sort of pull the plug. Is it easy to pull the plug or is it, you know, how do you pivot?

How do you sort of, you know, move that idea from the idea stage, gone through the proof of concept, but now, you know, let's invest to scale it. You know,

how

do you do that?

Yeah.

Let me start with that. First of all, I think that

we

have to be aware within a company that is sometimes not easy, that within, within innovation, we need to somehow accept some

redundancy. That

is it, and somehow misorganization.

I

mean, in ENI,

we

have, as you were saying before, different levers to doing innovation. We have a corporate venture

arm. We

have a venture building arm. We have a venture clienting, pretty big. We have an accelerator. And of course, if we dream that there will be never, ever overlap among them,

it's

a, it's a dream. There is sometimes overlap and redundancy. The point here is to engage discussion and create even redundancy because from redundancy, sometimes you do better decision.

So

this is the first one. The second point is that you,

I

mean, another dream that I think for the ones that

do

my job

has

to be clear and has to be clear also for my, my client internal customers.

is

that I cannot avoid uncertainty. Uncertainty is part of the innovation. What I can do is to structure an approach to reduce the risk. And the way we do it again is back to the,

the,

the, the logic that we use to build a portfolio of innovation, given that the resources by definition are short. So we try to create a balanced innovation portfolio based mainly on first lenses is the maturity

level

of the technology. So the technology readiness level,

we

have some investment in

low

maturity, some other that are ready for, or almost ready for industrialization.

We

look at the difficulties within the technology challenge within the innovation. There are things that are easier and things, I mean, we're investing in, as you know, in magnetic fusion. That's a pretty challenging one. We have created a venture on quantum computing. that's a pretty challenging one. But at the same time, we have also some other, some other

fields

that are, let me say easier. The third, the business urgency. We have solution targeting quick win, as I was saying before, and some other innovation that are targeting more medium terms perspective. And finally, also the investment scale of those innovation within our portfolio.

We

have some innovation that require little financials, some other that are pretty huge. So, I mean, mixing up these four perspectives, we try to create a balanced portfolio that we discuss. And these are mainly the criteria, even that we use to say no or to postpone some innovation.

Right, right. Thank you, Giacomo. So Benjamin, you know, Giacomo sort of kind of raised two interesting points. One is really, when we think about innovation, uncertainty is, is always part of it. You can never, ever get rid of uncertainty. You can minimize the risk, or you can try to, you can try to minimize the risk, but you can't get rid of uncertainty. But also there is another aspect of innovation, which is, you know, failures, right? Not all ideas actually are great in the end. Many ideas fail and you being an entrepreneur would know this better than, than anybody else. Right.

So, so do you, when you look at, when you work with the companies and when you see your own experience within Accenture, how do you deal with failures? How do companies deal with failures? Are they, are they good in terms of really, you know, engaging with it and learning from it as Giacomo was sort of alluding to just now? Or is there,

or

is there, failure is not acceptable,

as

is in large companies?

There's

the stereotype around,

you

learn more from failure than success and, and, you know, failing is not inherently bad. There is, without going into the depth of, of it really, and, and, and without sort of inching into philosophy, I would say that when you are on the entrepreneur side of the table. For

example,

the failure to obtain a contract to win, especially at the earlier stages means typically that everything else will cascade into a much bigger impact. Failure is extremely expensive when you are a small, nimble startup.

It

is also expensive when you are a large corporate with bigger resources, especially if you created a industrial scale failure failing machine. There is, of course, much to be said about the capacity to learn from failures and to grow from it and to become better at it, to, to build this muscle. But I wouldn't minimize how costly it is to fail whether you are an entrepreneur, whether you are on the corporate side of things. Overall, the observation is that

it

happens more often when there is an, an incapacity

to

just see what's happening to learn. Failure happens more often when you can't learn, when you can't observe the reality, when no one can say in a client, this solution, this startup engagement, this AI collaboration improved this metric,

improved

this problem set, this system under this condition. And when you don't have any of that sort of learning mechanism built in failure becomes more expensive, less desirable. Again, much of what we bring into the equation is around

the

discipline to

measure

things, not to pretend that everything will work always. But at least to have the right level of rigor around routing logic and model risk scoring and compliance risks and deployment hooks and all of that so that you can

move

more often from pilot to platform without burning stakeholders, stakeholders, stakeholders, stakeholders, capital, and more unnecessary. I think this risk of failure and this fatigue around open innovation that you have in many corporates comes from

shadow

projects, budgets not being managed with that learning mindset, and it erodes trust over time when repeated.

Yeah,

yeah, no, I think you're quite right your point about having a learning mindset is important and it is about mindset right how do you how do you look at failures and how you know do you see it as an opportunity to engage with it and learn something from it and. And, and, and etc. Right. Right. I think one of the other things that you mentioned that's quite interesting is bringing some discipline to measure things right. Giacomo, how do you do this in in E&I right. It is not easy to measure, but it is important to measure because you get a sense of progress.

How are these different, even if you're taking a portfolio approach, how are these different sort of, you know, ideas within your larger portfolio, are they moving forward? Are they tracking sideways getting nowhere? How do you deal with the challenge of

what's

your metric? What kind of metrics do you use to measure progress?

Well, I

mean, there

could

be several metrics, of course, and again,

complexity

is always behind the corner.

So,

yeah, let me answer what it depends.

Because

if we look at venture capital, you can imagine a corporate venture capital that the metrics we will look at

are

more in terms of return

of

value.

Even

if even there we are not a

pure

venture capital investor, we are corporate venture capital. So even there we look for what we call a corporate engagement.

And

there are metrics there

within

the venture, the

venture

clienting. So the traditional, let me call them like that open innovation.

We

started with the amount of project, amount of pilot, amount of startup we talk with. It's no more like that. Now we mainly look at two measures in the traditional venture clienting. The first one is if the value created of the overall project in one year

is

bigger. And how many times with investment? This is the first venture.

Of

course, the first of the second year will be more difficult. And now

it's better,

let me say.

This

is definitely one. And the second, the number of solution that are able to scale up within the company. Because of course, I mean, you can do a lot of things with very good solution. But if they remain tiny

means

that you don't spread innovation internally.

Yeah.

For the venture building,

our

drive is mainly economic. So if you want for the venture,

we

create starting from our internal investment, internal technology and technological heritage. We look if once we turn into equity, the investment that we have done in the past, if the equity value is bigger than the investment, this is a good sign that we have been able to create a better value. And then, of course, the typical financial and P&L of the venture, if the venture are commercially active from day one. This is a second,

definitely

a second ADI.

Yeah.

Thank you. That's interesting, because what you're essentially saying is that it depends. There are different ways to measure things and measure progress. And it could be different approaches that you're using have different metrics which are more appropriate than the others. So so I think it's important to have some metric in every approach, but but it can vary. And I think that is your point about complexity as well that you mentioned. Right. Benjamin, you you mentioned this a few times, and I want to sort of follow up. And and I'll let you both actually, Giacomo, you as well, speculate this on a little bit. AI. Everyone is talking about AI, gen AI, energetic AI.

Benjamin

is better than me on that field.

Yeah. But

but so we'll start with Benjamin. But Giacomo, speculate a little bit. Right. And and we don't know the full impact of of this technology on on on our lives as yet. Right. But we know that there is a transformative impact happening across industries, across businesses. How do you think AI is going to change the open innovation practices? What is it going to enable? You know, how what is it going to replace? What's what's your experience so far? Benjamin, let's start with you. Yeah.

Thanks

for putting me in the line.

That

was not the intent. But

but

as I said, you know,

speculate. Yeah. I

think the the real lift now becomes in

an

orchestrate in orchestration and integration.

Scouting

has become more commoditized in big part thanks to AI. When 10 years ago, access to specific innovation ecosystem was harder today, it is a lot easier. And the value comes from really

being

integrated and orchestrated within a very complex enterprise architecture made of hundreds of application, different types of infrastructure, different types of regulation, et cetera, et cetera. In the case, for example, of a nanny, which we work with very closely, the level of complexity is made even further by the

by

the nature of the business. They have a lot of customized hardware, customized software specific to what they do, the activities that they run. And it's not off the shelf. So it's even more complex in this environment. You have some, you know, really good solutions. I'm thinking of Lank chain, for example, who I think 40 percent of Fortune 500 use it today. It's like 90 million downloads in in a month. And

if

you look at what they do different, it's exactly that part. It's

it's

not better marketing. It's not being with the right accelerator or the right incubator. It's not even, you know, having a necessarily tier one venture capital firm investing in them. All those things may help. But what but they have become less useful. What they have been very smart at,

if

you if you take just an example, is that they handle context memory feedback logic from the different applications across all the different environments in a in a in a very smooth way.

And

so you don't have to re architect everything to to to make use of them in an enterprise in a context in a in a complex regulated enterprise. That's really the value layer. Not everybody does that again. That's why we have this refinery, you know, model where it's almost like an assembly line. It's not just about finding good AI. It's about integrating. It's about monitoring it. It's about making it sure it complies with regulation, et cetera. So I think this is what this is how AI moves the game with open innovation. The real value becomes more about integration and less about finding startups.

Hmm.

Thank you. Giacomo, would you want to add to that or?

I definitely agree. I definitely agree with Benjamin.

I

mean, but again, I'm just adding that

the

use of AI, the impact of AI or much AI can help you in your innovation process. Again, depend and is contingent to what kind of innovation you're talking about. For example, in venture clienting, definitely AI helps a lot in accelerating the scouting process. Or if you, I mean, for what we do in the venture building in the preliminary phase, AI helps a lot in fast tracking the market analysis or market landscaping. It helps,

or

benchmarking some partners that we might found.

And

then there is

an

entire pretty complex world where you apply AI in the core R&D. But, I mean,

on

that side, we need another.

Exactly.

So, you know, I want to get to the audience questions and we have a few and I'll read them out. But I do want, you know, before we get to it, I do want your quick reactions to really the poll that we shared with the audience here and their sense that,

you

know, what's your experience in terms of why do, what's the challenge involved in terms of scaling the open innovation efforts, right? Why do they get stalled? A lot of sort of participants in this webinar today felt that it is the integration of the core business. That seems to be the biggest challenge. Is that is that your experience as well? So comment a little bit on the poll results and your experiences in terms of what makes it difficult to scale open innovation approaches.

Benjamin? Yeah,

I would say this is the typical death value, as we call it in the innovation lingo. It's

it's

getting confused, being impressed by the parties, being impressed by the signal, confusing signal and motion progress that the, you know, metrics, I think, for innovation needs to be very different than the metrics of the business. In innovation, if you have no way to measure the cost of getting to what is the correct action, if you have no idea of the integration map, how does an interesting solution that proposes an innovative approach to a validated business problem integrates into this messy complex thing that is called

an

enterprise from a tech standpoint.

So that's really great point.

So

the point. If

you don't roll.

If you

don't

have

a

good

point. If you don't have

a good

point. If you don't have an escalation or shut down logic, then you get this sort of,

you

know, disappointment feeling of being stuck by entrepreneurs where nobody answers, etc. So, I would say

cost

per correct action, integration map or roadmap, and escalation shutdown logic. These are three key ingredients that sometimes you do find present in very mature organizations that typically have gone through these iterations of

open

innovation models and matured. One is Walgreens. They have about

380 billion

AI decisions

every

day

in

their enterprise. Think about it. 380 billion AI decisions per day.

They

have basically not treated AI as this new thing, interesting, let's explore, let's do a POC here, per use case, etc. It's infrastructure. It's not an afterthought. It's not a party.

It

is a way to change the fabric of everything, every process prioritized, and they have achieved an amazing level of maturity thanks to that, I think, clarity, really, on, you know, what is just decoration and what is transformation.

Yeah,

yeah.

I

like your term, decoration versus transformation. Giacomo.

Maybe

I have a too simplistic view, but to me, innovation is a process, and like a sales process, like a business development process, like a HR process or a talent process. So, my view, simplistic maybe, is that you fail if you don't manage the process, as all the other processes. So, if you keep some changing priority, if you cut the budget, all of a sudden, if you don't have the right people in the right place, if you don't take care of the project management, and so on and so forth. So, I don't see differences for the failure of innovation compared to other processes. Yeah.

Thank

you. Thank you both. Let me sort of ask a few questions from the audience, and this one is actually very interesting and an important one. So, this is Ken, and he's saying, when a firm relies on external parties to develop an innovative product services, what mechanisms are effective to protect intellectual property? Because, you can imagine, a certain amount of disclosure is necessary to get the ball rolling, but is an NDA sufficient, especially when there is a size asymmetry, when you're working, when a large firm is working with a small entrepreneur or a small startup?

So,

how do

you manage

the IP? If

I

may, I mean, this is exactly the question to me. So, the most

difficult

part of the open innovation, in my experience, is dealing with intellectual property. In the past,

I

do everything internally, or I buy the competencies, IPM is 100% mine. Now, everything has changed, so it's not easy.

I

mean, if you have to protect something that is yours, nothing has changed compared to the past. So, of course, there are intrinsic risks within, but, I mean, more or less the same. If you have to co-develop, co-work together,

this

is not easy. I mean, I don't have a simple solution in five minutes, but this is the key point to put attention on. If you are creating a venture, you have to agree on the foreground and on the value of the foreground. If you are not creating a venture, but you are creating and shaping a technology, you should wonder who's going to use that technology, and you have a licensing perspective on it. So, this is the question.

Yeah,

yeah, yeah. Thank you. Benjamin, this is actually maybe a question for you. So, one of the audience here, Saloni, is one to know that, do you see any differences in approaches across small and large organizations

when

it comes to open innovation?

Yeah.

I generally work today a lot more with bigger organizations, Fortune 500, Global 2000s, as we call them, organizations of the size that Giacomo works for. It's typically my clients. But, yes, with, you know, smaller organizations, sometimes that operate within just a region or a couple of regions,

and

you do see stark differences in approaching innovation. It looks fairly different in practice. Without overgeneralizing, I would say that the smaller and medium-sized enterprises may have a more direct outcomes-first approach by nature of business because maybe they are less diversified, they have a less complex strategy, and they know exactly what they want to get out of an initiative. They target maybe a specific problem set faster as opposed to sometimes in large corporates you have

a

level of skepticism, of resistance between business line owners, P&L owners, and the central teams. By central teams, I mean anything such as corporate strategy, innovation teams, et cetera. There is this sometimes, you know, perplexity around prioritization of what to touch, what system to approach first, and it's pure portfolio theory. I think because SMEs tend to be smaller, more focused, they could have a more outcome approach to

innovation

and capital deployment. That doesn't mean necessarily that as a whole they're better at it, but in some cases their time to value, the route to deployment, the feat is

more

fastly evaluated. That's if I was to be going in that direction of SMEs. On the other side, large complex companies

have

this capacity to evolve their model faster, to put bigger resources behind important things such as innovation and become really

leading

edge, I think, of firms like BBVA, like any, like others who just, true iteration that they could afford of their model, of their open innovation model, of their corporate venturing model in the oil and gas industry. I'm also thinking about Aramco as another leading example. The capacity to build that muscle and become really world class is greater at larger firms just because of the nature of, you know, the resources that they have. So

there

you go. Hopefully I've covered, I've said, I've said the typical consulting answer, yes to

one. Yeah.

So, so unfortunately we're running out of time, so I can't take more questions. There are some very interesting questions here, but I do want to sort of close the conversation with getting just like a 30 second response from both of you about what has been your biggest learning and as you, in the context of, you know, implementing these open innovation approaches and

secondly,

what's the most exciting thing for you in, in this context?

30

second response. What's the biggest learning and

what's

the thing that gives you a lot of energy

in

your role?

Biggest

learning to me is the way you have to merge diversity and

the

most exciting things

is

diversity.

Thank

you, Jeffo. Benjamin.

The

most exciting things

is

we've exited the age of

idea

-centric innovation and taking minority stakes is not strategy.

Yeah. Thank

you. Thank you both. This was a pleasure to listen to your thoughts and your reflections on this really important topic. I want to thank you for joining me and I want to thank the audience for being there and part of this conversation and putting in your questions as well. Thank you all. It was really great.

Thank you very much. Thank you very much.

Thank

you.

Bye.