Michelin Speeds Up Wheels of Innovation

Terry K. Gettys, vice president of R&D, says companies must be agile and customer-centric to innovate

Barcelona, February 15, 2017. – Corporate innovation strategies require fast decision-making, collaborative work, and listening to customer needs, says Terry K. Gettys, Michelin Group’s executive vice president of research and development.

Gettys, an engineer by training who has been at the Michelin Group for 38 years, describes innovation as part of the “DNA of Michelin,” a key force behind the company’s growth since 1889.

Speaking to MBA students at IESE’s Barcelona campus, Gettys said Michelin in recent years has shifted how it innovates to emphasize creating an “inspiring workplace for disruptive ideas” that encourages novel ways of thinking. The company’s new strategy is built on multidisciplinary platforms, collaboration and a customer-centric approach. The goal? To stay competitive by speeding up innovation.

Traditionally Michelin followed a classic three-stage innovation process: advanced research, applied research, and market development and industrialization. Gettys says this process is becoming obsolete: although effective, it is “too slow” for the current innovation environment and “not sufficiently interactive with the customers.”

Integral to Michelin’s new strategy are multidisciplinary platforms comprised of research, marketing development, and industrial teams. They work together on a shared objective and are empowered in their decision-making.

The result is a streamlined, faster and more effective innovation process that saves development times and costs. Plus, Gettys adds, “Teams love the responsibility of working this way.”

Solving Customer Problems while Boosting Company Performance

Michelin’s new strategy introduces shortcuts for faster real-world client feedback and greater company agility in responding to customer needs and rolling out products, Gettys says.

At Michelin, innovation is the “creation of new value recognized by the customer” and must solve a customer problem – as well as contribute to Group performance.

He says two kinds of product innovation drive market growth: breakthrough and renewal offers. The former are game changers; the latter maintain market value and appeal.

Among the key objectives of Michelin’s innovation process are: to differentiate products through constant renewals, and to contribute to economic results through “new raw materials and improved performance” at company plants.

Sustainable Mobility

In the long term, Michelin’s research also seeks better and more sustainable solutions for mobility. In 2002 Michelin became the first tire company to join the World Business Council for Sustainable Development.

The number of vehicles on the road is projected to double in the next 30 years, Gettys says. While this may benefit economic development and personal leisure, it poses challenges such as “more pollution, congestion and consumption of raw materials.”

Michelin’s innovation practices are aimed at helping the environment through “cleaner materials” and lowering manufacturing emissions, he says.

Diversification Beyond Tires

And although the tire business still accounts for 95% of sales, the company recently opened up its innovation strategy. It is moving into tire services such as fleet maintenance, and advancing its restaurant guide business with features such as Book A Table, an online reservations system.

Michelin’s research has also produced innovations in high-tech materials like 3D metallic printing, and the company is now part of a joint venture in this field.

Diversification demands an even faster innovation process. The dynamics of the service industry, Gettys says, are “not like tires.” The introduction of new functions and features is measured in months, not years. Michelin adapted its strategy to “co-innovate with customers.”

According to Gettys, this represented a shift in the company’s “cultural mindset” that involves “moving faster, taking more risks” and “learning to listen to the customer.”

Leaders Need Vision, Intuition and a Willingness to Take Risks

Innovation makes unique demands on leadership, Gettys says. Vision is an essential quality for managers who oversee innovation strategy, and leaders must empower their teams to make decisions and develop their skills to ensure operational excellence.

He says the key aspects of leadership and innovation are: vision, operational excellence, listening to customers, agility, risk-taking, empowerment and skills development.

Gettys notes there is always an element of uncertainty: “Innovations for the future are never clear. You need an intuition and you need to know what to bet on and what to stop.”

Big Data Redesigning Fashion Industry

IESE’s New York campus to host 3rd Fashion Operations Conference

New York, February 11, 2017. – New trends are shaking up the fashion industry. Increasing digitalization and new technologies are prompting a redesign of the sector’s industrial operations, with a view to making the most of insights customers provide when they shop.

“There’s a silent revolution happening in retail, and in the fashion industry in particular, with big data and analytics steadily becoming the best basis for decision-making,” says IESE Prof. Víctor Martínez de Albéniz.

New digital tools and applications multiply points of contact with consumers and make it possible to analyze their behavior.

As a result, fashion companies can now optimize their management of key aspects such as decisions on assortment, rotation and pricing in stores (brick-and-mortar and online); the design of advertising and promotional campaigns; and adapting industrial and logistics operations to customers’ demands and preferences.

It’s possible, for instance, to observe customers’ interaction with a given product in stores – be it on the basis of traffic or use in changing rooms – and look at subsequent sales to see whether or not the product is working,” says Martínez de Albéniz.

Fashion Intelligence

The large-scale, automatic analysis of information customers provide through their online activity – be it by liking a product on a social network, making a purchase via their mobile phone or using one of the interactive devices increasingly common in physical stores – is among the topics set to be discussed at the 3rd Fashion Operations Conference.

Taking place on IESE’s New York campus on February 14-15, this event will see professionals and academics from top universities (including Harvard Business School, UCLA and MIT) reporting on the latest advances, research and trends in the design of the sector’s industrial operations, and analyzing challenges and opportunities in the age of fashion intelligence.

»Related Program

IESE has created the “Fashion & Luxury Goods Industry: Gaining Competitive Edge” program for executives interested in furthering their knowledge of the fashion industry and hearing about the latest trends from renowned experts. Directed by Prof. Fabrizio Ferraro, it will be held on the school’s Barcelona campus from May 10 to 12.


Robert W. Gregory Wins 2016 AIS Early Career Award

The Professor was honored for his promising work examining novel IT phenomena

Barcelona, February 10, 2017. – Robert W. Gregory, Assistant Professor in IESE’s Information Systems Department, has won the prestigious Association for Information Systems (AIS)Early Career Award for his promising work examining novel IT phenomena.

Spanning topics from digital transformation to human-machine symbiosis, his research was honored – in Dublin – at the December 2016 International Conference on Information Systems (ICIS) in a special session recognizing “the best and brightest” in the field.

AIS aims to serve society “through the advancement of knowledge and the promotion of excellence in the practice and study of information systems.” Each year, senior AIS scholars recognize individuals who, although still in the early stages of their careers, have already made outstanding contributions to the field of information systems.

A Fast-Track Career in IT

Professor Gregory received his PhD in Business Administration (specializing in Information Systems) from Goethe University Frankfurt, and his research began attracting international attention soon after.

His work on organizational ambidexterity capabilities and the management of paradoxes in the context of digital transformation was among those to receive Best Paper Award nominations from the German Academic Association for Business Research and the CIONET community of 4,000 European CIOs.

For his dissertation on the management of global information systems projects, he won the Alcatel-Lucent dissertation award in 2011. He was also a finalist for the Targion 2011 dissertation award for Strategic Information Management.

Professor Gregory joined IESE in September 2013. Currently, his principal area of interest is digital transformation, which encompasses topics such as digital business strategy, digital innovation, the “consumerization” of IT, organizational ambidexterity, managing strategic paradoxes, competing institutional logics, and designing organizations and systems for human-machine symbiosis. Financial services, automotive, and healthcare are industries of particular interest to him.

Professor Gregory approaches these topics through engaged scholarship and establishes collaborative researcher-practitioner relationships in a variety of business areas in which the impact of new digital technology is potentially disruptive.

His work is inspired by the idea of having a positive and lasting impact and creating synergies among various types of research, teaching and consulting activities across multiple contexts and geographies.

His work is presented regularly at international conferences, including the annual ICIS, and has been published in Management Information Systems Quarterly, Information Systems Research, the European Journal of Information Systems, Information Systems Frontiers and Information Technology and People.

Start-ups Can Help Your Firm Get Off the Ground

Prof. Julia Prats publishes a guide to foster shared innovation

Barcelona, February 09, 2017. – Even though big corporations and start-ups might seems to be at opposing ends of the spectrum, new models of collaboration are starting to emerge to drive innovation in products, services and technology.

Corporate Venturing is the different types of bridge-building between well-established big corps and start-ups. And the concept is catching on.

Global giants such as BMW, Google, Unilever, Telefónica or Accenture are already working with start-ups, according to the study, “Corporate Venturing: Achieving Profitable Growth Through Start-ups

Published by mVenturesBcn and led by Júlia Prats, IESE professor of Entrepreneurship (and holder of the Bertrán Foundation Chair of Entrepreneurship), the study is a sort of how-to guide for corporate venturing.

It advocates three clear steps that companies must follow to successfully collaborate with start-ups:

1. Set-up objectives;
2. Build a venturing strategy;
3. Define the organizational strategy and resources.

“The question is not whether to capture innovation,” say the authors, “but how.”

10 Ways to Collaborate

There is a multitude of different tools that companies can deploy in corporate venturing. Among these are:

  • Sharing resources: granting startups access to useful tools and materials while the established corporations get closer to the entrepreneurial ecosystem.
  • Challenge prize: An open competition that focuses on a specific issue, offering an incentive to field innovators to develop the best solution.
  • Hackathon: A focused workshop where software developers come together to collaboratively find technological solutions to a corporate innovation challenge.
  • Scouting mission: The established company appoints an individual within a given industry to scope out innovation opportunities in alignment with the corporate strategy.
  • Strategic partnership: Alliances between established corporations and startups can take many forms – including the co-development of products and services and the venture client.
  • Excubator: A combination of an incubator and accelerator, it functions as an external venture builder for an established corporation.
  • Corporate incubator: This includes mentoring and value-added services to support entrepreneurs building viable, market-ready ideas.
  • Corporate accelerator: Short or medium-term support offered to cohorts of startups via mentoring, education, work space and more.
  • Corporate venture capital: Corporations use direct equity investments to target startups of strategic interest.
  • Acquisition program: Established firms purchase startups in order to access their products.

Building Bridges

This kind of collaboration exposes strengths and weaknesses in both established companies and start-ups.

Corporations have financial clout, the technical and human resources and the market demand to push innovation through to market reality. That said, they oftentimes lack the agility and the entrepreneurial or disruptive mind-set that characterizes smaller organizations.

In the entrepreneurial ecosystem there is an abundance of ideas, talent and an appetite for risk. There’s also a need for investment in projects, and the financial backing to keep developing ideas in the early stages.

It was only a matter of time till these two worlds found each other.
More information in IESE Insight

Over 4,700 jobs have been created directly through IESE’s entrepreneurship funding initiatives

  • IESE presented its Annual Report this week, during the meeting of IESE’s Alumni Association board
  • Over 4,700 jobs have been generated directly by IESE through the school´s venture capital fund FINAVES and through its Business Angels Network
  • More than 32,000 alumni benefited from IESE’s lifelong learning activities
  • The Alumni Association granted nine scholarships for outstanding students accepted to begin their full-time MBA

Barcelona, February, 2017. IESE’s Alumni Association board gathered on Wednesday and presented the school’s Annual Report. IESE continued this year to help job creation with 4,700 new job positions coming from the support to entrepreneurial ventures through IESE’s venture capital fund FINAVES and its Business Angels network. IESE´s Business Angels Network alone has invested a total of €4.9 million to finance entrepreneurs, launching 29 start-ups.

Moreover, in line its commitment to its alumni, IESE offered 226 sessions worldwide that had an attendance of more than 32,000 participants. This comprehensive lifelong learning program is part of the school’s range of activities dedicated to its community, with annual career counseling sessions, mentoring programs and networking events.

Also on Wednesday at the Alumni Association board´s gathering, five merit-based scholarships were presented on behalf of the school´s alumni to nine outstanding students accepted to begin their full-time MBAs at IESE. Additionally, the association awarded IESE profs. John Almandoz, Eric Weber and Xavier Vives with a special recognition for their excellence in research. Since 2002, these awards have recognized outstanding research contributions.

IESE’s new Alumni app improves the access to IESE’s lifelong learning activities

The Alumni Association has just launched a new app for its alumni. Through this new application, alumni will be able to access videos and articles on demand, enroll in events, follow e-conferences, contact colleagues through the digital directory and receive news updates on the Alumni Association. “We have joined the Digital Revolution to offer more value to members of the Alumni Association. We want to know them better and to be able to communicate events and content they are interested in, and harness new technologies so that they can strengthen their contacts network. The app with help extraordinarily to make this possible, “explains Javier Muñoz, director of the Alumni Association. Founded in 1959, the Alumni Association of IESE currently has 44,695 alumni of 136 nationalities in 123 different countries.

Around the Chinese Business World in 5 Days

MBAs on 1st China Career Trek

China, February 03, 2017. – “I wanted to explore career opportunities in China, to learn more about the attitude of Chinese companies towards MBAs, and what we can offer them,” says Yanfeng Huang on why he headed off for IESE’s first China Career Trek in January.

Each year, 20-25 MBA students will go on the trip for “immersion into the culture, deeper understanding of the companies, and access to top management and recruiters,” explains Nico Van Den Brink, MBACareer ServicesDirector.

Over the course of five days, participants visited a total of 13 companies, as well as attending networking events, such as lunches and presentations. Businesses that opened their doors to visitors this year include Google, Morgan Stanley, Schneider Electric, BASF, Adidas, Mindray healthcare, Tencent online platforms, and Huawei telco.

“I was surprised by how well-prepared all the companies were for our visit, and many of them invited senior-level managers to join the session,” says MBA Xiaochen Kong. “This gave us a deep insight into the company and industry.”

With offices in Hong Kong, China and Singapore, IESE has long had a presence in the region. But, following the success of the 3rd Career Summit in Singapore, an increased business focus on China called for a career trek as IESE’s second MBA activity there.

The China trek is just one of the many industry or geographically driven treks offered by IESE all over the world – from Silicon Valley to Brazil. “It’s aimed at any student interested in pursuing a career in Asia,” explains Van Den Brink. “This year there was a sizeable group of Mandarin speakers, but also people from other parts of the world, including Australia, the U.S. and Peru, reflecting the rich diversity of IESE.”

Rather than focusing on a specific sector, the China trek includes a range of companies from banking to tech, healthcare, energy and consumer goods, among many others. “I particularly appreciated the variety of companies because it gave me a very good overview,” says Alexia Herrmann.

What brings all these companies together, of course, is their origination or operations in China. “MBAs are able to go deeper into the challenges and opportunities of the region and what companies are looking for,” says Van Den Brink. “It was an opportunity to learn about the Chinese culture and globalization challenges,” attests Herrmann.

The end benefit of attending the trek is not as black-and-white as getting a job, says Van Den Brink. That said, some MBAs certainly feel they have made in-roads. “I learnt so many interesting things from different industries,” says Yanfeng Huang, “but I also identified a few potential career opportunities which I definitely need to follow up on.”