How to detect innovation. (Episode 44)

Interview with Fabien Cabirol, Open Innovation Director, Asia at L’Oréal.

 

Many companies have embraced the mindset of open innovation – as in being open to ideas and innovations from people outside of the organisation.

But as we will learn from L’Oréal, an important part of “open innovation” is to not be too open.

I learnt about L’Oréal’s approach to open innovation from Fabien Cabirol, Open Innovation Director, Asia at L’Oréal.

L’Oréal, of course, is the world’s largest cosmetics company.

“Our mission”, said Fabien about the open innovation group, “is to find deep tech solutions to disrupt the beauty industry, that includes disrupting others as well as ourselves.”

They work with applied research centres, universities, start-ups, external scientists and many other outside experts and innovators to make sure L’Oréal is tuned in enough to see the next big thing.

Fabien told me about the importance of seeing things also from the perspective of the other side while working with external parties.

“You have to look at the full picture to create win-win and make sure you support them through the whole partnership. Different partners need different support. A university can take a more long term approach while a start-up often need revenue quickly to survive, for example. We need to look at it both on how they can create value for us, and also how we can create value for them. We need to look at what is the best way to bring them in.”

Fabien then mentioned one of their many different projects designed to reach out to external people in order to get new ideas. It’s called “L’Oréal Runway”.

“Runway as in a catwalk, or as in airport?”, I asked him.

He laughed and replied: “A little bit of both. It’s a project where we let innovators show off their creativity, but also a project where we help the best ideas take off.”

At L’Oréal Runway companies pitch their ideas to a jury of experts from L’Oréal.

L’Oréal then has a process for how they decide on which ideas to go forward with. The level of innovation is, obviously, important but it was another criteria I found more interesting. At L’Oréal they call it “recruitment”.

The recruitment phase is where L’Oréal decides if the idea will fit inside of L’Oréal or not.

Fabien explained to me that many of the ideas they find can have huge potential or be very interesting, but they still might not get selected.

When you recruit a person for a job it is not enough to find a competent worker – the person also needs to be a good fit, and it is just the same with ideas. 

An external idea can be great, but if it is not a good fit with the company then the idea should not be recruited into the organisation.

“The problem is fitting”, Fabien told me. “We do not look for the best partner. We look for the right partner.”

At first that sounds counterintuitive. Who would not want to have the best partner? But Fabien gave a great example: “Perhaps a top university in the world is the best in an area, but they already have all the resources that they need. Then it could be better for us to partner with a smaller, less prestigious university that has a promising technology and give them access to our resources and our access to the market. The less prestigious university could be a better fit for us.”

But “right partner” means right for both partners. Fabien gave an example of a potential partner who came with a very promising product for skin salons, but L’Oréal turned them down because L’Oréal does not have strong relationships with skin salons so it would not be fair to the partner.

“It’s about finding the fit, for both of us. We will not embark on a journey where we can not fulfil their expectations.”

The etymology of the word “recruit” comes from the meaning “to grow again”, so it’s a very fitting word that L’Oréal picked for their phase of selecting partners based on their fit. If the idea will not grow within L’Oréal then L’Oréal should not do it.

The idea that a company should pick ideas based, at least in part, on if that would be good for their external partner might sound altruistic, but Fabien explained that it is in L’Oréal’s interest as well.

Because if the external idea will not match with the strategy, the DNA and/or the culture of the company that it is brought into then it can do more harm than good.

Again, just like how a very competent person can wreck havoc with the productivity of a whole department if that person is not a good fit with the culture.

Or if you want to be more dramatic: How an external organ that is transplanted into the wrong body can kill a person.

The wrong idea let into an organisation can kill its momentum. (And with “its” I mean both the idea and the organisation.) It can eat up focus, resources, and energy. 

To make sure that only the right ideas come in L’Oréal put’s some of its most senior and most creative scientists to evaluate the ideas – people who have not only a great understanding of the science, but also of what L’Oréal, and the beauty industry, is, stands for and how it works.

Fabien: “(They) have to be able to look at the idea and see the business.

Fabien also told me that the “Recruitment phase” is part of what L’Oréal calls “the Detection phase”.

The word “detect” is latin created from “de” (off) and “tegere” (to cover), so to “detect” is to “take a cover off”.

When I reveal that to Fabien he nodded with approval: “Yes, that’s what it is about. It is about taking off the cover of potential opportunities. But it is important to remember that there are a lot of covers that needs to be revealed. Lifting the covers externally is interesting, but you also have to lift a lot of covers internally. 

Fabien told the story about how L’Oréal had been focused on creating hair colouring products of high quality that stayed on for a long time – any technology that was not long lasting was dismissed, but customers changed and colouring your hair for an evening – hair make-up – started to become a thing and L’Oréal had to re-think what “high quality hair colouring” meant.

Fabien said: “You have to find the good surprises.”

“The good surprises”?

I love that phrase! 

I asked him to elaborate what that means. a “good surprise” is an innovation from the outside that does not only bring in a new technology or a new solution, but that also changes how the company looks at the world.

Then you really get the full effect of open innovation – innovation that opens up the internal organisation.

Fabien ended our conversation with the same message that he gave in the beginning: “There are millions of great ideas out there in the world outside of L’Oréal – but open innovation is not about just reaching out to find as many new ideas as possible, but instead to selectively find the ideas that are the best for us internally and – crucially – also the best for our external partner. That way we can grow together. The idea can grow better with us than without us. We can grow better with the idea than without it.”

Are you looking at external ideas from that perspective?

Are you open for the idea of open innovation being about not being open to ideas that does not benefit the external partner as much as it benefits you?

Are you ready to detect innovation by taking off the covers which are stopping you from seeing the best opportunities?