If you want to make your organization more innovative, start by listening to customers.

Of course, everyone knows innovation is the key to a successful, sustainable business model and long-term growth. But how exactly can we innovate? And what factors drive innovative success?

In this conversation, INSEAD professor, Ben Bensaou, and Bayer's Head of Corporate R&D and Social Innovation, Monika Lessl, explain how to build both disruptive and sustaining innovation into your organization.

The discussion includes these important topics:

Ben Bensaou is Professor of Technology Management and Professor of Asian Business and Comparative Management at INSEAD, Fontainebleau, France. He served as Dean of Executive Education in 2018–2020. He was a Visiting Associate Professor at the Harvard Business School for 1998–1999, a Senior Fellow at the Wharton School of Management for 2007–2008, and a Visiting Scholar at the Haas School of Business at UC Berkeley for 2013–2015.

Monika Lessl is Executive Director of the Bayer Foundation and Head of Corporate R&D and Social Innovation at Bayer AG. She is a member of Bayer’s Global R&D Executive Committee and the Global Medical and Regulatory Governance committee. Her focus is on driving organizational and societal transformation by strengthening the role of science and promoting innovation and sustainability through strategic initiatives, governance processes and partnerships.

Transcript

Ben Bensaou: Once people are given permission to innovate and they are given training to innovate, they can have fun in their job. They're going to like what they do.

Monika Lessl: Of course, the ambidexterity sounds easy in terms of, on the one hand, having execution and, on the other hand, having innovation. But it's quite hard to do.

Importance of innovation

Michael Krigsman: We're discussing innovation with customers. We're speaking with Professor Ben Bensaou INSEAD and Monika Lessl of the huge German conglomerate Bayer AG.

Ben, you're the author of this excellent book. It's called Built to Innovate. Tell us about the book. Tell us about your work.

Ben Bensaou: Over the last, I would say, almost 20 years, I spent a lot of time with established companies operating in very traditional businesses, and I have seen leaders transform this very old tradition companies into innovation powerhouses. What I wanted to do with the book is to document these transformation stories and try to codify what I have learned in the form of new frameworks, new concepts, new tools, and methodology that I want to share with a wider audience.

Michael Krigsman: Monika, welcome to CXOTalk. I'm very grateful for you taking the time to be here. Please tell us about your role and about Bayer AG.

Monika Lessl: My role at Bayer is I'm responsible for corporate R&D and social innovation, which means that I'm responsible for strategic research and development but also for innovation overall at Bayer.

Maybe they know Bayer because it's a more than 150-year-old company and it's known for the drug aspirin. But maybe it's interesting to note that we are a company that is active in different areas in the life sciences, which are the pharmaceutical area but also in agriculture and also in consumer health.

We have three main businesses, and I'm kind of strategically responsible for the innovation part for all three of them. Looking forward to the discussion today. Thanks.

Michael Krigsman: I don't think people realize that Bayer AG has about $50 billion in annual revenue. It's an enormous company.

Monika Lessl: Yeah, absolutely. We also have more than 100,000 people across the globe, so it's truly global and, as I said, really a life science company, which is quite fascinating.

Innovation and competitive advantage

Michael Krigsman: Ben, you talk about the innovation and execution engines as driving a business. Let's start there because I think that's the foundation for then moving into the relationship between the customer and innovation.

Ben Bensaou: As everybody realizes, we live in a competitive environment, which is very uncertain, volatile, and fast-changing. This means that organizations and their leaders must excel at two different activities and sometimes very contradictory.

On the one hand, they need to execute today's strategy. Deliver, with high efficiency, the products and services that the customers need. This is a challenge for the execution.

But at the same time, these leaders need to imagine the strategy of the future and help make it happen. They need to excel at rethinking and reimagining what they do today, imagining how to improve their existing products and services and think about the new products that nobody has thought about. This is the challenge of innovating.

Every organization has to be able to innovate and execute at the same time.

Michael Krigsman: Monika, thoughts on that topic of innovation and execution? You're responsible for significant innovation at a very large organization. How does what Ben describes resonate with you?

Monika Lessl: I think it's the challenge of ambidexterity, which is (as Ben described) on the one hand to make sure that you drive the new innovation that you invest in new areas but, at the same time, make sure that you execute. Otherwise, you have nothing to invest.

You need the revenues. You need the money and the returns in order to be able to go into the new areas. This is a day-to-day challenge, which is a role that each leader has to play. Otherwise, there is no future for an organization.

Product innovation starts with the customer

Michael Krigsman: What about this notion of innovation starting with the customer? Ben, you talk a lot about that and that concept is woven throughout your book. In a way, it seems like kind of an obvious concept. But I guess it's not that obvious or you wouldn't have had to write a book about it.

Ben Bensaou: What I've noticed, actually – if you allow me, I would like to also explain the distinction I made between innovation and innovating, which is really central to the notion of the importance of the customer.

I've learned through my early mistakes. In my early career when I was designing programs for innovation, I used to use titles like Value Innovation or Disruptive Innovation or sometimes Blue Ocean Strategy.

What I discovered is that the word "innovation" as a noun was deeply intimidating for non-specialists like frontline employees or managers. I was really puzzled by why this created so much anxiety and fear in people.

I realized that what was happening is that they had this feeling that (after the training, going back to work) they were being expected by their boss to come up with a new product or a new service, a new business model – some sort of a concrete outcome, a result.

Then, one day, I started to use a different word. I started to use the word "to innovate" as a verb or "innovating," and I realized that the tension, the fear, the anxiety would dissipate.

I understood that when we talk about how to innovate or learning to become more innovative, we are talking about a process, a behavior, an attitude. This is something that can be learned. This is something that can be supported with tools.

Now, if I come to this notion that if you think of innovation as the tip of the iceberg, if you will, the thing that we see above the water level, innovating and innovating capabilities is what is under the water level. It is all of these organizational capabilities, as Monika was talking, the capabilities of the 100,000 employees at Bayer who can bring new ideas, which might become innovations. Build to innovate and an innovating engine is about how to enlist and leverage all of these innovating capabilities within the organization.

Now, the definition I use for innovating is at the core of the notion of the customer. For me, innovating is about systematically looking for new ideas that create value for a customer and for the organization. What I mean by a customer, it can be an internal or an external customer. In B2B, it could be a direct customer, your customer's customer, your supplier, or maybe a regulator, an influencer. So, the customer is at the core of innovation.

Monika Lessl: I think it's been described (also when I started quite some years ago) as really the point that people felt not being included in innovation because they always thought it's something so big and you have to be a genius to drive innovation. This is where we said no; innovation is for everyone and everybody can contribute.

Of course, the levels are different, but also incremental innovation is important. You don't always have to have really disruptive innovation.

Of course, if you look from a strategic perspective, you need all types of innovation, but not every employee will contribute to it in the same way. By explaining this, we also enabled everyone to contribute.

Then, of course, the key question (what people were asking us) is, well, I really would like to contribute, but I don't know how. And so, this is where we also started to provide, on the one hand, trainings, very simple ones.

We started with something like systematic inventive thinking, which is a very easy methodology you can learn, you can easily apply. Then also supported with a whole network of people – I can say later a bit more about it – so that you have both. I think what we learned is it's not enough just to have this training, but then you have to have support, how you apply it in real life.

I think that was a very important point. Innovation is for everyone and not only for a selected group of people.

Ben Bensaou: I think this is a very important point that you're making, Monika. I see the pattern in many, many organizations.

Many people believe that you need to have a genius leader or to be a startup to be able to innovate. That's not true. In the research and the work that I've been able to do, I have seen established, even centuries-old companies able to innovate.

It's exactly what you were saying. It's not only being focused on trying to come up with a huge kind of an industry-changing effect, but they look for small, important changes, sometimes in very unexpected places. This is what you refer to as continuous and systematic innovation, innovation of every kind and driven by everybody in the organization.

This is why I found that many organizations that became very innovative – just like Bayer is a good example –are able to create this protected and fully legitimized pace where everyone can innovate, not only the specialists. You can innovate in everything you do—your products, your services—but also in your internal processes, in your functions, and innovating, as I was talking about the verb, becomes a habit.

Innovation management and corporate culture

Michael Krigsman: It sounds to me like you're both describing innovation as a cultural – Ben, you used the term – habit. I was going to say to develop innovation as being part of the cultural DNA of the organization. I see you're both nodding, so you agree. But that then raises the question, Monika, of how to do this. It sounds so simple. Fine. We now have a culture of innovation. But it's probably not that easy.

Monika Lessl: As we know, the most difficult changes are cultural changes, and I think there is this nice wording of culture eats strategy for breakfast because if you want to achieve behavioral change, this is the most difficult thing you can ever do. Therefore, it needs changes in many, many areas.

As I said, we try to, on the one hand, have a support system. But then also, what we did is include it in all kinds of training, I mean more leadership training that we have in the company be included in our values, so we have the so-called life values and then there are also innovation is one key element of this.

It takes time. It's nothing that happens from day to tomorrow. Of course, it also needs the right leadership in order to make it happen. Yeah, this is, I think, a concerted action that takes time and continuous movement.

Michael Krigsman: We have an interesting question from Twitter from Arsalan Khan who said, "Sometimes the lack of incentives is the reason why not everybody is engaged to be innovative. Can you talk about the role of incentives and driving, creating this culture of innovation?"

Ben Bensaou: You need incentives but, before incentives, I would say that you need permission. I think, especially if we're talking about innovation as being everybody's job, people need to sincerely be given permission to innovate. Of course, they need to be motivated.

I remember the words of Jan Carendi, who used to be the board member at Allianz (the German financial conglomerate). He was the one responsible on the board for innovation. He used to say, for people to innovate, they need to feel able, which means they have permission. They need to feel capable, which means that they need to have the tools, the training that Monika was talking about, to have the time and the resources to be able to innovate. And they need to be motivated. For them to be motivated, they need to feel that there is a sense of a challenge, they have autonomy, and they are recognized and rewarded for it.

Now, there's a very delicate question about who should be incentivized for innovation. Of course, if you start to put metrics on the frontline, then you're going to kill innovation.

As I said, innovation is very intimidating. If people don't know how to do it, they haven't been trained, they don't have the proper tools and proper coaching support for that, you're going to kill innovation.

The incentive should be with what I would refer to as the middle managers. The incentive should be for them to create an atmosphere where their team feels safe, they have safety and trust in innovating.

I can give you an example, for example, of Allianz UK. Some people use very hard incentives like a percentage of your bonus is attached to how much of new products are delivered to your gross. But there are soft incentives like what I saw at Allianz UK where they regularly publish an innovation league table for the UK businesses.

You can see that middle managers don't want to be at the bottom of the league, so they're going to be encouraging their team to be innovative. This is what I call "give permission and make other people jealous." It's kind of a model to show that if you give permission to your people, they're going to become innovative and they're going to make you look good.

Monika Lessl: Yeah. Maybe I can add to this, exactly what Ben was saying. Psychological safety is something that's first a concept that you need to teach leaders so that they can understand. It also gives the frame because you also don't want to innovate.

I mean let's give an example. You have a manufacturing facility which delivers drugs. At that moment, you don't want to change the system, running system. But of course, you want to see what's next. Maybe it's the printing of new pills, which is the new way of working.

You have to make sure in which area you want to drive innovation and set that frame. I think that's to be clear there.

Then also as Ben was saying, if you try to come up with a new concept, a new idea, you expose yourself. It's a natural behavior that the fear of losing something, which is your reputation, is much bigger than the fear of gaining or the potential incentive of gaining something.

For people to expose themselves, it takes a lot. Therefore, this safety environment is very important.

What I have learned is that the best is recognition, that you give them a platform to present to senior management, which can be an innovation day, which can be an innovation competition. Then, of course, if you are recognized and the leaders are showing the same behavior, then others will follow.

Ben Bensaou: If I may give you an example, actually, I really like what you just said Monika, the notion of safety. I'm always surprised how senior leaders are shocked to hear that, in fact, their frontline people are very innovative. They have lots of ideas. But the thing is that they are afraid. They are afraid. They don't know what their boss is going to think.

Actually, I learned a very interesting thing from a Japanese manager that I trained almost 10, 12 years ago. I happened to have met him just before Christmas in Tokyo.

He works for Recruit. People in the U.S. might know Recruit. They are the owners of Indeed and Glassdoor.com.

This is what he taught me. He taught me the power of thank you, [laughter] of all things. He explained to me why this was important because, after I trained him, I observed him for many years. He had this habit; every time somebody came up with an idea, he would say thank you. I was really kind of intrigued by it.

He explained to me a very profound thing. He said when people are in the execution mode, they are executing their task. They know that very often it's structured, it's observable, and their boss can know if they're doing their job well or not. They even have KPIs to measure them.

But when it comes to innovation (or innovating, as I call it), you don't have this visibility. I can't come and say, "Oh, Michael. I think you have an idea. You're hiding it from me." There's no way for me to know if you have an idea, so if you don't have the safety, if you don't feel comfortable and you're afraid to propose your idea to the boss or in a meeting, you won't.

His name is Iwashita. Iwashita-san, what he understood is that when people expressed an idea, they were effectively taking a risk. They were taking a risk. He took their idea as a gift to him. He told me, "When I receive a gift, I just say thank you."

Co-creation: How to innovate with customers?

Michael Krigsman: When it comes to innovating with customers, how should we go about that? The customer's culture is different from ours and we need their assistance. It places a burden upon us to listen, to understand. How do we go about it and, especially, how do we systematize this and build it into our culture (in the right way)?

Monika Lessl: Yeah. Maybe I can give you two examples. One is, of course, patients. We are a pharmaceutical industry. Now patients are coming much closer into our processes. If we design a clinical trial and how the processes are, we have also much more involvement of patients so that they really can say what they need.

Then, of course, if we develop a new product, we also (early on) ask questions. One example I can give you is we are developing drugs against endometriosis. That's a woman's disease and can be very painful. But the main cause of this is that you have some tissue of the uteri (and even in other areas of your body). These are called lesions.

From a scientific perspective, you always look on diminishing these lesions, but the main problem for women is the pain. This is also, I think, a good example where sometimes you cure, but you don't address the day-to-day problem, and you can only get this through the dialog. That's why this involvement is so powerful.

Another example is also if you look on the innovation process. There it's absolutely critical not only to follow your own idea but there's also this nice saying, "Don't fall in love with your idea. Fall in love with the problem."

Sometimes, especially in companies that are very technically driven or scientifically driven, you love your idea. Of course, you have to love it. But at one point, you have to test it with the customer. This is very, very important to get the feedback and listen carefully to what is really their need and then to pivot maybe your idea. That's how I see it and it has to be integrated into the process.

Ben Bensaou: Actually, if I were to add to this, I would say that, in a way, to learn from the customer, you need to actually close two important gaps. One that people tend to underestimate is to close the gap internally (within the organization) between the would-be innovators and the people who know about the customer (who are close to the customer). Even getting your scientists and your R&D people to build a partnership, a true partnership, with your marketing and sales is very important.

I remember you had on your show Jonathan Becker from the San Jose Sharks, the hockey team. He did the same thing. He built a partnership between the IT people and the marketing people.

I think already it goes a long way to get the people who are close to the customers to work with the would-be innovators. I could actually give you a very nice example of how, for instance, BASF developed a new sole, a new foam that goes into soles for Adidas.

Let me mention about the other gap that you have to close is the gap between your own organization and the customer themselves. It can be very simple things.

In a B2C example, I can give you the experience with had with Starwood, the hospitality global firm. They had a conference in Paris. They had 700 attendees, and they wanted us to come and help talk to people about innovation.

What we did is that we provided people with a few simple tools, as Monika was saying. Then we split the 700 people in teams of about 10 people. Then we sent them into the streets of Paris with a notebook and cameras and asked them to just roam around the streets, try to take pictures and notes, and find some insights about the experience of their customers.

Well, when they all came back, they had generated 1,700 new ideas in 3 hours. It was really fascinating that a lot of people were saying, "Well, I'm not a creative type, but I can do it." Just by observing their customers, they were able to generate innovative ideas.

The other way (in a B2B example), you can create a space where your people work together with the customers. I can mention the example—just to have a non-traditional business here—the experience of the Pentagon where the Airforce has a lab where they can simulate all sorts of dangerous and hazardous wargames.

They have this Operation Tech Warrior where they have these emersion exercises where they bring engineers from the suppliers, and they train them for two weeks. Then they put them in a battalion or a squadron where they can see their products (how they work or don't work) in a real situation with real weapons. I've seen other companies do the same thing, bring their customers into their research centers to see how their products work in the real world.

Michael Krigsman: Monika, does this notion of co-creation and collaborating with the customer again resonate with you? Is that something that's part of your set of innovation activities?

Monika Lessl: Well, I think it has to be part of those who are driving the respective innovation projects. Everyone has to be there close to the customer.

Maybe I can give you also one other example. We also used to have an animal health business as well, and there was one example where we have a very nice collar for dogs or cats against ticks. People always have to take care that this collar only is valid for, I think, two to three months. Then they have to be ready to change it and so on and so forth.

By interviewing the customers, they found out, "Well, I don't want to care about this," and so, in the end, we were selling more in insurance, a service rather than the product. I think that's a good example on finding out, okay, what do customers really care about?

I can give you another example. We also have an environmental health business. Let's say for a nutrition industry, this is an environmental health business. We also make sure that the manufacturing and so on is also pest-free and everything.

Again, it was a burden for them to take care of all of this, buying just the products. But then also we turned it into a service. Of course, it's much easier for them.

I think it's really about understanding where are the pain points and then how can you address them. Every market here, as been said, has such insight and it's about connecting these ideas then to the R&D organization or to the innovation colleagues so that, in the end, it's coming to fruition and brings in the new concepts and future growth.

Ben Bensaou: This is the important challenge when you're dealing with a customer, whether you bring them closer or not. You have to bring them closer, for sure. But what is really the challenge (I call it), one, is to learn how to listen to the voice of the customer, as Monika was saying, trying to understand their pain points, their dislikes, their likes, and their wishes. For this, you need to learn to switch from what I call the tell mode or the sell mode and move into a listen mode and listen with empathy.

The second challenge is to learn how to listen to what I call the silence of the customer, the things that the customer doesn't tell you. They don't tell you because they don't know themselves or they know but they don't think it's your problem to solve.

An interesting example is how Philips, for instance – the Dutch appliance company – developed the first kettle with a limescale filter. The project team sent some people to live. This was in the UK, so this was in the UK business.

They sent a team of people to live with UK families and, after a few days, they discovered the problem of the limescale. I suppose everybody is familiar with this kind of thin film of calcium floating on top of the water.

What was interesting is that customers never told them about the limescale problem. it's not because they were not aware of it, because they were spending a lot of time trying to scoop the limescale with a spoon. But they didn't think it was the kettle manufacturer's problem. They would complain to the water authorities.

Here, Philips just took their engineers a few weeks to develop a little filter, which you find now on all the kettles, by the way, to stop the limescale.

The third challenge, by the way, if I may just finish with this, is that you need to learn about the non-customers. I think we focus on customers, the voice and silence of customers, but you can also find a lot of weak signals and learn great innovation ideas by looking at non-customers.

Michael Krigsman: Arsalan Khan (from Twitter) comes back and says, "Who defines the customer? How do you identify the right customers to be listening to or the right non-customers, because this is so central?"

Monika Lessl: I also really support the idea of non-customers. Of course, it's the customer, but it's also, in a broader sense, society.

There, let me give you the example of sustainability. This now becomes such a huge topic or is such a huge and very important topic. It's a make or break if we are not successful within the next ten years, so we will have a hothouse Earth.

This is something where now also in our consumer, I mean, like every packaging has to be in a sustainable manner and so on. This is where there is a very, very strong voice. That's something where we also have to implement, and we are actively working on and also have our commitments in terms of, for example, getting carbon zero. But it also impacts, of course, our products, especially the consumer brands, but also our crop science business.

Yeah, I think it's about listening to the individual customer, but then also to societal changes and changing behaviors.

Ben Bensaou: If you want to do this in a very systematic way, I have a very simple technique or tool. You take your product or service, and you literally build the whole ecosystem that's around it.

Think about all the people who are in touch with your product. Think about all the processes that are in touch with your product or service. Think about all the points of decisions or information that are connected to your product. You build this whole web of people, products, and processes that are connected to you.

You know who your customers are, so you can identify the non-customers as all the rest. As I said, it could be your suppliers, could be your customers. The influencers, the regulators, could be the source of innovation. I don't want to say it's an endless task, but you can systematically identify who the customers are and non-customers.

Obstacles to innovation

Michael Krigsman: Let me switch gears a little bit. What are the kinds of challenges, typical challenges, that organizations face as they're trying to build this culture of innovation, as they're trying to empower the frontline workers and innovate across the organization and co-create, collaborate with customers? What are some of the challenges that you see? Monika, for example, what are some of the challenges that you see inside various organizations within Bayer?

Monika Lessl: As we started, maybe the discussion is of course ambidexterity sounds easy in terms of, on the one hand, having execution and, on the other hand, having innovation. But it's quite hard to do because you always have to sustain one part of the organization while, let's say, your other leg you have to play with.

That is, in the end, not an easy decision because it goes, on the one hand, on skills but it also goes into investments and it goes into the portfolio. How much do you invest in the new areas versus the existing and the sustaining ones (sustaining your business)?

We live in times which are absolutely disruptive. If I look on the healthcare side, for example, now we have invested also massively now in cell and gene therapy because it's the new paradigm that you no longer treat. You are going to cure a disease.

I think this is really where you can see and, of course, on the one hand, we also have the existing activities, but we have to go into a new way. Maybe it's very interesting how we have built this because we bought some new companies, but we now have to integrate them and we have as a whole ecosystem. It's not that we fully integrate these companies, but we keep them on an arm's length. But again, you have to manage this, so it also needs new skills.

I just want to give you this example because it clearly shows that you have to make always this decision. How far do you go into a new direction versus sustaining your existing revenue streams?

Ben Bensaou: One of the key challenges for organizations to become more customer-oriented or more innovative is really that their structure is modeled around the execution engine, basically. The execution is very much about control.

It's no surprise that many organizations have vertical hierarchies and silos where they bring teams together to deal with problems. It's really often problem-solving. You bring a set of specialists, and they have this very kind of conversion process of finding what is a best solution.

Innovating or innovation is less about control. It's more about collaboration and communication, and teamwork. It has to function with horizontal structures which are focused on the customer.

I can, for instance, give a nice example of how this can function. There's this company called Kordsa. It's a Turkish company which manufactures fabric that is used to reinforce tires.

What they do is that, on a regular basis, they send cross-disciplinary teams to go and camp in the factories of their customers. They spend three, four days at a time just roaming around and observing what is going on, trying to understand how their customers are working.

Just to show you how this can work, they told me that (once, at a plant) the team – you're talking about somebody from engineering, somebody from production, from supply chain, from legal, HR – they saw that the workers at the customer were struggling with unloading rolls of reinforcing fabric. The customer had never complained about this. They never talked to them about this.

They were there at the facilities of the customer, and they realized that they were peeking into a problem that nobody knew about. They came back and devised a small routine, which they then taught to the customer about how (because they know how to deal with rolls of fabric, and the customer was able to reduce the resources needed to handle these rolls from 30 minutes and 3 people to 12 minutes by one person.

Again, this is about horizontal cross-disciplinary teams focused on the customer and not vertical silos.

Innovation strategy and allocation of resources

Michael Krigsman: Monika, is there ever a tension between needing to justify the resources for innovation knowing that pulling resources into innovation may hurt the bottom line in the short-term because you're taking resources that won't see a result until sometime in the future? Is there tension there?

Monika Lessl: Absolutely, yeah. It's always the tension between the short-term gains and the long-term gains. As I said, we are living in times of disruption, be it on the bio revolution where, in the future, you will produce many aspects through biologic means. For example, if I just talk about artificial meat or other things.

This is where you have to balance if you want to have the short or midterm gain or the long-term. This is in the art. It's the art of management, I would say.

Michael Krigsman: Ben, do you have very quick advice on managing this tension between the short-term and the long-term when it comes to innovation?

Ben Bensaou: The advice is to pay attention and focus on middle managers because the senior people understand the importance of innovation. The front-line people, they're dealing with customers and non-customers all the time. They understand that innovation is a no-brainer.

The middle managers are the ones who are shielded from this pressure. They are also responsible for execution, so it's very important to explain to them, advocate to them, to incentivize them, as we said earlier, to make sure that their team is innovative.

Talent management and innovation

Michael Krigsman: Monika, how do you think about the talent management pipeline for the organization in order to ensure that you have the right people in place to support innovation?

Monika Lessl: You need diverse talent. That is very important for me. Diversity can be everything from gender, nationality, diversity of thoughts, and so on. This is very, very important.

Yeah, it's all about diversity, having different perspectives, and hiring for potential. Don't necessarily hire always for those who have the skills for a given area because it will more or less stay the same then. But if you hire for potential, people can develop and come up with new things.

Michael Krigsman: Ben, you're going to get the last word here. What advice do you have – again, very quickly – on this talent management issue when it comes to innovation? I realize it's an enormous topic. [Laughter]

Ben Bensaou: I don't mean it to be a pun, but I would say that it's not about talent; it's about skills. If you talk about innovation, people associate it with being a genius, to have a talent, to be creative.

You remember the distinction I make with innovating. If it is a process, if it is a behavior, then this is something you can learn. You can have tools to help people.

By the way, once people are given permission to innovate and they are given training to innovate, they can have fun in their job. They're going to like what they do. With the safety, they're going to start to generate ideas and other people will want to join your company because it's so interesting to work for you.

Michael Krigsman: Okay. With that, I'm afraid we're out of time. I want to say a huge thank you to Professor Ben Bensaou with INSEAD, and to Monika Lessl with Bayer AG. Thank you both so much for taking the time to be here. I really, really am grateful to you.

Ben Bensaou: Thank you, Michael. It was fun.

Monika Lessl: Thanks, Michael.

Ben Bensaou: Thank you, Monika.

Monika Lessl: It's been an honor.

Michael Krigsman: Everybody, thank you for watching. Before you go, please subscribe to our YouTube channel. Hit the subscribe button at the top of our website so we can send you our newsletter. Everybody, I hope you have a great day. Take care. Bye-bye.

Ben Bensaou: Once people are given permission to innovate and they are given training to innovate, they can have fun in their job. They're going to like what they do.

Monika Lessl: Of course, the ambidexterity sounds easy in terms of, on the one hand, having execution and, on the other hand, having innovation. But it's quite hard to do.

Importance of innovation

Michael Krigsman: We're discussing innovation with customers. We're speaking with Professor Ben Bensaou INSEAD and Monika Lessl of the huge German conglomerate Bayer AG.

Ben, you're the author of this excellent book. It's called Built to Innovate. Tell us about the book. Tell us about your work.

Ben Bensaou: Over the last, I would say, almost 20 years, I spent a lot of time with established companies operating in very traditional businesses, and I have seen leaders transform this very old tradition companies into innovation powerhouses. What I wanted to do with the book is to document these transformation stories and try to codify what I have learned in the form of new frameworks, new concepts, new tools, and methodology that I want to share with a wider audience.

Michael Krigsman: Monika, welcome to CXOTalk. I'm very grateful for you taking the time to be here. Please tell us about your role and about Bayer AG.

Monika Lessl: My role at Bayer is I'm responsible for corporate R&D and social innovation, which means that I'm responsible for strategic research and development but also for innovation overall at Bayer.

Maybe they know Bayer because it's a more than 150-year-old company and it's known for the drug aspirin. But maybe it's interesting to note that we are a company that is active in different areas in the life sciences, which are the pharmaceutical area but also in agriculture and also in consumer health.

We have three main businesses, and I'm kind of strategically responsible for the innovation part for all three of them. Looking forward to the discussion today. Thanks.

Michael Krigsman: I don't think people realize that Bayer AG has about $50 billion in annual revenue. It's an enormous company.

Monika Lessl: Yeah, absolutely. We also have more than 100,000 people across the globe, so it's truly global and, as I said, really a life science company, which is quite fascinating.

Innovation and competitive advantage

Michael Krigsman: Ben, you talk about the innovation and execution engines as driving a business. Let's start there because I think that's the foundation for then moving into the relationship between the customer and innovation.

Ben Bensaou: As everybody realizes, we live in a competitive environment, which is very uncertain, volatile, and fast-changing. This means that organizations and their leaders must excel at two different activities and sometimes very contradictory.

On the one hand, they need to execute today's strategy. Deliver, with high efficiency, the products and services that the customers need. This is a challenge for the execution.

But at the same time, these leaders need to imagine the strategy of the future and help make it happen. They need to excel at rethinking and reimagining what they do today, imagining how to improve their existing products and services and think about the new products that nobody has thought about. This is the challenge of innovating.

Every organization has to be able to innovate and execute at the same time.

Michael Krigsman: Monika, thoughts on that topic of innovation and execution? You're responsible for significant innovation at a very large organization. How does what Ben describes resonate with you?

Monika Lessl: I think it's the challenge of ambidexterity, which is (as Ben described) on the one hand to make sure that you drive the new innovation that you invest in new areas but, at the same time, make sure that you execute. Otherwise, you have nothing to invest.

You need the revenues. You need the money and the returns in order to be able to go into the new areas. This is a day-to-day challenge, which is a role that each leader has to play. Otherwise, there is no future for an organization.

Product innovation starts with the customer

Michael Krigsman: What about this notion of innovation starting with the customer? Ben, you talk a lot about that and that concept is woven throughout your book. In a way, it seems like kind of an obvious concept. But I guess it's not that obvious or you wouldn't have had to write a book about it.

Ben Bensaou: What I've noticed, actually – if you allow me, I would like to also explain the distinction I made between innovation and innovating, which is really central to the notion of the importance of the customer.

I've learned through my early mistakes. In my early career when I was designing programs for innovation, I used to use titles like Value Innovation or Disruptive Innovation or sometimes Blue Ocean Strategy.

What I discovered is that the word "innovation" as a noun was deeply intimidating for non-specialists like frontline employees or managers. I was really puzzled by why this created so much anxiety and fear in people.

I realized that what was happening is that they had this feeling that (after the training, going back to work) they were being expected by their boss to come up with a new product or a new service, a new business model – some sort of a concrete outcome, a result.

Then, one day, I started to use a different word. I started to use the word "to innovate" as a verb or "innovating," and I realized that the tension, the fear, the anxiety would dissipate.

I understood that when we talk about how to innovate or learning to become more innovative, we are talking about a process, a behavior, an attitude. This is something that can be learned. This is something that can be supported with tools.

Now, if I come to this notion that if you think of innovation as the tip of the iceberg, if you will, the thing that we see above the water level, innovating and innovating capabilities is what is under the water level. It is all of these organizational capabilities, as Monika was talking, the capabilities of the 100,000 employees at Bayer who can bring new ideas, which might become innovations. Build to innovate and an innovating engine is about how to enlist and leverage all of these innovating capabilities within the organization.

Now, the definition I use for innovating is at the core of the notion of the customer. For me, innovating is about systematically looking for new ideas that create value for a customer and for the organization. What I mean by a customer, it can be an internal or an external customer. In B2B, it could be a direct customer, your customer's customer, your supplier, or maybe a regulator, an influencer. So, the customer is at the core of innovation.

Monika Lessl: I think it's been described (also when I started quite some years ago) as really the point that people felt not being included in innovation because they always thought it's something so big and you have to be a genius to drive innovation. This is where we said no; innovation is for everyone and everybody can contribute.

Of course, the levels are different, but also incremental innovation is important. You don't always have to have really disruptive innovation.

Of course, if you look from a strategic perspective, you need all types of innovation, but not every employee will contribute to it in the same way. By explaining this, we also enabled everyone to contribute.

Then, of course, the key question (what people were asking us) is, well, I really would like to contribute, but I don't know how. And so, this is where we also started to provide, on the one hand, trainings, very simple ones.

We started with something like systematic inventive thinking, which is a very easy methodology you can learn, you can easily apply. Then also supported with a whole network of people – I can say later a bit more about it – so that you have both. I think what we learned is it's not enough just to have this training, but then you have to have support, how you apply it in real life.

I think that was a very important point. Innovation is for everyone and not only for a selected group of people.

Ben Bensaou: I think this is a very important point that you're making, Monika. I see the pattern in many, many organizations.

Many people believe that you need to have a genius leader or to be a startup to be able to innovate. That's not true. In the research and the work that I've been able to do, I have seen established, even centuries-old companies able to innovate.

It's exactly what you were saying. It's not only being focused on trying to come up with a huge kind of an industry-changing effect, but they look for small, important changes, sometimes in very unexpected places. This is what you refer to as continuous and systematic innovation, innovation of every kind and driven by everybody in the organization.

This is why I found that many organizations that became very innovative – just like Bayer is a good example –are able to create this protected and fully legitimized pace where everyone can innovate, not only the specialists. You can innovate in everything you do—your products, your services—but also in your internal processes, in your functions, and innovating, as I was talking about the verb, becomes a habit.

Innovation management and corporate culture

Michael Krigsman: It sounds to me like you're both describing innovation as a cultural – Ben, you used the term – habit. I was going to say to develop innovation as being part of the cultural DNA of the organization. I see you're both nodding, so you agree. But that then raises the question, Monika, of how to do this. It sounds so simple. Fine. We now have a culture of innovation. But it's probably not that easy.

Monika Lessl: As we know, the most difficult changes are cultural changes, and I think there is this nice wording of culture eats strategy for breakfast because if you want to achieve behavioral change, this is the most difficult thing you can ever do. Therefore, it needs changes in many, many areas.

As I said, we try to, on the one hand, have a support system. But then also, what we did is include it in all kinds of training, I mean more leadership training that we have in the company be included in our values, so we have the so-called life values and then there are also innovation is one key element of this.

It takes time. It's nothing that happens from day to tomorrow. Of course, it also needs the right leadership in order to make it happen. Yeah, this is, I think, a concerted action that takes time and continuous movement.

Michael Krigsman: We have an interesting question from Twitter from Arsalan Khan who said, "Sometimes the lack of incentives is the reason why not everybody is engaged to be innovative. Can you talk about the role of incentives and driving, creating this culture of innovation?"

Ben Bensaou: You need incentives but, before incentives, I would say that you need permission. I think, especially if we're talking about innovation as being everybody's job, people need to sincerely be given permission to innovate. Of course, they need to be motivated.

I remember the words of Jan Carendi, who used to be the board member at Allianz (the German financial conglomerate). He was the one responsible on the board for innovation. He used to say, for people to innovate, they need to feel able, which means they have permission. They need to feel capable, which means that they need to have the tools, the training that Monika was talking about, to have the time and the resources to be able to innovate. And they need to be motivated. For them to be motivated, they need to feel that there is a sense of a challenge, they have autonomy, and they are recognized and rewarded for it.

Now, there's a very delicate question about who should be incentivized for innovation. Of course, if you start to put metrics on the frontline, then you're going to kill innovation.

As I said, innovation is very intimidating. If people don't know how to do it, they haven't been trained, they don't have the proper tools and proper coaching support for that, you're going to kill innovation.

The incentive should be with what I would refer to as the middle managers. The incentive should be for them to create an atmosphere where their team feels safe, they have safety and trust in innovating.

I can give you an example, for example, of Allianz UK. Some people use very hard incentives like a percentage of your bonus is attached to how much of new products are delivered to your gross. But there are soft incentives like what I saw at Allianz UK where they regularly publish an innovation league table for the UK businesses.

You can see that middle managers don't want to be at the bottom of the league, so they're going to be encouraging their team to be innovative. This is what I call "give permission and make other people jealous." It's kind of a model to show that if you give permission to your people, they're going to become innovative and they're going to make you look good.

Monika Lessl: Yeah. Maybe I can add to this, exactly what Ben was saying. Psychological safety is something that's first a concept that you need to teach leaders so that they can understand. It also gives the frame because you also don't want to innovate.

I mean let's give an example. You have a manufacturing facility which delivers drugs. At that moment, you don't want to change the system, running system. But of course, you want to see what's next. Maybe it's the printing of new pills, which is the new way of working.

You have to make sure in which area you want to drive innovation and set that frame. I think that's to be clear there.

Then also as Ben was saying, if you try to come up with a new concept, a new idea, you expose yourself. It's a natural behavior that the fear of losing something, which is your reputation, is much bigger than the fear of gaining or the potential incentive of gaining something.

For people to expose themselves, it takes a lot. Therefore, this safety environment is very important.

What I have learned is that the best is recognition, that you give them a platform to present to senior management, which can be an innovation day, which can be an innovation competition. Then, of course, if you are recognized and the leaders are showing the same behavior, then others will follow.

Ben Bensaou: If I may give you an example, actually, I really like what you just said Monika, the notion of safety. I'm always surprised how senior leaders are shocked to hear that, in fact, their frontline people are very innovative. They have lots of ideas. But the thing is that they are afraid. They are afraid. They don't know what their boss is going to think.

Actually, I learned a very interesting thing from a Japanese manager that I trained almost 10, 12 years ago. I happened to have met him just before Christmas in Tokyo.

He works for Recruit. People in the U.S. might know Recruit. They are the owners of Indeed and Glassdoor.com.

This is what he taught me. He taught me the power of thank you, [laughter] of all things. He explained to me why this was important because, after I trained him, I observed him for many years. He had this habit; every time somebody came up with an idea, he would say thank you. I was really kind of intrigued by it.

He explained to me a very profound thing. He said when people are in the execution mode, they are executing their task. They know that very often it's structured, it's observable, and their boss can know if they're doing their job well or not. They even have KPIs to measure them.

But when it comes to innovation (or innovating, as I call it), you don't have this visibility. I can't come and say, "Oh, Michael. I think you have an idea. You're hiding it from me." There's no way for me to know if you have an idea, so if you don't have the safety, if you don't feel comfortable and you're afraid to propose your idea to the boss or in a meeting, you won't.

His name is Iwashita. Iwashita-san, what he understood is that when people expressed an idea, they were effectively taking a risk. They were taking a risk. He took their idea as a gift to him. He told me, "When I receive a gift, I just say thank you."

Co-creation: How to innovate with customers?

Michael Krigsman: When it comes to innovating with customers, how should we go about that? The customer's culture is different from ours and we need their assistance. It places a burden upon us to listen, to understand. How do we go about it and, especially, how do we systematize this and build it into our culture (in the right way)?

Monika Lessl: Yeah. Maybe I can give you two examples. One is, of course, patients. We are a pharmaceutical industry. Now patients are coming much closer into our processes. If we design a clinical trial and how the processes are, we have also much more involvement of patients so that they really can say what they need.

Then, of course, if we develop a new product, we also (early on) ask questions. One example I can give you is we are developing drugs against endometriosis. That's a woman's disease and can be very painful. But the main cause of this is that you have some tissue of the uteri (and even in other areas of your body). These are called lesions.

From a scientific perspective, you always look on diminishing these lesions, but the main problem for women is the pain. This is also, I think, a good example where sometimes you cure, but you don't address the day-to-day problem, and you can only get this through the dialog. That's why this involvement is so powerful.

Another example is also if you look on the innovation process. There it's absolutely critical not only to follow your own idea but there's also this nice saying, "Don't fall in love with your idea. Fall in love with the problem."

Sometimes, especially in companies that are very technically driven or scientifically driven, you love your idea. Of course, you have to love it. But at one point, you have to test it with the customer. This is very, very important to get the feedback and listen carefully to what is really their need and then to pivot maybe your idea. That's how I see it and it has to be integrated into the process.

Ben Bensaou: Actually, if I were to add to this, I would say that, in a way, to learn from the customer, you need to actually close two important gaps. One that people tend to underestimate is to close the gap internally (within the organization) between the would-be innovators and the people who know about the customer (who are close to the customer). Even getting your scientists and your R&D people to build a partnership, a true partnership, with your marketing and sales is very important.

I remember you had on your show Jonathan Becker from the San Jose Sharks, the hockey team. He did the same thing. He built a partnership between the IT people and the marketing people.

I think already it goes a long way to get the people who are close to the customers to work with the would-be innovators. I could actually give you a very nice example of how, for instance, BASF developed a new sole, a new foam that goes into soles for Adidas.

Let me mention about the other gap that you have to close is the gap between your own organization and the customer themselves. It can be very simple things.

In a B2C example, I can give you the experience with had with Starwood, the hospitality global firm. They had a conference in Paris. They had 700 attendees, and they wanted us to come and help talk to people about innovation.

What we did is that we provided people with a few simple tools, as Monika was saying. Then we split the 700 people in teams of about 10 people. Then we sent them into the streets of Paris with a notebook and cameras and asked them to just roam around the streets, try to take pictures and notes, and find some insights about the experience of their customers.

Well, when they all came back, they had generated 1,700 new ideas in 3 hours. It was really fascinating that a lot of people were saying, "Well, I'm not a creative type, but I can do it." Just by observing their customers, they were able to generate innovative ideas.

The other way (in a B2B example), you can create a space where your people work together with the customers. I can mention the example—just to have a non-traditional business here—the experience of the Pentagon where the Airforce has a lab where they can simulate all sorts of dangerous and hazardous wargames.

They have this Operation Tech Warrior where they have these emersion exercises where they bring engineers from the suppliers, and they train them for two weeks. Then they put them in a battalion or a squadron where they can see their products (how they work or don't work) in a real situation with real weapons. I've seen other companies do the same thing, bring their customers into their research centers to see how their products work in the real world.

Michael Krigsman: Monika, does this notion of co-creation and collaborating with the customer again resonate with you? Is that something that's part of your set of innovation activities?

Monika Lessl: Well, I think it has to be part of those who are driving the respective innovation projects. Everyone has to be there close to the customer.

Maybe I can give you also one other example. We also used to have an animal health business as well, and there was one example where we have a very nice collar for dogs or cats against ticks. People always have to take care that this collar only is valid for, I think, two to three months. Then they have to be ready to change it and so on and so forth.

By interviewing the customers, they found out, "Well, I don't want to care about this," and so, in the end, we were selling more in insurance, a service rather than the product. I think that's a good example on finding out, okay, what do customers really care about?

I can give you another example. We also have an environmental health business. Let's say for a nutrition industry, this is an environmental health business. We also make sure that the manufacturing and so on is also pest-free and everything.

Again, it was a burden for them to take care of all of this, buying just the products. But then also we turned it into a service. Of course, it's much easier for them.

I think it's really about understanding where are the pain points and then how can you address them. Every market here, as been said, has such insight and it's about connecting these ideas then to the R&D organization or to the innovation colleagues so that, in the end, it's coming to fruition and brings in the new concepts and future growth.

Ben Bensaou: This is the important challenge when you're dealing with a customer, whether you bring them closer or not. You have to bring them closer, for sure. But what is really the challenge (I call it), one, is to learn how to listen to the voice of the customer, as Monika was saying, trying to understand their pain points, their dislikes, their likes, and their wishes. For this, you need to learn to switch from what I call the tell mode or the sell mode and move into a listen mode and listen with empathy.

The second challenge is to learn how to listen to what I call the silence of the customer, the things that the customer doesn't tell you. They don't tell you because they don't know themselves or they know but they don't think it's your problem to solve.

An interesting example is how Philips, for instance – the Dutch appliance company – developed the first kettle with a limescale filter. The project team sent some people to live. This was in the UK, so this was in the UK business.

They sent a team of people to live with UK families and, after a few days, they discovered the problem of the limescale. I suppose everybody is familiar with this kind of thin film of calcium floating on top of the water.

What was interesting is that customers never told them about the limescale problem. it's not because they were not aware of it, because they were spending a lot of time trying to scoop the limescale with a spoon. But they didn't think it was the kettle manufacturer's problem. They would complain to the water authorities.

Here, Philips just took their engineers a few weeks to develop a little filter, which you find now on all the kettles, by the way, to stop the limescale.

The third challenge, by the way, if I may just finish with this, is that you need to learn about the non-customers. I think we focus on customers, the voice and silence of customers, but you can also find a lot of weak signals and learn great innovation ideas by looking at non-customers.

Michael Krigsman: Arsalan Khan (from Twitter) comes back and says, "Who defines the customer? How do you identify the right customers to be listening to or the right non-customers, because this is so central?"

Monika Lessl: I also really support the idea of non-customers. Of course, it's the customer, but it's also, in a broader sense, society.

There, let me give you the example of sustainability. This now becomes such a huge topic or is such a huge and very important topic. It's a make or break if we are not successful within the next ten years, so we will have a hothouse Earth.

This is something where now also in our consumer, I mean, like every packaging has to be in a sustainable manner and so on. This is where there is a very, very strong voice. That's something where we also have to implement, and we are actively working on and also have our commitments in terms of, for example, getting carbon zero. But it also impacts, of course, our products, especially the consumer brands, but also our crop science business.

Yeah, I think it's about listening to the individual customer, but then also to societal changes and changing behaviors.

Ben Bensaou: If you want to do this in a very systematic way, I have a very simple technique or tool. You take your product or service, and you literally build the whole ecosystem that's around it.

Think about all the people who are in touch with your product. Think about all the processes that are in touch with your product or service. Think about all the points of decisions or information that are connected to your product. You build this whole web of people, products, and processes that are connected to you.

You know who your customers are, so you can identify the non-customers as all the rest. As I said, it could be your suppliers, could be your customers. The influencers, the regulators, could be the source of innovation. I don't want to say it's an endless task, but you can systematically identify who the customers are and non-customers.

Obstacles to innovation

Michael Krigsman: Let me switch gears a little bit. What are the kinds of challenges, typical challenges, that organizations face as they're trying to build this culture of innovation, as they're trying to empower the frontline workers and innovate across the organization and co-create, collaborate with customers? What are some of the challenges that you see? Monika, for example, what are some of the challenges that you see inside various organizations within Bayer?

Monika Lessl: As we started, maybe the discussion is of course ambidexterity sounds easy in terms of, on the one hand, having execution and, on the other hand, having innovation. But it's quite hard to do because you always have to sustain one part of the organization while, let's say, your other leg you have to play with.

That is, in the end, not an easy decision because it goes, on the one hand, on skills but it also goes into investments and it goes into the portfolio. How much do you invest in the new areas versus the existing and the sustaining ones (sustaining your business)?

We live in times which are absolutely disruptive. If I look on the healthcare side, for example, now we have invested also massively now in cell and gene therapy because it's the new paradigm that you no longer treat. You are going to cure a disease.

I think this is really where you can see and, of course, on the one hand, we also have the existing activities, but we have to go into a new way. Maybe it's very interesting how we have built this because we bought some new companies, but we now have to integrate them and we have as a whole ecosystem. It's not that we fully integrate these companies, but we keep them on an arm's length. But again, you have to manage this, so it also needs new skills.

I just want to give you this example because it clearly shows that you have to make always this decision. How far do you go into a new direction versus sustaining your existing revenue streams?

Ben Bensaou: One of the key challenges for organizations to become more customer-oriented or more innovative is really that their structure is modeled around the execution engine, basically. The execution is very much about control.

It's no surprise that many organizations have vertical hierarchies and silos where they bring teams together to deal with problems. It's really often problem-solving. You bring a set of specialists, and they have this very kind of conversion process of finding what is a best solution.

Innovating or innovation is less about control. It's more about collaboration and communication, and teamwork. It has to function with horizontal structures which are focused on the customer.

I can, for instance, give a nice example of how this can function. There's this company called Kordsa. It's a Turkish company which manufactures fabric that is used to reinforce tires.

What they do is that, on a regular basis, they send cross-disciplinary teams to go and camp in the factories of their customers. They spend three, four days at a time just roaming around and observing what is going on, trying to understand how their customers are working.

Just to show you how this can work, they told me that (once, at a plant) the team – you're talking about somebody from engineering, somebody from production, from supply chain, from legal, HR – they saw that the workers at the customer were struggling with unloading rolls of reinforcing fabric. The customer had never complained about this. They never talked to them about this.

They were there at the facilities of the customer, and they realized that they were peeking into a problem that nobody knew about. They came back and devised a small routine, which they then taught to the customer about how (because they know how to deal with rolls of fabric, and the customer was able to reduce the resources needed to handle these rolls from 30 minutes and 3 people to 12 minutes by one person.

Again, this is about horizontal cross-disciplinary teams focused on the customer and not vertical silos.

Innovation strategy and allocation of resources

Michael Krigsman: Monika, is there ever a tension between needing to justify the resources for innovation knowing that pulling resources into innovation may hurt the bottom line in the short-term because you're taking resources that won't see a result until sometime in the future? Is there tension there?

Monika Lessl: Absolutely, yeah. It's always the tension between the short-term gains and the long-term gains. As I said, we are living in times of disruption, be it on the bio revolution where, in the future, you will produce many aspects through biologic means. For example, if I just talk about artificial meat or other things.

This is where you have to balance if you want to have the short or midterm gain or the long-term. This is in the art. It's the art of management, I would say.

Michael Krigsman: Ben, do you have very quick advice on managing this tension between the short-term and the long-term when it comes to innovation?

Ben Bensaou: The advice is to pay attention and focus on middle managers because the senior people understand the importance of innovation. The front-line people, they're dealing with customers and non-customers all the time. They understand that innovation is a no-brainer.

The middle managers are the ones who are shielded from this pressure. They are also responsible for execution, so it's very important to explain to them, advocate to them, to incentivize them, as we said earlier, to make sure that their team is innovative.

Talent management and innovation

Michael Krigsman: Monika, how do you think about the talent management pipeline for the organization in order to ensure that you have the right people in place to support innovation?

Monika Lessl: You need diverse talent. That is very important for me. Diversity can be everything from gender, nationality, diversity of thoughts, and so on. This is very, very important.

Yeah, it's all about diversity, having different perspectives, and hiring for potential. Don't necessarily hire always for those who have the skills for a given area because it will more or less stay the same then. But if you hire for potential, people can develop and come up with new things.

Michael Krigsman: Ben, you're going to get the last word here. What advice do you have – again, very quickly – on this talent management issue when it comes to innovation? I realize it's an enormous topic. [Laughter]

Ben Bensaou: I don't mean it to be a pun, but I would say that it's not about talent; it's about skills. If you talk about innovation, people associate it with being a genius, to have a talent, to be creative.

You remember the distinction I make with innovating. If it is a process, if it is a behavior, then this is something you can learn. You can have tools to help people.

By the way, once people are given permission to innovate and they are given training to innovate, they can have fun in their job. They're going to like what they do. With the safety, they're going to start to generate ideas and other people will want to join your company because it's so interesting to work for you.

Michael Krigsman: Okay. With that, I'm afraid we're out of time. I want to say a huge thank you to Professor Ben Bensaou with INSEAD, and to Monika Lessl with Bayer AG. Thank you both so much for taking the time to be here. I really, really am grateful to you.

Ben Bensaou: Thank you, Michael. It was fun.

Monika Lessl: Thanks, Michael.

Ben Bensaou: Thank you, Monika.

Monika Lessl: It's been an honor.

Michael Krigsman: Everybody, thank you for watching. Before you go, please subscribe to our YouTube channel. Hit the subscribe button at the top of our website so we can send you our newsletter. Everybody, I hope you have a great day. Take care. Bye-bye.