Accessing knowledge to fuel innovation

INSEAD Professor Felipe Monteiro discusses digital disruption and the benefits of seeking out new ideas and technologies from around the world

One key driver of innovation is technology and knowledge scouting, something INSEAD Affiliate Professor of Strategy Felipe Monteiro explores in his widely published research. His work delves into how multinational corporations create optimum environments for innovation, with a focus on the processes they use to access external knowledge across organisational and geographic boundaries.

Monteiro’s efforts both inside and outside the classroom have earned him numerous research  and teaching awards, including four times the INSEAD Dean’s Commendation for Excellence in MBA Teaching and the 2018 Case Centre Outstanding Case Writer: Hot Topic “Disruptive Change” Award for The TAG Heuer Carrera Connected Watch: Swiss Avant-Garde for the Digital Age A & B Cases, co-written with INSEAD Research Associate Anne-Marie Carrick.

Monteiro spoke with Salamander to discuss the TAG Heuer case and share his insights on global open innovation, technology scouting and digital transformation in Latin America.

Q: What drew you to the topic of global innovation management?
A: Multinational companies have the potential advantage of having subsidiaries and different ways of capturing knowledge from many parts of the world. By putting together good processes for searching for that knowledge, and then combining what they find, they gain an innovation advantage. I like that it’s a combination of global reach and the ability of accessing new knowledge that generates the possibility for those companies to be more innovative.

Q: What approaches to innovation should organisations take to increase success?
A: The main challenge to creating an optimum environment for innovation is not about accessing knowledge—it’s about how you integrate that new knowledge with what you have. A very common bottleneck is that new ideas and innovations found in different parts of the world don’t get internalised, especially when they challenge the existing dominant logic of the firm. It’s important to identify what processes you need to put in place in order to not kill excellent ideas that don’t confirm what you already know.

Another important point is that open innovation is a two-way street. If you want to access knowledge and innovation from companies all over the world, you have to give something to receive something. For an organisation to benefit from open innovation, you also have to be open yourself.

Q: How can business leaders leverage innovation and digital disruption within their organisations?
A: Oftentimes, the new, emerging technologies that you need are not happening right next door. The things that are going to disrupt your business might come from different places, and because you are surrounded by companies that are behaving like you, you might not see them. One of the key reasons for global technology scouting is that you need to overcome this local mind-set and go to different places to access new things that you might not have accessed if you stayed only in your home country.

Q: Why is INSEAD particularly suited to equip future business leaders to maximise innovation?
A: When you have such a global classroom with people coming from everywhere, the recognition that there are many pockets of knowledge that are important for innovation is natural. When you have a case about technology, and we’re deciding whether you should go to the U.S., China, Brazil, Finland or Israel, we have students from each of those places in class who understand the different ecosystems of those countries. They have experiences and deep knowledge that can generate discussion.

Q: The award-winning TAG Heuer case discusses how the company disrupted the Swiss watchmaking industry by introducing a digital product. What interested you about the topic?
A: Many times it’s difficult for the companies leading an industry to continue to lead as new technologies emerge. What happens if new players come from other industries and start to challenge the supremacy of the Swiss watch industry? I was able to watch the evolution real time and see how Jean-Claude Biver [President of the watches division of Moet Hennessy Louis Vuitton and CEO of TAG Heuer] decided to launch the connected watch. It was a privilege to follow that story as it was unfolding and afterward. At INSEAD, we have the privilege to interact with high-level protagonists in our cases.

Q: What made TAG Heuer’s approach to innovation successful?
A: It goes back to how leaders manage and leverage digital disruption by being fully committed to the change. What we saw in TAG Heuer was exactly this. The senior leadership figured out that the technology they needed for introducing a connected watch wasn’t available in Switzerland. They had to go somewhere else and partner with a company skilled at this disruptive technology, while still preserving their identity as a Swiss watch company. The case describes the journey of an industry leader facing disruption from another industry in another part of the world, and how they reacted to it. By establishing those partnerships, they were able to come up with a solution.

Q: Your research note on Digital Transformation in Latin America discusses how technology is helping to address social issues and reduce corruption in the region. How does the topic of utilising tech for good resonate with you?
A: In emerging markets, there can be an advantage to not having good systems or being underdeveloped. It allows firms in those countries to leapfrog and come up with the next generation of solutions. Digital transformation can be a means of progress. It’s as if the inefficiencies come as a motivation and a driving force for digital solutions to overcome the limitations and make a lot of difference in those regions. I’m looking forward to taking a group of our executive MBAs to Brazil in October and to learning how some business leaders are using digital to improve the lives of many people in the region. I’m also writing a case on doing business in Brazil after Operation Car Wash (and hosting Judge Sergio Moro on campus) and what it means for the country. This corruption probe has been painful, but I’m convinced it’s good for the country in the long term.

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