Innovation Methodology to Drive Differentiation and Growth

Bennet Bayer, Global CMO for Huawei, the largest telecommunications equipment maker in the world, talks with BrandingBusiness’ Director of Strategy in New York, Andrea Fabbri.  The two discuss innovation and marketing principles with real-life examples from Mr. Bayer’s extensive experience with some of the top B2B brands.

Topics include:

  • Ideas for innovation and where they come from (3:24)
  • Secrets to marketing success at Huawei (4:48)
  • Encouraging innovation (10:37)
  • The importance of fostering communication and how to do it (12:42)
Episode Transcript

Welcome to Expert Opinion, the BrandingBusiness forum where leaders share their views, insights, and experiences from the world of B2B branding. Now, here’s your host.

Andrea Fabbri:  Welcome to BrandingBusiness. I am Andrea Fabbri and our show today focuses on the role that innovation methodology can play to help executives drive differentiation and growth. With me today is Bennet Bayer. He’s the global CEO of Huawei, where he’s responsible for strategy and implementation focused on carrier cloud computing, big data, mobility solutions, and services partnerships. To characterize Bennet I actually would like to use a quote from a famous Quentin Tarantino movie, Pulp Fiction. “My name is Wolf and I solve problems.”

Like Wolf in Pulp Fiction, Bennet is usually brought in to figure it out, as he said to me, creating market-driven vision and strategy that can drive profitable execution. Welcome, Bennet. How are you?

Bennet Bayer:  Thank you, thank you. I appreciate that.

Andrea Fabbri:  Bennet, you and I have been corresponding and speaking for the last couple of months, and we’ve been having conversations about the fact that innovation is definitely a key component moving forward to drive business growth for B2B companies. I look at it and I see mobility, social media, emerging technologies are all creating really a new, and shaping a new business environment. They are commoditizing individuals. They are revolutionizing products in some cases, and clearly they are transforming competition and the interaction between brands and customers.

It’s very obvious to me that to drive business growth, companies must rethink how brands deliver value and also how they’re experienced. In other words, companies must innovate. You’ve spearheaded many innovative initiatives with success over the course of your career where you were brought in to figure it out. Is there a set of principles that you followed with success and that executives should adopt to ensure that innovation is accomplished, but also accomplished with the desired business outcome?

Bennet Bayer:  A great question with many answers. Yes, I think so. For me, a lot of it has been trial by error. Interesting story, one of my first big hires, I worked at Casio to launch the LT 70P video phone. It was a product that never existed in a category that never existed. I remember calling my father-in-law who was head of new products at a large consumer products company. I asked him, “Bill, they want a forecast, but how do I do a forecast on a product that never existed in a category that never existed?” He said, “Oh bloody hell, tell them what they want to hear.” Really? That’s how you do that? It took a lot of the mystery …

Where do ideas come from? I think there are really five basic areas. Where do the ideas come from and then developing an internal methodology to manage what can be a flood or fire hose of ideas. For me, how I organize my business, which is along the lines of how I make money, is one of the key ways to succeed. How you engage and foster communication across different business units with supply and distribution chains, and how you build currency both personally and for your department, I think, goes a long way towards success.

Then the most critical one is perhaps the most challenging. You have to be willing to be wrong. For me, when I take over a new tenure I usually come in and say, “Look, I launched the first digital camera. I launched the first mobile app store. I did the first global Voice Over IP service. I’ve had some success, but I’m wrong half the time. You guys have to figure out which half.” Coming into a company like Huawei in the Chinese culture where nobody dares question their supervisor and question things has been … I’m very pleased to say we’re making progress, but I think that’s one of the big reasons why we’ve had such outstanding success over the past few years in getting the younger team members to question everything. That’s what I want from my team.

I don’t have a franchise on being right, and every CEO I go in to interview with, I say, “Look, I need a partnership. I can tell you which way to go. I can tell you why. I can give you a PowerPoint and hundreds of pages of stats and data that say this is the way to go, where the puck is going. But here’s why I think we could have trouble or fail.” You have to have partnership and be willing enough to discuss both sides of any issue.

Andrea Fabbri:  That’s really nice. You mentioned recognizing businesses, foster communication, willing to be wrong, which is such a refreshing statement to hear. Can you give us some examples of past stories that you can share about how you applied these principles and why they were successful?

Bennet Bayer: Oh sure. One of my favorite tenures was at Unisys. I’m running what was the largest mobile messaging business in the world. We had 86% of it globally. We were going to lose everything within three years because it was a mainframe platform. The mission was replace that revenue. We won’t give you any budget, and we’ll give you two people to start. I came up on the idea of taking other people’s stuff. Spyro had a hundred mobile games so I productized them, put my brand on them, ISO 9000 and idle methodologies, and put them on a platform for our guys to sell to the carriers and the operators.

My business then became, and with success, I added a product marketing group organized by how we made money, which was lifestyle, was enterprise application, mobile-enabling enterprise legacy things, mobile payments, and infrastructure. I put four product directors or VPs in some cases, in charge of those business. Now they came up with the ideas. They had their own technologists. Then I had a separate group of resources which is all the marcom, promotional stuff, the business development guys that go out and help do the deals with different mobile vendors. Then I owned the factory with the head of my development. I had 3,000 developers.

What are we going to make? Basically I had four guys or four teams that would argue why we should build this mobile app or why we should do this mobile payment solution. That became the to-do list. Now I knew pretty much what was going to succeed because it’s my backside on the line, but they put together the business case. This is how the organizing by the business. When you get someone who really argues passionately, and maybe they’ve been timid, and they make the business case, even if you know they’re wrong, if it’s not really going to hurt the business and you can see they’re going to crash into a wall, you still let them go do it, because that’s how you learn. You have to support that. Is that answering your question?

Andrea Fabbri:  Yeah, it sounds like innovation really is driven by the willingness to dare, the courage to be wrong, and to admit that one is wrong. The reason why I’m attentively listening to you speaking is in today’s environment so dominated by data in search of absolute predictable results, I often wonder if we are losing courage and leaving behind the power of ideas.

Bennet Bayer:  The term innovation, I believe comes from, it’s a noun from the 15th century. I’m not a big fan of the term, because I’ve done over 400 new products and software applications or services. Only 27 of them have been unique. I would ask you to consider what’s the difference between unique and creativity versus, say, Darwinian evolution. A lot of times if you’ve got something, if you’ve got a product or a service, and you’re simply adding new capabilities to it, is it innovation or is it really just, as Darwin would say, the evolution of whatever that is.

Andrea Fabbri:  I agree with you, and definitely the word innovation is used and often misused. When you look at the principles that you briefly highlighted, where do you see most companies failing?

Bennet Bayer:  I think without question it’s around the willingness to be wrong, the willingness to question. That’s at the 100,000 foot level. At the execution level it’s failing to have a methodology to empower people. Everybody talks about you want all the employees to contribute to the business, to innovate. Yeah okay, that’s great. How do you do that? This is that flood of ideas and you have to have a methodology to funnel it down to okay, of these hundred ideas that we got this month, what are the top three? Of those three, what’s the business case and rationale to do one of those? That’s where most people fall down. Anybody can go out there and you can give me $10 million and I’ll do anything. Whether or not it’s going to be a success, that is a different matter. You need to think about it. You have to really look at it from every side, and then just as you would go talk to a VC, once you think the idea is fully baked, now turn around and try and pick it apart. Where can it fail?

For example, most solutions going to market today, how do people sell it? Not just why does somebody want this, what problem does it solve, but who’s going to sell it? Why should my guys at Huawei who are making their quota selling servers and storage and virtualization and all the 900 other products we have, why should they sell cloud orchestration? They’re making their quota. Why should they sell something new? That is probably the biggest challenge for most organizations: who sells it and why.

Andrea Fabbri:  I definitely tend to agree. You also touched on fostering communications and the importance of fostering communications. How do you approach that? Because those two words together are some of the most misused words in the business literature, the importance of fostering communications, especially functional communications among different departments. How do you approach that?

Bennet Bayer:  The best business lesson of my life, I’m at Infonet, which is, everybody was either 20 years plus, or five years less. There was nobody in the middle. I’m a new guy and I’m running one of four divisions, so I’m a Grand Poobah. I was launching a global service and I couldn’t get anywhere. Fortunately, I had a guy on my team who was in his mid 60s and knew everybody in the company, and literally going door to door. They had what’s called a tiger team. It was all the support, billing, customer care, help desk. Before I could launch, legal, I had to visit and spend time with every one of these people and fully think through how I’m going to launch my service, what were their objectives.

I think spending time before you launch when you have an idea … I’m in a great job as a chief marketing guy. They generally answer the phone but you’ve got to go seem them. You have to take them to lunch. You have to constantly talk to them, not try and sell them something. Transparency is something you have to live and breathe every day. I go take the legal guy or the finance guy, I take them to lunch just about once a week. I make sure to touch base with them and just catch up. Hey, this is what my guys are thinking. What do you think of that? Hey, I had this kind of reaction from this customer and that customer. What do you think about that? You need to ask questions.

One of the things I learned at Casio was they teach you to ask why five times. I continue that today on any subject with whomever I’m working with. Ask why. How does this affect you? Why do you think that? That’s what builds currency. Half of marketing is internal in most organizations, and I think that’s something we think too much about social and digital marketing and programmatic solutions and avatars and digital agents. Most of marketing is internal. It’s being that glue between different business units.

Andrea Fabbri: This is another quite beautifully worded statement, Bennet. I couldn’t agree more, especially in a day and age where communication seems to be happening more through texts and media postings and so forth. Last question that I have for you. It really caught my attention, it was actually issued in 2014, a report from the Corporate Executive Board that stated the fact that only 14% of B2B customers receive a true real difference in a supplier’s offering and value enough to be willing to pay for it. The number is quite low in my opinion, but certainly it is indicative of the fact that companies need to start to look at what they sell, why is their product relevant. In your opinion, what can companies do better to leverage their brands to drive differentiation? What is your take on it?

Bennet Bayer:  Communication. I’m thinking about this like geez, I don’t want any of my competitors to be listening to this. One of the things I believed, and I found in my previous tenure, I implemented enterprise social. If you could think of it like LinkedIn, which I hope many of the people listening to us will be familiar with, and if you think of an unlimited number of groups. I have 946 different product lines. Every one of those product lines has its own group, if you will. It has SharePoint and Access and different platforms, including communications, attached to this. Everybody associated with that product, that product manager can talk to all the people internally, salespeople. He can talk to all of the distributors and partners, which are carriers and mobile operators. Or he can talk to a single carrier and operator on that, say a storage product with Telefonica, and his product team.

You have this wonderful collaboration. Now you can expand that to the supply chain partners associated with that product, with the distribution partners. You can do it in an unlimited number of ways with gamification. If you come up with a great idea we’re going to track it. You’re going to get pats on the back on your annual review as to what you contributed to the project or project. It’s that kind of transparency and communication. We’ve got over a million users on this. Huawei itself is 160,000. We’re extending it now with a number of the carriers and mobile operators to their customers. We manage the network for let’s say for Etisalat, and how we expand it to their customers in different countries, just that country, and work on the issues that are relevant to them.