The One Who Runs The Applied Innovation Exchange At Capgemini

In this episode MING Labs COO, Sebastian Mueller interviews our guest Steffen Schacher. Steffen runs the Applied Innovation Exchange for Capgemini in Singapore which is part of 16 centers worldwide. He is responsible for Innovation Ideation, creating PoC's, and curating an ecosystem.  Steffen talks about his definition of innovation and how organizations can get started with an innovation process. He elaborates how Capgemini's AIE helps corporates leverage the startup ecosystem, and discusses how an Open Innovation approach can succeed and scale up. 

Transcript

Christine: (00:05)

Welcome to Lost in Transformation. This is MING Labs podcasting from Singapore, an international business hub innovation center and vibrant startup scene. Learn from digital thought leaders and designers about innovation and transformation of businesses in an ever evolving digital world.
 
Christine: (00:26)

Coming up is your host Sebastian Mueller, co-founder and COO of MING Labs with our guest for today Steffen Schacher. Steffen runs the Applied Innovation Exchange for Capgemini in Singapore, which is part of 16 centers worldwide. He is responsible for innovation ideation, creating PoCs, innovation events and curating an ecosystem. In his previous roles he helped several IT and technology positions within the smart city, energy, water, and healthcare sector. His experience includes startups within areas such as e-commerce, deep tech, hospitality and lifestyle. We hope you enjoy the conversation and look forward to your feedback.
 
 Sebastian: (01:12)

Hi Steffen. Thank you for doing this. Pleasure to have you today on our podcast. And maybe we could start by actually talking a little bit about your journey to understand a bit of the background, where you're coming from, and what have you been doing so far and how have you come to be interested in corporate innovation.
 
 Steffen: (01:29)

Yes. So first of all, thank you very much for having me here. I'm quite excited about it as one of my first podcasts that I'm actually doing for a broader audience. I'm looking very forward to the conversation. Yeah. What I've been doing so far in my career. So I started my journey, it was around 20 years ago in Germany as an electrical engineer and from there on I always had an interest in IT, in innovations and trying new things out and stuff like that. And I was working for this large company, it's called Siemens and within Siemens it's a client or it's basically a company that has like different business areas around water technologies, around energy, around infrastructure, around smart cities. And this is also where I moved myself around and I was always interested in like a questioning the status quo, doing new things, ideating around new business models and basically bringing the company forward.
 
 Steffen: (02:20)

 After that, I moved to Singapore. Within Singapore, I also got engaged within the startup community. I was doing three startups by myself. One of them was a very different one in water sports. It was basically selling Jet Ski in Singapore. The other thing was a battery technology company which basically gives you an overview about or invention on a new separator which allows you to charge and discharge the battery faster. And the other thing that I'm doing at the moment still is the e-commerce startup, which is basically selling art decor furniture from Asia within Europe, especially in the UK market. And the new thing that I'm just got connected with the hotel business in Indonesia, which is basically allowing me to look in very different other sectors like custom experience within the hospital and tourism industry. And apart from that, I'm still doing my normal job at Capgemini, which is all-around innovation, which is my passion for a very long time and which will also be continuing in the future for a very long time I hope.
 
 Sebastian: (03:21)

 That's all super interesting. I didn't know that you're actually still involved in a couple of startups.
 
 Steffen: (03:27)

 That's the thing that people who are in the innovation sector, can never be pleased with only doing one thing at a time. They always need to do multiple things to be busy with their head and like not losing or not having too much focus on one specific item, because this is when you are losing the touch of innovation ledger. Thinking about the broader picture and new inspirations from the outside.
 
 Sebastian: (03:48)

 So, besides the Startup journey that you had here in Singapore, how did you actually come to join Capgemini?
 
 Steffen: (03:53)

 So, it was basically the idea about like I'm driving corporate innovations because for me corporate innovation is always something that it's getting very difficult. So, there's a lot of enterprise problem statements, the enterprise demands out there, but how do you actually solve them in completely understanding an organizational framework.
 
 Steffen: (04:12)

 And the thing that organizations on a broader level are very well-equipped to foster innovations. So, they are very much geared towards like understanding the business needs, driving them forward and doing these small incremental innovations about it. So what is for me, very important after that, you need to have an idea and understanding about how can you make like leap frogs, how can you achieve this like 10 X things? How can you like really disrupt something in your business model, in your environment to have companies competing like with all the big tech giants? How can, for example a bank ideate a new business model to create new revenue streams. That's always something that interests me a lot and within Capgemini it's like I mean a large system integrator which is also working on the consultancy level in many, many different areas. Especially when you look to a six techs expertise we are very strong, in like the banking, insurance environment but also that in the utility sector, within the Telco environment, in the automotive environment.
 
 Steffen: (05:11)

 And that's basically, it's very demanding but also very fulfilling to ideate everyday around new innovations within different sectors, because you get so many insights about like different approaches to like how do you run a business, different approaches about like how does your consumer react to trends, different approaches, how do you get basically innovation in towards enterprise, great environments. And this is one of the reasons that I joined Capgemini and three years ago Capgemini decided to start the Applied Innovation Exchange here in Singapore. And it's actually a broad ecosystem about like how do we connect as Capgemini to the outside world. So, for us within Capgemini, we are very good in like working together with like let's say SAP, Oracle, Microsoft and AWS. But how do we integrate the cool new upcoming solutions from startups, being in a Blockchain environment, being in the artificial intelligence space, being in the virtual reality phase, so all this different technology, how can you apply them towards solving business problems?
 
 Steffen: (06:15)

 Basically an enterprise glance, that was my main interest within joining Capgemini and of course since it's a very global company, so you also get insights from like what is happening in innovation sector within San Francisco for example, what is London doing? What is Paris doing? What are you doing in India? So, you get a very good sophisticated overview. You learn about new things every day and you can contribute to very innovative like large company as well.
 
 Sebastian: (06:41)

 All right, sounds very interesting. You just mentioned you run the Applied Innovation Exchange now. What is the concept behind that? How does that work?
 
 Steffen: (06:50)

 So, the concept for us, it was always to how do you tackle actually the problem that companies itself find it very difficult to innovate. So what we wanted to create is tangible outcomes, very driven from business needs. So for us, we don't want to do innovation for the sake of innovation and we don't want to implement like technology solutions.
 
 Steffen: (07:12)

 That's just to engage with technologies. We really want to solve the business problem. So how do we do that? It's with a very rigorous framework that consists of four pillars. The first pillar is discovery. So discovery can be anything about like understanding new business models, ideating about around new technologies, identifying business problems, breaking them down, creating alignment and basically bringing to the next steps. So the next step would be device. Device is everything about like taking a small chunk of it out and like building something around it. This could be like a POC, it could be a MVP, it could be a small project,. It could be also like a MLP, this is one of the new terms that we hearing around the block more and more. Then after that, where is the consultancy game coming into play, like how do you actually integrate this small POC into a wider audience of like the group.
 
 Steffen: (08:06)

 So how do you deploy it? So within the deploy stage is all about like scaling it up, implementing it into the organization and bringing it into a level where you can actually, instead of like just having a small chat bot for 20 to 50 users, how do you enable it for like your customer base, which maybe plays into like 100,000? How do you connect it to the right systems and how do you make sure that like the right sets of data, will be used in a sophisticated and protected manner? The last point is sustain. I think sustain is a very important topic so you don't innovate once and then you can call yourself innovative. So it's a rigorous process that it has to be lift throughout over over again, especially within the cycles of like ensuring that your workforce is enabled as well to understand these different technology trends and do it on a basis, on a regular basis to integrate these kinds of things within the company. So there's a fair bit of change management, basically included as well. But this basically describes our framework or our mantra that we in Capgemini drive innovation forward.
 
 Sebastian: (09:11)

 All right. And do you only do that by bringing corporates and startups together or do you also build yourself? What kind of message do we actually use to go through these different stages?
 
 Steffen: (09:21)

 So, this could be a various way of approaching them. So one of the things is of course the ecosystem that we bring. So within Capgemini, the Applied Innovation Exchange has to clearly like bringing startups within the solution approach. But it's not only that, it's also looking at the outside part of the company. I mean if you take the 220,000 people that we are having within Capgemini at the moment, many of them are very innovative. But how do you bring like the outside innovation, looking over your plate, breaking out the silos and how do you bring them in? So the Applied Innovation Exchange basically provides this platform to integrate them from the outside part into the company and into the organization and work with them together on specific innovations.
 
 Sebastian: (10:03)

 All right, that sounds quite fascinating. So, which ways do they engage with the community and with startups as that seems to be a quite important piece of this.
 
 Steffen: (10:13)

 There is you see with Startups, there's always this challenge, you have to first of all find them. You have to kind of like identify them or vet them, check them out, see if they have like a good management team, understand if they have like a sophisticated funding. And do they have already a tangible amount on customer within their portfolio so to say. So what we do as well as also like in the community building aspect events. So, within these events we very often talk about very different subjects. So one of the last ones we had, it's called impact investing. So, this was all around the how to people in the future channel their investments, be it private equity, be it VC money, a bead seed investment into what kind of company. So the aspect of like purpose-driven investing is like very important. We do this evening sessions in a format, that's what we call "what's now". So it's basically, Hey, what's this happening new? But this can be very different topics. Could be around technology. Sometimes we did Blockchain events. It could be about sustainability, it could be about smart cities approach, basically anything. So it's the idea is also to open the eyes for our customers and our internal people towards different sectors towards like the outside approach and information from their side.
 
 Sebastian: (11:28)

 So as you see so many different spaces and topics and engage with the wider community, what are you actually excited about at the moment? What kind of technologies or spaces?
 
 Steffen: (11:38)

 So, at the moment I'm excited with like, many people are sharing this excitement I think, it's artificial intelligence. So, artificial intelligence I believe very strongly will be a game-changer and enable organize enterprise organization in the future to really understand the behavior of customers better, to understand what kind of value are the data's that they actually have within their own organization. I don't think at the moment we are there yet. What I'm seeing in the market is a lot of like small players, small solutions. They are very, very interesting. The disconnect is still a little bit in between. How do we integrate it into the organization. Lots of large players of course during their fear bit of coming up with artificial intelligence solutions as well. It will take some time but I think it's definitely the hottest topic that I'm seeing at the moment on the horizon and it's also what our enterprise clients are heading in demand at the moment.
 
 Sebastian: (12:30)

 How do you feel Singapore's position was in that? Are there interesting companies doing that here?
 
 Steffen: (12:35)

 In Singapore there's a few very interesting companies around AI. I mean if you compare the amount of data which is available in all the data centers in Singapore and you mentioned with kind of like enterprise clients that you have around here I think is a very, very good number. If you look at Singapore, yes I think they are on a good track, but if you would ask me for example about what is the country with the most sophisticated environment or ecosystem around artificial intelligence, I would definitely look to China. They are doing so many cool things. Sometimes also scary things about like they are able to track face recognition information about like within entire cities already. So that's obviously also a question is like do we really want it or is that something that like really can benefit? Of course the argumentation about like security and documentation about like business needs is a very controversial one. And it's always very interesting to see how people from different industries and from different roles and responsibilities have different perspectives on it.
 
 Sebastian: (13:32)

 So, we've talked a lot about innovation. Everybody talks about innovation. It's a very fuzzy topic. We need to be innovative, we need to be faster, we need to do new things. But then when you really get down to it, what does that mean? Everybody means something different by it. So, maybe before we dive into more towards the granular details on that, how would you actually define innovation?
 
 Steffen: (13:56)

 So, actually, I very much agree with you. Innovation itself it's a very, very fuzzy topic. So for, it's sometimes misused as a marketing tool for organization to display them better for their co-audience or for their customers itself. It's a buzzword. It's used in many contexts. Even in the space of meetings, a lot of people use it to just like outshine and how would you define it as well. So, as I come from a very process-driven approach and streamlining things about like how do you actually solve problems? So, how do you make something that is like a pain point for an organization or for an individual, how do you transform them into something new? I think this is what it is considered innovation itself. The other aspect about what I mentioned earlier about like 10 X growth disruption itself, that certainly comes into any innovation space itself.
 
 Steffen: (14:48)

 But I think you can break down this topic in like very many, many different areas. It's just like what, I don't agree with this like the overuse of the term. So for me, I like the word "problem solving way more and it's basically something that should be around innovation itself. What we also have is a so-called accelerated solution environment, which is I would call it like a workshop on steroids approach. So it's something that you play around with like emotions and feeling with emphasis of people to actually get out what do they actually need and want, because also within our environment we have many clients coming to problem statement basically that I'm hearing the most - I would like to be more innovative and I would like to be more digital. And I think that's very too much on a high level. I think you might have in your capacity heard this as well. So when we are trying to do is like to really to bring it down for them to voice it out, what is actually close to their heart on the emphasize on like what is it actually is the problem. I mean there was a very good slogan from Albert Einstein. If I would have a hundred years to solve all the problems in the world, I would basically spend 95 days on identifying actually what the real problem is. And I very much like that statement.
 
 Sebastian: (16:02)

 So, in your experience then when we talk about problem solving and you have to the right problem to identify what is a good innovation process, how does that work?
 
 Steffen: (16:12)

 First of all, in my opinion, what you need, it's a tool or framework, because you need to structure it. Innovation itself, it needs to be brainstormed, but it has to be in a certain format. So if you leave too much room for like going like over crazy, you will never end up in the end where you would like to go. So, the framework is a guidance to help. It's a process that that is required to do dedicated brainstorming. There should be no limitation in the beginning, but you should be coming towards a funded approach. That could be, I mean if you're looking at design thinking could be the double diamond approach, which is a very good tool and people should not feel trapped and confined in it, but they need to be driven to a certain outcome. Otherwise the process of innovation doesn't work.
 
 Sebastian: (16:57)

 So, for an organization that has never applied that before that it's just getting started on trying to innovate, maybe there are new business models trying all of these methodologies. You mentioned design thinking, but there was of course many, many more. What are actually the first steps? How can they get started if they have no experience whatsoever?
 
 Steffen: (17:19)

 Yes, I think the very first stop is top management CEOs, CEOs, decision-makers in the organization. They need to be aligned on innovations. They need to understand it's a very important topic. They need to give a certain room of freedom to the employees. I would like to see also like a certain amount of resources spent on it. If you take the large companies, for example, Amazon, they spent last year 22.6 million alone on R&D. It was 40% more than the year before. If you look at Google itself, Google invested 16.2 millions. So if you compare this figures actually to the revenue that these companies are producing, you will see it's like a very, very large chunk of the business and this is what this like big tech companies basically doing. They investing in so many different areas of innovation and R&D, into the future. And when you compare it to very traditional organizations that used to be in a couple of years ago on top of, the Nestle or whatsoever.
 
 Steffen: (18:18)

 It's way more that they are spending compared to traditional companies. Companies itself, they need to have also focus on organizational structures. Usually cutting costs, enhancing profit will enable the workforce to have more flexibility to innovations. No, it usually doesn't. It gives them more pressure. So, as a leader of the company, you need to see where do you give freedom of choice for your own employees doing it. In Google, for example, has dedicated a certain amount of, I do not know the exact number, but I think it's between like 10 and 50% to give the employees freedom to innovate in which ever area they like. So, that can be something which is totally independent from their current operational part within the office or within the organization. And I think these are companies who are doing it quite well and you can also see, I mean on the growth in all of the new solutions that they are bringing out is definitely very different to traditional companies.
 
 Sebastian: (19:15)

 So, commitment is important, resources are important. Let's say we have to the top-level commitment and the maybe usually they start hiring a person or a couple of people who are supposed to be leading all of this and obviously they now have to get everybody else on board. They have to talk to the other business units for the leaders, all the different stakeholders that are obvious there who need to that also if there's resources committed, free up the people and so forth. How can an innovation leader convinced the other stakeholders that they have to do with of the importance of actually doing this and doing it in a certain way that has this structure that you just described?
 
 Steffen: (19:56)

 Yeah, so that's, it's also a very good point. The innovation people within organizations are very often seen as coaches or as people who are helping them to guide the process. Very often what I see within large organizations, the answer is within the people who are doing it on operational level, but the difficulties, how do you get it out of them? So, how do you freed them up the time and resources, which I mentioned earlier to basically have this ability to disconnect the brain from like the fence thinking around like the operational stuff that they are doing. How do you get them to make them innovative? And this is a challenge and I have seen various companies who approach it with different solutions. So, it could be like a digital day. It could be like employees are creating in their own organization. It could be like just an innovation portal where they are free to like submit ideas. So, the leadership definitely has to find the right way that works within the organization. And there's also not one approach that works everywhere. So I have seen as mentioned very different ones in different organizations. So, it has to be applied and to the organization itself and understood.
 
 Sebastian: (21:04)

 So, then once we have that and we have a process, we're getting the ball rolling, things are happening. What are useful ways to actually evaluate what is happening? How can we measure the outcomes of doing all of these activities?
 
 Steffen: (21:22)

 So, it also actually comes back to the point that you mentioned earlier a little bit. So it's like, how do I convince my superior actually? So it's like how will he be able then measure it? Is it a good outcome? Of course there's always the monetary aspect. There's the aspect of like how many more customers do I, engage with it? Or how happy are my customers with that? Or how many new business models did I ideate?
 
 Steffen: (21:44)

 How many new revenue streams did I create? An example that I would like to give is, for example, Kodak. Kodak itself I mean we all know the, they kind of screwed really up with a digital camera. They missed it out, but they still continued to innovate and they have recognized, Hey, we did something seriously wrong on innovations. So, what they have done now, they partner up with companies, for example, Forever 21 and they're coming out with virtual aspects clothes. And this is something that gets more and more traction within the market because people are still loving the things from the old days. And now these virtual aspects had actually helped Kodak itself to lift with a new income stream, partnering up with the fashion industry company to create something new. And if you look at banks, for example, they're very scared of like being disrupted by upcoming fintech.
 
 Steffen: (22:31)

 So what are they doing? They integrate the fintech in like accelerators, incubators. Sometimes they just buying them over, but they also let their workforce work with them to create PoC's. So, there's within Singapore, definitely one very good example, DBS does it in a very scaled-up way and in a very successful way. So, if anybody ever has the chance to understand like how innovations are done, right, so I would always give like DBS in Singapore is a very, very great example. And for the measurement of course it has to be looked away from the typical reporting lines. So, if you look at all these companies, that I mentioned are large enterprise clients, what they are trapped in, it's usually the quarterly reporting. So, by quarterly reporting, if you look at innovation itself, it's very, very difficult, because innovation, they will take time. And what companies need to recognize is basically also the freedom of the time when you look at them.
 
 Steffen: (23:29)

 So, it could be that you are implementing like let's say a new solution which is working around artificial intelligence. But as you get more and more data, as you provide better data's, if you clean up the data's only then the real benefits will basically monetize on a very later stage. So, if you look at the horizon model from like, I don't know, from like two to five years, it's about, it's very, it becomes very, very difficult for large organizations basically to tap into that. Because again, coming back to the constraints of like creating shareholder value and being able to like to do financial reporting on a quarterly level.
 
 Sebastian: (24:04)

 But then are there any ways that when you work with your clients you would actually recommend them to measure. To say, okay, we don't do things on a quarterly basis and maybe definitely not on a, I don't know, market share or total revenue basis, but are there any other metrics that could actually be used to say here, but we have actually something that is creating value, because we could show, I don't know, it's growing. It has positive unit economics. Are there things that you are thinking about?
 
 Steffen: (24:33)

 Yeah, so basically these are the things that you have mentioned. So it's like customer-centricity is like revenue streams, is innovative partnerships that you created, new business models that you found. So if you find a way to be able to create KPIs on these kinds of measures I think is a very good way. Also when you look at from a system integration perspective, so what kind of methodologies do you use to like implement large system? Is it HR methodology? Is this a concept that is still around like waterfall or is it something, that is supported from like Scrum masters? Is it something that, a good example is Spotify for example, they are launching new kind of functionalities or products within their platform. Like almost like a [...] level and the way how they do it, it's a very disaggregated and broken down by packages. So all this containerization of like also like planning, producing an enterprise architecture all the way down to the coding and the implementation plays a very good role. And if you're able to put a KPI on your own organization and like how much do you change the organization itself, I think that's a very good approach. And like how do you manage innovation and how do you measure it?
 
 Sebastian: (25:40)

 When you're looking at the companies out there in terms of people focusing on the actual internal changes because obviously, it is a cultural change. It is a mindset change versus people looking at, okay, I need to create that in that much revenue from new things within the next five years and more caring about the money rather than the mindset and the culture. What do you feel is the majority in terms of the mindset out there?
 
 Steffen: (26:08)

 So, the mindset itself, let's take Singapore as an example. So Singapore is recognized, the country does not have a lot of natural resources. It has a very good banking and logistics sector. But in order to survive, Singapore needs to gear the country towards innovation itself. So, the government, government agencies, they have recognized they need to help creating an ecosystem. They need to train young Singaporeans for these new upcoming technologies. And Singapore is doing lots of, lots of like very streamlined and organized things in that. So, in terms of innovation, Singapore is like a very, very good example. There are certainly some other countries, they want to follow that example. The challenge is always, if you are in an environment which is just same city is relatively easy to control, but if you look to other countries for them it's like way more difficult to do it.
 
 Steffen: (26:54)

 If you look at Indonesia, Philippines, these are countries which is like consists of like a number of like thousands of islands. So, how do you enable information gets spread across, how do you ensure like innovations are available for like, the vast amount of number of people who are living there. And these are certainly challenges that these kind of countries are basically having to deal with it.
 
 Sebastian: (27:13)

 So, looking back maybe at the last few years, was your experience in corporate innovation? What do you feel are things that work and what does not work?
 
 Steffen: (27:23)

 Yeah, so there's obviously a couple of things that worked very well. But let me start on this one with the negative. What I've experienced, the stakeholder management, if there's no key amended around innovation, if it's not driven from top management, if it's not agreed and if it's not driven and accelerated within the organization, these are areas where I could see it has failed, so to say. But the organization also will learn, so it's like doing something in the innovation aspect and failing it's not a bad thing either, because you will learn in the process a lot of things are around your organization and how you actually have to drive it and how do they actually have to challenge it.
 
 Steffen: (28:01)

 When you look at innovation itself also the successful areas is basically what I've seen, when people are putting in, if you put the people into the center of the innovation. So, it's not about the technology in doing as mentioning against something for the need of technologies. These are people who are operating these systems, people who are implementing this change. It's still a people business and people need to change in order to adopt and make the corporation more innovative. What I have also seen is like if you start small within like single departments, create success stories, and transfer them over. That's a very good way for large organizations to approach innovation itself. And then, of course, time resources, flexibility is in my opinion, a very, very key driver for doing that.
 
 Sebastian: (28:51)

 So start small, show the success, focus on mindsets and behaviors, network to change and make sure that the resources and the time are there in order to really engage with a lot of that.
 
 Steffen: (29:01)

 Exactly, and what I think is also a very important point is passion. So, if people are passionate about something, if they like it, they will do it naturally. So, if your organization manages to bring the people on board with something they created and they like to talk about it, they like let's just say in a small conference room, a coffee room at lunch, Hey I did these very cool innovative things and they managed to convince others. This is where you basically integrate with this small little but many, many innovation ambassadors you might want to call it within the organization to do that change. Because in the end is about like enabling your people of doing it so your people like it, they are emphasized about it, the organization will change. And I think it's a very good example of it.
 
 Sebastian: (29:46)

 What we often see in our projects, especially when we talk about innovation or transformation for legacy businesses, is that oftentimes you need a new kind of orientation when you say, you know, entering now officially the 21st century doing all the digital technology, doing innovation, doing things in a completely new way, potentially even getting into new areas of business that were never our business before. Maybe now we have, I don't know, some ventures that we want to create and maybe doing more tech focus rather than what we were doing before. People need kind of a compass or an orientation. They need a vision, what does it now actually mean to be in this business within this new framework. I had a kind of purpose of what is my organization doing and therefore what should I be engaging in? And what are actually the things that maybe are not worth looking at? Do you feel that large companies are understanding how to actually bring forth a new vision for their enterprise in the next century?
 
 Steffen: (30:53)

 That's a very interesting question and I would like to bring out one example. So, we had one of the leading insurance companies in Singapore. They came to our innovation centers and it was like a very informal conversation about how do you do innovations, how do you look at it? And maybe also some like ideas and problem statements. So, in the end the conversation went into an area where where this CDO, basically chief digital officers say, Hey, I'm trying to change my company with a lot of digital transformation projects. So, but I'm not seeing yet the results and stuff like that. So, okay, maybe let's identify what kind of like people are working in your organization. Are they really equipped with the kind of skills that you need for them? And very interestingly, we found out that basically analyzing like LinkedIn profiles from this company with a small analytics tool, which, which is called Quid, that we are using for many engagements.
 
 Steffen: (31:43)

 That's of the total workforce within Singapore, actually only 9% of the people are equipped with digital skillset. So, we then took the company which is residing in Singapore as well, which is in the same sector and have a very similar size and product. And we analyzed how are they doing innovations. So, they have been like lots of positive examples within the media, within the organization as well. And analyzing their workforce with the conclusion that they have 27 people, of 77% of the people equipped with digital skills showed a very, very key example about if you don't have people within your organization that have these digital skills, it's very, very difficult to enforce or like push a digital transformation too. So, of course, you have like two possibilities there. You know you get your workforce skills or you hire people which are coming from a very different mindset. So, what I'm seeing very, very often in this industry, take insurance. Insurance is very traditional business and it's very difficult to manage with all the legacy systems to do a digital transformation. So, if you get people from the outside, make sure you get maybe people from the psychology background, people from various different industries to kind of implement this kind of like advocates of change within your own organization. I think that's a very good example for like fostering this change process as well.
 
 Sebastian: (33:03)

 Interesting. So let's talk a little bit about not only the internal perspective but then also actually the external perspective. A lot of your time goes into building a partner network and connecting the ecosystem, bringing corporates and startups together, as you shared earlier. How do you think that corporate can really leverage a larger startup and an innovation ecosystem?
 
 Steffen: (33:28)

 So, in Capgemini, it's very important to recognize the global presence that we have. So I believe firmly if you live in a place within Singapore and there are many good startups out there. Sometimes it's very difficult to find that specific startup, which actually solves your business problem. So, we are having 16 innovation centers on a global level within San Francisco, Munich, India, London, and many other places. Capgemini is very good enabled to have to step into the startup ecosystem. And what we see, we are able to match very often business problems from clients with companies or startups from other locations. So even within locations maybe don't have a presence being in Israel for example, we do have a really good understanding of the local ecosystem through our partner network. And I think it is of utmost importance to have this very huge and sophisticated network.
 
 Steffen: (34:21)

 Within Capgemini we only started this I would say like three years ago, but we are recognizing this. So, currently responding to RSPs with like partnering up with like large providers, like be it like SAP, Amazon, an Oracle, Microsoft or whatsoever. It's still one of the major chunks of our business. But we see a clear shift into working together towards smaller companies in smaller organizations. And very often we feel it's not only one startup that can solve the entire business or use case. It is very often a combination of very different ones, be it as a company in the KYC area, be it something in the Blockchain area, read something in the like data extraction from several different locations, putting this information into the next system. So in order to do this you need to work together with multiple startups and it is actually something that Capgemini is very good enabled of, of doing it, forming this kind of like consortium and solving entire use cases with multiple startups.
 
 Steffen: (35:22)

 But it takes time to build this ecosystem of partners and to understand what kind of innovation is happening in certain geographics. So, as well in the 16 innovation centers, what we do, many of us like have, like a customer, another customer of sector expertise. So, this sector expertise could be like something channel to a certain technology as well. Be it in Singapore there's lots of banking and logistics around and there's lots of data available. So, naturally, these three things come to a combined thing or take just as an example, if you're interested in solutions around the automotive industry, where would you go in our network? I mean both of us are from Germany and from the Munich area. So, that is naturally the point actually. And apart from that, have you have different other sector expertise like the defense sector which is in Toulouse and retail, which is basically happening in Lille.
 
 Sebastian: (36:16)

 All right. What do you think are realistic and unrealistic expectations that corporate have towards open innovation? Because nowadays it's kind of seen as sometimes a cure-all. Where they're just looking at, Oh, there's so many startups that can solve all our problems. What can this kind of open innovation and collaboration of startups actually do and what is not realistic?
 
 Steffen: (36:36)

 It's a very difficult question to solve. First of all, when it comes to open innovation, doing it together in a collaboration with companies which are working on a different frequency, I think it is a really, really big challenge. If it's sales cycles if it's procurement cycles if it's internal stakeholder alignment if it's like making decisions quickly. If you look at startups, they are working on a sometimes on an hourly basis, on a weekly basis to change their business model or produce new offerings in products.
 
 Steffen: (37:08)

 If you look at large organizations, they need a very long time. Also if you're looking for the aspect of getting everything in a legal protected environment, startups simply do not have the resources very often of doing that so they are relying on outside work. They are relying on like information which is not as sophisticated and not in a broad spectrum as the organization has it. So I see very often as this connects in the open innovation areas around there. Then of course if you talk about creating sandboxes, having API gateways, and basically fostering this open innovation that something that needs to be created and understood from both sides as well. Realistic in mind approaches like doing something or like the modeling of data, having PoCs, having smaller-scale projects. That's something that I think it can work. Open innovation is also the thing I think to create something new. Something that is not known from both sides, but again it's about like if you create something new, both of them have to open-mindedness about creating this open innovation. Right now I see very good approaches in the market, but also a lot of like complications, misunderstanding, and areas where there are lots of improvements are needed there.
 
 Sebastian: (38:19)

 It sounds definitely quite challenging. And then earlier mentioned sometimes even combining different startups or forming a smaller consortium as you said, to solve a certain challenge. How does that actually work, because that just becomes so much more complicated?
 
 Steffen: (38:37)

 Yes, so I would think commitments need to be clear from both sides. There needs to be certain flexibility and room in building something which is not clearly defined yet. So if you go to the RFP cycles and RFI cycles for large programs and the IT areas that we see at the moment, I don't think these are things they are working in like open innovations. I think it needs to be structured in a very flexible manner. It needs to be also very clear to not be afraid of sharing information. I mean you can also always work with dummy data in something which like does not relate directly to an area. Whereas privacy factors are coming to importance. Coming up with solutions, ideas on both sides, building that sandbox environment into an infrastructure that is accessible, understandable from both sides is very important.
 
 Steffen: (39:31)

 And then corporates itself, themselves have to dedicate time and understood how startups work. So it can't be what I see very often to say, Hey, let's cooperate with some startups and let's start the innovation center and basically give them the tasks to incorporate these new solutions into the organization, this won't work. What is very important, it's like you need to activate, understand and mobilize your organizational structure, the people who are doing it on an operational basis, and this takes time. So, it's not a process that can be done overnight, but these are basically the ingredients of the commitments of corporates working successfully together with startups.
 
 Sebastian: (40:08)

 So you already touched upon it a little bit, the different problems and the mistakes that can happen along the way, but maybe let's deep dive specifically on that a bit more, because we also see, especially in the startup space, quite some pain when it comes to working with these big corporates. What are the most common mistakes and problems that you see in these collaborations?
 
 Steffen: (40:30)

 Yeah, from my side I've seen legal problems, IP rights that can be blocking points, but also how do you integrate dummy data then into real data, for example? What are the restrictions of companies? What are the regulations? What is a different kind of like business model understanding around risk management and new resource planning? Those are areas where I've seen lots of mistakes happening and it's often drawn down to the processes within the organization. So startups as mentioned earlier, just work at a very different pace and if you apply these different kinds of frequencies, which I called earlier, it is very difficult for them, for both of them working together. And that's where I've actually seen most of the problems arising. Also, when you're looking at risk management from a system integrator perspective, we have different models and forms, and ingredients that we use in large approaches like bid, waterfall. Or even also in the HR development. So RACI for example is a model of who's responsible, who is accountable, who is informed, and who's consulted. So along with this kind of like conversations about who is having the responsibility for what if it comes to big corporates working together, within this company and then startup can create problems which I have seen inside this area.
 
 Sebastian: (41:50)

 All right, let's zoom out a little bit. So we've covered the internal perspective around innovation and mindset. We've talked about also the external perspective around open innovation. I think it would be quite interesting to hear actually a few examples of the engagements that you've had in the past to understand what does success actually looks like for you. And then also maybe what are some of the critical success factors that you've managed to identify?
 
 Steffen: (42:19)

 Yeah, so let me give you a couple of real-life examples. Company in Singapore around AI and data instruction, we have seen quite a lot of success with them in like bringing them in front of our clients, ideating around like new opportunities and like doing data extraction faster. Also putting these data than for example, combining it with like a status in the RPA, robotic process automation space into the right systems and then turning this data into enterprise-grade systems like ERP systems with Salesforce systems. So basically make more meaning, better decisions, and more value out of it. That's one example. Another example would be like forming a consortium of companies who are able to respond to a digital banking license. So this digital banking license, of course, there are multiple companies out there within other countries that already have done it. Singapore government will be issuing this license, I think 300 wholesale and two retail licenses and these will be given to companies that are not banks yet.
 
 Steffen: (43:22)

 So this could be companies who are playing in like the gaming industry, in the telco industry for example. But they basically, need also like an infrastructure, whatever you want to call it, to host this new digital customer for digital banking. And what we have seen also quite well, combining our knowledge that we have within other countries, coming up with the right place to port. It's something that looks very promising, but also it can go very much to different kinds of technologies as well. So one very interesting showcase that we have done, it's about rich Chinese customers within the restaurant industry and looking for high-grade lobsters from Australia. So what we did was basically we built it on a Blockchain environment to identify where was the lobster catch, how was it transported, what was the temperature like? Which way did it go? How long did it recite, within the area of a port until the clearance was done?
 
 Steffen: (44:17)

 How long did it take the transport towards the kitchen or towards the restaurant? How long was it in the kitchen until it landed on the plate of the customer itself? So people within China then were able to see where does the lobster actually come from, how did it go to me, and how good is the quality still? And it's something really interesting that we enabled with technology on the Blockchain itself. So these are just a few examples of working together with multiple industries in multiple technologies about like partnering up with a startup, ideating our own problems, coming up with solutions, implementing them, and actually creating more value for the end consumers.
 
 Sebastian: (44:57)

 That's a very interesting use case.
 
 Steffen: (45:01)

 The lobster case I have to say, I have not tried yet.
 
 Sebastian: (45:04)

 So, I'm just curious, this is a digital banking case because that sounds quite complex where you bring together a consortium of different partners and then try to basically build a bank from scratch. What would typically be the role of Capgemini within that?
 
 Steffen: (45:19)

 Yes. So it's also a very good question. I mean as mentioned, we are not the ones who are having like all the small solutions, so these are basically done from the startup. So we in Capgemini, we act as a kind of auto straighter for the entire solution. So we do build the enterprise architecture. How is which solution connected to which systems? We are touchpoints for the user interface. We are touchpoints for a user experience basically. So bringing all these different companies together and formulating or basically solving this entire use case about how do you build a digital bank. That is something that Capgemini brings to valuate. And then of course when you identify, let's say a mix of startup speed like I don't know, 7 to 10 that you need for something like this. This needs to be a credible and good startup. So how do you analyze them? How do you ensure they have the right management team? How do you ensure they have the right capabilities? Is it really a credible startup that will be still around the next two years? So as well, this process, it's quite a time consuming and the inheritance, it's a lot of like analytics, information about this, that's also a very important role for Capgemini to play it.
 
 Sebastian: (46:28)

 All right, interesting. I would like to talk a little bit about the startup ecosystem in Southeast Asia, because you both actually run startups, on both the startups and also on the corporate innovation side, they are quite immersed in that. Maybe starting with Singapore, because you're based here. What is your view on the startup ecosystem in Singapore?
 
 Steffen: (46:48)

 So I think the startup ecosystem within Singapore it's super vibrant. As mentioned earlier, the government has done an amazing job in putting things together, organizing events, but also the different players, be it VCs, be it accelerators, be its incubators. If you look at most of the large corporations, they all have innovation capability, which is definitely, definitely superior compared to other countries and areas, be it like Block 71, huge startup system, the FinTech hub within Singapore as well. These are all areas where there's a huge concentration of startups. I'm always very amazed when I go there to see them. Also when you look at the Viva collaborations, spaces, all these like offices, you really get the feel of like, Hey, there's something happening in Singapore. People are excited about it. People are going to events. the FinTech festival that is happening in November within Singapore. There are lots of conferences around it. So I can really see a very vibrant ecosystem happening within Singapore and it's something that also keeps me really excited about being in Singapore and being part of that ecosystem.
 
 Sebastian: (47:59)

 That's awesome. When we talk about larger Southeast Asia, which are the countries in the region are on your radar like hotbeds of innovation and entrepreneurial activity?
 
 Steffen: (48:10)

 Yeah, so if you look at the other countries, definitely I think Indonesia in terms of the size of availability with 250 people. Vietnam I can see is very vibrant as well. Good solutions that are coming outside there. It's still considered a very cost-effective market. Thailand, when you're looking at Thailand also lots of innovative solutions and these are also the huge startup systems as well. They are also provided with good funding platforms. VCs are very active over there. There are good business connections and business opportunities. I have seen comparing it to the scale of Singapore, they are all not there yet. They all have their uniqueness in some of the markets I would think in Southeast Asia, it's definitely Singapore. It's on the leading edge, followed very closely by Hong Kong, which also has the connections to the market impedance in Shandong Qingdao and of course the access into China. These are very interesting followed by Indonesia and Vietnam and Thailand.
 
 Sebastian: (49:06)

 And where do you see the most corporate innovation activity happening?
 
 Steffen: (49:09)

 Definitely in Singapore as well. Hong Kong also followed by, this is just that the government emphasizes or the government support is much higher there and people are more inclined of like doing the corporate innovation stuff. If you look at Singapore and Hong Kong, these are naturally obviously countries where there's many MNCs and international companies have their regional headquarter. And as well these kinds of innovation activities are steered from either the board, from the country management, that's why they're reciting in Singapore and that's where they are also mostly executed. What do you see in the other countries is they all want to adopt a little bit of the model from Singapore and Hong Kong. They are on a good track, but it will certainly take a couple of years until they can be on the same level then Singapore and Hong Kong.
 
 Sebastian: (49:56)

 Awesome. Thank you for sharing that. So we've been covering a lot of ground from understanding, first of all, the Applied Innovation Exchange, looking at corporate, how they can innovate internally and change mindsets, how they can work with startups, some success cases to start up ecosystem in Southeast Asia. I think it was a great conversation. Very insightful. Thank you very much for doing this and I hope to have you on again soon.
 
 Steffen: (50:24)

 Yeah, definitely. I mean, I also have to say I really enjoyed this conversation with you and of course, Capgemini will be around in the innovation space for a couple of years. I'm very sure about that. I see good traction in the market. I see very innovative companies. I see the eagerness and the hunger from corporate innovation arms to do innovation. And of course, always looking forward to connecting with young, emerging startups and professional companies like you guys are at MING.
 
 Christine: (50:52)

 Thank you for listening to this episode of Lost in Transformation with our host Sebastian from MING Labs. If you enjoy our podcast, please subscribe to our channel and leave us a review on iTunes. Join us next time for another episode of our podcast.