Pursuing breakout innovations requires both time and room for failure — a challenging mix in highly regulated industries like telecommunications. In order to better pursue these moonshot projects, Telefónica CEO José María Álvarez-Pallete launched Alpha in 2016.
Based in Barcelona, Alpha focuses on launching new services and developing new products within a five to 10 year timeframe.
“[Álvarez-Pallete’s] idea was to create a business unit that would be so lean…[and focused on] very specific projects, new lines of business, new revenue,” says Peter Williams, the CEO of the innovation group. “What was new within the industry…3G to 4G to 5G and so on? And what was new within the company? So how were we innovating on the basis of a telcom model?”
During a conversation at Impact 2020, Williams discussed how he empowers innovation as CEO of Alpha and how his team keeps track of projects in their portfolio.
Knowing When to Tap the Parent Company
Operating as a part of Telefónica — a telecom company with 344 million customers and over $58 billion in revenue — is “in itself a privilege,” Willaims said. According to Williams, leveraging the brand allows the Alpha team to tap into resources that other startups may not have access to, especially when the CEO of the parent company is involved. However, leveraging support from the leader of the mothership should be used “very sparingly.”
“I will go to the CEO…if we want to do particular experiments which have a bizarre cost profile. If we want to leverage…his name…it gives us that pedigree and it gives us a sense of corporate credibility underpinning what might be a very wacky idea,” he said. However, “if you’re going to have these resources bestowed upon you, you need to know what you’re doing.”
He compares the ideal relationship between Alpha and Telefónica as an umbilical cord. “If it’s too short, we are too close to the corporation. That’s not what we’re designed to do,” Williams explained. “If it’s too long and it breaks, then that’s a massive problem… If it breaks, the trust is gone.”
‘Time is Our Most Precious Commodity’
When describing his role as the CEO of Alpha, Williams emphasized the importance of protecting his team’s time and giving them the freedom to pursue new ideas.
“Time is our most precious commodity,” Williams said. “And what we’re trying to do is execute on a vision. We don’t need to envision things that have been defined for us.”
While the Alpha team aims to work quickly, Williams notes the idea of “patient impatience.” He said that he recognizes that moonshot projects take time but the different ideation stages should happen quickly.
Keeping Track of Projects
According to Williams, the team at the Alpha office can look at a big screen and see what their colleagues are working on, how much time they’ve spent on a project, and how much it cost. This tracking method isn’t about creating a competitive environment, but rather about keeping employees connected and on the same page.
“It lets us see where we are in the pipeline with various ventures and what we’re trying to achieve,” he said.
When deciding what projects to pursue, Williams recommends that teams bring in subject matter experts. These experts are able to inform the team of promising ideas or warn against ideas that are less feasible. “[They can say,] ‘If you want to do that, you need to break the laws of physics, or rewrite science, or something else,” he said. “An external visit from somebody or workshop or seminar group…can quickly give you a change of direction [or] a complete pivot.”