Scouting new science and technology is one thing.
But finding champions for it inside the business is another.
Chris Varley’s role at $15 billion Goodyear Tire & Rubber Company entails doing both.
Varley is a Global Program Manager within Goodyear’s External Science and Technology Programs group. “That’s Goodyear’s way of saying ‘open innovation,'” Varley explains. He’s the lone American on a 12-person team that is spread across the world.
Part of the job, Varley says, is “supporting and encouraging managers tasked with developing ‘something new’ on a five- or ten-year roadmap to think differently, and consider that it may actually be faster and less risky for them to take a chance on working with a startup on the outside than trying to build everything from scratch in the lab.”
Here’s his advice on paving a path to bring outside ideas into a 66,000 employee company.
InnoLead: How has tech scouting changed in recent years?
Chris Varley: Early on, a lot of companies thought scouting was simply about facilitating transactions between parties that otherwise didn’t have a connection. “Frictionless exchanges” that would operate entirely online were the goal, whether it was an online idea challenge or directory of startups or patents. But over time, more and more people are becoming aware of the importance of building good relationships between people.
Transactions are still a part of the game – a major part, since they mark the transition point where things shift from interesting “what if?” conversations to practical, actionable steps both parties will take to bring something new to market. But without a relationship that lets both parties know each other’s needs, that facilitates understanding of common goals and objectives, and that plays to the respective strengths of both parties, any transaction will fail to meet its full potential.
I can’t emphasize enough how important relationships are to successfully identifying technologies outside your company’s walls and bringing them “inside” in a meaningful, productive manner. It isn’t so much technology scouting as it is relationship-building – expanding the resources available to the company through open innovation exchanges and partnerships.
InnoLead: Are there some new pressures for people who do tech scouting?
Varley: The pressure to deliver something that can be deployed in market “immediately” is always there. But those kinds of technologies tend to be the ones that are already commercially available. New things take time. Lots of time. It’s the “slow pace of fast change” dilemma: it takes a long time for a truly new and different idea or technology to wend its way from mind to market. But when something hits big, it always seems to come out of nowhere overnight – despite being years in the making. So a lot of my job is a balancing act, trying to explain to startups and inventors that it will take time for the managers I work with to understand what they are trying to do, let alone be able to accept and value it properly.
That’s not their fault, by the way. We’re all like that with new things, especially if they impact the way we’re used to working. Which means I also need to spend time supporting and encouraging managers tasked with developing “something new” on a five- or ten-year roadmap to think differently, and consider that it may actually be faster and less risky for them to take a chance on working with a startup on the outside than trying to build everything from scratch in the lab.
As part of that, I also look for other ways to help de-risk projects through external grants and other funding opportunities, or by working with a startup’s investors to help them get comfortable with the additional investment that might be required on their part to get a technology up to the level where we can start talking about a deal that would make sense for us. Getting rid of the risks you can, and getting comfortable with the risks that remain, is key.
InnoLead: How do you decide which startups to meet with, or which conferences and trade shows to go to?
Varley: I work closely with a number of accelerators, incubators, venture funds, economic development organizations, and universities. Sometimes I’ll call them and tell them I’m looking for something that can fill a particular need we have. Other times they’ll come to me with something they think will be of interest. I don’t try to limit myself to the obvious kinds of things – automotive conferences and the like – because often the most interesting and exciting opportunities are more orthogonal in nature, less obvious, at the intersection of two seemingly unrelated things.
That makes the internal sales job that much harder, too. The earlier a startup is in its own development, or the more radical and disruptive a technology might be (if it’s successful), the longer it takes for the idea to take hold with managers in a large company. I’ve had the experience of bringing a startup I think can really add value to a manager’s portfolio to his or her attention, only to have them tell me they just don’t see the fit. Then, a year or two later, something clicks – and now they want to meet again with “those guys you took me to see a year or two ago.”
It isn’t simply that the technology or the startup has matured and is now ready for prime time; it’s more the case that the first meeting was simply “planting the seed” in a manager’s mind. It takes time for that seed to germinate and grow. But once it clicks, assuming I’ve kept the relationship going on both sides, we can come back to the table and start speaking a common language. It’s really pretty exciting.
InnoLead: Do you define a “maturity level” for technologies that you want to work with?
Varley: I don’t, actually. As a general rule, the more mature the technology, the easier it is to gain acceptance for it internally. But of course, as I mentioned earlier, a fully-matured technology is likely one that is already commercially available.
There are times when someone asks me to find something for them that turns out to be already on the market; they just didn’t know about it. But on my own I tend to look for things that are earlier in their development — beyond just the concept or idea stage, of course, but anywhere from proof-of-concept to ready-for-market trial is acceptable. And remember, too, that a lot of times what I’m looking to do is plant a seed that may take a year or two before it grows into something useful.
At the end of the day, success will be judged by a transaction that occurs, but the quality of that transaction is entirely dependent on building strong, lasting relationships; on establishing a foundation of trust and mutual respect; on a framework that takes the strengths each party brings to the table and fits together to create a whole that is greater than just the sum of the parts.
InnoLead: Are there any screening questions or tips you have that you think would be useful to others — either for screening needs that someone in the company might have, or outside entities you might work with?
Varley: Make sure the need being expressed by someone in the company addresses a true strategic question. Too often, researchers and managers will focus on the symptom that is causing them immediate pain, rather than on the cause of that symptom. An aspirin might make the pain in your back go away temporarily, but changing how you sit at your desk might make it go away completely. So make sure you ask good, probing questions. Spend time exploring a range of alternative solutions, including things that can be done in-house – don’t fall prey to the idea that every solution has to come from outside!
Similarly, when looking at an outside company or organization to work with, consider all the different cultural issues that may come up, and how you might address them. Identifying the technical hurdles is easy compared with the cultural hurdles that might arise on both sides. How receptive are the people in your own company to working with others who aren’t constrained by the same rules they are, and whose reward structures might be radically different? Will the other company understand how decisions are made in your company, the role of process and hierarchy in decision making, and the different pace at which things happen?
InnoLead: How do you set up pilot tests or collaborations for success?
Varley: By design I don’t operate with a portfolio of my own projects or a discretionary budget I can spend on things that interest me. It is important that I am focused entirely on helping other managers meet their development or business needs/goals. When I identify a technology that I think fits a need or could lead to a new business opportunity, I know I’m on the right track when someone who manages a portfolio or a product line is willing to commit resources – time, people, and money – to running a pilot or entering into some other kind of agreement.
A successful pilot clearly spells out what is in scope, what is out of scope, and the criteria by which the pilot will be judge to be successful or not. With early-stage technologies, success usually doesn’t mean that everything works as it will once the product is finished and ready for release, so it’s really important for everyone to clearly understand what “success” will look like.
Equally important is to spell out what the next steps will be for both parties: if the success criteria are met, are there funding requirements to get to the next steps? Are we ready to move to a market trial? If so, when and for how long? Who will be responsible for what?
I also think it is important to plan for things going wrong. Define what the minor, major, and critical “non-conformities” might be – for both sides – along with the steps required to cure them, and the impact to the pilot if they are not cured. This makes it easier for both parties to accept and recover from the inevitable mishaps and slip ups that will occur, or decide to amicably part ways.
InnoLead: Are there some success stories that you point to, where new ideas or technologies made it into Goodyear products or became new products?
Varley: We’re always looking for things that can improve the sustainability of our products. One of my colleagues discovered that in many parts of the world where rice is grown, the husks are burned as a biomass fuel. The ash produced by this burning is considered a waste product, and yet almost 90 percent by weight of this ash is silica – a material used in tread compounds. Working together with partners in India, China, Brazil, and elsewhere, we were able to conduct lab tests and feasibility studies on using silica derived from rice husk ash (RHA) in tire tread compounds. (Pictured at left.) The material has now been approved for use as a sustainable, environmentally friendly, cost-competitive alternative to other sources of silica, and a supply chain is in place.
Similarly, when we learned that an organization representing soybean farmers was interested in exploring other uses for soy byproducts, we were able to set up a program that allowed us to experiment with replacing petroleum oils with soy oils in certain compounds. In January of this year, we released to market the first tire built with soy oil, replacing some of the petroleum oils that otherwise might have been used in the past.
InnoLead: Any other advice for people trying to do scouting or open innovation?
Chris Varley: Open innovation and technology scouting are all about relationships, relationships, relationships. Don’t ever forget that. I constantly tell people that if it comes in a bottle or a box, then I want my procurement specialists to handle the deal right from the beginning. But if it comes in a brain…
If it comes in a brain, then it is going to take time to establish a proper foundation of trust and respect before we can have something that will eventually yield great results. Yes, at the end of the day there will be a transaction. And I do take great pride in seeing a relationship I helped nurture and build reach the point where procurement comes in to negotiate a supply agreement; but I also know that the value of that supply agreement stems entirely from the strength of the relationship.