8.1. The corporate context of CI B

The group, made up of a multitude of subsidiaries, is a French multispecialism company with influence at the international level. It occupies a leading position in several of its specialisms, but is subject to exceedingly harsh competition.

We immediately note that the group in question enjoys an average image in terms of innovation. This is, in any case, the CI manager’s view.

According to the CI B manager, “the group needs to secure and develop its turnover through having the necessary means to launch new services, which is a well understood view!” Moreover, this message is widely sustained by the management, which in particular insists upon the need to transform the group. Indeed, the group is subject to particular pressure by reason of transforming its core business.

In this case, as in others, some statements put forward as the view of the incubator manager all constitute undeniable assertions (within the literature we speak of “hard facts”) which justify the necessary work to translate this. Indeed, what stands out here is the existence of a highly competitive situation, in particular as regards the group’s core business and an indisputable commitment of top management to innovation, the latter being faced with ensuring the group’s survival.

In the past, the group had already tried to initiate specific collaborations with start-ups without any degree of success. Without supplying further information regarding the nature of the difficulties encountered, the CI manager states: “at this time, the group preferred to invest predominantly in start-ups with the principle objective of recovering all or part of their know-how!” By looking a little more closely at them, I discovered that the start-ups in question were generally relatively mature start-ups – having several customers – the asset values of which had largely been overstated following successive capital-raising efforts. This overvaluation had de facto given rise to sizable investments on the part of the group with no tangible return on investment. Beyond these attempts at unsuccessful collaboration, the CI manager told us that at the time in question “there were other structures within the group… but these were structures with some communication, co-development and prototyping, but this was far from the business itself!”

Moreover, this confirms, if necessary, that the CI can appear to take the form of a reinvention of preexisting relations between large groups and start-ups. Indeed, concerning the present case, according to the CI manager, following these initial unsuccessful experiments, the group decided to start afresh. From this point of view, the creation of the CI B therefore marks a reinvigoration in terms of developing relationships with start-ups, which are now intended to be resolutely orientated towards business development.

We thus learned that in recent years, the group has reorganized its various innovation structures for external relationships (particularly start-ups) and that the CI B is directly tied to a given business unit. There are, in any case, several competing players and structures in the group’s field, able to affect innovative structures.

Table 8.1 summarizes the key elements which characterize some elements of the corporate context within which the CI B is developing. Bear in mind that these elements reflect managerial perceptions of the CI B in his immediate environment, that is to say, the environment in which he intends to complete managerial work, with the objective of establishing incubator development within the group’s field.

8.2. CI B players

The CI B players are both direct and indirect. By direct players, I am referring to players directly connected to the entity, that is to say, the team in charge of the incubator. By indirect players, I am referring to other players, whether they are internal to the group and connected to a specific entity (marketing teams, business units or others) or external to the group (incubators, mentors, coaches and others).

The team responsible for the CI B is made up of two or three people: the incubator manager and one or two collaborators from the group. I speak of one or two, as often these types of organization unfortunately end up recruiting for temporary contracts. Moreover, it is a paradox as, considering the abundance of communication on the part of large groups across the CI, we may expect, viewed from the outside, that the CI has sizable human resources. If we rely to a degree upon the resources at the disposal of the CI to perform the job, we will often be surprised. Furthermore, we return to the question of human resources during our conclusion. In this particular case, I ask you to keep in mind that this CI definitely has very few human resources – a shortcoming largely compensated here by its financial resources.

Working with this reduced team, the manager has adopted a highly pragmatic position: “we launch and apply the accelerator”. This position reflects a form of assumed improvisation by the incubator manager and the need for learning by doing, which is incidentally nothing surprising. In the absence of previous experience upon which to capitalize to guide managerial work, the CI manager often has no other choice than to improvise. In the present case, this form of improvisation is cushioned by the CI manager’s experience since the latter founded a start-up before integrating the group that he has now known for some years.

Concerning indirect players, it turns out that the CI B manager relies upon profiles and key competences generally connected to other group entities. In particular, we can distinguish four types of key players among those described as “indirect” players.

The first key player is the group’s CEO and the group’s general management. It is appropriate to stress the involvement of the group director and his self-will, especially as regards innovation and open innovation (OI). The incubator manager believes “it is clear that the CEO has a highly business-orientated growth and turnover development view! He wishes for the group to be able to launch new services and new products!” The manager of the CI B appears to clearly make the most of this support: “in terms of internal and external communication, it is strong enough to be able to rely upon very precise written documents from the new CEO and upon the need to quickly launch new services”. As I invite you to discover with other CI cases, in what follows, I will show that the manager of the CI B will rely upon the management’s position to better stage and legitimize the CI’s role and operations.

The problematization stage is the basis here for arguing in favor of an incubation system. Because the CEO had the need to innovate in mind and because the CI is precisely a structure with a calling for innovation – together with start-ups – it is therefore becoming easier to “sell” the idea of a CI to different players, including internal players. The CI not only becomes the basis of the group strategy but also the embodiment of the institutional managerial approach. Hence, opposing the CI concept involves taking an orthogonal position with respect to the group’s strategy. Within this context, arguing in favor of or “selling” the idea of a CI is to sell the group strategy. Morality, the CEOs (and in the broader sense, their Executive Committee – known as the “comex”) may no doubt cultivate a sustained discourse even going beyond this, also adopting an operational approach consistently displayed alongside their CI.

The second type of indirect key players identified in this case groups together what the incubator manager calls “the sponsors” and who are indeed the “bosses” of business units. Moreover, he adds: “the difficulty […] operationally […] is succeeding in convincing business unit managers to find a start-up and test it out! They have many other priorities to manage and a significant workload!”

The position expressed by the CI B manager illustrates the difficulty of implementing an inbound innovation approach, despite having an official approach favoring open innovation and in particular the CI. According to the CI B manager:

“in fact, more globally this challenges the relationship of business units with open innovation”. This point echoes recent works (Chesbrough and Brunswicker, 2014; Duval and Speidel, 2014; West et al., 2014; Vanhaverbeke, Chesbrough and West, 2014) which mention that OI requires a particular mindset, a cultural change within the organization and, as a corollary, significant managerial work.

The CI B manager, therefore, appears quite lucid about the characteristics of the environment in which the CI B develops and about the significant managerial work necessary to make the incubator the ignition point for creating a new mindset. This awareness, which is displayed of both constraints, but also opportunities offered by the institutional context, is a characteristic trait. It is common to all the CI managers encountered in my studies. It is also a significant corollary to the problematization stage of this state of affairs. The position of the CI B manager appears to suggest on the one hand the need to involve operational players and on the other hand to develop the mindset of these players.

The third type of indirect key player includes “technical experts” who are generally connected to technological operational development management (either within or outside of the given business units) and coaches. In the view of the CI B manager, these players can easily be mobilized. This, therefore, still implies the available budgetary resources.

This “minor [budgetary] aspect” is, as we have seen through numerous case studies, an aspect deserving specific attention within the objectives attributed to a CI. Fixing a commercial partnership-based objective, without doubt, more easily justifies obtaining a budget to run the CI unit. The unit is not then perceived as a cost center but as a profit center (in short, a type of operating account).

In any case, the need to actively involve the organization’s key players appears to constitute a major complexity which the team in charge of the CI must deal with. Keep in mind that in our reference grid, the complexity refers, on the one hand, to the “difficulty of understanding” the concept of the structure. We must thus ask: “what is the purpose of the CI?” On the other hand, we must consider the complexity of implementing the incubation structure. This entails two questions: “how should this be done?” “How can I guarantee my mission or missions?” This level of complexity enables us to explain the organization of work within the team responsible for the incubator. At the same time, choosing this organization of work is an element of differentiation when compared to other competing innovation structures within the group. The following subsection will provide the opportunity to reconsider this aspect.

8.3. The structure of the CI B

The CI manager explains the CI as being a transversal structure “connected to a management team with the characteristic of having its traditional business model, with its customers, turnover and income statement”. “This management team also has a certain number of structures, operating transversely, just like the CI”. The direct organizational environment of the CI B, although somewhat “culturally” favorable, is no less competitive since various entities of the group work with start-ups. The manager of the CI B says “the internal structures are not obliged to go via the CI to work with a given start-up!” In this context, the connection of the CI B is an advantage, and this is at least because it enables the CI B to assert its vocation in the development of transactions with start-ups.

However, we may interrogate this internal competition by answering two questions. In the process of the digital transformation of large groups, why does the emergence of new structures not translate into the transformation of older structures? It appears that large groups make the choice of plurality of structures more certain within a “non-interventionism and may the best man win” concept. In short, as we see with this case study, we create the CI, but nothing in the past is affected, with the risk of the new structure not being fully able to operate, owing to excessive competition. We must acknowledge that change is a difficult aspect. Transforming the mindsets of teams that have worked in a given way towards new methods is difficult. This is probably the reason why change can often only mean the emergence of a new structure and new players who, if they succeed, will naturally make the old world disappear. This is the flexible method for change. Is there also a concept of “organizational Darwinism” without labeling it as such?

To return to our case study, the positioning of the CI B within the group’s field seems to confer a relative advantage over other competitive entities. Further on, we will see that the CI B manager, so as to exploit this situational income, has to produce work that aims to reduce the functional ambiguity of CI B’s structure by affirming and reaffirming the CI B’s business development objective. Moreover, as we will see, the manager for CI B can also rely upon other characteristics of (or connected to) its structure, to motivate business unit managers; that is to say, to obtain their support as well as the necessary key resources, so that the incubator’s mission is guaranteed.

The manager of the CI B says that the context is also favorable for a more practical reason: the lack of digital culture for employees of the group. Following the multitude of exchanges with the CI B manager, the latter stressed on several occasions that this lack of digital culture constituted a great opportunity to argue in favor of the incubator and to recruit new players. Within this context, the CI appears for many employees as a start-up center of expertise and the player towards which to turn when start-ups are an issue, “group employees are not necessarily at ease with everything that affects everything related to the digital and in particular start-ups! They have a tendency to come to see us and solicit our advice”. We may have successfully reassured this CI manager that this observation is far from being unique to his group. Indeed, for readers who make the effort to consult all five case studies in this work, we have to admit that employees within large groups are still in the process of increasing competence around the “digital aspect”, in any case, as part of their jobs within the given groups. Nobody spoke to me about the issue of digital transformation in large groups, a broad notion which can as much affect the tools offered by a company to its employees, as how those same employees will generate or manage innovation. We may, going further, wonder about a particular point. Is it not the weak digital culture, within the large groups, which leads the latter to want to embody digital technology, in particular, through the CI tool? No doubt, the response is “yes” if you believe Mintzberg’s findings¹.

The manager of the CI B, in any case, clearly intends to capitalize upon this lack of digital culture to gradually appear as the compulsory crossing point in order to collaborate with start-ups and to become the focal player in this field. Each of these interactions with internal players will thus constitute an opportunity to better affirm the CI’s positioning and to configure its own field within the institution. The repetition of these events over time contributes to a process of accretion through which the CI gradually configures its “relevant” field within the group. It is through this process of accretion, upon which the transition of the proto-institution CI (an aspiring institution) to the CI as an established institution within the group depends. It is the accumulation and the repetition of FCEs² managed by the CI that enables it to find a space and a legitimacy within the group’s field. Although it is not a structural characteristic of the CI, the capacity of the CI to implement this type of FCE is no less linked to situational income mentioned above and therefore to its positioning within the group structure.

So as to illustrate our point, let us approach a current FCE example for the CI: preselection start-up committees. The manager of the CI B lay out: “the key point of this structure is that in these preselection committees, I called the managers of the business units, and that when dealing with them, we had start-ups with practical and sufficiently robust solutions to convince them to work hard together! If this appears straightforward, it actually is not, and it is even the contrary… it is quite complex!” We, therefore, even see the great advantage that can be drawn from the CI through the configuration of this FCE by means of the benefits provided by the CI.

For a business unit, it is the chance to directly capitalize upon the preselection committees managed by the CI. Moreover, especially being in the presence of a start-up which has developed a practical solution – taking the form of a POC (Proof of Concept) and even an MVP (Minimum Viable Product) amounts to substantial time saving. These preselection committees are a practical illustration of the work produced by the CI and the value that the structure can create within the group, in particular, for business units. These preselection committees are as much field configuration events which enable the instigation of trust between players and prove the efficiency of the incubation structure. Hence, these FCEs are an opportunity to bring the players together, forging a common identity through collaboration and thus contribute to the institutionalization of the incubation structure within the given group’s field.

Returning to a significant characteristic of the CI B – already mentioned: its financing capacity. The CI B enjoys a unique budget as a result of several million euros, the purpose for which will be explained later. This budget mainly serves to organize various FCEs (whether these are preselection committees with business units and/or the various internal and external players) and various tests, and also for investing in start-ups.

The tests are an important indicator. For business units, the start-up market is a “market” of opportunities. When a business unit develops its budget at the end of the financial year for the subsequent year, it cannot anticipate the integration into its budget of potential expenses, should the CI propose relevant cases of start-up innovation to such a business unit. Being able to finance tests in favor of the business unit is, therefore, an undeniable advantage for the CI. Once the test has been concluded, it is apparent that it is simpler for the business unit to deploy a project with the start-up based on implementation costs (integration within the road map marketing processes) and the expected income.

With some start-ups, the budget available to the CI B enables subscription to minority shareholdings, and even subscription to majority shareholdings. This capacity to directly invest in a start-up is a means used by the incubator to, on the one hand, further reassure the business unit and, on the other hand, to secure work with the start-up (Business Development). Incidentally, the capacity of the CI B to directly invest in a start-up is clearly understood by the start-ups themselves. For the latter, this equity financing enables the financing of the change of scale made necessary – but also much sought-after – through collaboration with a large group and to ensure business development.

Taking into account the previously mentioned elements, we notice that although digital transformation is not an operation carried out by the CI, some of its intrinsic characteristics – whether structural or not – do nevertheless make it an integral player in their own right within the group’s digital transformation. The various features of the CI B all constitute the means of action that the CI manager can mobilize as part of his team’s managerial work, and, in particular, its adaptation work. This adaptation work involves certain practices, and, in particular, the organization of FCEs enables the federation of various players around a common project – start-ups and BUs – backed by sizable financial means.

In the end, the structure of the CI B has certain advantages: a direct control over the “business” dimension (Business Development) to the extent that the CI is connected to an operational entity; its expertise within the sphere of start-ups and, in particular, in the relationship of start-ups to other internal entities; the CI’s capacity for value-creation with internal players and to mobilize local players and group entities; its “financial standing” and, in particular, the capacity to finance and support the implementation of innovative projects with the business units. By further stating the tasks and operations carried out by the CI B, we will have had the opportunity to appreciate the nature of managerial work produced by the manager of the CI B in detail. Indeed, faced with this panorama of undeniable advantages, we must truly give our full attention to the excellence of managerial work implemented.

8.4. Tasks and missions of the CI B

The manager of the CI B is in no way ambiguous as to the objective pursued by the structure or as to how he envisages the implementation of CI B’s objectives.

The general objective is business development, and this enables the CI B manager to come forward as a stakeholder in the field of business units. He states: “the corporate incubator objective is to favor the implementation of partnership businesses between innovative start-ups and the group. A business partnership is a partnership enabling development of both group and start-up turnover”. I found it particularly interesting listening to a CI manager clearly telling me of his goals. This is a sufficiently rare occurrence such that I should emphasize it. Many, in the absence of practical indicators, are content in the end to mention traditional messages having touched upon the digital transformation necessary to continue to do business. It is very clear in this case: start-ups are recruited to support the large group’s business. This is an admission of the necessary introduction of start-ups within the citadel of the large group, if the latter wishes to survive. As a corollary, even the very existence of the CI is at stake. As the host par excellence of start-ups, the CI is the Trojan horse desired by the organization, even if it encounters many challenges, and the road ahead is long. Overcoming internal resistance by endlessly evangelizing in relation to start-ups is itself a genuine labor. Indeed, the interviewee is aware of the fact that these objectives will not be immediately achieved and that “a long term and tricky approach will be necessary!” It will take time for relationships with start-ups to manifest themselves as an actual and measurable contribution to group turnover.

We have broadly mentioned the means available to the CI B. I can wager that with such means, the company may be tempted to demand rapid returns on investment. How might such returns be rapidly obtained when working with start-ups? It is difficult to formulate a response to this question, other than to say, and it is appropriate to be aware, that the manufacture of innovation itself leads to the need for a long-term approach. I am well aware that this is not the appropriate response to the issue. However, this response allows us to avoid focusing upon the issue in the context of relationships with start-ups. It therefore avoids unnecessarily stigmatizing this category of economic structure. In any case, this forces the CI to devote itself to capacity building in order to quickly present other axes of short-term value generation.

In addition, beyond the business objective pursued, the CI B manager mentions other secondary objectives. On the one hand, it is a matter of monitoring. “Afterwards, in addition to the traditional CI activity, we then attempt to conduct proactive monitoring to be sure to identify all start-ups that appear above the radar, in those activity sectors of interest to us”. If, as we have indicated, CI B has not committed to monitoring, it remains no less of a player in the monitoring sphere, owing to its proximity with business via start-ups. In this regard, “it is appropriate to point out that our having contact with start-ups, and therefore being able to alert operational managers as to what is happening on closely-related markets, is a significant point. Indeed, if all solutions developed by start-ups do not enable the generation of a visible turnover, they can avoid the erosion of large groups’ turnover across several of their historic businesses”. On the other hand, a secondary objective for the CI is internal group transformation: “the CI can contribute to passing on messages to employees generally and middle managers in the group, and become an indirect player in digital transformation!”

The monitoring objectives, as with those relating to organizational transformation, let us not forget, are instead driven by the other management teams within large groups, and within this one, in particular. The CI B manager, by adopting a clear position regarding business development objectives, therefore ensures that such objectives complement these management teams. How activity is implemented confirms the very low level of functional ambiguity. There appears to be a very high level of involvement of direct CI players in the commercial partnership development process. The main tasks of the CI will be, on the one hand, to select start-ups in line with business unit expectations and, on the other, to actively pursue the course of the relationship, even if this means financial support in the pilot and post-pilot phase.

This type of approach confirms that the CI manager works hard in the sphere of exchange areas with business units, this aspect appearing to be very important to us. Indeed, each chosen start-up case study becomes an opportunity to consolidate the CI B’s field through presentation meetings/committees for the start-up, financing or implementing experiments. However, we must emphasize that these FCEs are only clearly apparent subject to one or several business units validating the start-up and company’s capacity to integrate the start-up solution, knowing that “the integration of a start-up solution across core business areas is still complicated”. These two aspects (validation of the business unit and technological integration using a third party solution) are genuine difficulties from the interviewee’s perspective.

Despite a rigorous process, these difficulties show us that implementing new business practices, and, in particular, OI, does not happen without affecting the moral and cultural foundations of businesses, but also the organizational foundations. Managerial work makes perfect sense, and the latter is conducted, in the end, in a sustained manner, whatever the configuration of advantages or the CI environment.

8.5. The tools of the CI B

Few technical structures appear to be deployed by the CI B manager for running the organization’s missions. Press releases, the web and Twitter (not mentioned during our interview, but specifically discovered during my research) are the only ones identified. Far from being a problem, this further confirms that the CI is a managerial novelty, which by its nature is more malleable and testable than technological innovations.

8.6. Summary of the CI B

At the very beginning of this account, I asked how the manager of the CI B might translate the structure for the group’s internal players. Indeed, from the beginning of the interview, the CI B manager appeared to problematize the issue in these terms: “the main objective of a large group is to increase the turnover and to innovate”.

Problematizing the issue proved to be a starting point, which we clearly realized was gradually enriched by the interviewee, who based his comments upon more or less affirmative statements. The CI B is a structure that develops within a highly competitive company. Moreover, this company is not considered by the interviewee as innovative per se. The company did not have highly developed relationships with start-ups, except through costly investments. There was little digital culture within the company, which can constitute a disadvantage when you wish to strengthen business development through a start-up innovation. These are all reasons that seem to lead to the company reorganizing its innovation by including this new operating method, CI B, in order to deal with start-ups with a more direct co-innovation approach.

The CI B manager can fully capitalize upon the managerial talk as a means to strengthen the problematization of the issues with the given situation and ultimately facilitate his work in the recruitment of players and business units. The strategy adopted by the CI B manager is based upon three points.

On the one hand, the CI B manager capitalizes on some advantages that he acknowledges or which the company provides. These include its connection to the business field, digital expertise versus internal teams and its financing capacity. On the other hand, it is a matter of exchanging unambiguous views with the objective of contributing to the group’s business. Finally, the manager of the CI B increases information sharing and the interactions with business units, gradually configuring a more precise field of activity for CI B within the business field. It is a matter of doing business with start-ups. Finding its position, its legitimacy within the business, then becomes practical for CI B, provided that the manager can make up for both the cultural and organizational reluctance internal to the OI and has the know-how to construct a network of allies open to this issue.

Some results are already tangible. This is mainly its image, a point the interviewee considers as a tangible contribution: “when the financial or business press writes articles on innovation and where the group is cited as an innovation company”. This outcome is all the more important since reaching the business development objective will not happen immediately as “value generation will take a lot of time”, as part of forging commercial partnerships with start-ups.

In the case of the CI, the interviewee implements several work types, both of a political and normative nature. So as to complete this different type of work, he seeks to translate the CI B on an operational level, by multiplying the interactions within the internal parts of the organization, thus “playing” with advantages/characteristics (adaptation) so that a given structure is adopted. This adoption effort, through adaptation, is all the more significant as it constitutes an issue for CI B and probably for all CIs as “it is clear that the challenge confronting the incubator is the perpetuation within the lifetime of the structure”. Indeed, for CIs, the “problem of observing the results arises, as it is only after the incubation phase that we can actually measure the potential impact upon the turnover of the business unit ”.