CORPORATE
RENEWAL
THROUGH
STRATEGY AND
INNOVATION:
WAYS TO INVIGORATE
GROWTH AND SCALING
Conference Insights
October 22, 2014
University Club of Chicago
Chicago, Illinois
CORPORATE RENEWAL THROUGH STRATEGY AND INNOVATION • CONFERENCE INSIGHTS
CONFERENCE INSIGHTS
Attendees of the inaugural year of the Kellogg Corporate Renewal Conference learned that corporations can be akin
to ships: slow to change direction, and requiring the help of all hands on deck to maintain a successful course.
Similarly, conferences require the help of all attendees to successfully navigate new directions, which is why everyone
at the Kellogg Innovation and Entrepreneurship Initiative is grateful to the attendees and speakers for creating such
an enriching day.
This year’s conference — Corporate
Renewal Through Strategy and Innovation: Ways
to Invigorate Growth and Scaling — delivered many lessons, from esoteric (which touch screens can
survive being thrown across a room) to universal (how culture is essential to strategic reinvention).
We’ve assembled key insights from the speakers and panelists to serve as a reference to inspire strategies and
innovations for growth and scaling until next year’s conference can reconvene the conversation.
2
CORPORATE RENEWAL THROUGH STRATEGY AND INNOVATION • CONFERENCE INSIGHTS
KICKOFF KEYNOTE: OVERVIEW OF DISRUPTIVE BUSINESS STRATEGIES
AND COMMON THEMES
SPEAKER: DAVID J. SOLOMON | CEO, LAZARD MIDDLE MARKET LLC
Kickoff keynote speaker David Solomon tracked the forces of disruption through history and delineated a world
where new entrants displaced legacy players that rarely proved capable of responding to shifts in technology and the
emergence of the global economy. His call to companies? Differentiate and find niche markets, and don’t be held
back by existing structural positions and organizational inertia.
“When we discuss disruption, we discuss technology, but social
change brings disruptions as well, and change is happening
at a ferocious pace.”
“Why don’t large companies respond strategically to the disrupters?
The most significant barriers include organizational inertia,
technological ‘DNA’ limitations within the company, and deep sunk
investment in infrastructure.”
“When responding to a disruptive industry entrant, it isn’t always
the best strategy to be a fast follower, but instead to be nimble
in identifying new strategies for differentiation within the shifted
competitive context.”
SESSION ONE: STRATEGIES TO MEET DISRUPTION
MICHAEL J. MAZZEO | ASSOCIATE PROFESSOR OF STRATEGY,
KELLOGG SCHOOL OF MANAGEMENT
Professor Mazzeo delivered a roadmap for responding to disruption. Companies
must leverage existing capabilities to create sustainable competitive advantages.
Identifying where strengths meet market opportunities is key, whether you’re a
building block company utilizing your design expertise for new purposes, or a
nuclear power plant supplier recognizing that your core competencies allow you to
manufacture customized titanium wheelchairs.
Gain more insights from Professor Mazzeo in Roadside MBA: Backroad Lessons for
Entrepreneurs, Executives and Small Business Owners: roadside-mba.com.
“Competitive advantage is inherently a comparative concept.
It’s not important to identify what you do well; what’s important
is what you do better than the competition.”
“Be critical when you distinguish between those resources and
capabilities that are superior, and those that are required just to be in the game.”
3
CORPORATE RENEWAL THROUGH STRATEGY AND INNOVATION • CONFERENCE INSIGHTS
PANEL ONE: USING STRATEGY CHANGES TO GROW AND SCALE
MODERATOR: PROFESSOR MICHAEL J. MAZZEO
PANELISTS:
KEVIN CARMODY | PRACTICE LEADER — RECOVERY AND TRANSFORMATION SERVICES,
MCKINSEY & CO.
ANN DRAKE ’84 | CHAIRMAN AND CEO, DSC LOGISTICS
RYAN ESKO ’06 | PRINCIPAL, LEADER OF PERFORMANCE IMPROVEMENT TEAM, SUN CAPITAL
MANUEL VALDES ’93 | CEO AND PRESIDENT, FRONTERA FOODS
In times of change, get closer to your customer, advised Ann Drake during the panel on “Using Strategy Changes to
Grow and Scale.” Indeed, customer relationships are the key to success at Frontera, where Manuel Valdes maximizes
customer touch points to create comparative brand strength.
“Coming from outside the industry helped me see what some of the megatrends for the
industry would be. I had the attitude that we had to run as fast as we could
away from who we were, and learn along the way who we want to be.”
“You can no longer plan your way to success. The ten-year plan, the twenty-year plan, went
out the window with the coming of the twenty-first century, because change was no longer
going to be predictable.”
—Ann Drake ’84, Chairman and CEO, DSC Logistics
“We have to keep one eye on the customer, and one eye internally. Internal creativity is
incredibly powerful when coupled with insight gained from your customers.”
“I wanted to create a brand that touched consumers in multiple ways. Becoming part of their
lives in ways that were meaningful was going to be the strategic advantage we were going to
have as a small company.”
—Manuel Valdes ’93, CEO and President, Frontera Foods
Kevin Carmody and Ryan Esko both emphasized the intransigence and importance of culture in strategic changes:
company-wide buy-in is difficult to engineer, but essential to new strategies.
“Be confident enough to look in the mirror and question your strategy twice a year. Any more
than that is too much, and any less than that is not enough today.”
“Great new strategies fail because companies are like ships, hard to turn. You can’t change
strategy every day.”
—Ryan Esko ’06, Principal, Leader of Performance Improvement Team, Sun Capital
4
CORPORATE RENEWAL THROUGH STRATEGY AND INNOVATION • CONFERENCE INSIGHTS
LUNCHEON KEYNOTE:
HOW INNOVATION CAN IMPACT INDUSTRY
SPEAKER: SELIM BASSOUL ’81 | CHAIRMAN & CEO,
THE MIDDLEBY CORP.
In a rousing recount of Middleby’s astronomical rise, Selim Bassoul identified the
key moments and decisions that led to success. Bassoul bet the company (as well
as his house) on automated equipment that didn’t require training and energy
efficiency. The legacy of that decision has been industry-shifting innovation after
innovation.
“We have literally changed the restaurant industry the way
Apple changed the mobile phone industry. If you are a chef it’s
difficult not to use Middleby products. Right now, I can go in to
most kitchens in the world, and there will be Middleby products.”
“You cannot expect people to invest in your company if you
don’t buy into it yourself.”
—Selim Bassoul ’81, Chairman and CEO, The Middleby Corp.
SESSION TWO: INNOVATION FRAMEWORKS
FOR MAKING CHANGES
SPEAKER: PROFESSOR MOHAN SAWHNEY |
MCCORMICK FOUNDATION CHAIR OF TECHNOLOGY;
CLINICAL PROFESSOR OF MARKETING,
KELLOGG SCHOOL OF MANAGEMENT
The key to leveraging innovation is to broaden your aperture, instructed
Professor Sawhney. You must look beyond high-tech products and
imagine how innovation can drive business-wide change, as the
transformation driven by process innovation has only begun. You must
also look beyond your own industry and draw ideas widely: innovation is
frequently the process of creative reapplication.
Gain more insights from Professor Mohan Sawhney from Fewer, Bigger, Bolder:
From Mindless Expansion to Focused Growth: fewerbiggerbolder.com
“Know your core and build on that. No market is too narrow if you go deep enough.
We get seduced by opportunity before we mine our backyard.”
“Innovation is not invention. Invention is bringing something new into being. Innovation is
bringing something new into use.”
—Mohan Sawhney, McCormick Foundation Chair of Technology; Clinical Professor of Marketing;
Director of the Center for Research in Technology and Innovation, Kellogg School of
Management
5
CORPORATE RENEWAL THROUGH STRATEGY AND INNOVATION • CONFERENCE INSIGHTS
SESSION TWO: INNOVATING TO GROW AND SCALE:
CUSTOMERS AND NEW MARKETS, ORGANIZATION AND
HUMAN RESOURCES, SUPPLY CHAIN AND OPERATIONS
MODERATOR: PROFESSOR MOHAN SAWHNEY
PANELISTS: ROBERT B. KAY | CHAIRMAN AND CEO, TAYLOR PRECISION PRODUCTS
JAMES MESTERHARM ’99 | MANAGING DIRECTOR, ALIXPARTNERS
DANIEL WEINFURTER | CEO, GROWTHPLAY
Commercializing innovation is as important as generating it, agreed the panel on “Innovating to Grow and Scale.”
Make sure you deliver the right message, as innovative products often require customer education, advised Robert
Kay, while James Mesterharm added that you have to be sure you’re talking to the right person as well; innovation
can require redefining your customer.
“We are moving into adjacencies that fit in our current distribution channels. We look at
potential products that use our existing capabilities and leverage our brand.”
“You may have an innovative product, but you have to get that information to consumers.
We had to change the packaging on our smart scale, because it didn’t differentiate from
other products and didn’t educate consumers. You have to get the information out that
this is a different product.”
—Robert Kay, Chairman & CEO, Taylor Precision
“Having the best product is one thing, but you also have to figure out who to deliver the
message to.”
“Kodak didn’t fail because they didn’t innovate; they failed because they weren’t willing or
able to commercialize their innovations.”
—James Mesterharm ’99,
Managing Director, AlixPartners
Daniel Weinfurter recounted different strategies for reconciling growth with focus. Expansion can be alluring, but you
have to keep an eye on your core competencies.
“Bad growth can be as dangerous as no growth. It’s indigestion as opposed to starvation. The
temptation to expand unwisely can be hard to resist, particularly when you’re being asked if
you can do it.”
“In the B2B world, especially in complex services, marketing is increasingly important, but the
sales process is still the most important touch point. Most information is still conveyed during
the conversation between the agent and the buyer.”
—Dan Weinfurter, CEO, GrowthPlay
6