Enabling a Culture of Open Innovation

Lale Kesebi, Li & Fung

Lale Kesebi
Chief Communications Officer & Head of Strategic Engagement
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Lale Kesebi is Chief Communications Officer & Head of Strategic Engagement at Li & Fung, a role she has held since 2014. She is responsible for the company’s brand and corporate foundation and oversees the workshop, Li & Fung’s newly formed open innovation unit. Lale joined Li & Fung in 2003, has worked in Asia since 1998 and began her career as a litigation lawyer in Canada.

Video Transcript:

Good morning everyone. How many of you are robots? Raise your hands. Excellent. Matt, I always knew that. I ask this question because I usually start the other way, but I felt like after Watson this morning, I needed to ask who was AI and robot and the ...

How many of you are human beings? Raise your hands. Or attempting to be? This is not my opening joke. It's what I talk about all the time because I really believe the role that many of us as leaders and organizations is understanding the n=1 equation, and that is that if we have 18,000 people in the company, or 22,000 people or 50,000 people, those people are ... it's one human being, one story, one ambition, one innovation, one idea times the number of people that are in your company.

It's very easy to refer to people as headcount. It's very easy to refer to people as manpower cost, but until you can fundamentally understand that your role as a leader is to lead another human being and leading them to change, leading them through innovation, leading them to transform your organization, it's very hard to talk about culture because culture, as many of you, is based on values that we all hold dear as individual human beings. Values then create a subset of behaviors. Those behaviors manifest themselves as culture. Culture ultimately is the fundamental ethos and DNA of your brand, and your brand drives revenue. So it starts from a human being, and it goes to profitability of your company. And people who focus on profitability without focusing on a human being have really missed the boat, and particularly as it relates to culture and as it relates to leadership.

So I'd like to talk today about really the role of culture to a group of innovators who know much more about innovation than I do, and you'll understand why that is. My story and my team's story of how we happened across the creation of our innovation unit is highly organic, never could have been predicted, and I'm hoping that our journey inspires in many of you a truly innovative way of approaching innovation and that's through experimentation.

So before I get started, for those of you who don't know Li & Fung, we are 18,000 human beings in 40 markets, and where our principle language of business is English, but where the first language for many of our colleagues, approximately 80 to 85 percent of them, where their first language is not English. So we have a huge barrier. We represent probably about 48 different cultures as well, i.e. national cultures. Highly diverse mixed group of people who are involved in creating the supply chain of the future and supply chains that move your goods in your home and most of the things you are wearing today. So we're behind the buy of moving goods from the developing world to the developed world to over 1000 brands and retailers across the world. So you would know many of our customers, and you may actually be one of our customers sitting in this room.

So I don't need to tell a group of innovators in this room and particularly people who are trying to make change that the biggest threat to innovation is internal politics and an organization of culture which doesn't accept failure and/or doesn't accept ideas from the outside and/or that cannot change. And this is what I would call culture friction. It's my favorite quote from Gartner. It's the most applicable thing that I can share with you today based on a 20 year career and certainly one where I've led teams that were built to transform and change culture inside companies.

Now one of the other things you don't know about this quote is the flip side. I'm an eternal optimist, and my optimism is that culture is also your fuel. So where you find friction points, your first job is to try to eliminate them or to run experiments and projects and to find people who can work with you to fuel the change you're looking to make inside an organization. And if the culture itself is the sticking point, then you need to change the behaviors to then create the fuel which then creates the change in your organization, and leadership is absolutely crucial to that. I mean, myself, I believe that artful communication is the language of leadership, so you really have to communicate with human beings, not just through emails, but actually eye to eye, standing in front them, having conversations about the change that you're trying to make because it impacts culture because this is how we operate as human beings.

So if I were to tell the story at Li & Fung and if my unit on how we sort of got to an open innovation unit, I would say that it's a story of three acts, and I'd like to share with you today what that story is. So the first is act one. I call it postcards from the edge.

About three years ago, I entered into a new role leading communications in an area that we kind of called strategic engagement, and I'll share a secret with you: There is no magic to strategic engagement. It was just so much more corporate to call it strategic engagement than to call it Lale's area. It was a role that was devised around the things that I wanted to work on the company and the things that somebody higher up thought that I was good at, so really what it was was communications and an area that was going to focus on new ways of working.

Could we create a role model change to a culture of a very traditional company that was looking to bust out and create transformation in its business model? Could we get back to the n=1 of a human being in an organization? Could we identify their motivators? Could we create an environment that inspired interesting people to come together and to do interesting work, and could that role model the change for the company? That's what strategic engagement is, and we were edge operators inside the mothership. I know many of you are outside the mothership, but we're the edge operator and we're connected inside the mothership. I sit on our executive committee, and I work directly with the CEO on the strategy of the company, and this was one way of demonstrating change inside the company.

So what we did is we decided to say that at the core of everything that we were going to be working on would be WIIFM, and WIIFM is "What's in it for me?" So we were going to answer the WIIFM question on every project that we were going to run. Every strategy in the company needed to be able to translate itself to WIIFM, and we needed to be able to connect with the colleagues in our company globally, whether they spoke English or not, whether they were in Hong Kong or not, and being able to relate the power of the why of the change and what was in it for them and how they could participate in that transformation. So this is our modus operandi in my unit.

So in order to do that, we said, "Let's demonstrate what that might look like." And rule number one was let's design a space and let's design a team that really was a high performance team that would work on this kind of strategy. So the first step, what you see here is my office in Hong Kong, very typical for all of you who are based here in San Francisco, very not typical for those of us who live in Hong Kong. What you would usually see are cubicles after cubicles after cubicles. Managers' offices usually line the outside, and the bigger you are as a manager, the bigger your office is. So we went completely flat, and we tested the theory that human beings if they came together in an open space, whether they were senior or whether they were an entry level designer, could actually still have the same impact on a company. So we created this office space. This was 50 percent of the project.

The other 50 percent of the project was to say, "All right, by design, how could we create a team that was very high performance, that was nationally collaborative, that could co-create together, and how do we honor their own ability to bring their full selves to work and unleash their full potential?" So you'll see here, my colleague Samantha Chen around ... This is how we work together on a regular basis. We weekly do show-and-tells on our projects. We have mentoring circles. We do reverse mentoring. We run something which is up next here, our rockstar award which is audaciously given out to people on our team randomly, usually every three days on some great work on a project. What could you do to bring feeling, emotion, connection, collaboration, and sense of belonging to a team of extremely high performing individuals themselves based on expertise? So on this team, you would have a videographer sitting next to a graphic designer sitting next to a communicator sitting next to an innovator sitting next to a foundation folk. So very disparate group of people who've come together to create strategy and change within the company. So this was kind of act one.

Act two was, "How could we inculcate what we thought we were onto something here in Hong Kong globally?" And in our company, Hong Kong is headquarters. And I don't know about your companies, but HQ has this love/hate relationship with every other office outside of HQ. People love HQ because that's where the decisions get made; they hate HQ because they never get heard from, and they feel the decisions are taken when there's an equally fantastic best practice that's happening somewhere else and nobody's taking the time to figure things out. So we decided that ... we asked ourselves a very crazy question, and we said, "Has anyone actually been to all 350 locations and 40 markets ever?" And I've traveled to most of those locations myself, not all. My colleague [Ji Hyun 00:10:54] who's on a panel this afternoon has also traveled to a lot of those places, and between the two of us, we couldn't say "yes" to our question.

So we said, "Well why not start a project called The Culture Crew," and these three colleagues, including [Ji Hyun 00:11:09] decided that they were going to spend the next eight months of their life, on top of what they were already doing as their full time job, traveling the world, meeting our offices, meeting our colleagues, figuring out the stories of our people in those markets, asking them really what were the values of the company as far as they were concerned, and spreading the love. This was a spreading the love experiment. And powered with that was our creative team, which would allow them to, with their GoPros, edit videos, shoot videos, tell these stories that were coming in, vlog it, blog it, push it out through our internal channels. They were rockstars for about eight months inside of our company, and everyone was learning from everyone else what was going on because the stream was just coming in through our internet and through our existing channels.

But here's the coolest thing that happens when you launch an experiment that you don't really know what the output might be. You usually get a bunch of different ideas you never thought you were going to get to begin with, and one of them was the influx of innovative ideas that we were discovering simply by being in market on a completely different exercise. So for those of you who are familiar with WeChat, we use WeChat a lot as a social channel. Our little group was on a daily WeChat. Whoever was in market was giving the rundown of what happened during that day, and then there'd be stories like this: "Lale, you've gotta meet so-and-so, because he's just figured out how to do this incredible thing that F&A hasn't been able to figure out for the last three quarters on this report that they need to run to be able to get ROI. And by the way, he's a race car driver in his free time."

Every single day, we had stories like this of some incredible people out there who were innovating who were interesting people, and we thought, "What can we possibly do about that?" And frankly, what happened over the course of that eight and a half months was this. Our guys had been to 100 locations. They'd seen 90 percent of our colleagues. They went around the world seven times if you talked about the number of airplanes they were on. They had a lot of really, really bad airplane food. They couchsurfed where they could. The total project cost less than 50,000 US dollars to do. We were super scrappy about it because we didn't really want someone to say this was a boondoggle for three people out there. And they came back with all of these ideas, and we couldn't figure out how we could connect these people besides us. We were the center of that spoke.

And then, very coincidentally, one crazy idea led to another, which was act three. I was speaking to a Chief Strategy Officer conference in Singapore, and the sponsor of the Chief Innovation Officer conference next door was Spigit. So for all of you guys who do not believe in cold calling, I'm a very good example of a cold call. We received an email some three months later to say, "Hey, would you be interested. Here's something interesting." Meanwhile, [Ji Hyun 00:14:23] and I are wracking our brains going, "How do we pull these innovators together?" And then we struck on the fact to say, "Wait a second. Maybe we could actually launch something as a challenge. Maybe this was the scalable technology we could take a look at." So that's what we did.

And we launched our platform, and it's called The Kitchen. We believe in effect that we have all the ingredients to make and serve up Michelin star meals on a daily basis of the company. We just don't know where those ingredients always are, and we don't always know the meal that we're going to make. So we launched The Kitchen. We launched our first challenge out to everybody. This is the challenge question: "What innovative product can you create to delight a customer?" And what we got out of that in 2016 were 6,900 visitors, 2,000 active users, and 390 ideators. We continued on with further challenges. So we did another eight week challenge. We did four week idea jams, which for us were both online ideation and offline groups of people coming together. We held one innovation week for our grand challenge winner, and we did 14 one hour brainstorm sessions on separate topics.

And we thought, "Okay, great. We're connecting. We're lightning-rodding people." We had the coolest ideas from a simple redesign of a body brush for back cleaning, this is true, and a system of building sensors and digital maps that enable emergency response after national disasters. It was a team out of Turkey that was looking at how they might be able to find people post-earthquake, which was an issue that had impacted them. And all of these ideas, our hypothesis was, "I wonder if we ask, if people will come, if we build this." Our ideas came from everywhere globally. There was not a market in which we were dark, and remember, the challenge question here was completely in English to non-native English speakers.

The ideas themselves, what we were hoping to see is human beings of all rank and file, everywhere in the organization, have ideas. These are not held to the highest ranks of your organization, so you'll see my favorite numbers in relation to this are in the seniority area. The majority of the ideas are still coming from below middle management, so middle management and below. Senior management 14 percent. And then on the business unit side, you'll see over here on the left circle that brown outer ring. Those are our internal operations units, so this would be typically HR, finance, corporate services, etc. So we had an outpouring of ideas from innovators who were not naturally product merchandising guys. So they don't make this every day, but they were making it online.

Then we said, "Okay, we loved the fact that the platform enabled scale." And we found that the ability for the platform challenge idea to be fantastic and to really become part of the culture. Our people really liked coming together and talking about ideas. So we facilitated the offline idea jamming portions with challenges that were online, and in some cases, we didn't even do an online challenge. We only did an offline challenge, and then we resolved problems that way. So we started to morph the approach based on the question that we were asking and how it is that our teams wanted to engage around answering that question.

Our community of innovators started to emerge out of both our offline brainstorming sessions and online challenges, and we started pulling this group together because they needed to actually have a conversation with each other beyond the time limits of the challenge. So you all will know that typically you challenge will run from either a super fast one of 6 weeks all the way out to 12. What happens to innovators when it's past 12 weeks? So we started pulling this group together, and we created a group of innovators on slack. So they actually regularly talk to each other, has nothing to do with challenges. They're just basically a global community of people that are now starting to talk to each other.

Then we said, "Okay, if you can do it online and digitally again you could do it online and have ongoing conversations, could you pull people together around just innovative ideas altogether?" So we launched something called a curated group of experiences called The Gorilla Sessions. So if I were to meet any of you here today, you happen to be in Hong Kong or New York let's say five days from now, we would invite in, and we'd say, "Can we put you in front of 100 people, and can we have you just talk about innovation? The good work that you're doing in your area, how might we encourage them through your story of innovation?" So that was sort of the last pillar.

And then all of that came together in an area that we launched called The Workshop. So The Workshop has online physical challenge, online challenges of innovation through The Kitchen, it hosts a community of innovators, and then a third piece, it actually has curated experiences around innovation called The Gorilla Sessions.

So if you were to take a look at all of those three acts and then say, "Okay, what were we able to do in the last 16 months?" We went from a design challenge, which was that original challenge we talked about; a beauty idea jam, which was similarly around a product; we did a WOW challenge, which was a ways of working challenge. How can we recreate that original office space that we had in our area and make that now the new global standard that the company has adopted? To various other challenges that we are running. One in particular, the Make Life Better for a Billion idea challenge around our purpose: How might we make life better for a billion people connected in the supply chain, from the consumer all the way to the factory worker? And we invited in the entire organization to have that conversation with us.

And then we took that to a process efficiency challenge. Many of you are doing that now. I would love to learn more. We're currently in the process of doing that with one group. We've expanded out the ways of working challenges now geographically. It's gone from India to Korea. It's going to move on to other markets. We'd like to get into a public challenge next. For me, I think that really pierces the envelope on innovation, so for any of you who are doing that, I'd love to learn from you. A challenge with our customer, and a challenge with our partners. So from I guess the day of somewhat before January 2016, kind of going from nothing, a series of experiments over three years that was leading us towards just the human being to really having created The Workshop. And that's our story, and I'd love to talk to you more about that at the break. Thank you very much. Thank you. My pleasure.

Wonderful. Now do you have time for a couple of questions?


That'll be great. Any questions? We've got the handy dandy yellow boxes. Don't throw that too hard, David. You may hurt someone.

Good catch.

Speaker 2:
I don't know how to use this.

Hi, I'm Miriam from Toyota. I'd like to know a little bit more about the evolution of how you organically were able to get a team of people to grow this to such length. I know that there's not a lot of resources, and I know that there a lot of ideas and people who are motivated and passionate. But how did you gather that and make it what you've made it?

Well first off, we're a very small team. [Ji Hyun 00:22:24] leads The Workshop team, and he's got, including himself, now a team of five. And we started out with a team of one, which was him, and then we've really only went to I think four and five the last two months.

Our audacious goal at the end of the day was whether we could put ourselves out of business, so could our three year plan be that The Workshop did not exist such that the culture of innovation has just enabled itself through the company and it just becomes the air that you breathe and the way that you work all of the time and it doesn't need a central enabling unit like ours to make that happen?

So part of the cell, if you can say that, was can we find partners that are easy to work with? Can we use technology that has ease of access? Can we create new ways of working that people change their capabilities of how to approach problem solving, and can we just light those fires and then be able to step away? So that cell is a lot easier than walking in and saying, "I need to have 500,000 dollars, and I need to have 14 people to make that happen." And it changes the way you solve that problem. You go for where you can create the biggest amount of impact that's sustainable as opposed to just opening up a fire hose and putting resources into an area. So that was our approach, but I'm happy to talk to you offline about some tips and tricks.

Terrific. One more question? There we go. Speaker 2: Uh yeah.

First of all, thank you so much for sharing this. This was great. And you mentioned ... had a great quote as you started about internal politics, and certainly, everybody in this room has dealt with that. But I noticed you didn't really pick up on that and tell about the kind of pushback you may have gotten in the course of your journey here.

Mm-hmm (affirmative).

Speaker 3:
I know we're among friends, but could you at least comment on that a little bit?

Did you get any pushback or was this like smooth sailing and this is like the dream example of how it can be? Or what?

So it would be great to have it be a dream example. Look, I think that empathy takes you a long way to understanding challenge, and I think if you can truly 100 percent embody the principles of design thinking and lead with empathy, you will find that in many cases, you're not dealing with opposition. You're dealing with ignorance. You're dealing with fear over being misplaced by a change that you can't cope yourself. You're dealing with a tremendous amount of ego, which is a very traditional leadership's characteristic of, "Oh my God, I need to have all of the answers, and of course I need to look like I know what I'm doing, but I can't possibly ask for help."

This is what you get, what we call politics. There are very few people that are operators in that political way that we would understand it. Many of them are human beings who just can't cope, and if you can figure out why it is that somebody is not supporting your agenda, then you have ... it's step one of figuring out how to convert them. And in some cases, if they're holding a tremendous amount of influence on your organization, you need to lean in and get that support. If they are not, then you just have to decide it's just about neutralizing them. So you just need to neutralize them. They don't even need to be in your camp to support you.

And my fundamental advice to the group is that experimentation is wonderful. Do it, but couple that with tremendously high impact communications. The organization needs to see what you're doing, and they need to feel what you're doing. So if you have a whole group of people talking about you and you only have one person who's against you, that whole group of people are going to be the place where you're going to find your support. And you're just going to keep doing that over and over and over again, and you're going to find that there'll be a tipping point and the obstacle person can't possibly be vocalizing opposition anymore because they want to be part of the party. So you got to get people into your party, and you got to tell them where the party is, and you got to tell them there are great drinks, and you got to tell them that they want to be there. And then you got to tell the world that you just threw the best party, and you got to do that every weekend.

Thank you ever so much.

Thank you.

Lale, thank you. Outstanding. Boy, that was great.