2 July 2020

Innovation lessons learned: Culture defines structure

Afera’s 6th webinar in COVID-19 lockdown exit series offered unique perspectives on new ways of thinking, emerging market opportunities, product diversification, culture versus structure, focus and collaboration within innovation

Incorporating important updates on E.U. lockdown exit and regulatory developments by our industry collective’s dedicated Regulatory Affairs Manager, as well as a panel of noted R&D experts, Afera’s recent Webinar explored “Innovation: lessons learned from the first months of COVID-19 disruption.” Over 60 Afera Member Company delegates tuned in to learn not only how to weather but to benefit from this period of upheaval by exchanging experiences, knowhow and best practices on Afera’s unique community platform.

“It is said ‘necessity is the mother of invention’, and ‘necessity’ has definitely been our theme over the past 3 months,” commented the Association’s Secretary General, Astrid Lejeune. “COVID-19 is probably the most abrupt and broadest wave of unavoidable ‘necessity’ that we have experienced in generations, so it follows that the greatest wave of planet-wide innovation has begun to unfold. Approaching this topic with our Members and other industry experts from every angle is one of our immediate goals.”

E.U. lockdown exit and regulatory developments

E.U. border control
Afera Regulatory Affairs Manager Pablo Englebienne reported that the European Commission had recommended that Member States (MSs) lift their internal border controls during the week of 15 June, and that the Schengen area will be open to some external visitors as of 1 July.

The E.C. has disclosed the E.U. strategy to promote the development of a vaccine and ensure equal access for all MSs. Of interest is that funding will be made available to companies that can ensure sufficient supply and E.U.-based production. The estimated timeline for availability was discussed as 1-1.5 years, which is a considerable reduction from the typical 5-10-year developmental timeline for a new vaccine.

International decentralised contact tracing apps
Over the past month, there has been much discussion about contact-tracing apps that have been implemented in some countries to facilitate the discovery of cases after a positive test. Now that the E.U. borders are opening, the additional challenge is keeping track of contacts across MSs. Accordingly, MSs and the E.C. have developed a set of guidelines to enable the sharing of information across MSs, even when each country develops their own app.

New E.U. trade policy
A new E.U. trade policy is being developed with the goal of strengthening the position of the E.U. in the global market post-COVID-19. Some of the key points mentioned in the consultation: shortening supply chains by moving production back to Europe, recognising that trade with China is challenging, increasing competitiveness of E.U. industry on a global scale, developing African trade (as a partner for growth possibilities), supporting SMEs, and meeting the Green Deal objectives. Public consultation via email remains open through 15 September.

Renovation Wave
Renovation Wave is one of the new initiatives of the recovery package Next Generation E.U. and the Green Deal. The goal is to renew buildings to make them safer, more energy-efficient and sustainable. This Renovation Wave is expected to generate employment post-COVID-19, and it is probably a relevant development for tapes that are used in construction. Public consultation is open until 9 July.

Auto industry
The auto industry is in discussion with the E.C. to recoup some of the lost sales in Q1 and Q2 of 2020. There was a welcome announcement of millions of charging points for electric cars across the E.U., a plan which will likely be accelerated from the original 2030 timeline. Also, ACEA is pushing for clean fleet renewals to be included in Next Generation E.U. initiatives.

Innovation and green technologies for the European Green Deal
The E.C. organised an event on innovation and green technologies for the E.U. Green Deal on 25 June. It was a hybrid event held in Tel Aviv. Speakers included the CEO of Unilever and members of the E.C.

Mr. Englebienne and Afera Sustainability Working Group Leader Martijn Verhagen (Lohmann GmbH & Co. KG) participated in a BREF workshop on 12 June to discuss the future of the updates. BREFs are Best Available Techniques reference documents, of which there are 29 that describe how some activities should be performed in the E.U. Afera was involved in updating the STS-BREF for “Surface Treatment Using Organic Solvents”. Organised by the E.C., the meeting saw broad stakeholder attendance, with representatives from European industry associations, governments and NGOs. Interesting topics of discussion centred on the Circular Economy and sustainability: The E.C. proposed to develop a BREF for these topics, but the consensus was that it was better to introduce these within each BREF individually. Afera is currently preparing feedback from the tape industry to be shared with the E.C.

Updating Packaging & Packaging Waste legislation
The E.C. published a roadmap for updating the Packaging & Packaging Waste legislation, that is based on a consultant report for the update of essential requirements for packaging materials. Feedback on the roadmap for “Reducing packaging waste” is requested by 6 August. Afera plans to investigate this matter within its Sustainability and Regulatory Affairs Working Groups.

Chemicals for sustainability: definition of sustainable chemical needed
Lastly, one of the initiatives stemming from the E.U. Green Deal is the “Chemicals for Sustainability” initiative. In Afera’s last Webinar, Mr. Englebienne mentioned the Safer Chemicals Conference 2020 organised by ECHA, the European Chemicals Agency, on 2 June. ECHA Director Bjorn Hansen’s presentation revealed that there will be a definition of sustainability established at all levels within Europe for sustainable products, practices and chemicals. The definitions will be ongoing but will likely take into account the capacity of chemicals to enable the circularity of products, i.e. how recyclable a product will end up being because of the properties of specific chemicals it contains.

Innovation: lessons learned from the first months of COVID-19 disruption

If we look at moderator and marketing strategist Bert van Loon’s timeline above, it is obvious that we have experienced an extremely remarkable period of the last 3 months. We are currently entering into a new stage of functioning commercially that holds many uncertainties. This Webinar marked this moment to review what the adhesive tape industry has experienced and learned when it comes to the products and process of innovation and how to proceed with this valuable knowledge to improve our Member businesses.

“The future delivered”
Mr. Van Loon referred to innovation as a beast with many appearances. For companies who want to hold internal discussion on what innovation is, there is a website called ideatovalue.com which discusses the definition of innovation according to 15 experts. The 4 adhesive tape industry leaders and one field expert in managing experimental data who made up the Webinar panel agreed on a generic definition of innovation: executing an idea which addresses a specific challenge and achieves value for both company and customer.

Encouraging new ways of thinking

In sharing their unique perspectives, the panellists confirmed that entering into the coronavirus lockdown—having time, perhaps a change of scenery and a modified work agenda—engendered new ways of thinking about product innovation and business. Jeff Burrington, a PSA tapes and label application specialist at H.B. Fuller U.K., Ltd., shared that with the onset of COVID-19 disruption, “the business philosophy put across by the Company internally was to try to increase levels of entrepreneurialism and opportunistic activity and to encourage employees to look outside of your normal markets and applications.” H.B. Fuller is a global leader in adhesive technology across a very diverse set of applications and global business units in every market you can imagine that consumes adhesive.

“We have to admit that in the first weeks of the Crisis, it seemed like we were running around like headless chickens,” related Michel Sabo, who is the R&D ANT manager of Nitto Belgium. “We didn’t know what was going to pop up next, but we were seeing everything happening at once, and we were just putting out fires left and right.” After 2 weeks, said Mr. Sabo, a clearer focus on what mattered settled in. From one day to the next, they were working remotely from home, which “gave some people a lot of time to think differently from in the past... This brought forth out-of-the-box thinking and new ideas, some of which we are working on materialising.”

New market opportunities in hygiene and medical products

“The key change we experienced during the onset of the coronavirus disruption is that we barely spoke with our customers because they had too many issues they were dealing with,” said Jean-Loup Masson, who is the director of innovation, marketing and digital, as well as a senior vice president, at Novacel S.A.S. (France), a leader in manufacturing surface protective films, technical tapes and machinery. “Instead we witnessed the creation of instant markets that we had to capture.”

“The coronavirus crisis has surely created a lot of market opportunities for companies,” commented Mr. Sabo. “But we have to be fair in saying that the traditional markets, like automotive and metal, have been very much hit – as you will see in our sales figures, which have not posted as projected back in February.”

Mr. Sabo, Mr. Burrington and Mr. Masson refer to diverting resources normally used in producing their traditional products to meeting the demand of emerging hygiene and medical markets. In the past, Mr. Masson said, specific markets were closed to Novacel, but with the Crisis they had some “openings” and quickly developed in-house and sold a hydro-alcoholic solution and gel, and within the textile end of the Chargeurs Group “pushed the production of masks when there was no production of masks anywhere else in France, and the sales turnover in just that activity will be in the hundreds of millions.”

“Like a lot of large companies, we were able to leverage raw material resources by diverting them into products for disinfectant sprays both surface and aerosol,” recounted Mr. Burrington. “And we tried to guide adhesives into the construction of personal protective materials where we were either functionally necessary or could see a benefit towards doing so.”

Mr. Sabo witnessed “new possibilities popping up in membranes technology, specifically semipermeable membranes or PTFE membranes, which are used mainly in the production of surgical masks... And that is becoming a booming business.”

Product diversification benefits

“What for us was the most important observation of the first 3 months of the coronavirus crisis is that you have to have a broad range of products.” Mr. Sabo advised that if you adopt “this type of approach, you’ll always hit in at least one area... So product diversification is relatively important.” Likewise, Mr. Masson reflected that during this period “we were very happy to be protected by our strong diversity and customer base.”

Rethink your innovation structure

A key theme that panellists touched upon often was the issue of a company’s functional structure encouraging or impeding a culture of innovation. Kalli Angel, who leads account management for European customers of Uncountable, which is based in Munich and San Francisco, talked of the challenges of the R&D industry they serve by providing a cloud-based platform on which to store, analyse and collaborate on experimental data. Across the last few months, she sees across her customers in the adhesives space and in other materials an acceleration and even urgency around the trends that were already forming: These include making company R&D programmes speedier and more efficient.

“What is key now is building a culture of digital collaboration, as well as developing a strong data and materials informatics strategy,” Ms. Angel explained. Things that were nice to have in the past and maybe difficult to justify the time and resources for change management suddenly have become necessary over the last few months. “We’ve worked with customers on change management and building the right structure for their data, helping their teams bring a lot of their lives online in terms of collaboration to make sure the actual experiments in the lab are the most efficient and valuable that you should be doing.”

Mr. Burrington shared candidly, “The largest thing that I have observed over the last few months is that there is always innovation in ideas and development at work, but perhaps the innovation structure was overwhelming innovation culture, and that there is a real sense of trying to reappraise how much structure is attached to the process of innovation... really with the mindset of trying to speed it up.”

Likewise, Mr. Sabo said that creativity doesn’t often fit into the functional structure of certain companies, in which certain rules must be followed in order to achieve your R&D goals: “During the first COVID-19 months, because there was a lot of pressure on employees to generate results, the conflict with the culture of innovation becomes even more pronounced. This is especially true for bigger companies in terms of employees, products and systems... In following a strict set of procedures, sometimes their functional structure becomes a burden by hampering progress in innovation.”

According to Mr. Masson, what matters most in innovation is that you have to have a structure which enables you to work without distraction and to adjust and adapt to customer and market demands without having to ask themselves too many questions and forge through too much red tape: “Because the point of innovation is to go test and figure out what’s working.”

“I believe the toughest part of the situation is now, because the market is slowly returning to normal,” Mr. Masson continued. “Customers are returning to normal business with services claims, meetings, issues and old projects. And at the same time we have to keep working on what we started that was new, when people were available because the market was down.” He said that now is the time he believes Novacel should restructure innovation, because they need to ensure that they are not only “market pull, techno push” to its existing customer base but positioned to diversify, digitalise and go even greener than before in order to cope with transitioning to the new reality.

Culture defines structure

“Structure” implies control and direction, while “culture”, according to Mr. Van Loon, “is kind of fuzzy and soft”, evoking the human experience. But what do you see as essential in culture while you are basically offering a structural support tool? Is there a culture of innovation that benefits from incorporating structural elements? Ms. Angel replied that structuring data is most important, and this is why when Uncountable starts working with large companies, they try to zero in on how their R&D teams think about and set up experiments as human beings, making sure to structure and link experiments across different labs and projects in the most effective, non-rigid manner.

“And when we get to the point with data structure that you are collaborating with AI algorithms, we see it as collaboration,” Ms. Angel explained. “These tools don’t work unless you have a way to enter into it with your anecdotal experience, your gut feelings, and encoding as much of that as possible. So we don’t see it as replacing a lot of the observations and qualitative nuance but making that link.”

Beyond updating essential R&D work patterns, Mr. Burrington cited 2 examples in which the greater innovation culture is seen to encourage product and technology development and overbearing structure discourage it. During the first weeks of lockdown in Minnesota, an H.B. Fuller employee, faced with the extraordinary events unfolding around him, was inspired to design, produce and deliver 15,000 ear reliever mechanisms for surgical masks on the fly with a newly acquired 3D printer.

At the same time in the U.K., when the country was facing a shortage of ventilators, McLaren and a few other companies worked with 2 large British universities to fast track and prototype ventilation equipment in order to fill the gap. “But in the end, the governmental and procurement structures, in spite of the U.K.’s wanting to be innovative, were unable to bring the process to an agreeable end from the perspective of McLaren, which was trying to diversify beyond its automotive business. Other pre-approved companies, regardless of whether they were actually innovative, were the preferred partners in the project.

“So for me, that really showed the impact of where structure is an overbearance to real innovation and that whether we are small or large technologically driven companies, or manufacturers or even at the commodity end of the market, in the end a certain amount of structure is needed, but it is actually culture that is the critical part if you want to be innovative.” 

Focus, teams

The importance of forming functional R&D teams and having proper focus was broached often during the Webinar. It is a balancing act if you are leading an innovation team. On one hand, you want to give a maximum of liberty and just a little bit of direction and see what happens. On the other hand, you want people to focus, to choose to find a certain outcome. An interestingly extreme example of the former is Harvard University’s labs, where scientists do not have a work agenda or anything to be accountable for and full liberty to pursue their innovative impulses.

There are different innovation cultures in companies that need to be cultivated: the culture of focus on customer projects long-term and another culture of short-term, more free and opportunistic development. Can you organise different innovation teams within an organisation?

“If you look at organising those different cultures of opportunity and timeframe in innovation, I think you need 3 teams,” Mr. Masson offered. “One team should only focus on new customers and new values for customers long-term, and it needs to be differentiated from the regular sales teams. And then, as always, we need to have a team which focuses on answering customers’ requests short-term, offering the correct rapid response and support. Lastly, we obviously need a team to prepare for the future of technology and markets.” Interestingly, Mr. Masson revealed that if Novacel had managed to push innovation during the Crisis, most of the time it was bringing to full-term development projects that had already been in the works.

“You want your teams in that mindset of learning from each other and prompting questions between each other, so that you might have teams focussed on different scales of innovation, but those Eureka moments could come from any of those 3 teams,” Ms. Angel advised. “And innovation is not just about having the next great idea—it about applying it quickly and efficiently across your organisation. So making sure that if it is the very business-development-focused team that figures out how to use a new raw material in an innovative way, you apply that quickly across all the other work you are doing.”

About Nitto’s innovation focus, Mr. Sabo said that “after the first 2 weeks of the Crisis, you got the idea that is not just something, that is was a severe situation which was going to take a lot of time. Yet our strategy very much depends on where our customers want to go, and much of it deals with innovation over the longer term, a few years, and not new products developed in just one or 2 months.” In this respect, he concluded, you have to be really careful not to lose sight of your goals and develop something that is no longer relevant. And you can’t jump on everything. A company cannot deal with developing 15 different technologies at the same time: “Again, you have to focus.”

Collaboration within innovation

With the onset of the corona crisis, the importance of collaboration within the Industry ecosystem, especially remotely and on a day-to-day basis, with partners, competitors, clients and even between departments of the same company, has come to the fore. Most panellists see this trend accelerating under market pressure. “In an environment in which not everyone can be in the lab at the same time, you need to rely on teams collaborating well, even within groups of 4 or 5,” Ms. Angel shared. “Our customers who had moved out of their customised excel sheets and were storing data in a more structured way on our platform had a huge advantage when COVID-19 disruption set in.

“Similarly, teams that were trying to collaborate better around the world, which had been working on similar technologies in the past but didn’t have a way to share their learnings with each other... If they had invested the time over the last 6 months or a year in doing some alignment among those teams, it made it much easier to take learnings from a team in North America and apply them to a team in Asia that was working on the same technology within a company.”

“Nitto’s by-line is ‘innovation for customers’, so most of the time we are working closely with them to develop new products and technologies,” Mr. Sabo commented. “Speed is crucial, and if you want to do this all by yourself in Europe in our divisions, you need a large internal team to do so. We could rely on our Japanese colleagues, but they also have their own set of R&D projects. It is very hard to find people available within the organisation, so we have to deal with partners.” He referred to universities and other organisations. “Competitors? We haven’t done that yet, but maybe we will in the future. Collaboration creates speed in the development of your product technology.”

Mr. Masson revealed that the major change within Novacel during the Crisis was an increase of collaboration within the entire Group. “When you want to move fast—and you have to move fast because your CEO tells you that you have to have something ready in a week—you have no choice but to reinvent yourself and find the proper level of resources and knowhow through forging partnerships.

“And we had to be creative in finding partners, because if you cannot travel to visit people face-to-face, you need to figure out who can get things done for you quickly, e.g. for purchasing and providing internal knowhow. Luckily, because of COVID-19 disruption, we found a gem of a company nearby that can provide to us the things we are not able to do as well as lots of ideas for innovation.”

Mr. Burrington explained that, to a certain extent, how collaboration evolves over the next year is hard to predict, because behind the push for accelerating collaboration in innovation is the reality that the markets have in many cases shrunk—in some cases catastrophically—creating competitive pressure and also opportunity. Companies may fail to sustain their core businesses and/or fail or succeed in filling the new environmental niches. “So in terms of collaboration, I would like to see more of it happen, but it may not because of competitive pressure,” he said. “But I also think that economic problems such as those created by COVID-19 cannot be resolved by any singular economic, business or political entity, so like it or not, businesses will need to collaborate, because it will lead to a collective survival and sustainability of the Industry.”

Next webinar – register now!

Afera’s next exclusive Webinar in its lockdown exit series “Navigating the COVID-19 crisis within the adhesive tape value chain” will cover “Sustainability an business recovery in the new normal”. It will be held on Thursday, 2 July, 14.00-15.00 CEST. Please register here. An 8th Webinar discussing “The state of sustainability in adhesive tapes” is scheduled on 3 September, after a summer break. Please register here.


The recording of the 18 June Webinar is now available here using the password 3p*p46tL. The Webinar slide deck including active links is also available upon request to the Secretariat.