Leading R&D and external innovation:
A conversation with Austin Kozman, PhD, R&D Director PepsiCo Technology Ventures (PTV)
On potatoes? The Boston biotech founder thought the PepsiCo R&D executive was talking crazy. Why would anyone want to use a cutting-edge biological cell disruption technology on… potatoes? But R&D Director PTV, Austin Kozman, Ph.D., P.E. is a leading expert at taking technology from one area and using it to accelerate innovation in another.
Dr. Kozman explained that he was looking for a way to improve on traditional potato slicing technology; the Boston firm’s niche technology should theoretically work where no food science approach ever had. The biotech firm agreed to let him do a proof of concept work at their lab. But they still thought the idea was wacky.
“All of their engineers and scientists followed me around the lab, and they’re like, ‘What is he doing? Why is he here?’” said Dr. Kozman, who obtained his PhD in Mechanical Engineering from the University of Texas at Arlington and worked in semiconductor/optoelectronic thermal packaging engineering and mechanical and thermal design for a large industrial bakery Original Equipment Manufacturer before rising up the R&D ranks at PepsiCo. “But it ultimately ended up working and had a benefit on snack food production. Now there are actually other companies in this space as well.”
The potato cell story encapsulates much of the art and science behind Dr. Kozman’s approach to open innovation or “external innovation.” The PTV team, which he directs, is charged with identifying, researching, and developing emerging novel technologies for PepsiCo’s food and beverage business. They seek mature technologies (not equations on the backs of napkins) and business ventures that are robust enough to perform at a pilot scale, where internal R&D teams can further explore potential applications that can impact PepsiCo’s portfolio of beverages (Pepsi, Tropicana, Gatorade, etc.) and foods (Lays, Doritos, Quaker, etc.).
Dr. Kozman and the PTV team mostly seek innovations in agro/crop science, ingredients, processing, packaging, and quality/food safety. But they also explore novel business models that influence the core business, as well as more peripheral impact areas like sensors, analytical equipment, point of sale equipment, distribution/fleet innovations, and so on. It’s a wide but crucial mandate, and the PTV team isn’t afraid to look far afield for technical unlocks. Let others keep turning over the same ol’ stones in the same scientific fields.
“Our team doesn’t typically go to food and beverage shows because that’s where everybody at PepsiCo (and our competitors) are already going. So we go to pharmaceutical shows, we go to semiconductor shows, even automotive shows because we’re looking for ways at perhaps tapping those industries’ technologies or manufacturing capabilities to solve our problems.”
All that exploration demands a compass. Dr. Kozman has developed a set of core principles to help steer the successful execution of co-innovation projects. It begins with creating a diverse R&D team to manifest a company-wide cultural embrace of external innovation, which is defined as the use of purposive inflows and outflows of knowledge to accelerate internal innovation. External partners could be a consultancy; a startup; a university or research lab; a crowd-sourced innovation platform; or a curated innovator network (like Xinova, with whom Dr. Kozman and his team have co-innovated for several years on many projects). Some principles that he’s found to help drive successful open innovation partnerships include:
- An internal R&D team dedicated to external innovation will ensure better project success
- Fresh perspectives from diverse technical fields can solve old problems—that goes for the internal team as well as the external partner. Diversity of thought is critical to “think outside the box”
- Great technical unlocks can be found in unexpected disciplines
- Being scientifically and industry-agnostic on how challenges are defined to open up new innovation horizons
- Incentivizing engineers to be creative and fail fast indicates a healthy innovation pipeline and kills zombie projects
- Every search for a solution should begin (and hopefully end) in the library: The solution may already be out there and if it is, that’s the fastest, cheapest, safest path to commercialization
- If you do need to go the invention route, make sure your co-innovation partner is in it for the long-term and has skin in the game with your own R&D team
Teamwork
Finding new technologies within the wilderness of scientific disciplines demands a technically diverse team open to new ideas. As such, each member of Dr. Kozman’s team possesses deep expertise in one technical area. Their collective pool of expertise enables better triaging of feasible technologies and ideas they encounter in their research, at trade shows, and via partnerships. (Indeed, they never attend food science conferences in order to stay at the cutting edge of virtually everything else). As for open-mindedness, he said he looks for R&D experts who’ve demonstrated a history of finding interesting workarounds and process hacks that made their roles more efficient, as opposed to doing their tasks always in the way they were originally instructed.
“I think a big part of success for an R&D person is using all our scientific and technological background and to partner that with our creativity to solve challenges in an interesting way.”
Dr. Kozman himself is an inventor; he’s co-ideated on multiple solutions, patented and otherwise. Thinking differently and creatively has always come naturally to him. Drawn to forensics as a young engineer (he was accepted to the FBI not long after 9/11), it could be said that he’s compelled by the investigative quality of solving a problem, poking around in dark corners for bright ideas.
When they set off to solve a challenge, the PTV team accepts that no ideas are bad right at the start. They build their problem solving and brainstorming muscles by participating in brainstorming sessions with co-innovation partners (like Xinova, with whom he and colleague Sameer Talsania, Ph.D. have co-ideated on several patented solutions).
The joy of failure
From there, Dr. Kozman’s team members are encouraged and incentivized to fail fast and fill the innovation pipeline. Their license to fail fast is sometimes made more possible by tapping external partners’ stripped-down rapid prototyping and concept development capabilities. Failing fast is possible, he stressed, when job performance metrics don’t start and stop with a single project’s success, but rather reward the overall quality of the innovation pipeline.
“Sometimes failure is a great inspiration,” said Dr. Kozman. “So, learning why we fail and getting to know fast whether something is viable or not is important. I think some of the more creative people won’t belabor an idea that’s not working. Alternatively, large companies tend to have a lot of projects which just drag on because their owners won’t give up, which is fine. And in some instances, that’s good. But a creative person will try 10 things, and then has so many other things on their plate they can move on to… You have the ability to get to a minimum viable product and rapidly test things, which I think is very important.”
Agnostic solutions
Diversity of backgrounds has been shown to predict better innovation outcomes. But what does that actually look like? Dr. Kozman notes that enough diversity of perspective strips away the dogmatic, industry-specific thinking to reveal a fresh agnostic perspective to the problem.
“When we create teams we try to look at the diversity of thought and background. By bringing those different backgrounds and experiences together, you can think outside the technical person’s traditional roles and that’s important to what we do, which is taking our problems and making them agnostic. So don’t just look at it as a food challenge per se, but how can you make it agnostic to industry and look at it from a different perspective?”
For instance, one of the evergreen problems in the snack industry is improving seasoning powders on chips. For decades, the industry has focused on spraying dried powders onto snack food substrates (chips, crackers, etc.). But the underlying principle of the problem needn’t be constrained to food science. Dr. Kozman notes that if one takes a step back and looks at the situation agnostically the goal is really about adhesion of particles to a substrate in a uniform manner. Once that is accepted, a whole new world of opportunities emerges in the problem space.
“And now that you’re looking across industries for something that has applicability to something else–it could be semiconductors, or automotive paints and lubricants—you can bring in new people, new ideas, new approaches that no one’s ever tried before. By bringing in people from those disciplines, they don’t have the same baggage that someone who’s been in the snack food industry for 30 years has. I think innovations happen by getting a fresh perspective from someone who may not be biased by previous work done in the space. For a solution to be disruptive it does not have to be new to the world, just new to PepsiCo”
Xinova once presented Dr. Kozman with a submission to a Request for Innovation for sugar-free food binding solutions. He looked at it and just laughed. It was simple and brilliant. The technology was based on an advanced robotics application that he’d recently examined at a robotics conference. It blew Dr. Kozman away that no one had ever considered the robotics application because, once it was in front of him, it seemed obvious. It was yet another example of someone from a non-food science background defining the problem agnostically, and taking a cross-disciplinary approach to solve an essential challenge: binding food particles without a high-sugar binder.
The value of the PTV team cannot be overstated in advancing these sorts of out-of-the-box innovations. Because they are incentivized to fail fast, the PTV team knows they won’t get reprimanded for taking chances on wild new ideas.
“When your performance evaluation is predicated on project success, then you’re encouraging and incentivizing people to try and do whatever they can to make those projects be successful, and sometimes that’s not the best thing for the business. Again, it’d be better to kill a project if we truly believe it’s not going anywhere, so we can reallocate both those monetary and people resources elsewhere.”
Food and Bev disruption
Another powerful effect of the PTV team’s dedication to filling the innovation pipeline is they can keep an eye on the future, exploring potentially disruptive technologies and ventures for tomorrow while solving the challenges of the day.
When it comes to disruption, Dr. Kozman likes to point to the iPhone as an example of a transformational product that is not itself a single invention. Rather, it is a collection or creative agglomeration of innovations. This consortium-of-innovations model, says Dr. Kozman, is the likely playbook for disruption in the food and beverage industry. Single technologies like 3D printing aren’t likely to deliver on their Star Trek promise any time soon, if ever.
“If someone is going to disrupt our core business; I want it to be PepsiCo,” he said. “And that’s definitely a challenge because you still have to deliver on your core business because that’s what pays the bills. But to stay ahead of that disruptive space is always a challenge.”
Dr. Kozman has an eye on personalized nutrition. As more and more sensors collect more and more data about consumers’ genetics, microbiome, and general health and wellness profile, he sees demand increasing for more ways to create personalized diets leveraging that data for upgraded nutrition.
“Food isn’t going to be looked at like medicine exactly, but people’s relationship with food is going to be more involved in their continuous preventative health maintenance. No one’s provided the unlock, and that’s again going to be a solution where I would call it the iPhone model. It’s going to be a consortium of providers that delivers in that space.”