How to lead successful innovation teams and build transformative R&D portfolios: a chat on diversity and open innovation with Chris Koh, PhD Senior Director and R&D Senior Fellow at PepsiCo
Leveraging diversity of experience and expertise, both in-house and externally, Chris builds and leads elite R&D teams and successful technology portfolios at PepsiCo
by Eliot Baker, Programs and Content Manager
The first time I met Chris Koh, PhD, Senior Director and R&D Senior Fellow at PepsiCo, I was hoping for bragging rights on seeing the next big thing in snacks. I was tagging along with Dr. Koh (“Please call me Chris,” he insists) and a group of Xinova Invention Development Managers to check out batches of food innovations fresh out of the lab. If any of them ever made it onto grocery aisles, I could say, “I was there when Chris said, ‘Yummy. Scalable. Let’s call marketing.’”
The first stop was a prototyping studio on Lake Union. There’s a huge market waiting for plant-based snacks, and PepsiCo had tapped the Xinova network for breakthrough ideas. No details went unchecked as Chris examined the results: How did the plant fibers respond to the different extrusion and flavoring processes at different temperatures? What equipment can replicate the manufacturing process at scale? The samples were technically promising, but not ready for nibbling. Fortunately, we had more treats to examine elsewhere.
Next, we met at Keon Research on a sunny and brisk Seattle winter day. A group of scientists led us past the 3D printers and walked us through the process of creating a new stackable snack experience. The shape of the snack was as inventive as promised, per PepsiCo’s Request for Innovation on segmented snacks. After watching a batch get made, Chris drilled into the details of the manufacturing process. He appreciated that this snack could be produced, with minor adjustments, on existing PepsiCo equipment.
Keyon CEO, Mike Manion and Xinova Head of Innovation Services, David Kraft sampling innovation at the Keon lab
He picked up a piece and studied it as we began crunching into the samples. The texture was crisp and satisfying, and the taste was unexpectedly delicious. While we helped ourselves to seconds and thirds, Chris dropped one on a plate and smiled at the way it broke apart. He stacked several together, played with them, and dropped them again. Then he tried a bite.
“This is pretty awesome, you guys are so creative!” he said. The young scientist who’d come up with the idea beamed, as did her colleagues at Keon.
The principles of innovation and R&D
I came for the snacks, but I stayed for the wisdom on leading R&D and innovation. The governing principles of R&D and food innovation, Chris shared with me, hold across all fields with which he’s been involved, be it oil exploration or snacks. Those principles include:
- Research: invest in long-term projects that advance the science of the industry, knowing most results may not directly or immediately translate into commercial products
- R&D portfolios: Strategically develop a portfolio of technologies from that research for testing and further concept development
- Align the R&D portfolio with product line strategies: buy-in across business units is critical for a technology project to advance, no matter how cool that technology is
- Understand innovation constraints for commercial feasibility
- Figure out what your consumers really want: always be using engagement tools to get continuous insights from your customers, and reference them against customer behavior data
- Build diverse R&D teams for innovation: diversity of expertise and experience prevents stale ideas and groupthink
- Collaborate with external partners to accelerate ideation, validation, development, and adoption
Research, development, and the power of R&D portfolios
There are different time horizons for different types of innovation projects. Discovering and inventing something strange and new will entail dead ends and false starts. Failure will precede success.
Early stage scientific discovery—the raw research in R&D—is where breakthroughs are found, but it’s a fundamentally riskier undertaking than developing a proven technology. There’s no telling what will actually work out. PepsiCo’s product portfolio reflects its mission to create more smiles with every sip and every bite, and the company also looks to make foods and beverages that are tastier, more nutritious, and more sustainable. In creating, say, a new, breakthrough snack bar, many innovation gaps must be identified and filled with the results of research. Technologies must be invented or re-applied in a novel way.
“Companies really need to develop two portfolios, and hopefully those two will mesh,” said Chris. “One needs to be a portfolio of products covering different segments of the market. But from R&D, it’s going to be about developing a portfolio of technology that you choose to invest in or not invest in.”
Building a technology portfolio is critical. Not all of those early-stage technologies will prove to be feasible, much less transformative innovations. But some of them will. Experimentation, testing, and early-stage development projects will reveal which technologies are promising and merit heavier investment. If you have the fortunate problem of multiple promising technologies, you can invest in the one that’s most likely to advance your established strategic business goals. Ultimately, innovation strategy must align long-term research projects with the tech portfolio’s development and product lines’ business strategy.
“If done well, that R&D portfolio will enable success in whatever strategic direction your company will head in. The tech portfolio must be put together while considering the overall brand and product portfolio, to make sure that the company as a whole is heading in the right direction.”
Open innovation to accelerate results
Alternatively, a sudden market insight might reveal a big innovation gap that must be filled quickly. That could be a healthy snack or a new e-commerce-friendly packaging design. But developing the new technology alone in-house might take longer than the window of opportunity allows; and it might be prohibitively pricey or risky. In such cases, it’s worthwhile to look outside for a third-party collaborator.
Chris stressed that open innovation is part of R&D’s game-winning formula. To further the sports analogy, R&D must get as many shots on goal from as many angles as possible to score an R&D victory. And they may need to take those shots fast to convert on an emerging opportunity.
Diversity defines the face of innovation
To stay agile and accelerate innovation, Chris thus recommends strategic innovation partnerships.
“I think it’s very important to have external partners,” he said. “It could be Xinova, or it could be university professors or vendors or someone else. The reason is that many of the things you are doing in R&D are technically very challenging, so to be agile, you simply cannot do it all in-house. It could be that capitalizing on a new insight means developing or integrating a new technology, so by the time you’ve built that new capability, you may have already missed the boat on that opportunity. So you need to engage with the right partners to supplement what you have in-house so you can take your shots on goal at all different angles. If you end up kicking it at that one direction a few times and they all miss, you go look for another area to kick the ball from, and you can do that if you can access that other field of expertise.”
Sometimes fresh perspectives from a good partner can unlock new solutions to old problems. Other times an external partner helps make sure you are going down the right path with an emerging technology, and that you have the right resources for execution.
From a practical standpoint, Chris stressed that an external partner can be beneficial when a new technology will not only change how your company makes things, but what is being made. That benefit intensifies if the new technology changes the business model.
“That’s when you really need to engage your strategic partner,” said Chris.
Diversity of expertise and experience
Recall the segmented snack experience at the beginning of this article. Just getting to that concept development stage took significant time, creativity, and technical expertise from numerous PhDs from various fields. Innovation always does. Dozens of ideas had been submitted to the Xinova Request for Innovation. The bad ideas were killed. The good ideas were explored. Only a fraction proved feasible and worthy of development.
Having a trusted innovation partner is something of an innovation-hack. That wealth of diverse expertise helped Chris and his teams generate new ideas and add ideas to PepsiCo R&D’s portfolio in a timely and efficient manner.
I really enjoy working with Xinova. You are very open minded and flexible, and you take the effort to listen and understand. That impresses me. The folks I’ve interacted with–Nick and Jason and Matt–they really try to understand our challenges and that is very much appreciated by someone like me, working in the consumer products world, who is always trying to understand what the customer really wants, and not just what they say they want. There’s a difference. Working with Xinova, they are working hard to get at the real core of the problem and trying to understand me or PepsiCo as the consumer of their output.”
Know your customers, from oil platforms to snack aisles
Early on, Chris was sure he’d follow the academic track to become a professor. After undergrad at UC Davis, he pursued his PhD in chemical engineering and fluid dynamics. Having spent his life moving around the globe—born in Australia and raised in Hong Kong, Malaysia and Canada—Chris always found math and science an inspirational constant. Fluid dynamics offered a lifetime of differential equations to solve while pushing boundaries of scientific knowledge. But about halfway through his PhD, he found himself drawn to the practical side of science.
“I wanted to see an end result from my work that was more practical than a concept you would find in a scientific journal.”
So, seeking an industry fit for his expertise, he went into the petroleum industry to work on advanced oil recovery technologies. Working alongside engineers, geologists and geophysicists, Chris was thrilled to learn the commercial side of innovation as he sought new and better ways to extract petroleum.
“The technology couldn’t just be elegant and cool. It had to deliver ROI to the shareholders. Innovation had to be commercially feasible, and those commercial constraints continue to fascinate me.”
In advanced oil extraction, he worked on both short-term projects with a purely corporate team, as well as on long-term university research collaborations with 2-5 year horizons. He was constantly on the lookout for low-hanging fruit in the form of process efficiencies, while scanning higher branches for novel extraction techniques. He recalled working on the potentially catastrophic problem of paraffinic wax accumulating in pipelines when pumping warm, subsea oil up through the North Sea to an oil platform. These problems entailed very high financial and operational stakes.
“If you screw up, you’ve just built the world’s most expensive candle using tens of millions of dollars of infrastructure.”
He can’t think of anyone else in R&D at PepsiCo who came from the petroleum industry. Does his somewhat unique background give him an edge? Yes and no, he said.
“Coming from a different industry, and having that experience along with my educational background, helps me add to the diversity of the group when I am working on projects.”
In the petroleum industry, the technology itself was the focus because his customers are other technical people.
The food industry is the opposite. He quickly learned that it didn’t matter how brilliant a technical solution was; all consumers care about is whether the product will serve a need. Understanding consumer behavior and desire presented a completely new angle on what problems to solve, with whole new commercial constraints to prioritize for innovation.
“My first year or so, when I transitioned from petroleum to food, I was thinking purely as an engineer and I was bringing consistently just my engineering hat to work. I was used to speaking with other experts and focusing on the merits of the technology to sell them on it. Then I realized someone would only buy a new food innovation because they enjoy it, not because it is derived from a really cool technology.”
What do consumers really want? This is the million-dollar question. Consumer behavior frequently belies customers’ stated desires. Understanding those desires is vital but—be it smart phones or electric cars or food—is not such a simple thing to grasp when consumers often don’t know themselves what they really want. At least, not until it’s shown to them.
Chris favors the restaurant analogy. He sits down for dinner certain he’d order fish. But the calamari looks good, too. He scans the menu, and then he orders the T-bone he’d really wanted all along but only realized upon scanning the menu. For him, an engineer, this riddle of human psychology is an endless source of fascination. PepsiCo and their insights team have developed a number of tools to help their R&D leaders connect with and understand their customers.
“If people really knew what they wanted, our job would be much easier, but maybe less fun and rewarding,” he said.
The value of diversity on R&D teams
The ability to think differently is an advantage. As much as he initially struggled to get his head around the consumer focus and constraints of food R&D, Chris’s unique background added valuable perspective to PepsiCo. And diversity, he stressed, is a priceless feature for a successful R&D team.
“I have actively recruited people to PepsiCo with very different backgrounds beyond food. Having a diversity of skill sets and, maybe more importantly, a diversity of experience and thought processes, can really help push us beyond group think. When you’re trying to innovate and you are not challenged by people who think differently and have different experience, technical and otherwise, it is very difficult to come up with a different and inventive solution.”
He laughs when asked how R&D skills in oil fields transition to nutritious snacks.
“Engineering principles, whether applied to the food industry or the oil industry, are really not that different. As far as an engineer is concerned, the basic science doesn’t change, it’s just how you leverage it to solve important problems.”