Interview with Shai Albaranes – Vice President of Innovation and Ventures at Mexichem
Managing Global Innovation
I walked into Netafim’s office building on a hot day. It is not in the most glamorous part of town but as I walked in, and Shai welcomed me, the office was inviting, well-designed, colorful and full of light. This was the first sign that Netafim, and Mexichem, Netafim’s new owner, are not necessarily what you would expect from an industrial conglomerate.
Shai’s Journey to Mexichem Innovation
Innovation managers often follow non-traditional and varied paths before putting on the innovation cap. Shai is no different. He had his first entrepreneurial experience right after the army. It was Israel’s 50th anniversary and he and a friend, not being too interested in what the job market had to offer recently discharged soldiers, designed a board game that taught kids the history of Israel. The timing worked in their favor and the game got a lot of attention from the media, large stores and organizations looked into buying it. He took the money from the game and traveled for a year. Returning to Israel, he received a scholarship to study computer science at the Interdisciplinary Center. He later joined the Zell Entrepreneurship Program at the school. The program, considered one of the best in the country, if not the world, taught him many of the skills needed for entrepreneurship. After graduating, he worked in marketing and bizdev in various startups and later went on to pursue his MBA at INSEAD, joined McKinsey in London and then in Israel. He started at Netafim in 2012, managing several projects dedicated to increasing the company’s value, then managed the product management and product marketing teams as well as the unit dedicated to strategic crops.
What is Mexichem
A 7.2 billion dollar sales company, with 22,000 employees and a worldwide presence. The company is a world leader in five different verticals. The largest fluorine producer, which is a far more significant material than people know. Other verticals are polymers, urban infrastructure, agriculture (Netafim) and fiber optics. The company has grown exponentially over the last 15 years, mostly through M&As as well as organic growth.
The Story of Innovation at Mexichem
Getting Started – Transformation
In February 2018, Mexichem appointed a new CEO, Daniel Martínez-Valle (who was previously a senior manager at Cisco). He had a clear vision of where he wanted the company to go and on his first week in the office said: “the past 15 years were great but if we want the next 15 years to be great as well we have to make significant changes.” In order to achieve this, he set up a transformation team of 15 people from around the world that touched on different aspects of the organization. Shai was a member of this team and shared that their first step was to understand and formalize the organization’s purpose and values.
Purpose and Values
Daniel placed great importance on formalizing the organization’s purpose and values and saw them, among other things, as a way to unify the different companies that makeup Mexichem (which were very independent). He wanted to answer the big questions: Why do we get up in the morning and come to work? Why would someone come work for Mexichem? How do we solve the world’s biggest problems?
After a long and complex process involving employees from different verticals, levels and locations, they eventually came up with Mexichem’s purpose and values:
- Purpose: Advance life around the world
- Values: Diversity, Responsibility, Bravery
Parallel to the purpose and values process, the transformation team also addressed other important pillars such as strategy, digital, talent, sustainability, internal processes and innovation. Shai was chosen to lead the innovation pillar.
Becoming VP of Innovation and Ventures
Once he was chosen to lead innovation, Shai started talking to anyone who had innovation in their title or was linked to the field in one way or another (VC’s, accelerators, incubators, etc.). He tried to understand how people saw this role and their vision for innovation and then developed his own. Shai mentioned that while reading books and articles on the topic did contribute (he recommended “Beyond the Champion”, by Gina Colarelli O’Connor, Andrew C. Corbett and Lois S. Peters), his strongest recommendation was going out and talking to people in the same position.
His first task was to define what innovation means, and after some consideration, he formalized it as Creating something new, that addresses a need and that its economic value is greater than the cost of development.
He then went on to define, together with the CEO, the role of innovation for Mexichem – establishing an environment in which innovation could systematically be created and commercialized to deliver upon Mexichem’s purpose and drive future growth.
It was important to make clear to the entire organization the need to address all three levels of innovation – core, adjacent and transformational (based on the Christensen model for innovation).
The next step was to agree with Mexichem’s CEO on the main objectives of the innovation: generating new revenues, above and beyond each one of the business groups’ growth plans and creating a culture of innovation focused on looking out (and bringing in innovation from the outside) while exponentially increasing the pace of experimentation and learning.
Finally, he defined the four main activities that will make up the Mexichem innovation ecosystem. The structure includes:
- Mexichem Ventures:
the corporate venture capital fund (CVC) which is the vehicle to invest in startups and enable bringing innovation from the outside in
- Startup partnerships:
A platform for startup partnerships (Open Innovation) which is independent of the fact of whether equity investment took place. It is important to acknowledge that the culture and velocity of a startup is completely different than the culture of a big organization. This is the reason why so many partnerships fail. We have built a dedicated team and the required processes to try and overcome those challenges.
An internal innovation program which was designed to allow each employee in the organization to suggest his or her idea and, more importantly, to create the right program, the right processes, the right coaching of these ideas to actually succeed and generate revenues for Mexichem
- Lighthouse Labs:
Lighthouse Labs is Mexichem’s new innovation engine—a collaboration between IDEO and Mexichem. The vision of Lighthouse is to launch bold new ventures that address global challenges.
These are the filters used when it comes to selecting Lighthouse projects:
- Critical to Mexichem’s business group’s strategy.
- The projects must also sit at the intersection of what the Lighthouse does best: human-centered innovation, technology, and the subject matter expertise that each business group brings
- Finally, and perhaps most importantly, Lighthouse projects must be focused on questions and finding solutions that will embody Mexichem’s purpose and the future vision for this company
Innovation in a global company
Mexichem is made up of five business groups, each focusing on a different vertical.
Shai believes that while Mexichem should have a global and unified approach to innovation, implementation programs should be tailored to the specific culture, skills and challenges of each one of the business groups.
Shai is not blind to the challenges of his role: the long term effects, the relative suspicion this new role still receives, securing a budget and much more. He believes that receiving the CEO’s and upper management’s ongoing support is critical in order to overcome these challenges.
Before we ended our meeting, Shai mentioned that his own personal challenge in this role is to bring something new to the world of innovation. As he has relied on sources and people who came before him, he would like to add a new stone to the Innovation road.