Today we chat with Carlos Gustavo García, Director of Innovation at Grupo Castrosua, who tells us about the role of innovation within our company.
1. Let’s talk about your role in the company, how would you describe your role as Director of Innovation and what are its key responsibilities in the company? What is your vision for innovation in the context of the organization?
First of all, innovation should be defined. Innovating, in a broad sense, is nothing more and nothing less than identifying, promoting, and carrying out actions that allow us to offer greater added value to our clients and increase the company’s market value. This is achieved either by improving what we already do (incremental innovation) or by venturing into new scenarios (radical or disruptive innovation).
At Castrosua, I perform 3 connected but distinct functions: internal innovation, open innovation, and intrapreneurship. The first consists of supporting other departments in launching R&D&I projects in specific strategic lines, assuming management and funding responsibilities, but always at their service, as everything starts with them. The second consists of mapping emerging technologies that could affect our business model. An example is the EmotAI project, where we apply artificial intelligence to increase passenger safety, reduce risks, or lower operating costs. Finally, intrapreneurship consists of identifying and promoting new products or services based on our capabilities to diversify the business model by opening new markets on the periphery of ours or even beyond. It is, without a doubt, the most difficult thing for any company to tackle. A practice now widespread among corporations and large companies to better understand their environment and show their solidity to the market. In this regard, we are also taking our first steps.
It is not an easy challenge, but there is no other way. Companies that do not innovate are doomed to extinction. I call them zombie companies; they are still alive, but they move by pure inertia and in a semi-conscious state. Studies by BCG or GIMI show that the average lifespan of companies has halved in recent decades and will continue to decline. Why and why now? We are immersed in an increasingly rapid spiral of change that began with the development of computing after World War II and went viral with the advent of the internet at the end of the last century. We live in an era of exponential disruption that acts like a black hole that swallows those who stop, like that 100-meter runner who decides to bend down halfway through the race to tie his shoes and by the time he gets up, it’s all over. The only option is to evolve along with the system, and we must do so without losing the values that have brought us this far. In this context, my vision for Castrosua is that of a company that, without renouncing its identity (high quality, customer orientation, product customization), also assumes the commitment to explore and evolve in other areas (digitalization, differentiation, transformation). In summary, to bet on the business, but without neglecting innovation, because without business there is no present, but the present of tomorrow will require today’s innovation. To use a simile, business is the air and innovation is the food. Without breathing, I won’t survive today, but to live next month, I will have had to eat.
2. In relation to strategy and objectives, what are the main objectives you seek to achieve through innovation initiatives in the company? How does the innovation strategy align with the broader objectives of the organization?
Innovation must be at the forefront of the state of the art in direct business areas, and incorporate elements before the competition to continue making a difference. It is and must be a transversal element, which can be driven by anyone, inside or outside the company. That’s why I met with all the employees of Castrosua and Carsa, so that anyone who wants to can contribute, knows they can contribute, and that their opinion matters. It’s not an empty phrase, just to look good, or for what people will say; it truly matters to me, and that can make a difference. As Di Stefano said, “no one is as good as everyone together.”
Today we know that innovation results are achieved through collaboration and persistence, as various management experts have demonstrated with concepts such as open innovation (H. Chesbrough, 2009), continuous innovation (E. Ries, 2013), and democratic innovation (E. Von Hippel, 2006). Although these aspects are not always known yet. That’s why some associate my work with that of a magician pulling ideas out of a hat, but nothing could be further from the truth. In reality, my job is to help and ensure that others’ ideas become reality. I am more of a manager, a facilitator, than a creator. Which makes sense if you analyze it carefully. I cannot be an expert in everything. I cannot know about technologies (AI, blockchain, IoT, cybersecurity, deep learning…), industrial processes, products (materials, air conditioning systems, electrical wiring, power trains…), marketing, etc. No one is like that. Musk (SpaceX), Hastings (Netflix), Chesky (AirBNB), or Branson (Virgin), who have driven an innovative culture in their companies far above their competitors, are not the ones who provide the ideas, but they support the creativity of their employees. The creative process can arise at any time, anywhere, and from anyone, so it is important that if someone believes they have an idea that allows us to grow competitively, they have the confidence to tell me. I cannot guarantee that it will move forward; for that, its viability must be analyzed, if it fits with the company’s strategy, the ROI, etc., but I can guarantee that I will analyze it and, if viable, I will help make it a reality. And it will always be their idea… I enjoy helping to realize the ideas of others. My reward is not the idea; that belongs to them. Mine is sharing with the rest of the team that it is carried out.
Regarding alignment with the company’s overall strategy, there is a bidirectional flow. On the one hand, the Management Committee defines the strategic verticals for Castrosua, which I always keep in mind, such as the interest in the circular economy or startups in new materials. On the other hand, when I detect an element, process, or technology outside Castrosua that can enhance our offerings, I propose it to the Committee for evaluation, as happened with the AI project. In this way, the company’s strategy and innovation always evolve hand in hand and do not become dissociated. Furthermore, something happens with innovation that does not happen with any other area of work: managing expectations. Innovating is very difficult. It requires courage, competence, and effort, and even then, success is not guaranteed. Precisely because of this, it is highly valued. Hence, innovation allows for reputational gain even when the results are not as expected. This does not happen in finance, marketing, production, etc. Have Apple or Google suffered reputational consequences when some of their innovations have not turned out as expected? No, quite the opposite. Why?
Precisely because the market rewards the intrepid, those who dare to go a step further despite the risk. And this also happens in reverse. The market penalizes companies that do not innovate, that do not take risks, because it knows they are on their way to becoming zombie companies or that, at best, they lack vision, mission, ambition… That said, risk should not be confused with a lack of professionalism or misalignment with the company’s strategy. Both are non-negotiable premises. If they are met, the fruits will come. It is a matter of time.
3. Regarding culture, how do you foster a culture of innovation within the team and throughout the organization? From your perspective, what is the role of leadership in promoting innovation and change?
Culture is the foundation of everything. Without an innovative culture, it is impossible to achieve results, just as without a collaborative culture, it is impossible to work as a team. Perhaps one of the most difficult things in a company is to transform its culture. Not because I say so; there are countless studies from PWC, McKinsey, or EY in this regard. It is something I experienced firsthand in a company, and there was no solution. Because it cannot be imposed; culture only transforms if the majority of employees want it to, and for that, they must truly believe in the advantages of doing so (or in the disadvantages of not doing so, which is more common). It is useless to say, “From now on, we are going to innovate.” Thousands of companies have said that… and have failed. Those that have succeeded have done so from conviction, but beware, that alone is not enough. There is a whole methodology of work behind it that must be worked on.
First, it is a top-down transformation, meaning it must have a firm commitment from the company’s management; without it, it is impossible. Second, we must make everyone at Castrosua aware that, with innovation, we will age better. Companies are living beings. No one lives the same at 10, 20, and 40 years old. Life, nature, is evolution. Keeping everything good and considering how to improve in other areas, that is the key. Third, we must know how to listen and speak. Innovation belongs to everyone; it is a common good of each company, and if we manage to innovate, we will all advance more, and the merit will be shared. Great ideas are rarely individual; that is a myth. So, whoever has an idea, I invite them to share it, for the good of all, starting with their own. I always practice active listening. The idea for the next project can arise at any moment, anywhere, so we must be very attentive.
Regarding the role of leadership, I see it as being in service of the common good. Imposed leadership never works in innovation, especially in today’s world. Perhaps it worked in the ’80s, when society, business models, structures, and interpersonal relationships were different. Today, co-creation projects, collaborations between companies and universities, and even co-financing (crowdfunding and crowdlending, among others) are multiplying to drive developments because we already know that isolated innovation is destined to fail. Bringing this down to Castrosua, everything generally starts with a conversation, either one I initiate by detecting synergies or one where someone contacts me to present an idea. Once certain filters are passed (interest, applicability, strategy…), the development phase begins, a phase where my job is, as I said before, to do everything in my power to ensure that this idea evolves into a reality that adds value to the company. But I neither seek to take ownership of the idea, nor would it make sense. Whoever contributes the idea will always have the merit if that idea reaches its destination and the recognition of everyone, starting with mine. Being creative is an act of bravery because the easy thing is not to take risks.
4. It’s time to talk about challenges and learnings: What have been the biggest challenges you have faced in leading innovation initiatives and how have you addressed them? Can you share any specific actions or achievements in the area of innovation?
Innovation has an intrinsic challenge, as it is born at the frontier of the possible. And so it should be, of course, for it to make sense, because if it were easy or obvious, someone would have already done it. Therefore, to innovate, one must first accept and face that technical, technological, or professional challenge as necessary. However, the biggest challenge concerns people, both individually and collectively. The individual challenge involves accepting that we don’t know things, that we will make mistakes along the way, and that only by learning from them will we reach our goal. It involves consciously understanding that failing is not failing; on the contrary, failing is almost always the beginning of success. The collective challenge involves accepting that no one knows more than everyone and that we can all learn from others. Internalizing that, when working at the frontier of the unknown, we need others more than ever. Which, in turn, converges with the first point. It always costs us more to fail when working with others because we expose ourselves. That’s why in innovation, value judgments are avoided when an error occurs. Failing in innovation is not the issue. The issue is how we are going to face it. André Gide said that to discover new oceans, one must first have the courage to lose sight of the shore, and undoubtedly, that is true.
Regarding actions achieved through Innovation, I highly value the meetings held with the entire staff. It’s not the first time I’ve done it, but never before with almost 500 people. Afterwards, some colleagues have shared ideas, projects, or their interest in what we discussed there with me, some of them very interesting, although they haven’t yielded results yet. I am also particularly excited about the AI project we have promoted at zero cost, as I hope it will serve as a double spearhead. On a technological level, it is a direct application of AI that could differentiate us from the competition. At the very least, it tells the sector that we are a restless company, on the move, concerned with being at the technological forefront. That is empirically good. Furthermore, on a corporate level, it represents a first strategic alliance with a technology startup to grow together, with each company contributing its potential through collaboration and synergies. That is the path undertaken for more than a decade by large and medium-sized companies to face an environment that is changing as exponentially as the current one, and it is impossible for all developments to be internal. Neither Apple nor Tesla achieve this; in fact, they promote the opposite. Open innovation must be the means to face the technological challenges we have in Grupo Castrosua in general and in the digitalization and “servitization” of the bus in particular. Some we will be able to do in-house, but many will come from ad hoc joint ventures with startups and companies in the sector and even from other sectors.
5. Regarding trends and the future, from your position, how do you identify and evaluate emerging trends that could affect our sector? What do you believe will be the main areas of focus for innovation in the coming years?
Mainly with time and patience. One must attend events, participate in forums, talk to many people, knowing that opinions are often contradictory, sometimes due to ignorance, sometimes because the technology is not yet mature enough, and sometimes due to hidden interests behind each option. I remember years ago people in the sector proclaiming that the EV was a chimera, and today they are the first to sell it as the only option for the future. Then there are the official reports from specialized consultants like Gartner or generalists like the Big4. And of course, by being attentive to any idea from within that they want to share with me. As for trends, it is evident that the evolution from selling products to services (MaaS, Mobility as a Service), as I reflect in my latest article (MaaS, the calm before the storm, La Opinión de Zamora), AI, or IoT, which is only a matter of time before it becomes a reality. However, these are not the ones that should concern us the most. The most worrying are usually those that are not seen coming, what are commonly called black swans, although the reality is that there are far fewer than people say, but it is always easier to blame something abstract…
No, in reality, the ones that should most capture our attention are those located at the edge of our ecosystem. Decades ago, innovations that altered a sector came from within and were easier to detect, but today that is no longer necessarily the case. Tesla revolutionized the automotive sector, but Tesla is not a car company; it is a software company; Airbnb revolutionized hotel occupancy, but it does not come from the hotel sector; Apple has merged the watch sector, which had been stagnant for centuries, without needing to hire watchmaking experts, to enter the health and fitness sector; and Starlink offers borderless satellite service for €50/month, threatening all telephone companies in the world, with a bet on a “winners-takes-all” strategy, which we will see if it is successful or not.
What I mean is that I believe many of the advances in mobility in the next two decades will come from importing developments made in other sectors, and that is where we will need to be attentive. We will continue to move, there will still be public transport, but it will be different, and the exciting challenge we have is to anticipate needs so that, in addition to selling the high-quality and customized products that characterize us, we are also identified as a company at the forefront of technology. We are entering an exciting decade; everything will evolve a lot and quickly, and together we have the opportunity to continue growing. I am fully convinced that this will be the case.
