Intrapreneurship at Pernod-Ricard: test and learn in action

Astrid Froment created Kangaroo Fund, an open innovation Fund for the 18,000 Pernod Ricard Employees, and an intrapreneurship program adopting experimentation & lean Start Up. In 2 seasons, it generated more than 250 ideas, 20 finalists, and 10 ideas incubated… She shares with us this exciting story.

Following my article on “Dare to be difference makers”, I have seen a lot of interest in my experience building from scratch an “Intrapreneurship” program. Boosting entrepreneurship in the corporate world, I have run a structure to accelerate the development of new ideas and people behind it for 4 years. Along the journey, I have learnt there is no “true” recipe, but you can apply few principles to increase chances of success…

Revive your entrepreneurial spirit

Getting Entrepreneurship as part of its DNA, Pernod Ricard embarked quite early in this journey in comparison with other CAC 40 companies. In March 2012, my top management gave me the challenge to give life to an Innovation Fund called “Kangaroo Fund”, such a challenging name! My first move has been to transform this constraint into a strength. I discovered that this is an animal not capable of moving backwards, and of course it nurtures its little ones for a while, and moves forward in leaps. It’s a good analogy when it comes to Innovation ways of working, made of a strong ambition with step-by-step progress. I had three months to launch the fund among our 18 000+ employees from any functions and any affiliates around the world.

The program has been launched just before summer with a strong internal communication campaign. I have used my marketing background to build K Fund, it’s nick name, as a brand by establishing an emotional connection with employees across different cultures. With a design agency, we created a character looking like the “shaddocks” to embody the fund main motto: “Everyone Kan-Do”! It was very powerful, lowering the barriers for people in my company to participate.

To enter the fund, people just had to send a 1-minute video. The call for ideas was very simple, it was all about any new offers with a real added value to our consumers: new products, services, or experiences. We received 147 projects from all over the world, engaging employees from very different backgrounds. 66% of the ideas came from Marketing, but also many ideas came from Finance, Legal, R&D, Commercial, HR… Season 1 kick off released a lot of positive energy: “Entrepreneurship is alive and kicking in Pernod Ricard”!

Not being aware of the full challenge at that stage, I built K Fund step-by-step. No need to build big machinery not knowing where we would end up, plus I was the only resource behind it. Developing this initiative from scratch, I have realized the true meaning of Entrepreneurial Spirit: a mindset that embraces critical questioning, followed by quick actions, and continuous improvements. It’s an approach to actively seeking positive change rather than waiting to adapt to change.

Unlock ideas’ value with several leaps

Getting an idea is a great eureka moment but it quickly needs to be tested against reality and to resonate with consumers on the field. People behind the ideas must test usage at a very early stage. Inspired by Lean Startup from Eric Ries and with the precious advice from @Tobias Rooney, an external partner, I wrote a methodology adapted to Pernod Ricard culture. It’s made of several leaps to select ideas and project owners behind it with most potential. Let’s see how it works…

An idea on its own is difficult to assess. That is why K Fund went for a call for ideas limited in time. It mobilizes energies on a regular basis, and it enables the capture of small signals from the field, highlighting emerging consumer’s needs. After the call for ideas, a jury made of internal and external people, selects the top 50 ideas addressing Pernod Ricard strategic vision at the time, and chooses also a balanced portfolio of ideas with a different level of disruption.

Leap 1 / “Why people would love my idea?” This phase enables the participants to understand where the value comes from, the pains and the gains for consumers, the Unique Value Proposition. What’s new & different? What’s the real benefit for people? The idea owners share their new offer already with few colleagues, friends and family, talk with experts to enrich it and understand their idea’s full potential. It takes 1 month and a couple of hundred euros to come up with an initial unique value proposition.

Leap 2 / “Why people would buy my idea?” It is all about validating a usage, Consumer Traction. This phase digs into understanding who the early adopters are, people buying first the idea, when and where these people would buy the offer. The top 10 ideas selected at this stage get access to a workshop to meet up with some startups, to embrace a build/measure/learn mindset! Project owners work on it alongside their day to day job. Leap 2 lasts three months to focus only on what truly matters. It gives enough time to build a minimum viable offer (product or service), a first realistic version of their idea using a couple of thousand euros, to experiment in market.

Leap 3 / “How to make money with my idea long term?” The top 3 ideas enter a phase to dig into the offer/market fit, and to understand how to build new revenue streams. It’s all about Business Stickiness…. The project owners must break silos to get access to expertise they do not have yet. They put together a team made of internal experts from other business units and external partners to explore a new value chain: everything from procurement to new production techniques, from exploring new route to markets to engaging with customer/consumers in a different way… also considering all legal and fiscal implications. Developing a new business is challenging! This phase starts with a boot camp to acquire new capabilities such as Business Models Experimentation. It lasts 6 to 9 months to get enough time to understand repurchase, key for a sustainable new business. At this stage, a burn rate is agreed every 3 months, and official time from business unit is allocated project by project.

In September 14, we launched K Fund Season 2, receiving again around 150 ideas. As I gathered an enormous amount of learning from Season 1, I made K Fund Season 2 evolve accordingly. The K Fund methodology has been iterated along the journey and has become the foundation of Pernod Ricard Innovation ways of working. It has also accelerated the adoption of agile capabilities within the group.

After the 3rd leap begins the real challenge! In 2015 I built an internal Start Up to incubate the top ideas in market at a small scale…

Selecting ideas with potential is not the most important

What makes a difference is identifying and accompanying people with the qualities to make it happen. Anyone can have good ideas, many new ideas are surrounding us, the strength comes from transforming those ideas into sustainable business value.

As you do not become an innovator overnight… Project owners need support to enrich their expertise, to learn about business model canvas tools, and to boost their leaderships skills. Like a start up CEO, they need to pitch and to prepare their ideas for business investment. Coaching is critical. Time and money behind it should not be underestimated. Training organized at different stages of the idea development are highly valuable. These gatherings are in a way a first official recognition from the corporate entity. It also enables evaluation of the project owner’s qualities, to challenge their thinking, and maintain the right level of energy at every step of the idea development.

Mobilizing a community to accelerate the idea’s development is key at every phase. Every K Fund event has been filmed to transmit stories to the core business on their journey. It gives visibility and credit to the participants. It has also been a good way to mobilize people with expertise in the group, to tap into our collective intelligence, a strong corporate unfair competitive advantage. In 2016, our Innovation community reached 1,000 employees on our Enterprise Social Network, and became a real asset.

Identifying people with entrepreneurship qualities is unfortunately not enough… I have underestimated the difficulty to assess new disruptive ideas, the temptation to judge it through the lens of the core business when it should be challenged with a new business model in mind. Some Corporate Leaders need to be coached to become Corporate Business Angels to facilitate decision making, to agree on burn rates, to lower the barriers in the core business when necessary.

To conclude, many questions remain open on THE recipe for success of an entrepreneurship program in the corporate world. If I had an opportunity to do it again, I would keep the entrepreneurial mindset and key methodology principles of the KFund journey, but there are a few things I would do differently.

1 / Be specific on the call for ideas / I would start first to clarify the scope. I would deep dive into the Pernod Ricard Value Chain, to understand where there are frictions, and find out how we could generate new revenue streams. I would then make a call for ideas around these areas. Entrepreneurial initiatives are a way to create value, to build potential growth options for the future…

2 / Get Operational Sponsors / Then I would only experiment on new business model ideas addressing critical challenges for our Business Units to obtain sponsorship from the field from day one. I would then make sure we have some corporate business angels to facilitate decisions making and agree on burn rates on a regular basis to keep momentum…

3 / Recognize Talents / I would go further than freeing intrapreneurs’ time from the core business. I would try to find ways to better value these people with HR departments, as it is a real pool of talent for corporate entities. Entrepreneurial capabilities shall be valued in their carrier’s path. It is such an asset for corporate to get skilled people that can quickly adapt to the change our industries go through, with capabilities to transform ideas into new business value while consuming the least time & fewest resources…

You need to be passionate to move ideas forward, passion drives engagement and actions. Passion also makes it an emotional journey… Several sponsors are necessary to accompany corporate entrepreneurs during this bumpy road, to show empathy and to support people through the unavoidable periods of trial, doubt, and struggle.

Go for it, make your own experience…

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Nicolas Bry is Orange Startups Studio COO. He entices Orange employees into becoming intrapreneurs, bringing their idea to life within Orange business. International executive, he sets-up innovation devices for new business. International speaker, writer with RapidInnovation.fr, guest lecturer at the Google Academy mini-MBA, visiting innovation professor at Telecom ParisTech, MediaSchool & EM Lyon, freelance consultant for the EC. Follow him at @nicobry.