Christoph Goppelsroeder is the Chief Executive Officer and President at DSM Nutritional Products. Christoph talks on how a large organization can create the right space for innovation and sustainability. He believes in order to create impactful and disruptive innovation, you must understand precisely what it is that your company lives for.
Innovation and Sustainability, Curiosity, Clean Cows and Organisational DNA with Chris Goppelsroeder
Well, with me today is Christoph Goppelsroeder who is President and CEO of DSM Nutritional Products, which is a five billion dollar business with a long tradition of innovation and sustainability. Thank you and welcome to the Innovation Ecosystem Podcast.
Thank you, Mark.
I think, Chris, if we can start, can you just tell us a little bit about DSM and the role that innovation plays in the business?
DSM is – including affiliated companies – overall about a ten billion dollar company, of which a large part as you mentioned is Nutrition. We produce and sell nutritional ingredients, micronutrients. Those are the ones that really keep you healthy and fit. And we have been doing that for a long period of time. We originally came out of Roche, here in Basel, Switzerland and have seen many acquisitions in the meantime. We are primarily active in animal nutrition & health, human nutrition & health and personal care/cosmetics.
Okay. I guess I would imagine that this is an industry that’s undergoing quite a lot of change.How does the company keep ahead of these trends in terms of innovation and sustainability? As we were saying earlier on, you’ve got a number of assets here with many, many years of physical life ahead of them. How do you more importantly I guess design your long-term plan given the uncertainty of the consumer changes?
The two underlying mega trends that really keep us on our tippy toes so to say are healthy living, innovation and sustainability. Maintaining our health and our appearance over time as best and as long as possible through a healthy diet is our business. , The other one, innovation and sustainability, is currently gaining more and more momentum given also the latest global agreements from Paris known as COP21. For example for animal nutrition & health, a more sustainable animal protein production is key for the future of global meat consumption.
Now, staying ahead of such trends or more practically speaking, understanding the resulting opportunities for us meant we had to do a number of things. First, we had to better understand the business opportunities of our customers and the market segments in which they play. This has to become a priority of our local & global business teams….in addition to their day-to-day jobs. And second, innovation has to become the number one objective for the longer-term development of our business and also the key motivator for people here in the company itself.
But let’s not talk too much theory, but rather look at an example on innovation and sustainability, one that you might find interesting and topical. Internally we call this innovation project “Clean Cow” and it is our likely response to cow burping. Yes, cow burping! When cows burp they emit methane gas, in fact they produce around 15-20% of global methane gas emissions, putting in question the longer term sustainability of meat or animal protein production –
Methane, massive quantities, yes.
Yeah and methane gas is typically a greenhouse gas but in contrast to CO2, it degrades 20-30 times faster. So if we can do something to reduce methane gas emissions, it has a much faster impact on the world than the corresponding CO2 reduction would have, in fact it would already improve the situation for our own children.
Can we do something in terms of DSM?
Yes, we actually might soon be ready to do so. The product we have in development called “Clean Cow” has the potential to reduce those methane gas emissions by 30-50% while at the same time having positive effects on the cow’s weight gain and milk protein content. A miracle in innovation and sustainability you might say, or rather a relentless drive for radical innovation. One that started years ago when impact from agriculture on climate change was less talked about.
This kind of thinking on a long-term sustainability level is not only about innovation and sustainability, it’s about capturing the hearts and minds of current and future employees. It makes a huge difference with the younger generation, but not only them, I guess you and me included.
When you came into this role three years ago or thereabouts, was there anything that you noticed about the culture at DSM when you first arrived?
Oh yes. DSM stands for Dutch State Mines and when you think about our origins in mining, then we certainly came a long way with our today’s business portfolio in life sciences and material sciences. And innovation and sustainability is written all over this journey!
But I guess, when you talk about culture then you also talk about purpose, the company’s DNA so to speak. Not surprisingly given our past in mining, safety of our employees belongs to the core of our DNA, it comes even ahead of our business success.
Another core element of that DSM DNA is micronutrient deficiency of the underprivileged in this world, what we call “hidden hunger”. This care about the third world started already 30-40 years ago, when this business belonged to Roche, the Pharmaceutical giant with HQs just a few kilometers away in Basel. Building on our nutritional expertise, we today partner with the World Food Program or NGO’s to help reduce and hopefully ultimately eradicate micronutrient deficiency that often leads to stunting of children and a broken life thereafter.
Together with the before mentioned strong focus on sustainability, this makes it a trio of core aspects of our DSM DNA, one that is lived by our company CEO, Feike Sijbesma and many others including myself.
Okay, so in time that you’ve been in the role, what have you done as the leader of this business? How many people are in the business?
How do you sustain this innovation and sustainability DNA and I suppose more specifically, are there certain things that you’ve been trying to change about the culture to make it better oriented towards some of these mega trends that you referred to earlier on?
I think everyone has a different way of driving radical innovation and sustainability in a company, so there’s no good or bad, it’s just a question of style, personal style. I’m a very curious person, so I’m very interested in both, potential new market opportunities as well as the technologies that might bring us closer to a solution. In other words, I like to keep my feet on the ground or sometimes even in the mud if necessary.
Okay. How do you do that?
It’s not rocket science as you know. I talk to many people inside and outside of DSM during my visits around the world, which results in a tremendous amount of input. We then discuss this and other input in topic related and always cross functional meetings, eg involving not only R&D but also the business here in HQs and locally, to better grasp our innovation opportunities. That is particularly important when it comes to global, radical innovation and less so for local incremental improvements within the day-to-day business.
In my view, as the CEO you need to be involved in radical innovation, as these tend to be big bets that determine your future and the underlying programs are very costly and resource intensive. I therefore don’t think you can delegate those large bets or risks, in other words they often tend to become “Chefsache” as the Germans say.
Besides the “Clean Cow” project we discussed earlier, are there any other examples of radical innovation and sustainability or prospective disruption that you’ve actually noticed and have enabled your organization to explore and put in place a strategy to confront it or to manage it? Is there anything that we can talk about that is in the public domain? I’m curious I guess to understand that that’s a very, very important point, is to the extent to which you as the leader of the organization actually co-own it and everyone understands that because in many organizations as you rightly imply, it gets pushed down and down and it’s someone else’s job and nothing really happens. You get incremental and you also get the fear of failure associated with thinking, “I’m going to be held accountable if this doesn’t work,” and clearly most organizations carry a significant risk.
I believe that the particular approach to risk taking is to a certain extent part of the company culture. Whether the CEO is involved and takes ownership or how he or the organization treats people when things go wrong has enormous impact on whether people stick their neck out in future.
Another example of radical innovation and sustainability that we started over the last years is linked to fish feed, especially for salmon. Given the enormous popularity of this fish with consumers, which is also related to its healthy omega-3 fatty acid content, salmon are more and more farmed in big quantities in the ocean rather then caught in rivers naturally. But farmed salmon need to be fed tons of small omega-3 rich fish to get to similar levels as the salmon living in nature.
Unfortunately, an ever more appearing El Nino (warm current in the ocean) is gradually reducing the seasonal catch of such small omega rich fish and the industry is scrambling for alternatives. We are far advanced in being able to provide a nature-identical solution from a sustainable source, like we were some 30 years ago when we succeeded in coming up with a sustainable solution for pigmentation. The investment needs are very high, though, another reason to be intimately involved myself.
From your view, it changes your role radically?
Oh yeah, it changes it radically.
Presumably that of some of your team members as well?
If we can switch gears a little bit, in terms of how you lead your team, when we worked together, in a previous organization, I was always impressed by how you were able to create the space for the right kind of conversations on innovation and sustainability to happen in your leadership team. I’m interested in any advice you have for people who are trying to encourage their team to be more innovative, to be more creative, to be more agile? How do you go about it? How do you create this space for these conversations to happen, to embrace the unknown? Any tips that you can give or any lessons that you’ve learned as to how not to do it?
I think in the end what I can say here is less about advice and again more about style. Everybody in this organization knows that I’m hugely interested in the “new” and that innovation captures my mind and if you come to me with something interesting I will listen no matter which part of the day it is. Also, I strive not to have an agenda that is completely full, because that allows me to be flexible and quickly include these mental excursions that I sometimes need to understand potential innovation opportunities better.
When you say talking to people, you mentioned to me the other day that it’s very unlikely that you’d have all the right people round the table at the same time that will come from the organization. In other words, the importance of collaborating with third parties was key for the organization. How do you think about external collaborations and co-creation with different stakeholders? How do you make yourself easy to do business with as a company but also how do you reach out to potential collaboration partners and identify them?
I think that’s a very important element and I think it’s very clear that size of a company does not matter that much, it’s speed of a company that matters. And speed comes from having the right capabilities at the right time in the right quantity available. The likelihood that you have those ideal resources available in-house at the time you need them is close to zero.
Obviously good partnerships in our industries start with a clear distribution of the ownership of the relevant IP? Let’s assume the IP is settled in the right way, then I found that collaborating can be extremely beneficial. But collaborations are not a spreadsheet or a NPV. They are built up of trusting relationships between two organizations on different levels, starting at the top and including all the different key leaders within the project. These relationships need to be good and we often call this the cultural fit. The cultural fit can make a project fly or kill it even if you have the best set up, the best technology.
And then there is the mentality which is important: we in Europe often see the glass half-empty, while other regions like the US see it more half-full or again others like Brazil even see it overflowing! A certain passion and can-do mentality can be a tremendous energy behind a joint project.
Just wrapping this up, what advice would you give your 25 year old self?
A great question to ask a fifty-something person like me! I’m curious. I started as a civil engineer and I’m now in a totally different sector. It was not a plan. It was a happening. I think letting go of the plan and rather decide by what happens and see what interests you, would still be high on my list.
What matters is if you have the heart for it, if you have the mind for it, if you have the passion for it. By the way, my kids are getting to that age. They are not yet 25. They are younger but we never discuss what I would do. The topic is always, “where is their passion?” It’s the only thing that counts. I don’t know if that resonates with you?
Yeah, it resonates with me and it also resonates with some of the people I’ve interviewed earlier on for this show. I mean, it’s a very consistent message or a theme coming out of that question when I ask it, so excellent. Final question, where can people get in touch with you and we can include for instance your LinkedIn profile in the show notes. Is that the best …
That is certainly the best once I have cleaned it up a bit.
Chris, this has been a great pleasure talking to you today. I really enjoyed our talk on innovation and sustainability as I’m sure our listeners will and thanks very much for your time.
Thank you Mark. It was certainly a roller-coaster through all your questions. Thank you very much Mark.
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