Corporate Innovation Community Member Spotlight: Telefónica’s Miguel Arias Bermudez

Miguel Arias Bermudez is Global Entrepreneurship Director at the telco giant Telefónica. The role is his first corporate gig.

That’s not to say he is inexperienced; anything but, in fact. Arias comes to Corporate innovation from the world of startups. A member of the Whitespace Corporate Innovation Community, he has been an entrepreneur across his professional life and frequently engaged with open innovation from the other side of the Corporate-startup relationship. That’s something that has given him a distinct and fascinating perspective on the intricacies of contemporary innovation. As such, Whitespace caught up with Arias to talk about bidirectional innovation, ‘human APIs’ and his reading of ‘innovation poetry’.

Whitespace: How do you feel your background as an entrepreneur has informed your approach to Corporate innovation and open collaboration?

Arias: You know, I was a business operator my whole life, so I’ve already tried to be super hands-on now I am working with these startups. That resonates very much working with startups now; I can see what issues they’re having because I have had those issues. But while I might have that empathy and ability to understand them, that’s almost impossible to deliver at scale, right?

I have 500 hundred startups that have active in our portfolio at the moment. So I’m learning to be a bit less hands on. But what I do think is the biggest advantage [of my past experience] is that I do understand the pain these startups feel. I know because I tried to work with Corporates in my past, or was actually dealing with Telefónica myself so many times in the past. So I can help our startups to overcome the hurdles I have overcome. I think that’s an amazing advantage because you are seen as trustworthy while within the ecosystem. And that’s very important. What I’m lacking is enough understanding of the many levels you have in a corporation. But I’m going to learn. I’m learning on the go; that is innovation.

Whitespace: How do you – or Telefónica – frame or understand what ‘open innovation’ means? It can, after all, mean different things to different Corporations.

Arias: Ah – ‘innovation poetry’, right? There are so many terms in corporate innovation and so many meanings. I love the overall definition that I saw that said ‘innovation is invention plus commercialisation’. That’s important, I think. I mean the ideas – or just innovation as a concept – doesn’t work out if it has no place in the market.

So for me ‘open innovation’ is about asking how you bring in inventions that come from outside your Corporation and are able to commercialise them jointly or use them internally to achieve operational efficiencies. That’s a pretty important point for us; we try to bring in the products and services from the startups, and our main goal is to do joint business development with them. This is probably a bit different from other Corporate innovators, but we have a very strong business focus after all these years.

In the beginning [our innovation effort] was more about fostering ecosystems. It was also a bit about positioning. Now it’s really about revenues. That’s either because we are able to generate new revenues or because we are generating efficiencies and cost savings, because we have been more innovative. But still, open innovation is a lot about bringing things from the outside for us. Innovation is bidirectional, so we try to find innovators external to our corporation, and also bring innovation from the inside outwards. We’re opening our digital platforms to entrepreneurs. We are opening our IOT platform through our wider IOT activation program. We are also opening our blockchain platform to the wider blockchain startups ecosystem. So we try to expose our own technologies to startups and entrepreneurs so they continue to be used in innovative ways.

Whitespace: The idea of considering innovation as a bidirectional process is fascinating. How has that mindset or approach served Telefónica’s innovation efforts?

Arias: The advantages are two-fold. I mean, scale ups can become users. We give them easy access credits, training and so on. So when they grow they will become bigger customers because they will scale well. Or some of them, at least, will scale. So that is an advantage from a business perspective.

Secondly, there are tremendous learnings around looking at innovation in that way, because we’re looking at platforms just in development. It is hard to get feedback from people who use those things on the edge; on the edge of the abilities of technology. So it’s very important we innovate openly, with that bidirectional movement. Then we can create working use cases we can then offer to our customers. A lot of what we do is trying to then bring this stuff on – using IOT or blockchain, perhaps – to sell polished products to our own customers.

Whitespace: Those in Corporate innovation often talk about that idea of innovation spreading through the culture of a corporation. What is your perspective on fostering internal innovation, and engaging the company and company culture beyond the silos that innovation departments can be?

Arias: Let me first be clear about one thing. Innovation can happen all around a company, it would be impossible for an innovation team to claim that they are behind every innovation. Our global innovation team may be a few hundred people across the globe. And we have 120,000 employees. Innovation happens within the network team, the data team, it happens in the legal team, it can happen anywhere. Our innovation teams can innovate for the company, though; or support that more natural internal innovation.

We take a transverse approach, and we act as the interface with startups for the whole company, for global business units, and for our local units. But we are also very visible as a project internally and externally, and I think seeing that can help change culture, or encourage people to think about innovation. In fact, we created a group of stakeholders called the ‘innovation shapers’, and we try to influence the people within the company that are keener to do innovation to work with us internally and externally.

Whitespace: You mention interfacing with start-ups. It would be good to hear about Wayra, which is described as a ‘global interface’. Wayra is a Telefónica subsidiary focused on providing seed investment and mentoring to new companies. How does that couple with Telefónica’s open innovation efforts?

Arias: You can think of it as a translator; a translator between two different systems or worlds that don’t always understand each other so well. Startups and Corporations are very different things, of course. I see Wayra as something like ‘an API of people’ that connects those two different systems. It can be an interface program and make those different systems work well together. Really, Wayra focuses there in three ways.

There are people. We will sometimes need to ask people to be motivated to take risks, aligned with KPIs and initiatives, of course, and empowered to work in startups. And there are processes. We need the easiest constructs in procurement, in legal, etcetera, so that projects are not killed from the middle.

And the third one is that – since we are talking about revenues and business – we need to be able to work at scale, and that means things like productisation, adding companies in the portfolio and selling to thousands of customers, which again means post-sales has some activation, churn and control.

To learn more about Telefónica and Wayra, visit telefonica.com.