Traditional companies across all industries must adapt to technological disruption, or face intense competition from others in their market that do so. The array of new technologies emerging from Silicon Valley is driving a fourth industrial revolution from which no traditional business is safe. For legacy companies looking to survive, the way forward is to understand the disruptive innovations coming their way — and to meet them head-on.
The supply chain business is no exception. With its endless variety of packing logistics, transportation needs, and business partnerships, supply chain companies are open on all fronts to disruption from new technologies. The list of emerging trends is long: sustainable sourcing, AI routing, autonomous vehicles (forklifts, trucking caravans, and electric cargo ships alike), flying warehouses, last-mile drone delivery, blockchain tracking of shipments, the Uberization of freight. These technologies and those yet to be invented are impossible for supply chain businesses to ignore.
CHEP — an international supply chain provider operating since WWII — has no intention of ignoring change. In October, executives from CHEP Canada came to Silicon Valley looking for inspiration on how to embrace the tech trends disrupting their business. CHEP came to SVIC with two key learning priorities:
- How can a traditional business position itself to work with Silicon Valley companies?
- How can a traditional business emulate the successful work cultures of big tech companies?
We put together a full-day immersion program for the CHEP executives to shed light on these questions and strategize for the future of their company.
Collaborating with Silicon Valley Startups
There is no “one size fits all” approach when responding to technological disruption. As the CHEP executives heard from our own experts at Silicon Valley Innovation Center, a company’s reaction to outside innovation must be tailored to its business, industry, size, and other factors. Our presenters offered CHEP Canada insights into how a multinational supply chain management organization might effectively transition its business into one dominated by new technologies and business models.
For a company of their breadth and complexity, we recommended investing broadly. By partnering with multiple tech accelerators, incubators, and startups, traditional companies like CHEP can get in on the ground floor of technologies coming to shake up their business — without having to pivot into becoming technology companies themselves. Our experts shared their experience in approaching innovative Silicon Valley startups, choosing the right investments, and incorporating developing tech into existing systems. The CHEP team went from wondering what a “unicorn” is (a privately-held startup valued at over $1 billion) to having a clear perspective on partnering with legendary successes of their own.
Key takeaway from SVIC: for large companies in traditional industries, collaborating with tech startups can be a straightforward, cost-effective way to embrace technological disruption.
Learning to Work Like a Big Tech Company
The blistering growth of Silicon Valley is not due to technology alone. Just as important have been the innovative business practices shaping tech giants and startups alike: lean cultures, rapid development cycles, diverse hiring systems. These new ways of doing business, aided by high tech and a pioneering spirit, are creating some of the most successful companies in the history of the world — and lighting a path for others to follow.
For the second half of their program, the CHEP executives visited Google’s Mountain View headquarters to get an in-depth understanding of the company’s approach to corporate innovation. The group took a tour of the facility with one of the company’s Engineering Directors, who explained that Google’s “pipeline of innovation” starts with its employees. By offering multiple “channels for expression” to its people, no matter where in the company hierarchy they fall, Google is able to maintain a comparatively small workforce of engaged employees whose best ideas will systematically rise to the top. The CHEP group saw some of these channels for expression themselves, like Google’s open, collaborative workspaces and their in-house Google Cafés designed to strengthen bonds between employees and across teams.
Other Google work culture innovations have already transcended the “Googlegeist” (the company’s organization-wide survey taken to solve pain points as they emerge) and hit the zeitgeist at large. The company’s famous “20% time” policy, wherein employees are encouraged to spend 20% of their time working on new projects they believe will benefit the company, has led to the development of now-foundational products like Gmail and AdSense. In fact this policy doesn’t exist in any formal sense: rather, it persists as an idea that permits creative employees to pursue projects they’re passionate about. In this way Google gets its top-tier talent to experiment in a pressure-free and personally rewarding environment. Once these passion projects start to seem viable, the company naturally shifts to developing them more formally — and the cycle of innovation continues.
“People look for meaning in their work. People want to know what’s happening in their environment. People want to have some ability to shape that environment.”
Laszlo Bock, Former Senior Vice President of Google’s People Operations
The CHEP executives took Google’s meaning: a talented workforce is only as effective as a corporate culture allows it to be. For large companies with a lot of employees, that can mean a lot of untapped talent — and the difference between adapting to technological disruption or succumbing to it.
Key takeaway from Google: creating a corporate “innovation culture” starts with empowering employees to engage with the business and experiment with new ideas.
Bringing Physical Business to a Digital World
The myriad trends shaping the future of the supply chain industry — autonomous vehicles, innovations in warehouse design, the emergence of the sharing economy, to name a few — are the disruptions CHEP hopes to embrace by partnering with Silicon Valley startups and emulating the innovative work cultures developed by tech companies. The executives from CHEP Canada used their SVIC program as inspiration for bringing their core business into the digital era. They learned how to start working with startups and how to drive innovation by keeping their employees engaged, motivated, and comfortable with experimentation.
New trends and technology will continue to redefine the supply chain business for years to come. CHEP Canada’s response strategy is to understand those trends and to align themselves with the tech companies creating them. These organizational changes will prime CHEP to adapt without missing a beat and to keep doing what they do best: deliver.
Visit The World’s Leading Innovation Ecosystem
Get inspired by the Silicon Valley ecosystem and see how innovation can happen at speed when startups and corporations work together. On the SVIC Leading Digital Transformation executive immersion program you’ll learn best practices for leveraging new technologies to solve real business challenges.