Behind the Wheel: Embracing Open Innovation through Curiosity

Behind the Wheel: Embracing Open Innovation through Curiosity

May 15, 2024

Interviewed by Nicolas Sauvage on April 18, 2023

With over 35 years of experience in the automotive sector, GM Ventures President Kent Helfrich shared his perspective on the industry’s dynamic landscape with TDK Ventures President and Corporate Venturing Insider host Nicolas Sauvage. Articulating his pivotal role in guiding a team of dedicated professionals, they are passionately working to cultivate top-tier startups within the automotive domain.

Having started in a startup himself, Kent was able to discuss his role with an entrepreneurial mindset, highlighting the benefits of having that experience in the corporate venture world. Over the years, he returned to GM for distinctive roles and found that the immense scope within a large corporation offered diverse career opportunities. Recognizing the importance of constant self-improvement, Kent pursued an MBA to gain broader insights and build a network beyond his technical circles. In his role as Chief Technology Officer, he learned the importance of what to say no to and channeled collective energy toward targeted objectives. Finally, returning to GM and launching GM Ventures, he was able to take this diverse set of skills from his background and begin working towards their goal of becoming “the world’s greatest CVC.”

Equal Win Relationship

At the core of the relationship between an industry giant like GM and a startup, there is a delicate balance that is overseen by the CVC branch. Recognizing the inherent asymmetry between the two, GM Ventures places a premium on ensuring that smaller companies understand their mission: to facilitate their success. In this endeavor, Kent describes a playbook they have created with streamlined processes and standardized agreements. These agreements include technology licensing agreements, strategic partnership pacts, and material evaluation letters, all pre-vetted and approved by GM’s comprehensive legal and financial apparatus. This proactive approach seeks to shield startups from the intimidating complexity of corporate legalese and, instead, provides them with a clear path to collaboration.

The underpinning philosophy behind this mentality is one of trust and radical transparency. GM Ventures not only endeavors to simplify the contractual landscape but also conveys a resounding message: they are steadfastly committed to growing the startup. They aspire to be not just a customer but the startup’s “first and best customer,” establishing a foundation of trust that extends beyond exclusivity clauses. This approach, as Kent suggests, fosters an environment where both sides can thrive and critically recover swiftly from any setbacks.

“From the beginning, you can tell when things don’t go well, that it’s a lot of times due to this asymmetric relationship, and I’ve been on the other side of the relationship from a big company to a small company when I was working at the startup,” explains Kent. “But I’ve also been on the other side of the table from research and ventures, so I understand how the dynamics play out.”

With this understanding, Kent and his team have created a system of equal win, where symmetry of value creation is paramount. This approach, as opposed to the traditional win-win, ensures that both parties not only reap rewards today but continue to do so in the long term. It’s a vision of partnership that transcends individual gains, aiming for a collective ascent, and ultimately, it’s a strategy that lays the foundation for enduring success in the landscape of corporate innovation and entrepreneurship.

The Contrarian View

While this is not the first interviewee to bring up the importance of obtaining a contrarian view, Kent highlighted how this practice is helping his team achieve their ambitious goal of becoming the best CVC. This practice, while rooted in high conviction, sometimes necessitates the development of conviction in viewpoints that diverge from conventional wisdom. The question posed is one of enabling a team to construct and support such contrarian perspectives, even when they may not align with personal beliefs.

“The best way to deal with a counterintuitive or counterfactual argument, or an alternative view to the status quo is to do very fast iterations so that you can have a decision point,” says Kent.

Contrarian investors diverge from the crowd, seeking out investment opportunities that defy conventional wisdom. This approach not only diversifies risk but also uncovers hidden gems that elude the spotlight, leading to sustainable, long-term growth. By steering clear of market bubbles and emphasizing fundamentals over fleeting trends, contrarian investors can identify disruptive technologies that reshape industries and deliver value. Moreover, their ability to scrutinize undervalued assets, backed by thorough due diligence, often results in resilient, well-balanced portfolios.

Open Innovation and Staying Curious

Central to GM’s open innovation philosophy is the amalgamation of internally generated ideas with those from external sources. This approach, rooted in the concept of open innovation, aims to combine these diverse ideas in a crucible, ultimately yielding outcomes greater than the sum of their parts. However, there lies a challenge when established thinking clashes with innovative ideas from startups. The innate human response is often skepticism and search for research on why the status quo is superior. Kent underscores the critical role of intellectual curiosity in this context. Part of promoting this curiosity culture lies in recruitment. He values individuals who are willing to challenge orthodoxies, question their mindsets, and embrace intellectual diversity. In this dynamic environment, diversity is not just about demographic differences but about cultivating a variety of intellectual perspectives. People trained in different fields and schools of thought are essential to transcending the confines of established paradigms.

“Open innovation is an important concept, the basic idea is to take internally generated ideas and externally generated ideas and combine them in a crucible,” says Kent. “Some things get spun out, some things get adopted internally, and some things die of their own accord.”

Kent describes GM Ventures as emphasizing a culture of giving individuals the “grace and space” to evolve their thinking and adapt to new ideas. It’s a culture that encourages individuals to let go of entrenched beliefs and be receptive to fresh perspectives. He emphasizes the need to not just seek the most optimized answer but to find actionable solutions that deliver realized value over time. The key is not to be constrained by the status quo or local maxima but rather to nurture curiosity, pushing GM and GM Ventures to explore further horizons beyond their regular scope.

As the automotive sector continues to evolve, GM Ventures shows no signs of slowing down continuing to pursue their healthy culture of innovation, trust, and empowerment in propelling startups towards a future of boundless possibilities.