Coca Cola’s investments in startups is the real thing for innovation

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SAN MATEO, CALIF. – Coca-Cola as an incubator for fast-growing startups? It may seem an odd match, but Alan Boehme, chief innovation officer at the $42 billion beverage giant, says it’s a smart move.

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“You can’t innovate in a vacuum, you need to reach out to partners and customers,” Boehme said at the CIO Perspectives conference here this week. “We scan the broad spectrum of trends, and get inspiration from — not trying to solve specific business problems because that is incremental – but where we have to go.”

Boehme is referring to The Bridge, a program Coca-Cola launched globally three years ago. The Bridge selects 10 startups each year that are given the opportunity to leverage Coke’s marketing expertise. On the flip side, The Bridge gives Coke early access to new consumer technologies.

The early results are promising. After three years, The Bridge has spawned 68 pilot programs, 15 license agreements and four global license agreements. Now Boehme, based in Silicon Valley far from Coke’s Atlanta headquarters, is looking to scale it faster.

One way is partnerships. Coke already has a brand partnership with Turner Broadcasting and Mercedes Benz.

“The partnership with Turner and Mercedes has been an unbelievable blessing,” says Boehme. “Turner teaches us a lot about where advertising is headed, how content will be consumed by smartphones and websites. Mercedes brings an unbelievable focus on quality, and Coke brings our marketing expertise so everyone benefits.

The Bridge has also partnered with such tech heavyweights as Amazon, Google and Microsoft.

Some of the services and technologies the startups have produced are things Boehme says the drink giant would never have thought of. This includes augmented reality software that shows a store owner what an endcap (the display at the end of an aisle) product placement will look like.

Another offers some interesting ways to reuse content. For example, Coke is reusing its famous “I’d like to teach the world to sing” commercial in movie theaters with an opportunity for select consumers to be part of the song. Another more practical technology uses video technology to monitor wear on truck tires so they can be replaced before there’s a blowout.

And Boehme says these startups benefit from access to Coke’s resources. “When you’re a 4-, 8, 10-person company looking to support 200 countries across multiple languages, it’s hard to provide that kind of coverage,” he said. “We went from three to 27 countries with augmented reality in three months. Now we want to get to 100 countries in a year.”

CBS Interactive encourages moonshots

Not every company can – or should – invest in startups, but that doesn’t mean you can’t benefit from new ideas. In a later panel on innovation, Stephen Comstock, CIO of CBS Interactive, talked about encouraging discussions of moonshots, big ideas that can potentially take the company to the next level.

“At our company the cultures comes from the top. My CEO is also chief digital officer and fosters the thinking that anyone can contribute,” said Comstock. “We have a suggestion box and regular hack days. The next one is around AI.”

One example was a recent effort to make everything self-service. “When we got out of the way, the ideas that came back were amazing and everyone is participating.

Comstock said it’s important to make everyone feel they can participate rather than “siloize” innovation. That said, he noted that someone has to “herd the cats” so there aren’t crazy projects out there that don’t relate to the company’s mission.

Keep the focus on the needs of the business

“We’d love to focus on innovation for innovation’s sake, but if we did we wouldn’t have jobs. It has to be tied back to business needs,” added Tom Cullen, vice president and CIO at Driscoll’s, the $3.5 billion supplier of fresh berries.

[ Related: CIOs can be chief innovation officers, too ]

For Cullen, working with business partners on moonshots is of interest, but he thinks it’s important to focus on improvements to “the small stuff” when it comes to his company. “Maintain trust with your team and create an environment where they feel they can fail and you have their back,” he said.

Boehme also made an interesting point about how hard it can sometimes be to evaluate whether what appears to be a good idea is worth investing in because so much of its success or failure can be a function of timing.

He recalled Pets.com, which became the poster child for all the high-flying internet firms before the dotcom crash in the early 2000s. But last month PetSmart bought Chewy.com, the leading online retailer of pet supplies (the same idea as Pets.com) for a whopping $3.35 billion.

“We laughed at the sock puppet (the mascot Pets.com featured in its ads), and when Pets.com crashed we all said ‘what a bad idea’,” said Boehme. “The problem wasn’t that it was a bad idea, it was that it was 10-15 years too early.”

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