No sustainable business without innovation.
Antoine Frérot, CEO of the Veolia Group, continually reminds us that “opening the way, making a mark, being one step ahead, creative, and bold, and taking the risk of novelty is the role of a world leader that wants to be the benchmark in its industry.”
Technological advances are the first things that come to mind when beginning this journey to innovation and change, but innovation does not just concern machines: innovation also affects business models, governance and our people. At Veolia, what began as a simple yet vital need for clean drinking water for all grew into creating wastewater treatment solutions, then developing facilities that produce energy and can extract nutrients to be used in farming from wastewater: showing that the Group’s history can be told through its 165 years of innovation.
Veolia wants to pave this continuously renewed path leading to a world that not only respects nature but also creates wealth: the Group continues to pursue links between established activities – such as water access, and emerging activities that will be crucial issues for the health of the planet in the future – like air quality, issues that need strengthened solutions for the benefit of as many people as possible.
Innovation or the ability to turn constraints into opportunities
Any conditions can foster innovation. Firstly, regulations impose new requirements by enforcing environmental obligations on businesses and local authorities. Customer demand also provides a rich source to foster innovation. Social pressures to meet community expectations drive companies like Veolia to design services that alleviate impacts. Finally, climatic and demographic changes, and more generally, environmental constraints are becoming increasingly important, revealing the crucial need for alternative environmental services, such as wastewater recycling in the Middle East or Asia. All these circumstances require businesses to adapt, evolve, anticipate... and, in short, innovate.
Jean-Christophe Taret, Head of Corporate Strategy at Veolia
“For each activity, we ask ourselves, ‘How can we go further to anticipate customer needs and market trends?’ We need to be agile, keep on the lookout for new ideas to keep ahead of the competition. Whatever the activity, innovation is part of strategic thinking.”
Established markets, a regional mindset, and new business models
Innovation at Veolia aims to meet the needs of the Group’s markets and propose solutions where new issues emerge. In a Group where businesses are at different stages of maturity from one region to another or one industry to another, innovation is created on a caseby- case basis.
An example of this is energy recovery from waste, a mature business for Veolia: “We are more in a regional mindset,” states Jean-Christophe Taret, Head of Corporate Strategy at Veolia. “The waste treatment needs of what used to be one large customer has become many customers. For this to work commercially, we must have an innovative approach to markets or contractual models with customers (see Frontline Rookery South). In this complex ecosystem, Veolia intends to play a key waste management stakeholder role, with all this entails in terms of the design and financing of recycling facilities, the search for waste feedstocks upstream – via digital platforms – and downstream opportunities for recycled products.”
In the spirit of asset pooling, which is a major trend in industries that outsource ever more environmental services, Veolia is developing more operational efficiency projects with assets designed for several customers rather than one facility per customer: a new business model that combines technical performance with economic productivity. For example, in Indonesia, Veolia is building a plant primarily intended for Danone’s recycled plastic needs. However, Danone will not make full use of the recycled food-grade plastic that the plant will produce. Therefore, Veolia needs to find other customers to sell the surplus. “We will own the plant and, as such, we are taking the industrial risk,” explains Jean-Christophe Taret. “We are responsible for sourcing the volumes of plastic to be processed and finding customers for our recycled plastic.”
Similarly, in the historical water market, Veolia has gained the competitive edge through contractual innovation. For example, in Nîmes (France), the Group has won a contract partly thanks to a mode of governance where all the stakeholders (local authorities, consumer associations) are not just involved but also make decisions. Veolia is also developing social innovation in the water sector (Boosting the local social economy).
To meet climate change and economic sobriety issues, some hot topics need quick deployment. One solution Veolia offers is an innovative digital technology service, called Hubgrade, to monitor and manage energy consumption. Hubgrade is a 4.0 platform that identifies energy consumption anomalies for real-time response. With almost thirty Hubgrade centers worldwide, the Group plans to expand this solution and create synergies between its activities.
Similarly, Veolia provides novel solutions and original business models in its new indoor air quality offering and use of waste heat from wastewater networks. Veolia targets the most promising topics and encourages the sharing of existing facilities and cross-fertilization between the head office and business units, between the business units themselves, and outside the company through open innovation to ensure that these new areas of development become sustainable solutions.
Instill a culture of innovation
Encouraging employees to share their ideas helps instill a culture of innovation within the Group: implementing a reward system for those who put forward and develop innovations fosters this culture. To be bold, we need to accept failure and know when to stop.
“Behind technical, economic, or social innovation, there is always managerial innovation,” emphasizes Jean- Christophe Taret. “We need to give all hierarchical levels an opportunity to speak out so that all ideas are expressed.”
Incremental, gradual, locally developed innovation is widespread. The sum of all these small improvements has a big impact. When the process is successful, the challenge is to extend innovation to the whole group, worldwide.
“An innovation that works is developed through a preliminary collective selection of good ideas, then co-worked with the various operational entities involved, both participating from the beginning in the design of the offering and the business model,” explains Jean-Christophe Taret.
“We are always at the service of the business units, to meet their innovation needs,” adds Christophe Nebon, Technical and Performance Director in charge of Veolia’s Research & Innovation department.
Veolia is increasingly developing these innovations with its stakeholders, whether customers, employees or startups.
“Co-development is always the aim: we create an innovation with our partners and customers, which is then replicated and adapted for each customer,” says Jean- Christophe Taret.