Capital Magazine Feature Story (Interview with Bilal Kaafarani)

INNOVATION GURU’S “YILDIZ” DREAM 


One of the world’s “25 innovation experts”, Bilal Kaafarani will now determine the course of  innovation for Turkey’s food giant Yıldız Holding. Kaafarani spoke to Capital for the first time.

  

“My dream is to make Yıldız the company that earns money with the most diverse products”


THE INNOVATİON GURU‘S “YILDIZ” DREAM


BILAL KAAFARANI, who up to now has given direction to innovations for P&G, Kraft, Frito Lay and Coca Cola, is now hard at work with Yıldız Holding.  Kaafarani intends to diversify the group’s product portfolio as a start, while also he is preparing to introduce new categories that have yet to be seen. He defines his goal as to turn the company into the Yıldız of my dreams by transforming it into one that earns money with the most diverse products. “Hopefully, within 5 years it will be a more powerful, much more internationally-oriented organization,” he said.


Speaking of innovation, he is one of the few names come to mind…. P&G, Kraft, Frito Lay and Coca Cola are some of the companies where he has worked as a global innovation manager. Under his guidance, in 2009 Coca Cola was recognized as one of the 25 most innovative companies in history for the first time.


This is Bilal Kaafarani who is known throughout the world today as an “innovation guru”. He is the person responsible for many revolutionary and innovative breakthroughs of a number of giant corporations. And now he will determine the path of innovation for the food giant Yildiz Holding. 

 

As soon as he began his duties with Yildiz Holding 4 months ago, he conducted a thorough analysis of all the details and current states of all the group’s companies, and he says “Now I know where we are headed.” He arranged what he had to do: “I have two basic points of responsibility.  The first thing we must do is to diversify the main products in our product portfolio, keeping in mind the tastes of the consumer and the product’s potential to earn money. The other thing that I must do is to find products which we can use to enter into new categories and to create new business. There are two ways to do this.  The first is through acquisition and the other is by creating new business sectors.”  


Yildiz Holding Global Innovation and R&D Group President Bilal Kaafarani told his view of innovation and what he has planned for Yildiz Holding to Capital:


First of all, could you please tell us about yourself?

I have worked with P&G, Kraft, Frito Lay and Coca Cola, which were all good experiences for me because they taught me how I have to think and how to establish communications correctly. At Kraft, I gained experience working with their very unusual units and teams.  PepsiCo is a company that is more result-oriented.  As Coca Cola’s Senior Vice President of Global Innovation and Technology, my duties took on a more global nature. I worked with some very interesting people. We produced a lot of beverages. I established very effective teams and administrative centers. During that time I also made mistakes, but I learned from them. 


How did you come to be at Yildiz Holding?

My familiarity with Yildiz Holding began to develop because I had decided to write a book. I wrote a book in collaboration with Korn Ferry Vice President Jane Stephenson called “Breaking Away”, in which I shared my knowledge and some of my experiences. 


During research for the book, we visited 150 senior managers and executives.  We wanted to concentrate on the question “What type of leader is needed for innovation to flourish.” One of the 150 CEO’s that we interviewed was Murat Ülker. We had a wonderfully comfortable conversation and were impressed with each other.  

Murat is a powerful and intelligent entrepreneur with a huge product portfolio. He has been involved in many impressive achievements. I was really electrified by his vision.


Apart from those factors, one of the reasons I agreed to work here is to be nearer to my parents who live in Lebanon. When I got the offer from Murat Ülker, I thought, “It would be a dream to work for Ülker and Murat.”


Kaafarani’s 10 Basic Steps for Revolutionary Change


  1. First we introduced strategy. We determined how the innovation team would be structured.
  2. Some of the team would be from inside and some would be from outside the company. We know which vacuums exist while skills are being developed, we fill those gaps.
  3. We will increase diversity as we follow the path of innovation. To increase diversity, we will search universities and find people who create new value.
  4. We will ensure that the main products we manufacture remain competitive.
  5. We will diversify our product portfolio. We will concentrate on products in the food sector that are more sustainable. 
  6. We will expand into other existing categories and enter new businesses.
  7. We will do this by creating new business sectors and acquiring existing businesses.  We are currently researching these ideas. 
  8. We have been concentrating more on goods.  We are working on nutritional products and snack foods.
  9. We will develop a network outside of the country.  In this way, the procedures will take less time if we decide to acquire foreign brand names or companies.  
  10. I want to see us as a leading player in the global market and to be one of the world’s most innovative companies. 


I have a mission here. We will manufacture more diverse and sustainable products. We will enter existing categories that we have never broken into. All of these possibilities make Yildiz Holding a very attractive company. 


What impressed you most about the vision of Murat Ülker?

Murat is an open-minded man who is always trying to learn new things. He isn’t afraid to admit when he is wrong.  He is the person who built all of this. Now he wants to go further.


How are your adaptation to Turkey and your new company going? 

It’s been 4 months and I’m already used to my new life. My family loves it here. From a professional standpoint, I’m still in the learning stage. I have made a list and paid visits to many people who are in the same market sector. I have held meetings with the marketing team.


Murat Ülker asked me to examine the innovation procedures and all the other business processes. I have only been limited by the R&D and technical subjects. I have had a look at the marketing, distribution, sales departments and various partners. That helped me to understand the dynamics of the group. 


I’m not sure where we go next.  I am prepared for what I have to do. I understood the business and its culture and how quickly we can proceed. Speed is crucial. If you go too fast, you might create frustration.  You have to find the perfect tempo. That is a significant challenge for this management. Keeping current, being sure that everyone is on the same page and getting the product right are very important elements. 


Exactly what are your duties at Yildiz Holding?

Basically, I have two responsibilities.The first thing we must do is to diversify the main products in our product portfolio, keeping in mind the tastes of the consumer and the product’s potential to earn money.The other thing that I must do is to find products which we can use to enter into new categories and to create new business. There are two ways to do this.  The first is through acquisition and the other is by creating new business sectors.


While maintaining our core businesses, we will add new products. We are very lucky because we have a company to help us, Gözde Financial Services. We could use this company to purchase technology that the company needs.  Most importantly, we will develop an out-of-country network to make sure that we can act quickly and not lose opportunities to acquire what we need.


What about the budget?

Unlimited. We have no limit for this matter.


Can you give us some details about the innovation room that you have established at Yildiz Holding? What is being done in this room?


Will there be more acquisitions?


You said that you wanted to get into new fields; what are they?

We are concentrating on foods at this time. We are working on nutritional products and snack foods. 


Will you be merging with or purchasing other companies?

It’s quite likely. Right now, all we are doing is looking around for what would be good for us. By forming partnerships, we would benefit from some of the features of other companies. The most critical point about innovation is to understand what you are good at, what you can bring to the negotiating table and what your weaknesses are. We know what a good partner is and what it can bring to the table.  

   

There is an innovations room right next to my office. It’s a comfortable room with flowers. I particularly want you to know that I am not here to change the company or its culture, only to make better structures from what we already have.

On the wall of the innovations room is a picture of a bridge. It is a symbol that represents the wonderful things we have done so far and our entry into new territory.  We will build a wonderful new company on the existing company.  There is water beneath the bridge, so we have to proceed over it carefully. This is what I am trying to do here. 


How will you persuade the people you are with to change their outlooks and create a culture of innovation?  

It’s a journey. Yildiz Holding is first of all an operational innovation company. This means that the company produces goods of the highest quality and offers them at the lowest possible prices. They always do that.


We call that operational innovation. That is the reason that Yildiz Holding has grown into the popular company that is loved by its customers today.   Where do we go from here? The place we need to go is the place where our fate leads us. When we get there we will reach more customers. What we have accomplished up to now is magnificent. But now, we have to take another leap forward.  That is why there is a picture of a bridge in the innovations room.


Which products will you and Yildiz Holding be especially enthusiastic about in the future? Are there some products and categories that are going to be abandoned? 

We’re successful here and we’re going international.  However, some cases will be dealt with at the local level. This is because many people have a discerning palate when it comes to what they eat. Even huge companies have to cater to local tastes. If you ask me, when writing a success story, you have to first of all display a good performance on an international level.   We are expanding now to become global.  We are going into China, the Middle East and Africa… but on the other hand, we have to look at the gaps in the foods sector that need to be filled.  There are groups of people who have very different levels of income in Turkey. In some regions, people eat only our food products. We want to be sure that the nutritional quality of our products is suitable for such people. We have to bear consider the fields we are in and demographics when we produce new foods or enter new categories. 


Have you determined which those products will be? 

Not yet but we are in the process. 


What do you think of Yildiz Holding’s performance as an innovator prior to your participation? 

I think Yildiz Holding has been very innovative, because the company displays both operational and marketing innovation.  You can see how successful that was by looking at the financial results, revenue and growth rate of the group. Its marketing innovation when you add peanuts to chocolate. Turks love it.

They make a variety of soups and dairy products. People know us mainly as a chocolate and cookie manufacturer, but there are some very important marketing opportunities out there.  We can use that information to make more nutritious products. 


The most important secret of successful innovation


WHO SHOULD BE THE LEADER? When a Company’s CEO or Chairman of the Board does not have a culture of innovation or an understanding of the importance of innovation, it is the worst thing that can happen to the company. The most important secret to the success of a company is to have a CEO or Chairman who opens the way for innovation. 


DON’T BLAME THEM FOR THEIR MISTAKES My advice to any Turkish company that wants to focus on innovation is to encourage members of upper management to foster a culture of learning, and not to blame anyone else for their mistakes. It’s important to know your customers, competitors, and the region where you do business. Introduce and encourage new ways of thinking. Get help from people both inside and outside your company to achieve your goals. 


What kind of leadership would you recommend for Yildiz Holding, in order to develop innovation?

Yildiz Holding has the right kind of leadership for operational and marketing innovation. If you consider what Murat Ülker has done in the past few years, that is category innovation. To create a new category from scratch, you need to be innovative. To pull of something like that, people like Jim Zaza, Ahad Afridi and me are necessary because we have experience in establishing new categories. 

We don’t do a lot of operational innovation.  However, we do have to differentiate between the two. If you are a leader in category innovation, it does not necessarily mean that you are the leader in operational innovation. By the same token, if you are the operational innovation leader, you may not be the leader in other types of innovation. This has a bit to do with combination …


What is Yildiz Holding’s position in the world? What could its position in food sector become?

I want to see Yildiz Holding as the biggest player and the most innovative company in the global market. My dream is to make Yildiz Holding the company of my dreams by transforming it into one that earns money with the most diverse products. In the end, if the consumer is happy, our shareholders will be happy as well. Of course it is also important to have healthy competition. My hope is that we will be more international and powerful in 5 years.


“I will bring skilled ex-pats back to Turkey” 


WE WILL FILL THE GAPS. We are currently in the process of creation.  First we will put forward strategies.  We determined the structure of the innovation team. Some of the team will be from inside and some will be from outside the company. We know where vacuums exist while skills are being developed, and we will fill those gaps.

TWO THINGS TO DO There are two important things I want to accomplish.  The first thing is to bring a large number of Turkish ex-pats back to Turkey.  If I can show them what a great and wonderful country this is, it would be very good for Turkey.  The second thing I want to do is to train new graduates. That way, Turks can study and work in the country.  


FLEXIBILITY FROM ÜLKER–When it comes to how many people will be on the team, I really can’t say right now; I will have to determine that when I am formulating employee requirements.  The best part about this job is the authority and flexibility that Murat Ülker has given me. We don’t have to do everything from inside. Today we are in a period of diversity. We must work to diversify our thinking processes and increase our paths of innovation. To increase our capacity for diversity, we will search at universities for people with different outlooks and those who can create different values.  The innovation team may consist of hundreds, or even thousands, of people. 


What are your short term and long term goals?  How many new products do you expect to introduce annually? 

As for short term goals, I plan to establish strategy, develop skills and make very sure that our mainstay products are in a strong state. That is what I’m working on at this time. While in the process, it’s necessary to determine which categories we will be entering.  The number of projects is not the important thing. We will establish ourselves in a category where we know our competitors, how much of a market share we can capture and what we bring to the table.   When we enter a new category, we hope it will create a difference. 


You are responsible for all products other than beverages. Why not beverages and does it has something to do with Coca Cola? When I left Coca Cola, I signed a agreement not to work in the beverage sector for a period of 24 months.  I respect that agreement. It was necessary.


What will happen after 24 months?

Who knows?


On the subject of innovation, what does a company need to have to become a giant?

First of all, the culture of the company is important. You have to give people the power to do their best. That’s a big point. There are two points that I think Turkish companies may benefit from. The first is that it is possible to increase the efficiency and productivity by 20 – 30 % just by planning for the future. The second is that Turkey is a diversified country. This diversity could help Turkey to become a player in the international arena if we could bring it under control.

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