Potential Over Profits: In Conversation With Alcatel-Lucent Bell Labs’ Jean-Luc Beylat

Authors

Lisa Barrett and Benoit de Monspey, MBA students, INSEAD

Rapid technological advancements have coincided with a profound economic crisis and a growing global awareness of the limitations of our natural resources. But Alcatel-Lucent Bell Labs France President Jean-Luc Beylat—who recently spoke at a Grand Debats event at BSR’s Paris office—abides by the sentiment that great opportunities arise from great challenges. He shared his vision for how innovation and technology—alongside long-term thinking that values market potential as well as current profits—can help solve pressing sustainability challenges.

How do you measure the impact of social innovation?

Often, we measure activity in terms of innovation, as a proxy for impact, and often, the beginning of innovation is so new, and so hard to grasp, that we have to look for other measurements of our success: scientific reputation, the number of patents, the number of connections, and the quality of the ecosystem that you create in which to innovate, involving business partners or competitors. We also have to care about acceleration, or how fast you can get your business to market: Now is good; your technology is useful. Later is going to be too late.

Some companies are concerned that when they introduce CSR metrics, there will be trade-offs, particularly in regard to short-term profits. How do you make the case for a long-term view that embraces sustainability? How do you reconcile CSR goals with shareholder value?

As a company and as an individual, you also create value through your impact on the planet and the evolution of civilization. Sometimes you find value in the books, and sometimes you find it somewhere else. In the past, we’ve had too much emphasis on short-term profits. Yes, it is mandatory to drive toward, but it’s not enough. We need to have a different direction, aligned with bigger concerns in a broader perspective that includes sustainability as key criteria.

I am, however, aware of the challenge companies have to capture as much of the value as possible that they create when innovating. For example, IT applications enabling cities to better manage congested traffic requires a significant level of data [to run and connect].

Critical innovation is happening at the Bell Labs level. Market value is, however, likely to be captured primarily downstream in the supply chain. We firmly believe that CSR goals and performances are a source of inspiration to drive innovation and create market value. For us, sustainability is a business imperative. We are committed to doing our share by making communications more sustainable, more affordable, and more accessible as we pursue our business mission: realizing the potential of a connected world. We must be creative ourselves to find appropriate business models that capture value—[and we need to share those ideas] with our shareholders.

Shareholders may say, “I see the profit—these numbers are really clear—but I can’t see the other benefits you are describing.” What do you show them to demonstrate the benefits?

There is profit, but there is also potential. If I compare the revenue of a company with the revenue of others, others may have a better market cap because they have more potential. And I think more and more people will want to see companies investing for the future. We are convinced that by integrating corporate responsibility into our [core] strategy, reporting our CSR targets and performances, and demonstrating that we are a trustful partner, we will [demonstrate] better impact toward our stakeholders and contribute to global growth. The corporation today must think of itself as a global citizen first, and play an important role in changing our global reality.

Stepping back and looking at how instrumental ICT solutions and big data management is becoming core to society, shareholders can see the huge potential of companies like ours, in the way our innovation potential [can] shape large-scale solutions [that improve sustainability and] the lives of people worldwide.

We often measure improvement in terms of speed: download rate, access to information, mobile connectivity. Yet some may argue that sustainability requires slowing down, thinking more in the long term. Is this a real tension?

It is positive in terms of CSR [providing] technology access—and access to knowledge to a lot of people—as fast as possible. It is a responsibility, and it is a good thing. Globally, there is no contradiction between help and sustainability. We could limit people’s consumption, by limiting, for example, the amount of information they can download, but this means less chance for the spread of information. This is a question of trade-offs, and one that we will have to address.