Innovating To Win

Sustainable Innovation at Boston Scientific

Here’s a very interesting podcast with Dan Kussman, R&D Manager for Boston Scientific’s cardiovascular group.  In this podcast, Dan talks about the role of sustainable innovation and the importance of making innovation an ubiquitous activity for everyone, every day.

Dan discusses how innovation must be more than a mere buzz word if an organization is going to survive in today’s ever more competitive world.  He also touches on the push-pull dynamic of innovation and the need to strike a good balance.  He also discusses the need for cultural integration and investments in innovation.

Watch the podcast below and hear some terrific insights from Dan on Boston Scientific’s approach to building a sustainable innovation environment.

Anatomy of an Innovation

I avoid writing about my job too often.  But, I have gotten a lot of questions recently on how the concept for Invention Machine Goldfire came about and its path to market innovation.  It’s an interesting case because not only is it about a technology and product innovation; it also takes us into the realm of innovating innovation.

Birth of a concept
In the winter of 2002, Trident Capital invested in a company called Invention Machine.  Trident tapped Mark Atkins and me to be the turnaround team.  (Mark and I had just been part of a successful exit for Trident in where he was CEO and I was CTO.)  We had helped with the investment due diligence for Trident, and we felt the company had some interesting technologies.  However, the existing products and positioning were not optimal but could be realigned to produce great value.

Sitting at the Au Bon Pain across the street from the office, Mark and I discussed the strategy for the company.  On a napkin, we mapped out a concept to create a new software platform for innovation that would bring together some of the company’s technology and knowhow assets.  This new product would combine innovation methodology with state of the art semantic technology to make is easier for knowledge workers to innovate.  Mark asked me if would be possible to do; I told him it would.  He asked how long it would take; I told him we would have a deliverable product in 10 months.  Of course, identifying a product concept is a far cry from delivering a product.  There were some important things that needed to be understood along the way.

Assessing resources; Understanding the job
Few things are entirely new.  All innovations build on the past.  New products evolve from the changing needs of customers as they interact with incumbent solutions to do today’s jobs.  For this reason, the first issue I tackled was to understand the resources we had to work with and the jobs that customers wanted to get done.

From the resource perspective, it begins with the people.  I interviewed every person on the product team to understand the scope of skills and the depth of the team.  Fortunately, we had very strong people on the team including a world class research group.  Another aspect of resource was the existing technology.  The company had a grab bag of componentry from the existing products.  Some of it would be reusable, but much was not going to contribute to the new product.  The third internal asset of the organization was its institutional learning about innovation best practices.  The company had been engaged in innovation consulting for over a decade with some of the leading innovation companies in the world and had helped these companies to successfully build repeatable innovation practices.

The other key asset was the customer base.  Most of my first 45 days at Invention Machine was spent on the phone interviewing clients around the globe, learning from them what they did.  Each interview recorded not just what the client did with our software, but also the nature of their work, what they did outside of our software, and what they wished they could do differently.  This interaction was the key to further developing the original concept into a strategic path to delivering value.

Moment of synthesis
There was no aha moment.  Innovation doesn’t really happen like that.  Rather, it was like a photographic image gradually appearing as you watch the paper sitting in the developer bath.  The pieces were fitting together.  Innovation is a full life cycle activity.  At each point in the lifecycle, knowledge workers have two main challenges: indentifying the right concept, and finding the optimal solution to the problems of realization of the concept.  These challenges occur across and at every level of the entire value creation chain.  Software tools provide problem analysis frameworks for thinking about and modeling innovation challenges.  The resulting models can be thought of as networks of requirements and problem statements.  These statements can be mapped into conceptual representations of solution templates and correlated with information captured in knowledge databases to identify precise solution concepts for the problems.  In short, we could imagine a system where as an engineer, designer, or scientist went about their work, the software would automatically source and deliver high relevance information and speed the time to solution.

Validating value
A concept not delivered in merely a concept.  If it does not deliver value and is not accepted by the customer, there is no innovation.  In the fall of 2003, we delivered the first version of Goldfire to customers.  A module called the solution manager provided a new capability where the software figured out what question the knowledge worker needed to ask based on the problems implied in their models and sourced high relevance concepts without the user needing to submit queries.  User feedback was strong; user liked the integration of best practices and knowledge access. The new platform delivered value for the innovation workers.

Endless innovation
Of course, innovation is a continuous process.  As new solutions are introduced, our vantage point and understanding evolve as do the goals and aspirations of our customers.  Through studying what innovation workers need to do, we have continued to evolve the product with a number of changes.  Some of these have been incremental enhancements, but others have been big leaps forward.  That is a familiar pattern for most products.  There is a broad spectrum of change that occurs in the innovation process.  It is important to swing for the fences if you are going to find the big innovation that sets you in a class by yourself, but the incremental innovations are important too.  Small innovations build value and more importantly, when pursued with the same innovation methods hone your innovation capabilities so that you are always ready to innovate on demand.

I hope you found this recounting of one path to innovation interesting.

The Trouble with Twitter

Like many people, I have jumped on to Twitter.  Just in case you have been living under a rock recently, Twitter is a communication service that broadcasts your messages (limited to 140 characters) for all the world to see.  When people subscribe to your message feed (“following” in Twitter speak), they can be sure to see your tweets in their personal view of the global message stream.

People chat about many things on Twitter.  A favorite topic seems to be Twitter itself.  In the stream of tweets on innovation, several comments have gone by recently suggesting that Twitter is a disruptive technology that may displace Google.  This notion raises some interesting questions.  Is Twitter a disruptive technology?  What are the prospects for Twitter to emerge with a viable monetization strategy?  Is Twitter long for this world, or will it vanish as quickly into obscurity as it emerged on the scene as it is replaced by fast-followers?

In examining these questions, let’s start by asking what customer need Twitter actually serves.  Generically, Twitter provides a interpersonal communications platform.  In this sense, it competes with a wide variety of technologies and products.  These cover traditional web sites, blogs, video sharing (Flicker, YouTube), e-mail, instant messaging, hosted discussion lists, community/social networking sites (Facebook, LinkedIn), SMS, and phone based communications.  It is a wide field of application serving a broad range of specific needs for the users of each.  What distinguishes Twitter?  Here’s my quick list:

• Real-time model
• Highly engagement
• Voyeur friendly
• Concise messaging
• Medium independence

On the flip side, here are some things Twitter seems weak in:

• Deep exchanges (I still am laughing about the person that expected me to explain a complete theory and methodology of sustainable strategic innovation practice and deployment 140 characters at a time.)
• Direct rich content
• Continuity of exchange
• Easy navigability of information

In a very nice article, Renee Hopkins Callahan suggests Twitter’s target customer is the person needing an easy one-to-many means of communication.   I think this is not an accurate characterization of the customer that Twitter needs to identify for success.   Why?  A painful truth that Twitter will need to come to terms with is that the one-to-many communication space already has a few strong and established players (Facebook and the like), and the real-time aspect of the Twitter model is not a significant barrier for these established channels to overcome.  [In the interval between my writing this article and posting it, Facebook has announced that it will be adding real-time status capability in the near term.]  This will bring into sharp focus the limitations of Twitter and force them to find the factors and hence refined use model to which they are uniquely suited.

Already, I have seen bands of Twitterati forming discussion group off the tweetin’ path.  Why?  So that they can break free of the limitation of 140 characters and poor discussion continuity.  Real-time fast-followers have strengths in areas of rich content and media.  They also have much further community reach than the fledgling Twitter.  (These days, 6 million registrations is probably not critical mass.)

The bottom line is that when community/social networking sites start rolling out real-time, and instant messaging services roll out one-many syndication, Twitter will find itself in a very awkward position.  So, where does Twitter turn?

They are unlikely to be able to withstand the entrance of a big player into their current niche.  They have not carved out a sufficiently distinguished value proposition.  This really just leaves Twitter with two options:

1. Find a more defined value prop that can secure a real and significant revenue stream
2. Hang the “For Sale” sign on the front door and auction the technology asset off to the highest bidding fast follower that wants to get a jump on adding a missing piece of capability to their offering

We’ve all heard of Twitter’s secret business plan, but time is running out as companies like Yammer are already trying to establish a lead in specific niche markets that are aligned with Twitter’s current service.  Evan Williams’ recent talk at TED doesn’t give Twitterati much to hang their hopes on either.  The window of opportunity is closing very quickly, and Twitter needs to stop being so cavalier about its future.

I suspect that option 2 is the most likely outcome for Twitter.  There are many strong market forces converging that could push this choice on Twitter. 

Granted this is not a deep analysis of Twitter’s outlook since I am not privy to their business plan, and only time will reveal the final outcome.  But at this time, I don’t see any evidence that Twitter presents a significant threat to Google as some have suggested, and I do seen many indicators pointing to Twitter being just another interesting paragraph in the history of the internet.

Innovation Is Not Just For The Big Guys

Yesterday, a colleague was telling me an exciting story of a company that was embarking on a plan to break into an emerging market.  The company he described was a components manufacturer.  Like every company today, they are challenged by the current economic climate.  Like everyone else, they are concerned about the sustainability of their business in this new business reality.  However, rather than following Lemming, Inc. off the cliff of retracting investment in the future, this company has made a strategic decision to make their future today.

This company looked inward to understand their core competencies and outward to understand the market and economic macro trends.  From that understanding, they have identified a new opportunity space. They are now moving forward with a product and business model innovation program that will put them squarely in a new market and simultaneously reclassify them as a different type of business.

It is an exciting story made even more interesting when we understand that this company consists of only twenty five employees and is completely self-funded.  This company is not alone in its desire to find new channels of opportunity.  But we often hear people lament that their company can’t embark on the path of innovation because they are too small or lack venture backing.  Yet, here we have a proof point that size needn’t be a constraint on innovation.  Small companies have certain strengths that they can leverage to help them along the way—agility, focus, team affinity, management engagement.

Of course, this parable contains a message for the big guys, too.  When small companies are driving innovation all around you market eco-system, how long can you afford to hunker down and try and simply wait out the storm?  You can’t.  Such misplaced confidence will only ensure that one day in the not too distant future you realize that someone else has eaten your lunch.

Interesting Video On Drawing Innovation Inspiration From Nature

Thanks to Bill Fowlkes for pointing out the very nice segment from the TED folks.  In this talk, Robert Full of U.C. Berkeley provides some very interesting insights on how biomimicry can be an inspiration for innovation citing examples of animal locomotion.

There is certainly a lot of fruitful ground in this area.  I am seeing many companies gaining tremendous value from using innovation best practices to target areas of investigation and then finding high value conceptual paths from the examples of natural systems.

The video runs about 20 minutes.

Want to learn more about how companies are applying these concepts?  Here is a video podcast featuring John Bradford of Interface talking about how his company is doing it.

This video podcast runs about 12 minutes.

And Still More from the Front End of Innovation

Trisha Pergande of General Mills gave an interesting presentation on her company’s experience in improving its innovation capability.  Trisha explained that theirs is a mature industry and thus innovation is very important to fuel growth.  But, General Mills found that its approach to innovation was not very good.  It was slow, random and characterized by a lot of re-creation.  General Mills needed a repeatable method.

In thinking about their problem, they considered the Stage Gate process as a framework; they felt that Stage Gate was strong once you have the idea.  They wanted to employ Stage Gate, but their problem was in finding the initial ideas.  In response to this, they implemented a specific program for the front end of the process.  As Trisha put it, “The fuzzy frontend doesn’t have to be fuzzy.”

The key to General Mills’ approach is embodied in two elements:

Developing internal innovation skills
Cross functional internal consulting teams (called iSquad) were established.  These teams are leveraged resources that help across the enterprise on innovation problems.  The consulting team owns and develops innovation expertise.  However, a critical success factor to General Mills’ approach is that the business units own the outcome.  This ensures that innovation outcomes have a home.

A repeatable best practices approach to innovation (named I³) that defines a path to ideation that can be replicated across innovation teams.  The I³ process aims to identify new product strategies that are highly populated with concepts for implementation.  There are three basic steps to the I³ process: Immersion – understanding the problem by absorbing all available information, Interaction – experiencing the problem and developing customer empathy, and Idea Creation – solving the problem.

One key theme that came through in the presentation was that the I³ process was a transformational catalyst.  It helped more the company from accidental product centric innovation to consumer centric value innovation.

Sound Guidance From Four Top Practitioners

It is always interesting to hear the insights of leading innovation practitioners.  The article, “Instituting Innovation: Tell-all advice from 4 leading practitioners”, posted on Core77 doesn’t disappoint in this regard.  Here Arkadi Kuhlmann, CEO of ING Direct Bank; Ken Koziol, Corporate Senior Vice President for the Restaurant Solutions Group at McDonalds Corporation; Matt Mayfield, Senior Director for Mobile Devices of Motorola; and David Lawrence, Senior Manager of the Bicycle Product Development and Marketing division of Shimano, contribute their thoughts on how to build an innovation program.

In each case, an approach to innovation has been taken that is aligned with the general character of the company.  Factors such as culture, innovation readiness, and industry rate of change influenced the decisions of which direction to take.  And while the four companies demonstrate examples of the incubator, diffused participation, and tactical project driven approaches, there are common threads that run though all of the examples.

There is recognition that innovation is a process, not an event.  In this process, there are many different actors which contribute different skill sets along the way.  When building your innovation process, it is important to think about the different stages of innovation as a product moves through early stage ideation, conceptual materialization, validation and delivery, and the various skills that you need to have represented in the innovation team to be successful.

All four of the practitioners agree that innovation needs to speak to the customer to deliver value and hence success.  Listening to your clients and understanding what they are trying to tell you are critical elements in any successful innovation practice.  Oddly, the author of the article, Brianna Sylver, distinguishes this from seeking innovation through technology advances.  However, the two approaches need not be at odds, they can be very synergistic.  High value technology innovation is always driven by a need.  Understanding the repeating patterns of technology innovation can be of tremendous value in finding the market winning approach to answering a customer need.

Once an interesting concept is identified, working with the organizations culture is key to achieving productive support.  Contrary to the just do it approach which is often advocated, these executives advise to not emulate Sisyphus with futile efforts working against the corporate terrain.  Instead, learn how the change mechanisms in your organization are structured and which methods will engender the best response.

The topic of measuring innovation success is also discussed.  However, proceed with caution when considering the comments here.  The discourse highlights an example from Shimano of a new coasting bike that has not met financial expectation.  This is used to bolster the argument that short term profit should not be the only metric of success.  In general, this is a valid point.  Success metrics should be well balanced and capture the whole view of the innovation program goals.  However, we should fall into the trap of trying to redefine success in order to salvage a poor result.  In is import to be coldly objective in evaluating outcomes.  The criteria of success should be defined from the start, and in so doing we should heed Clayton Christiansen’s advice to be patient on revenue, but impatient on profit.

Related to defining good success metrics is the notion that your innovation program should always be aligned with the company’s business objectives.  It should go without saying, yet this is where many organizations go astray.  As they strive to think out of the box, they begin to think themselves out of business.  Koziol says it very well, “You need to always be in sync with the company’s strategic vision.  You just can’t afford to be off strategy.”

All in all, this is some great advice from four practitioners who are accountable for innovation in their companies.  While each has created a program to fit their environment, there are common lessons for us all.  As you think about these lessons may mean to your own innovation program, keep in mind that while each of these companies has elected to focus on one model of innovation, many companies achieve great success with hybrid models that blend the best aspects of all three of the approaches represented by this group.

A Conversation With Vincent Lyons - Part III

This is the final installment of the first podcast in my series of conversations on innovation and innovation practice with leading innovation practitioners.  In this three part discussion, I have been chatting Vincent Lyons, Vice President of Engineering & Technology for Leggett & Platt.  Vincent joined Leggett & Platt in 2006 to head up the company’s Innovation Redefined initiatives and has achieved much in a short time.

In the first segment, Vincent and I talked about the universal challenges encountered by global 2000 companies when trying to create a sustainable innovation engine.  In particular, we discussed how companies:

• have few if any models for repeatable means of innovation
• are pushed to rush to a solution by competition & time pressures
• lack the ability to leverage of internal corporate wisdom
• have limited visibility to relevant knowledge outside their domain of expertise

In the second segment, we explored the strategies for successful deployment of sustainable innovation practice.  In particular, we touched on how to think about culture, personnel, process to drive innovation, communication, and impacts on the organization.

In this final discussion, we delve in to how these strategies are being put into action at Leggett & Platt to power their Innovation Redefined initiatives.

(Podcast length: 14:36)

I hope you have enjoyed the discussion series as much as I have.

Proctor & Gamble and Innovation Management

Elana Varon points out in “Exiled from Innovation? Maybe It’s Your Performance” that while many of us are conditioned to think of IT as the acronym for Innovation Terminator, this is not necessarily a fair or deserved appellation.  In the March issue of CIO magazine, the Forum column provides some excellent insights in to how the CIO can help foster an innovation friendly environment.

In the article, Robert Scott, P&G’s Vice President of Innovation and Architecture, Global Business Services, talks about the need to provide the right framework to support innovation.  He says “You’re going to have to let innovation flow in and out of the walls of your organization and in and out of your company.”

The article goes on to describe SIMPL (Simplified Initiative Management and Product Launch), a process used by P&G to move innovation along through the company.  The process includes six distinct phases: Discovery, Design, Qualify, Ready, Launch, and Leverage.

All in all, this provides a nice look at how a high performance innovation organization looks at the issues of innovation management.  For the full article, check out www.cio.com/030107.