Innovating To Win

Kyoto Musings

I am taking the bullet train this morning from Tokyo to Kyoto to go speak at the 2008 Japanese TRIZ Symposium.  While in Japan, I have also had the chance to meet with several members of the Japanese innovation community.  It is interesting to note the differences and similarities in attitude and approach to innovation that can be observed as one touches different geographic regions.
 
Some things are very consistent.  Japan is feeling an economic slowdown after five years of growth.  This has companies thinking about many of the same issues as their Western counterparts.  Companies globally are coming to the realization that innovation is at the core of their competitive sustainability.  But whereas innovation has been only the domain of R&D in looking for new technology and products, some Japanese companies are rethinking their innovation agenda.  The possibility to push innovation skills to production engineers as a way to spur a new wave of efficiency gains is gaining attraction to these organizations.

This is an interesting trend, but these companies should be expanding their vision.  Innovation touches all aspects of what a company does in delivering value to the most important customers in the value chain.  While it is easy to consider the discrete innovation actions as independent event during the product lifecycle, such a viewpoint is self limiting.  Product creation, delivery, and service are interconnected elements of a complex corporate ecosystem of value creation.  As such, companies should consider how to encourage and leverage the connectedness of these activities.

Another trend that I have seen recently in Europe and the US which has been validated in my discussions with Japanese companies is a shift in thinking about knowledge management and its role in innovation.  There is a growing awareness of the fundamental importance of connecting knowledge workers with information.  But, traditional models of knowledge management are viewed as being failed systems.  While thinking in this area is still lagging globally, more and more companies are beginning to understand that a new metaphor of design intent and role based knowledge enablement is needed to break the barriers between knowledge workers and the information they need to formulate new concepts of innovation.

See You in Long Beach

If you are going to be in Long Beach, California on June 3, I hope you will stop by and say hello at PTCuser World Event 2008.  I will be giving a presentation there titled “Putting the Precise ‘P’ in PLM”.

As PLM/PDM systems are becoming strategic infrastructure for many companies, it is important for these organizations to understand the synergy between there PLM processes and innovation disciplines.  Most companies struggle with the challenge of commercializing innovation and homing in on ideas that will translate into successful, revenue-generating products.  Designers and engineers are constantly under pressure to deliver new products, only to experience technical and design problems mid-stream—problems that could easily have been avoided by leveraging the right technology and global expertise.

I will be describing how key manufacturers are generating and validating the right ideas before putting them into the product lifecycle management system by integrating certain elements of sustainable innovation practice into their processes.

FEI Day Two Continued

Well, the conference is winding down.  In another half-hour, it will be history.  The content was very good, and I am glad I was able to attend.  Many sessions were informative, entertaining, or both.

This afternoon’s session on biomimicry was particularly interesting.  John Bradford of Interface gave a passionate account of how his company, the leader in commercial carpet manufacturing came to an epiphany around being a socially responsible corporation and has recast their business ethos.

John discussed the ecological impetus that led to this change in direction, how Interface thinks about energy and recycling in their processes, and how they have used biomimicry to drive strong growth in revenue, profit, and corporate value.  Examples of how Interface evaluates technology, product, and process choices along various dimensions of an eco-impact footprint were also shown.

I found this session to be a standout because of the growing attention to green initiatives in companies globally.  The sustainability agenda is emerging as a front burner business issue, and companies are faced with difficult challenges in meeting this agenda without undermining their business objectives.  Interface is an interest case studying in how an established company can use innovation as a key driver for being both financially effective and socially responsible.

This is my last post from FEI; I hope you found the coverage interesting.

FEI Day Two

I am still at the Front End of Innovation conference today.  This morning features a number for plenary sessions covering an array of innovation topics.

First up is A. G. Lafley, Chairman and CEO of P&G.  He has recently written a book: “The Game-Changer: How You Can Drive Revenue and Profit Growth with Innovation.”

A. G. is winding down as I write this.  He has made some very interesting observations in this interview format session.  He has described how P&G adopted more customer-centric innovation process.  He also says that getting ideas is not the problem; it is the process of transforming ideas into successfully delivered products.  Certainly, the impact of P&G’s innovation transition is stunning.  They have improved from a 15% new product introduction success rate to a 50% success rate.

A. G. identifies the company’s two most important constituencies as customers and employees.  More interesting however, is the notion that for P&G, a company widely noted for its open innovation initiative, employees are the most important source of innovation.

Lastly, A.G. states that the CEO must be the Chief Innovation Officer.  This is a key point and one that I will be reiterating later this week when I post on the role of executive leadership as the first pillar of sustainable innovation culture.

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.

More from the Front End of Innovation

One of the fun aspects of going to a conference is meeting people.  Whether it meeting old friends or new ones, connections provide the leitmotif that accents the event.

This afternoon, I had the pleasure of meeting fellow blogger Jeffery Phillips of Innovate On Purpose.  It was great to put a face to the name, and we had a nice discussion about the challenges of bringing the message of sustainable innovation to organizations.  Jeffery proved to be a engaging in person as he is articulate in his blog posts.

The chance to hear stories form field experience in the form of practitioner presentations is another reason for going to a conference.  This afternoon, I sat in on a very interesting session in the Can Innovation Be Made Predictable track presented by Shane Johnson of Bank of America.  The topic was Six Sigma & Innovation.  This is a subject that gained some serious attention last year when 3M stubbed its toe in the introduction of Six Sigma.

In this session, Shane talked about BofA’s innovation journey.  He described how the organization moved through various stages of innovation maturity—from being strictly focused on uniformity of delivery to investigating innovation methods to exploring how to make innovation a repeatable phenomenon and culminating with cultural transformation for innovation.  Becoming an ambidextrous organization, one that can both delivery reliable quality and drive innovation, has delivered measurable value for the company.

Some of the ways in which BofA measures its innovation results include:

• Units of Innovation Output – such as number of ideas generated, WIP, yield, kill rate, and strategic mix (incremental, strategic, breakthrough)
• Time to Market Impact of Innovation – expressed as average project completion time, average time to launch, average aging (Shane did warn that these measures require careful interpretation in that more strategic and breakthrough innovations tend to need more time to mature.)
• Quality
• Outcome Benefits of Innovation – such as % revenue from new products, percent benefits from new products, number of patents

While BofA is still evaluating the specific metric they use for evaluating the impact of innovation, they are right to place an emphasis on this.

Shane finished his presentation with a summary of key dimensions along which BofA has tweaked it Six Sigma method to better foster innovation.  All in all it was a very interesting story about one company’s journey in to the innovation wilderness.

At The Front End of Innovation

I am at the Front End of Innovation conference today.  This has been a great conference in the past, so I am looking forward to some great presentations.  It is always interesting to contrast different people and their messages in this type of environment.

As I was milling about this morning before going in to the keynote session, a vendor approached me.  She asked me how things were going at Invention Machine (the company I am with) and then began to tell me about her company’s value proposition and method of delivery.  She went on about how they help companies understand the market receptivity though a web based survey technology.  The concept sounded great, but then she revealed a fatal flaw in her company’s method.  The surveys are based entirely on random sampling.  As anyone who has studied polling and sampling can tell you, random sampling in notoriously unreliable—and yet this company was making a conscious decision to go down this path and label it as a strength by claiming to be tapping into the wisdom of the crowd.  Yes, some people just don’t get it.

Fortunately, some people do.  The keynote speech delivered jointly by Gunter Pauli and Janine Benyus was excellent.  The talk was centered on biomimicry—the practice of looking at how nature solves problems for practical idea to use in solving innovation challenges.  Gunter opened the session by saying that the session wasn’t going to be about going green, it was going to be about innovation and driving business.  As he put it, “If you are not innovating, you are going out of business.”  The pair then proceeded to consider a number of bio-phenomenon and discuss the potential business implications of each.

If you missed the conference today but find this topic interesting, John Bradford, VP Operations and R&D for Interface, will give a presentation tomorrow on Interface’s green innovation strategy and their application of biomimicry.  A $1.1 billion global manufacturer of commercial carpets, Interface has doubled its core business through sustainable innovation.

Innovation and The Information Fund

I am writing a paper to be submitted to the upcoming Japanese TRIZ Symposium.  The topic is one that I find very interesting.  In short, how do technical advances in computational linguistics change the landscape of innovation practice?

This weekend I sent a draft of an extended abstract to my colleague in Japan to get some feedback on the topic.  I was pleased that he liked the topic and the outline for the paper.  He also asked for some clarification on two phrases used in the abstract: “information fund” and “accrued global knowledge”.  Of course, language differences being what they are, it was no surprise that some questions would arise, but these questions got me to wonder about how many people don’t know about the concept of the Information Fund.

Sometimes referred to as the TRIZ Information Fund, this is a very important concept for all designers, engineers, scientists, and innovators.  The idea is really very simple.

In the mid 1940s, an engineer named Genrikh Altshuller had an idea that inventiveness and creativity could be learned.  He set out to look for the foundations of creative problem solving by studying the legacy of scientific and engineering invention documented in Russian patents.  Through this study, he developed a theory of how problems can be systematically approached and solved inventively.  This theory is what is called TRIZ.  (Pronounced treez, it is an acronym for the Teoriya Resheniya Izobretatelskikh Zadatch which is roughly translated as the theory of inventive problem solving.)

However, as Altshuller worked on his theory, he recognized that having a disciplined approach to innovation was not sufficient to solving problems, nor was having tools such as the inventive principles.  He understood that problem solvers needed knowledge of facts -- facts like Bernoulli’s principle or that Sun move from east to west.  It is the notion that there exists a body of global knowledge, that scientific and engineering knowledge that is currently known, which is referred to as the information fund.

Of course, Altshuller wasn’t the first person to recognize the importance of learning from those who have gone before us.  In a 1676 letter to Robert Hooke, it was Sir Isaac Newton who wrote, “If I have seen farther, it is by standing on the shoulders of giants.”  This is the reality of every great innovation.

This is why the Information Fund is so important.  In the past, the notion of tapping into accrued global knowledge was impractical.  Individuals had to rely on their personal resources to collect information that they could use.   Time and technology have changed all that.  We live in the information age, and the notion of amassing such a vast collection of leveragable knowledge is not only conceivable, it is a practical reality.

When considering how to construct the architecture your organization’s innovation infrastructure, particular attention should be given to how you have equipped knowledge workers to leverage the information fund.  If you are not looking at this seriously, you will be operating at a severe disadvantage compared to leading organizations that are already putting this knowledge into action.

Front End of Innovation – Boston

I was just looking over my calendar and just noticed that the Annual PDMA Front End of Innovation Conference is just a little over a month away.  This is always an interesting conference with terrific presentations by industry practitioners.  This year, the event is being held May 19 – 21 at the Boston World Trade Center.

Let me know if you are planning on going.  It would be great to see you there.

Time To Rethink The Bayh-Dole Act

Today, Bill Gates is scheduled to testify before the U.S. House Committee on Science and Technology on the future of innovation and U.S. competitiveness.  At a hearing commemorating the committee’s 50th anniversary, Gates will focus on key issues around the future of U.S. competitiveness: including education and work-force development, the need for immigration reform to allow highly skilled workers to remain in the U.S, and the need to continue to invest in basic research.

“I know we all want the United States to continue to be the world’s center for innovation. But our position as the global leader in innovation is at risk,” Gates said. “If this nation is to continue to be the global center of innovation, Congress, the current administration and the next president must act decisively.”

Well, here’s a thought.  How about we amend the Bayh-Dole Act?

For those who are not familiar with the Bayh-Dole Act, it is a very significant piece of U.S. intellectual property legislation that was enacted in 1980.  Perhaps the most significant aspect of the legislation was the change in the assumption of ownership of the intellectual property created by government funded research.  Prior to Bayh-Dole, the resulting IP from government funded research was the property of the taxpayers—the people who actual paid for the research.

It was argued at the time, that the ownership of IP by the taxpayers did not benefit society because universities had no incentive to move the IP into the commercial arena.   By creating a monetization opportunity for the research institutions, the taxpayers would benefit because the inventions would more rapidly make their way to useful products, and innovation would be further spurred by the institutions seeking enhanced IP driven revenue. 

In practice, Bayh-Dole has been mostly a benefit to the business community.  Not that this is a bad thing, but it was certainly not the stated intent of the bill.

It seems that a modified Bayh-Dole could continue to serve the original intent, and at the same time help ensure that the benefits of publicly funded research inure more directly to the taxpayers.  Rather than transfer ownership of the IP wholly to the research institution, the ownership should be held by taxpayers under a profit sharing program that cuts research institutions and inventor in on a piece of the monetization action.

An Office of Innovation Development should be formed that is responsible for working with institutions to actively promote such IP.  The portion of the proceeds from IP development that inure to the taxpayers should then be put in a specific innovation development fund that is earmarked to fund science & technology education, basic research, and innovation skills development.

I am usually the last person to argue for governmental expansion, but privatization of such valuable publicly held assets was a very raw deal for taxpayers.  We are at a pivotal moment in history relative to world economic development.  The resources generated from these intellectual property assets could be channeled to great public benefit.  This would be a real benefit to the U.S. and a significant benefit to the global community as well.