Discover, Unlock and Unleash Innovation
Posted by Jeffrey Henning on Tue, Sep 28, 2010
Joe Batista, the Chief Creatologist of Hewlett-Packard, kicked off Day 2 of the 2010 American Marketing Association’s Marketing Research Association in Atlanta. “What is innovation? Innovation is growth. Seeing growth is not a matter of selling more of what you produce, but expanding the domain in which you can respond to your clients, consumers and customers.”
Joe discussed five key attributes of the DNA of innovation:
- What is your capacity to fail? “WD-40 was the 40th formula; the first 39 failed.” Mr. Dyson failed 8,217 times in his design of a vacuum cleaner. “Do you have the capacity to fail 8,217 times?”
- Do you celebrate innovation? Honor success.
- What is the color of your money? Money takes many forms of operational excellence: depreciation of assets, making money, saving money. At the end of the day, innovation has to be about money.
- What is your innovation model? With a closed innovation model, you have barriers at the boundary of firm. “At HP, we have a $4 billion R&D budget. We can do closed innovation. But with the open innovation model, the boundaries become porous, so I take the DNA of my company and combine it with the DNA of another company to make something ‘net new’.” UPS had a expensive process to scan a bar code and print a new label; “we co-designed a scanner that scans a package, wirelessly transmits, and prints a label, saving $180 million a year.”
- What is your suite of assets? Your organization’s assets are not just technology and products but “collaboration, shared experiences, knowledge, intellectual property, supply chain, business processes, research and development.” Joe said, “Assets are the currency with which we innovate around.”
When seeding innovation, look to different capacities.
- Harvesting Knowledge - Year 1 and year 2 interns misdiagnosed heart and lungs 75% of the time, so HP worked with a company to attach the stethoscope to a PDA to produce a digital signature of heart rate. HP leveraged its PDA platform, its software development team, engineering and a physician with 30 years of experience to create the product in three months and $150,000. Converting an analog signal to digital was the key to this innovation.
- Connecting Assets with Silo Busting – P&G sells toothbrushes, toothpaste and batteries. “Why couldn’t they invent the spin toothbrush?” They had to acquire the technology because they didn’t bust the silos.
- Track Emerging Trends – One fascinating trend is infolust, “the concept of giving more meta-meaning about an asset”. For a sweater, what was it made from? Where was it made? What is the supply chain logistics? HP used 3D barcodes printed on produce packaging in Japan to enable consumers to look up information about where the produce was raised using their cellphones.
- Business Models – “Look at the ecosystem and extract value.” The average iPhone has $95.88 applications on it, with 30% of the revenue going to Apple. App stores are a huge revenue stream for companies. “If you manufacture a product, can you turn it into a service?”
- Business Processes – What processes in your company are world class? The Aetna annual report shows the U.S. states they want to grow in their market: states, as it happens, with high rates of other languages than English spoken at home. Aetna wants to move to the web to provide self service to customers, but Aetna websites were all in English. HP has a structured content factory, which reduced the cost per new product introduction by 56% through “enterprise translation management architecture”, for a $5.5 million annual savings for HP. This was a cost center that has now become a service, content globalization. So think of your processes as assets that can be leveraged.
- Reorient Your Expertise – The HP cartridge puts ink on a page by creating 36,000 vapor blasts of heat per second: it’s not ink, it’s microfluidics. Turns out the same science of an HP printing cartridge can be used for creating monitoring systems for diabetics, inventing a device 10 times more accurate than the competition.
“In summary,” Joe said, “the innovation road is not easy; ‘the roads are wicked slippery’. What do you create, beyond the domain of the customer? What is your inventory of assets? Discover, unleash and reorient everything. What is your DNA? What are your capacities? Use the capacity to innovate to unleash your own Growth Engine. You will be amazed at the results!”