INSIGHTS FROM CISCO:Igniting a Startup Culture with Co-Innovation Inside and Out

PRESENTER
Alex Goryachev
Senior Director, Corporate Strategy and Innovation Group
Cisco Systems

SESSION ABSTRACT

No company – no matter how big or established -- can dominate innovation by itself anymore because of the hyper-accelerated pace and complexity of change. Mass disruption of industries and business models are the new and chaotic normal in this era of mass digitization. Today, it’s imperative that companies co-innovate customer solutions to keep up and succeed at a time when unforeseen competition can come from anywhere, any time. At Cisco, the most valuable co-innovation comes from synergies realized by two vital and interdependent sources: external startups, partners or even customers, and the entrepreneurial talent already inside the organization.

KEY TAKE-AWAYS

• Success factors in developing a dynamic external ecosystem of innovation partners, including accelerators, incubators, startups, entrepreneurs, and application developers
• Insight on igniting a startup culture within by unleashing the full potential and passion of employee talent
• Proven ways to synergize both external and internal co-innovation experiences to become more competitive, retain and attract top talent, and to shape the workforce of the future

Alex Goryachev: Our company was founded 30 years ago. It was two cables and a desire to connect. Large companies are made for scale. Some companies missed out—the companies that died. Listening to employees, customer and market trends is best.

In 2020, most of the Fortune 500 companies will be gone. What’s driving that is a shift in consumer behavior. We’re seeing new business models everywhere. The pace of change in increasing, and there are new business models, like UBER, LYFT, AirBnb, Amazon, Prosper, and LiquidSpace. Amazon transformed the book market, then electronics, and how we buy things, now they have retail pop-ups. It doesn’t cost a lot of money to start a business. There are way more businesses starting up than 10 years ago.

Disrupt or be disrupted:

• The speed of innovation is accelerating
• Ideas can come from anywhere
• If we don’t act, our employees will leave and act on their own
• If we don’t act, our employees will leave and act on their own
• Competitive landscape shifts constantly
• Leaders are confused
• It’s a challenging environment
• Talent is essential
• Focus on the innovators not the innovation

TAKE-AWAY

Lending has changed. People are no longer buying storage or infrastructure. Now, with technology, you can start a business anywhere. It’s a low entry point. Or you can crowdsource a business. Every day we wake up in a different world. We don’t know who our competitors are. There are more consumers because of globalization. We’re noticing everything is super-fast. Our employees leave and start their own businesses. Our competitors go in and out of business every day. In the past we had dominant players we would compete with. Now there are small companies are chipping away at our wallet. We are now competing with hundreds of companies. This causes so much confusion. Everything is changing. This is the new normal.

What is the solution? Think like a startup! We establish pockets of startups within the company so we can move faster. Everyone has a common purpose. When people are highly engaged and focused they can sometimes change the world.

Cisco Innovation Strategy

Traditionally we were building stuff. We were selling to customers. Now, we buy companies for three reasons:

1. We like the team
2. Intellectual property
3. Route to market/relationships

When we buy a company, we hope that we acquire all three of the above. We move into partner mode. Today we think of partnership as a model. We are investing in our partner companies. Right now we are accelerating. You get to work with startups. As we discover startups, we don’t want to acquire them. We want them to develop on top of Cisco. It can be a university too. We have shifted from building to a solutions world where we partner with many people.

Cisco Innovation Centers

Our goal is to get an idea, customer, or startup and see if we can partner with them. We’ll make money, we are quick to monetize. We have 9 of these centers. They are all over the world. The goal is to create a strategic presence. There are 5 – 10 people in these centers.

Innovating with Employees

In the past, there was no way to innovate outside the box, which led to many silos. We put together a program that’s structured. We work with our employees. We give them themes to innovate. We give them resources and tools. Time off to implement their ideas. The goal is to give everyone a role in innovation. How do you get everyone aligned to innovation? Angel personas are important. We’re building a role for coaches, mentors, judges etc.

We want them to focus on the business outcome. If we think about drones, focus their ideas on this area. We encourage people to form teams. The goal is to get people thinking about their daily jobs. We follow a structured process and it has been successful: 52 percent participated—in a company of 30,000 people. We gave them $1,000 for innovative projects. At first, there was a lot of resistance from managers. It’s going in the right direction. There are opportunities to work with like-minded people.

One catch: you cannot innovate within your day job. Not a rewards and recognition program. We have spent $1 million dollars so far.

TAKE-AWAY

• Listen to employees, customer and market trends
• Create an entrepreneurial environment within your organization
• You are now competing with hundreds of companies

IMPLEMENTATION GUIDELINES

• Diversify the silos (engineers with engineers, marketing with marketing)
• Listen to employees as much as you do customers
• Be aware that consumers are way more savvy than in the past

BEST PRACTICE

• Innovate with your employees
• Give all employees a role in innovation
• Offer a cash reward

ACTION ITEM

• Be thoughtful with your employees, they have good ideas
• Understand that the price of entry to the marketplace is inexpensive, so your competitors can come from anywhere
• Listen to your employees

FINAL THOUGHT

Every day we wake up in a different world. We don’t know who our competitors are. To stay ahead of the curve, Cisco has implemented an internal entrepreneurship program for their employees. Their participation rate of 52 percent of 30,000 employees was a huge surprise to this 30-year old.

Panel Discussion: User-Centered Design

MODERATOR
Kevin Goldman
Former Chief Design Architect
Tallwave

PANELISTS
Michael Flynn, Vice President, Innovation & Strategy,
Bank of the West
Chris Kampf, Director of Product Innovation, Amtrol Inc.
Andy Lee, Senior Manager, Innovation Labs,
Lowe’s Companies, Inc.
Deepankar Pant, Senior Brand Manager, Innovation,
Jarden Home Brands
Jonathan Mann, Director, User Experience Design, PayPal

SESSION ABSTRACT
Who’s leading your user-centered design program? Is their team scaling to meet your incredible demands for customer centricity? Although there are 20,000 unfilled experience-design jobs in the U.S., the major design schools graduate only 500 candidates a year. This interactive session featured innovation and design leaders sharing their strategies and tips for getting the most from user-centered design.

Among the insights: Designers have a method in which they think about and solve problems. The key to their problem solving strategy is empathy. Designers must empathize with the user since the user is typically not present during the decision making process. This process involves diverging, converging, ideation, prototyping, and testing. Design-thinking also requires much building, testing, measuring, and pivoting. Kevin Goldman facilitated a panel to share the philosophies, processes, and tools around design-thinking.

KEY TAKE-AWAY

• Best practices to galvanize customer centricity across teams
• Guidelines to know when and what to in source versus outsource
• Approaches to measure customer experience and design
• Vocabulary for successful user-centered company cultures

KEY DISCUSSION POINTS
What have you seen some companies do when it comes to incorporating the customer in the design-thinking process when the customer is not the user?

This can happen in situations where the customer is a wholesaler or distributor of the product, but not necessarily the daily user of the product. It’s important to include all stakeholders in the design-thinking process. Include customers in the conversations because they’re thinking about things totally differently as a stakeholder. They may be considering factors such as merchandising and packaging.

We’re four steps away from the end customer. We’re the manufacturer, than we have a wholesaler and others. The end-user may not even know we’re involved. How do we have that user in mind? How do we innovate in a way that incorporates all customers/users?

Utilize a vast group of sales representatives that can go across the country to get a good cross-section of the demand that is out there. Representations can assess: where there are more types of a specific sale in one region of the country than another, information about the user of the product early on, what they see in the field, and what customers/users are talking.

Field testing is important because users can utilize all of their senses to get a feel for the product and offer their opinions in the process. Users can touch, feel, and see the product and help move the design-thinking process along.

When coming up with the product concept, determine if your plan is cost effective, as well as what the right type of business model would be for your product. Attend trade shows and selectively pull people to get their input to start making decisions regarding design and direction.

There are a variety of ways you can connect with customers and users throughout the process to gather feedback.

I find it interesting you don’t recommend starting with financials after the field test. What if you have a really great product that could be well-received but financials don’t work out? Doesn’t it make sense to confirm financials are not an issue before moving too far along the design process?

A lot of things would probably get killed and never tried if we talk about money first. It’s important to play with the ideas first and create a plan. Once we see if a product can work, we can always figure out how to make it less expensive and keep working at it. We don’t want to preemptively shut down an idea solely because of financials.

BEST PRACTICE
The Four “Rights” of User Testing – The following factors are imperative in the design thinking process. If one of these factors is missing, the process does not work. You need to find:

1. The right users for the product
2. The right methodology to conceptualize the product, gaining feedback from users, and continuing to design the product
3. The right analysis. What do you do with your observations? Do you analyze the data properly or are you lost? This step is very important to continue pivoting to create the best product that will be well-received by users
4. The right time for the product

When developing prototypes, an example of a good field testing strategy is when you actually hand a notebook to a customer during testing and get the customer to sketch their ideal product.

During early prototyping, create products or services that are delightful for customers but increase revenue for the company. Understand what users see as the key challenge and understand what the solutions begin to look like. The key to innovation is enhancing the reward for the customer. Your goal is to make the user experience more joyful and minimize the chore by creating new products or changes to current products that improve usability, speed, efficiency, aesthetics, etc.

Rapid prototyping involves quickly coming up with prototypes that are ready to move into the new product pipeline. Lab testing with both customers and unlikely customers can help move this process forward. One example of this is Google Glass. While many people would think innovation can take a long time, it took less than one day to create the prototype for Google Glass.

FINAL THOUGHT
Separate market research from the user design process. Market research is really good for understanding the market before actually involving the user. User design is different from building, prototyping, etc. You don’t know the true opportunity until after you’ve involved the user in the process.

Growth, Innovation and Leadership: Silicon Valley

Monetizing the IoT: How Organizations are Making or Saving Money with IoT

MODERATOR

Dilip Sarangan, Industry Principal
Internet of Things (IoT)
Frost & Sullivan

PANELISTS 

Sukamal Banerjee, Executive Vice President and Head of IoT,
HCL Technologies

Jesse DeMesa, Venture Partner, Momenta Partners

Christoph Inauen, Vice President, IoT, GTM, SAP

Makarand Joshi, Director, Product Management, IoT Platform, Schneider Electric

Abhi Rele, Director, IoT Product Marketing, Samsung

Faraz Shafiq, Associate Managing Director, Global IoT Practice, Verizon Enterprise Solutions

Pavan Singh, Vice President & Business Head, IoT Security, Covata

SESSION ABSTRACT

IoT transcends industries and vertical markets with solutions that range from automotive to healthcare to energy. This panel discussion featured industry leaders discussing how they work with organizations from the planning stages to deployment and post-deployment with the goal of helping them save money and monetize their investments in IoT.

KEY TAKE-AWAYS

• Proven ways that IoT could help your organization save money
• Use cases illustrating how organizations have maximized their potential with IoT
• An assessment of the relevance and importance of IoT
• Key areas where IoT could help your organization save money
• Use cases illustrating how organizations have maximized their potential with IoT

OVERVIEW

The purpose of the discussion was to help the audience gain a deeper understanding of monetizing on IoT deployments. Most of the panel believed that the easiest current opportunities present themselves in the cost reduction cases. Revenue generation will be the next step. As illustrated in the chart below, a recent Frost & Sullivan global survey of 1,980 IT decision makers across verticals revealed that 34% of companies have already invested in IoT solutions, and 39% plan to invest over the next 2 years. Over one third of the respondents are providing small trials and proof of concept; live services with customers, distributions, and suppliers; and deploying next-generation solutions.

  

Some industries are further along the IoT curve than others, but almost all are on the path.

BEST PRACTICE 

Each of the panelists shared case studies to provide success stories around IoT to the audience. Below, please find highlights:

Christoph Inauen, Vice President, IoT, GTM, SAP:

Customer cases are categorized into 3 areas:

1)  Save money – Port of Hamburg

• Problem: The increased capacity of the port created huge problems with traffic flow due to the additional number of shipments and vehicles.
• Solution: They deployed sensors along the port and in parking lot areas that needed to be managed. The also installed dashboard units in the trucks to notify them of accidents in real time and then give them instructions on where to park or where to go to avoid congestion.
• Results: In the one year they have been up and running, they have improved conditions and enhanced capacity.

2)  Create revenue streams – Trenitalia (The primary rail transport company in 

     Italy)

• Problem – They needed to increase efficiency - every car that had battery issues had to be taken out of commission.
• Solution – Sensors can now share the status the battery, allowing trains to stay in the system much more of the time.
• Results - Trenitalia saves 7% of maintenance costs. 

3)  Change business model – Under Armour was discussed as an example of a   company that had reinvented itself. Its vision is connected life. They are embedding sensors into shirts and shoes to monitor health and give each consumer tailored recommendations on their body. Specific diet plans can be provided to each individual based on their personal data and goals. This gives the company new revenue streams.

Faraz Shafiq, Associate Managing Director, Global IoT Practice, Verizon Enterprise Solutions:

 “We, as in Verizon, can’t just focus on cellular; with IoT we have to be network agnostic.” The platform can take care of IoT needs for cellular as well as fixed lines with connectivity and security. A key question is “what do you do with the data?” 

Shafiq gave an example of a situation where there were hundreds of containers on a ship and fourteen people to monitor the containers. With a small form factor sensor attached to the container, they no longer need monitors on board, but only the mechanics to fix any problems when they are alerted. The devices also provide preventive information so problems can be fixed before they become huge ones. Another benefit of this solution is that any data can be sent to customers on their mobile phones. Customers can always check in on their shipments. This reduced operating expenses  and capital expenditures.

Makarand Joshi, Director, Product Management, IoT Platform, Schneider Electric:

Schneider makes Uninterruptable Power Supply (UPS) products for data centers. Often these were returned to Best Buy because buyers failed to read the manual. Now, buyers have the capability to register their UPS purchase on theirs smart phones and Schneider can monitor their usage. This way, Schneider can tell the customer when the battery runs out and it needs to be changed. This prevents buyers from simply throwing the UPS’ out. Also valuable is that when there are a lot of UPS’ low on battery, the utilities can be informed.

Sukamal Banerjee, Executive Vice President and Head of IoT, HCL Technologies:

A medical devices company wanted to track and trace inventory and equipment needs for surgical cases. The ability to manage inventory and ensure all the equipment needed for the surgery, and for potential emergencies, is in the surgery room, is critical to maintain costs, and save lives. Previously, a lot of time was lost, when the right tools were not in the operating room when needed. 

TAKE-AWAY 

The barriers to deploying IoT include security risks, cost of integration, managing data protection and privacy requirements, cost of connectivity and the time it takes to develop the solutions.

This should not deter companies in any industry from taking action today to capture the opportunities that lie ahead with the integration of IoT.  Start with implementing solutions utilizing IoT to reduce costs. At the same time, start planning for how to create new revenue streams, or how to change a business model.

The key drivers for investment include the ability to boost customer service and marketing programs, automate manual processes, collect customer usage data, and optimize field or on-site operations. 

Ecosystems are going to be critical for IoT to really take off. Below are some key quotes from the panelists:

 “If you can connect the ecosystems and work together, it can really make IoT implementations successful.” -- Jesse DeMesa 

“What’s different about Samsung’s IoT solution is its end-to-end solution, which includes hardware modules, IoT, cloud, and partner ecosystem. It is integrated (saves 9 to 24 months), interoperable (you don’t have to “do the plumbing”), and easy (everything is API driven).” -- Abhi Rele

“Someone who understands the whole ecosystem is important for the solution.” Verizon has implemented a new strategy where the professional services group, rather than the sales team, is the front door to discussing opportunities that IoT can create. These are multi-year engagements, so creating the right relationships is very important to the success of this solution. -- Faraz Shafiq

ACTION ITEM

1. Use the case studies you heard about as a starting point. Consider how these case studies can be applied to our organization.
2. Discuss IoT implementation costs with your executives – especially the ones that are no-brainers.
3. Plan for ways to utilize IoT to create new revenue streams or new business models.
4. Understand that every industry is already looking at IoT opportunities – now is the time to get started on your roadmap.
5. Talk to Frost & Sullivan if you have any questions – we can support you in a number of ways throughout your planning, implementation, and monitoring process.

FINAL THOUGHTS FROM THE PANELISTS 

“IoT is not something you can buy. You buy solutions such as sensors that alert you when there is a problem or you add predictive features that warn before things happen.”
--Christoph Inauen

“The common denominator is information; value of information depreciates with time. Aparking spot won’t wait for you for a half hour. [The] right application and analytics in real time is critical.” -- Faraz Shafiq

“Once you implement IoT, it’s critical to recognize that it has to be run in a very different way than you run IT because it has to be a much smaller percent of the cost for each transaction.”
-- Sukamel Banerjee

“Why now? [More] connectivity available, [the] cost of sensors down, cost reduction needs, [and] we can process a lot more data effectively. [We] need to position IoT based on industry trends. Data exchange is a big part that IoT will drive towards when the connectivity issues become resolved.” -- Pavan Singh

Innovation Benchmarking: How Innovative Are You?

PRESENTER
Richard Sear, Partner
and Senior Vice President,
Visionary Innovation 
Frost & Sullivan





SESSION ABSTRACT
The term innovation is heavily used and more truthfully, it is heavily over-used. This session explored just what being a world class innovation company means. Richard Sear identified the core stages of an innovation system and introduced participants to the Innovation Maturity Model, a benchmark by which you can gauge the gaps your organization has in its capabilities, and more importantly, determine how to go about the process of addressing them.

KEY TAKE-AWAYS

• A key framework to understand the seven stages of a world class innovation system
• Key benchmarking tools to relate your organization to world class companies
• Best practices for implementing innovation techniques in your organization
• Personal techniques to address innovation, even if your organization does not support it
• 60% of companies will not see a 10-year anniversary
• If you do not have a clear big-data strategy within the next 3 years, over the 10 years beyond that point, there is a 50% chance your organization will fail
• If you’re looking for new areas of innovation, you need to start with big ideas, not small ones. However, you do need to break down big ideas into specific strategies that  can be implemented in a clear 3- 5- or 10-year plan
• The best companies in the world have the innovation team members embedded throughout the organization to see the innovation process through from start to finish 
• Innovation is the ability to create and sustain a competitive advantage in existing and emerging markets. It is a process of developing an idea into a commercial business solution
• In a competitive business world, it is essential for organizations to pursue consistent innovation in order to remain ahead of competition. 
• An innovation culture cannot be established overnight due to the abundance of obstacles. It is a long journey through various stages of maturity

BEST PRACTICE
The Technology Innovation Continuum has five levels of maturity:

1. Ad-hoc innovation
2. Defined innovation
3. Supported innovation
4. Aligned innovation
5. Synergized innovation

There are three capability requirements on the Innovation Continuum that contribute to an organization’s maturity level:

1. Innovation Process: This refers to the complete innovation lifecycle
2. Knowledge & Competency: A knowledge system that allows an organization to innovate consistently
3. Organizational Support: Infrastructure, resources, metrics, leadership, policies and strategies required to support innovation

EXAMPLE: This Innovation Process From GE Has Seven Key Steps:

1. Input – Ideas going in, captured in a way that it makes it easy for the  organization to digest
2. Insighting – A review level for captured ideas that seeks to understand the foundation of the ideas
3. Problem Definition – What is the problem that we are looking to overcome?
4. Solution Generation –Coming up with multiple different ways to tackle the problem
5. Qualification – How do we qualify the end need? Where are the opportunities and problems we could face?
6. Research & Development – Putting numbers to the idea, coming up with a business plan
7. Implementation

TAKE AWAY
Know your Innovation Readiness Score, based on the following factors 
(ratings from 1- 7, where 1 = poor and 7= excellent):

• Do you have no problem finding white space growth?
• Is your industry is being disrupted and do you have a plan to prosper?
• Are you strategically developing new business models?
• Do you have a clear 10-year vision plan?
• Do you have a fully optimized innovation pipeline?
• Organizationally, do you react quickly?
• Does every employee know your innovation process?

FINAL THOUGHT
The problem is that most innovation teams only have the first piece of the innovation process in place. The best companies in the world have innovation teams involved in the entire process to hone the ideas, work with the ideas, and cultivate the ideas. Moreover, most organizations are unable to reach a maturity level 5 unless they were established as a level 5 with all the organizational support for innovation from the beginning. Google is an example of this. Without being established from the start with the infrastructure, leadership, policies, and culture of innovation and change, organizations are typically able to reach level 4, which will still put your organization in the top percentage of innovative companies worldwide.

Finally, the one thing that will harm your organization faster than anything else, even faster than having bad ideas, is having ideas and not implementing them fast enough.

CASE HISTORY Proven Ways to Incubate New Business and Product Opportunities

PRESENTER
Shawn Williams
Vice President
Research & Development
Rogers Corporation




SESSION ABSTRACT
In this session participants learned why successful companies struggle to maintain an innovative spirit, where new entrepreneurial vigor can be found, and how to get the best of both worlds. Rogers Corporation found that the best means to cost-effectively maintain a vital product portfolio and a robust pipeline of next generation technology was to separate core product R&D from more collaboration-focused innovation efforts and to leverage both university and start-up-based relationships to nurture these opportunities.

KEY TAKE-AWAYS

• Lessons learned on why it is hard to change behaviors that have traditionally led to commercial success, and how ‘R’ and ‘D’ may require different skill sets
• Outcomes of how a 180 year old company injected reinvigorated its creativity, implemented new discipline for product development and portfolio management, and created a next-stage opportunity pipeline with a value of >$500M
• Best practices for early technical/commercial opportunity assessment and incubation of next generation businesses & technologies

ACTION ITEM
Shawn Williams of Rogers Corporation, a large, legacy company with mature product lines, discussed his organization’s need to re-evaluate, change, and innovate in order to remain relevant and competitive in their industry.

Specifically, he addressed the following keys to innovation:

•  Overcome the “accountability trap” 
• Avoid rivalry with Business Unit Research and Development (R&D): In his organization, central and divisional R&D complement one another
• A hand-off isn’t tossing it over the fence; have a planned transition strategy
• Don’t make it defensive – the first thing you can do is measure, and then improve
• Simplicity versus System – there is so much more to driving discussions than a big complicated spreadsheet
• Less is more, and number projections are always just a guess

TAKE-AWAY
Rogers Corporation has successful, mature product lines, a business to maintain. New market share is harder to find, and incremental improvements are necessary to help offset commoditization. The challenge they have is that the projects are too small in potential, and resources are spread out across too many platforms. Rogers took intentional steps to re-invigorate R&D and initiate a strategic dialogue. The first thing they did was to evaluate expectations and set new ones. New expectations for Rogers Corporation needed to be set in order to see bigger changes (e.g. base case revenue = $11M/project, new aspirational revenue = $50M/project).

How do you turn things around and get people comfortable with new things? A generational strategy can help: first look at making incremental changes (18-24 months), then evolutionary changes (24-36 months), and then revolutionary changes (36-60 months). Rogers Corporation created an innovation center to develop nurturers and subversives in symbiosis. Most important to the innovation center is having people who are unaccountable for current business. If this doesn’t happen, 9 times out of 10 the organization goes for the safer bet (current business) rather than taking the risk of innovation and new ideas. Portfolio Management Tools were used to maximize the decision-making power of data. They help drive strategic discussion, and help define the shape of portfolio needs and gaps.

ACTION ITEM

• What do you need to believe? A simple analysis to help set level expectations always helps. Identify your opportunities, and put numbers behind them to understand potential gain. These exercises can be extremely motivating and help prioritize projects. Example: 1 billion cell phones per year sold x 2 antennas per phone x 50% antennas addressable x 0.30 per antenna = $300 million opportunity
• Getting people on board is more important than taking a stand and telling people what to do
• Handoff includes moving products from an innovation center to the product development process, and that’s not just dropping it off, but transferring knowledge

FINAL THOUGHT
It’s hard to incubate without a strategic perspective. It’s even harder to win without a strategic dialogue.

Overcoming the Fear Factor: Breaking Down Customer-Facing Organizational Silos for Product Strategy Excellence

An Excerpt from New Product Innovation & Development 2015:
A Frost & Sullivan Executive MindXchange

SESSION ABSTRACT
The guest speakers hosted a duel-presentation covering the collaborative innovation initiative between United HealthGroup and AARP. They shared some of their experiences around learning how to identify and recruit potential “landing zones” or business owners for their innovation ideas, building evidence to reduce risk and learning best practices for preparing others to promote ideas.

Their organizations were both seeking growth through innovation. When they started working on the initiative together, they realized it was having little to no market impact. The question that arose was, why aren't we better at innovation? So they began to develop an innovation capability and discovered that it was not easy. The first step they took to was to put some definition around their work. The guest speakers clarified why they were working together and created a care-capabilities perspective. Next they put forward an actionable-shared purpose, which touched upon points such as impact, achieving growth and retention. Finally they developed a vision for the initiative.

PRESENTERS
Jennifer Draklellis, Senior Director, Innovation, UnitedHealth Group
Marla Hertzel, Director, Innovation, AARP

TAKE-AWAY
The two organizations are learning how to be innovative. They decided to service both the “student and the teacher” and having this perspective helped them manage the many challenges they had with innovation.

BEST PRACTICE
To innovate effectively, organizations need to shift from the operator mindset to the innovator mindset. The operator is uncomfortable with uncertainty, makes data-driven and analytical decisions, works hard to be accurate and precise and works to avoid errors to zero. The Innovator mindset is just the opposite because it is comfortable with uncertainty.

ACTION ITEM TO IMPLEMENT
You need to hold people accountable differently. There are three types of accountability: Results: Did you deliver the predicted outcome? Execution: Did you execute the plan well? Learning: Did you follow a rigorous learning agenda?

Other accountability factors:
Are you taking the planning process seriously?
Are your predictions improving?
Is the team facing the facts?
Is there evidence of learning?
Is there a clear hypothesis?

TAKE-AWAY
Another challenge to overcoming organizational silos is the inherent performance tension involved especially when a company puts forward an innovation agenda. That is because there is more to innovation than just ideas—they are only the beginning.

BEST PRACTICE
Innovation = ideas + execution. The problem you need to recognize is that companies are built for efficiency, not for innovation. They're managed by the operator mindset and this is appropriate because if they weren't, they wouldn't make the money needed to survive.

ACTION ITEM TO IMPLEMENT
You address this challenge by creating a smooth transition from innovation team to market. Look to the business owner to shepherd the following concepts into the organization for complete execution.

Think about folding your concept into the operational side of the organization.
Seven hints for selling ideas:

1. Seek many inputs, listening actively about the concept you are pursuing.
2. Do your homework, gathering a lot of data and facts to talk about the concept intelligently and tie it into the company.
3. Make the rounds, meeting with people one-on-one, give people the opportunity to get used to your idea.
4. See critics in private and hear them out, good for a lot of push-back. Also prevents people from ganging up on you.
5. Make the benefits clear, arm your supporters to go out and sell your idea.
6. Be specific, relates to your executives and the right time to approach them. You need to test your big notions about the concept.
7. Show that you can deliver, people want to back winners and want that promise and success within the business. Build that reputation and credibility.

TAKE-AWAY
Putting some of the seven tips and ideas into practice, Draklellis and Hertzel asked their steering committee to become champions of their work. The committee members were given a specific request to go out and evangelize their concept to their constituents in two to three meetings in a specific time frame.

BEST PRACTICE
This evangelization helps to show senior leadership support even if the executives were not on board completely with the idea. Just hearing the team talk about it increased credibility to their
constituents and started to plant the seed in the organization so that as these ideas are starting to scale, the organization is already prepared to take them on.

ACTION ITEM TO IMPLEMENT
To collect the feedback, there is a specific technique called the Rose, Thorn, Bud Experiment that the steering committee used.

• Rose: What are the positive or bright spots?
• Thorn: What concerns do you have?
• Bud: What  opportunities does this present and how does it fit into your business?

FINAL THOUGHT
This initiative still continues to be a learning process for both of the guest speakers.

Execution is 95% of What Matters: Delivering Great New Product Outcomes

SESSION ABSTRACT
Guest speaker Phil Swisher shared his company's approach to innovation as he elaborated on two of the company's long-term goals: generating meaningful revenue from new businesses and building a stronger culture of innovation. BBH's approach to innovation is a strategy of what you do and do not do. An innovation does something different than the core business. The same mindset and processes of the core business will not lead to different outcomes. He also articulated some things his company will not do when it comes to innovation, which included ROI analysis, creating detailed business cases, allocating costs to other business units, and attending boring corporate meetings.

PRESENTER
Phil Swisher
Senior Vice President & Head of Innovation,
Brown Brothers Harriman

BEST PRACTICE(S)
Six primary activities practiced by BBH involving solution building and infrastructure building:

1. Pursue ideas using team and firm resources for direct idea advancement
2. Utilize an internal venture capital fund for funding the commercial ideas of others
3. Seeks external wisdom, engages with the rest of the world for insight
4. Innovation, used as a catalyst
5. Innovation, used inside the firm
6. Metrics and advocacy

TACTION ITEM(S) TO IMPLEMENT
Use a different measurement methodology to determine how innovative your new product or service really is. It can be best described as a cumulative test asking questions such as, “Who else currently offers this product or service?” Points are awarded based on the multiple choice answer picked. The higher the score, the better.


TAKE-AWAY
When building innovative new products, alignment across four populations is critical: the innovation team, business unit management team, IT department and one of BBH's 38 owners. Approval is required only from the partner who oversees innovation and the partner who oversees the business unit in which Innovation is investing.


ACTION ITEM(S) TO IMPLEMENT
Swisher suggests that management ask the following questions of top performing management teams in order to make innovation a strategic priority:

• What commercial projects is your team working on, where outcomes are uncertain? 
• How are you building innovation into the lives of your team members? 
• For each member of the management team: 
• How are you participating directly in the creative process?
• In the past month, how many clients have you spoken with, excluding sales situations and service problems? 
• Who has made the most significant positive impact on your innovation efforts?

BEST PRACTICE(S)
Deployment Values for best practices:

• The standalone revenue generated by Innovation’s new product
• The revenue benefit of the new product retaining clients of the core who would otherwise have left
• The revenue benefit of the new product helping the core business win new clients, or new business from existing clients
• The technologies, people and methods used by Innovation set new benchmarks and precedents, which increases the knowledge, permitted toolkit, and capabilities of the core, and creates productivity improvements and cost savings in the core
• Portions of Innovation’s work, both product development work and product’s code, can be reused or adapted for projects in the core, which increases speed and quality while reducing costs

FINAL THOUGHT(S)
Career advice from Mr. Swisher: The world is small, life is cumulative, always look for ways to help others. Optimize for great mentors and maximum learning, especially earlier in your career. Be passionate about the major areas where you invest your time. Have a runway – you can’t negotiate unless you can walk away.