Innovation Cubed Conference

Last week I was invited to speak at the Innovation Cubed Conference in Orlando, Florida.  The crowd attending the conference was a good mix of large and small companies, some multi-national and some based solely in the U.S.  There were also several innovation consultants at the meeting who spoke about their consulting experiences.

I took away several insights from the conference.

Buying Stock in an Idea

Nearly every corporate presentation mentioned their internal processes for running an idea contest.  What surprised me was the number of companies that allow employees to buy “stock” in an idea, and reward the idea(s) that achieve the best metrics at the end of a defined period of time.

The company that focused the most on this concept was Motorola.  Rami Levy described Motorola’s struggle to filter through a backlog of thousands of ideas in their popular idea submission system: THINKTANK. The THINKTANK review board had too many ideas to judge, so they decided to rely on the “wisdom of the crowd”. They created an idea market (TIX) that stood between the global submission system and the judges. Their message to employees was “invest if you believe this idea would result in increased value for the company”.

The idea submission cycle was two months long, (and at the beginning of the second month the investors could buy during a two-month window see Rami’s corrections in the comment section below). In addition to investing they could tweet about, tell a friend about, discuss, and tag stocks. At the end of the quarter they came up with a variety of metrics to filter out ideas based on stock price. These metrics were used to filter the best ideas and bring them to the judges. Once the new quarter started, new ideas came in, and the stock purchase plan started all over again.

The Innovation Reporting Structure

At my own company the Innovation Network reports up into the Office of the CTO. It was interesting to see the reporting structure at other companies. It was all over the map:

• The KRAFT innovation team reports into the R&D structure. They have a peer innovation team that reports into their Packaging division.
• PepsiCo runs their Idea Jams and contests out of their IT organization.
• Menasha Packaging involves their HR organization in the administration of their innovation framework and process.
• Motorola runs THINKTANK out of their Mobile Devices Engineering organization.
• The Clorox idea repository and framework is largely designed and run by the company’s social media gurus.
• AT&T’s Innovation Management organization is part of their Intellectual Property group.
• Equifax’s New Product Innovation team reports into the CMO.

Spigit Versus HomeGrown

For the most part, idea contests, idea repositories, and contest management software is either home-grown or Spigit.  The number of companies using Spigit was impressive: Mitre, PepsiCo, Cisco, and AT&T (to name just a few).  EMC at this point is using homegrown software.

External Open Innovation

Perhaps the most prevalent theme of the conference was the discussion about “open innovation” with customers and partners.  Many companies described their experiences.

Perhaps my favorite speaker on this topic was consultant Gene Slowinski from Rutgers. He started off by describing an “open innovation use case”. He had a bottle of Lipton Ice Tea in his hand, and described how Snapple threatened Lipton’s Tea business. Snapple had easy-to-buy-and-consume tea, while Lipton had put-bag-in-boiling-water inconvenience.

In order to compete with Snapple, Lipton figured they had to create their own bottling and distribution infrastructure.

Or they could partner with someone who already did. So they started shipping their tea leaves to PepsiCo, who bottled and distributed a new product for Lipton.

He also talked about Unilever (maker of “Dove” soap) and their corporate strategy of “anti-aging, anti-wrinkle”. Their R&D Academy is using Open Innovation to partner with a company called CynoSure, an anti-aging, anti-wrinkle light-based (e.g. laser) device. Clearly their soap team doesn’t have laser expertise, but Unilever is attempting to increase revenue by adding to their portfolio with a strategic new product. (And no, the lasers will not go into the soap).

Gene mentioned that the key steps in open innovation are WANT, FIND, GET, and GROW. He went on to say that “GET”, by far, is the most important.  During this phase the contractual process for an alliance is hammered out.  His suggestion was to use an Alliance Framework™ document and process. This process has one main characteristic: speed. The framework allows companies to put together a high-quality deal quickly, or walk away quickly.

The framework sounded sensible to me, and caused me to wonder how Cisco/VMware/EMC put the VCE Coalition together.

Of course, all presenters discussing Open Innovation had a lot to say about Intellectual Property rights.

#1 Presentation

Without question my favorite presentation was by Kurt Schneider of Quality Ingredients Corp. He unwaveringly bashed the idea of innovation contests and said that any corporation that puts a “process” or “framework” around innovation is actually killing innovation. His idea instead was to:

1. Identify the contrarians within an organization
2. Ask them to think about “productizing their company’s services”, and/or “servicizing their company’s products”
3. Ask them to apply their conclusions in ways that disrupt their company’s business model
4. Seek and form external partnerships that help to accomplish this disruption

Any suggestion to find contrarians and turn them loose is alright by me!

Summary

I enjoyed the conference and learned some things but it was a bit of a hodge-podge. I have access to all the slides from all the presenters, and these are my main take-away from the conference. The slides will allow co-workers of mine to “see how other companies do it” as we come up with new plans for 2011. The discussions about Intellectual Property will be valuable as well.

And finally, my award for “best reward for innovation contest winners” goes to Equifax.

Equifax is in the credit report market. They have an enormous amount of data that needs to be mined, and they have chosen to innovate with external partners as part of their mining strategy.

The winners of their contests get week-long vacations at cool resorts.

That’s a strategy that I will begin to endorse going forward!

Steve

Information Playground

Twitter: @SteveTodd

EMC Intrapreneur