THE FUTURE OF CORPORATE INNOVATION CENTERS WORLD FUTURE SOCIETY 7/28/01

1. THE FUTURE OF CORPORATE INNOVATION CENTERSWORLD FUTURE SOCIETY7/28/01 Jack Hipple, Innovation-TRIZ Tampa, FL jwhinnovator@earthlink.net www.innovation-triz.com

3. OUTLINE • Why is this topic important? • What has been learned? • What works • What doesn’t work • Contradictions and issues • How to do it right--in the future

4. SOURCES OF INFORMATION • Network of 15 former innovation managers from major corporations--study sponsored by the Association of Managers of Innovation/Center for Creative Leadership--in the process of being published • Analysis of experiences in corporations in a medium size city network • Personal experience leading major corporate innovation programs and projects • Consulting experience with clients • “Crisis and Renewal”--David Hurst

5. Corporations are constantly looking for inventions, acquisitions, collaborations, and processes which can allow them to grow at a rate faster than the GDP of the country/world--and faster than their competitors! Many unsuccessful attempts have been made to sustain internal efforts to support these goals--nearly all have been terminated (sometimes restarted years later!) These efforts have spent HUNDREDS of millions of dollars! Perception that there are untapped ideas within the organization Even perceived “successes” have seen downsizings eventually What/where are the learnings? I. WHY IS THIS IMPORTANT?

6. WHY IS THIS IMPORTANT? • Previous leaders of these programs, for the most part, are in successful consulting businesses or start-up companies--major corporations have lost them--probably forever • Their clients usually always include ex-employers! • Learnings?

7. II. WHAT’S BEEN TRIED? • A specially funded “enterprise”, usually under the umbrella of the R&D organization • Funding usually (but not always) outside the control of existing business units and sometimes at the expense of these existing businesses • Sometimes combined with other corporate initiatives in acquisitions • Sometimes minimally funded for support staff only--”can’t fund and can’t say no”---primary responsibility was encouragement and moral support • Programs sometimes focused around a unique physical facility • Leadership of program frequently in the hands of one key senior leader

8. III. WHAT WORKED • Ideas were stimulated • R&D personnel were allowed to explore outside their normal focus area • Special meetings, demonstrations, exercises highlighted the importance of the activity and demonstrated support • New products and businesses were started

9. IV. WHAT DIDN’T WORK • Ideas were not integrated with corporate business structure and environment • Ignorance of the amount of effort and investment required to change the corporate climate and/or business • Business/commercial involvement after the fact caused priority conflicts and resentment • Little or no involvement of the sales/marketing organization • Time horizons and impact poorly estimated • Narrow and individual sponsorship

10. CONSEQUENCES • Subtle forms of sabotage • Corruption of funding process • Lack of staying power during economic downturns • Program “died” with the loss of sponsor

11. SABOTAGE AND CORRUPTION • Funding of “normal” business projects under the innovation umbrella • “Perceived” innovation funding greater than actual • Credibility of program suffers over time--deliverables vs. spending • Simple competition for $$

12. CONCEPTS PROVED INVALID • A single location (“creativity centers”) in an organization can facilitate broad organizational innovation • The R&D function can do it alone, or in spite of other functions

13. CONCEPTS PROVED VALID • People within an organization DO have unique ideas • There ARE new business opportunities which will not be discovered by normal business visions and processes

14. RECENT BUSINESS TRENDS • Customer driven vs. technology driven ---the balance has shifted • Core competencies being used to identify focus areas and sometimes used as shadow organization structures • Alliances and strategic partnerships that are not necessarily permanent • New problem solving tools • “Business” teams and organizations vs. functional leadership of activities

15. RECENT PERSONNEL TRENDS • Dramatic decline in loyalty, downsizings • Increased specialization • “Temporary” assignments and more rapid turnover Impact Capturing and broadening of intellectual property (not just patents, but “know how”) much more important AND difficult

16. STUDIES AND INSTRUMENTS FOR ASSESSMENT

17. INPUT FROM AMI STUDY

18. ASSOCIATION OF MANAGERS OF INNOVATION • An informal group of 30-40 innovators, most of whom have (had) responsibility for innovation programs within large companies, government agencies, or non-profits • Meets twice yearly with outside stimulus speaker and shares experiences • Active since 1986 and still going • Sponsored by Stan Gryskiewiecz at the Center for Creative Leadership

19. AN OBSERVATION WAS MADE….. • A large percentage of corporate innovation managers had become consultants through downsizings and early retirements • These were usually associated with termination of the function • With further passage of time, the percentage rose more, with 15 people identified

20. AMI DECIDED TO….. • Survey and study this phenomenon • See if there were any learnings that could be shared • Publish if possible

21. RESULTS • Study completed in late 2000 • Draft of publication in progress • Results can be shared anonymously • Findings significant

22. LEARNINGS FROM STUDY • Significant differences between “styles” of innovation champions and “norm” around them • KAI and Meyers Briggs analyses can help assess

23. THE MEYERS BRIGGS (MBTI) INSTRUMENT

24. MEYERS-BRIGGS • A tool which measures our “style” of social interaction • Extraverted/introverted (E/I) • Sensing/intuition (S/N) • Thinking/feeling (T/F) • Perceiving/judging (P/J)

25. MEYERS BRIGGS • 85% of innovation champs were “NT’s” • Only 1% of the population are “NT’s” • >80% of corporate senior managers are “ST’s” • This sets up major potential conflict

26. IMPACT OF MBTI DELTAS • Change always seems bigger to an “ST” than an “NT” • “NT’s” are more comfortable with change in general • If desired change is not defined clearly, conflicts will result

27. EXAMPLES…. • “We need to do different things in this company…” • Does this mean get into an entirely new business, make an acquisition? • Does this mean we need to process existing orders more efficiently?

28. THE KAI INSTRUMENT

29. WHAT KAI MEASURES • Meyers Briggs measures how people relate to each other • KAI measures how people relate to problems--their problem solving style • Instrument measures originality, rule/group conformity, and efficiency

30. THE INSTRUMENT • A 32 question assessment with a range of responses • Range of score, 32-160 (32 questions X (1-5) response • 15-20 minutes to complete • Highly validated across many areas and cultures globally • Dr. Michael Kirton, Occupational Research Centre, Hatfield Polytechnic Institute, England • Indiana State University, Terre Haute, IN

31. THE INSTRUMENT • Measures how we relate to “problems” and the problem solving environment vs. how we relate to people • “Norm” of population is around 90 with the majority of people in the 70-120 range (highly adaptive to highly innovative)

32. THE INSTRUMENT • Composed of 3 sub-scales, which, when added, produce the total “score” • Originality • Rule/group conformity • Efficiency • Sub-scales also important in themselves

33. KAI DIFFERENCES • Managerial “norm” is around 95-100 • Average of innovation champs was 135 • Friction visible with differentials of 10-15

34. KAI DISTRIBUTION NORM

35. IMPACT OF KAI DELTAS….. • Replacing vs. improving • Reaction to internal vs. external threats • Appreciation for detail • “Right” vs. risk

36. PERSONAL FEEDBACK FROM THE AMI STUDY

37. PERSONAL LEARNINGS • Broader support and involvement beyond one executive (especially one near retirement age!)--don’t depend on the energy and drive of one person • Top level support • Understand political and business cultures, recognize you may be a threat to someone • More education on role of innovation • Succession planning • Treat as a business process • Use the “coin of the realm” in discussions and planning • Corporate, not a research process • Marketing/commercial involvement and support • Share successes AND failures • Share process successes

38. CONTRADICTIONS OF INNOVATION PROGRAMS--MAJOR CITY CORPORATE INPUT

39. THE PARADOXES OF INNOVATION • Somebody’s job vs. everybody’s job • Must be everyone’s job at some time • Simulation exercises • “Inside” business structure vs. “outside” business structure focus • Set up separate structure if necessary • Chaos vs. discipline • Separate in time/upon condition • Passion vs. objectivity • Separate in time/upon condition • Risk vs. job security • People learn quickly--protect risk takers or you soon won’t have any!

40. ANOTHER DRAMATIC CHANGE…. GENERATING COST OF INFORMATION Source: Jim Palmer, P&G DISSEMINATING TIME

41. COST OF INFORMATION….. • Generation • Must be right in the first place • Must be focused on the right problem • Problem definition more critical than ever • Must be protected and provide value • Dissemination • Retrieval • Access

43. LONG TERM BUSINESS TRENDS (NOT CYCLES) Emergent Action Rational Action Constrained action Charismatic Leadership Creative Network Conservation CRISIS CHOICE Confusion Strategic Management Entrepreneurial action Source: Crisis and Renewal, David Hurst, Harvard Business School Press, 1995

44. REGARDLESS OF WHERE YOU ARE IN THE CYCLE…. Innovation is ALWAYS NEEDED!

45. IN THE ENTREPENEURIAL PHASE... • Intellectual property protection may be most important • Freedom and lack of control is stimulative

46. IN THE RATIONAL ACTION PHASE • Decisions must be made • Prototypes and manufacturing plants must be built • The nature of innovation requirements change • Delivery and marketing are important, and they too require innovation and creativity

47. PREVENTING THE CRISIS/CONFUSION PHASE • ALWAYS have someone figuring out what could replace you and your business • Listening only to your current customers can be a big mistake! • Innovation in manufacturing is no less important than in new science and products • New techniques such as TRIZ can really help this analysis

48. HOW TO DO IT RIGHT

49. HOW TO DO IT RIGHT • Functional integration • Identification and assessment • “hunters” and “gatherers” • Identification of long-term trends in addition to input from current customer base • Change the “program” vs. cycle, but support must be CONSISTENT • Extension/broadening of intellectual property work to make whatever is done more valuable

50. FUNCTIONAL INTEGRATION • All innovation efforts and initiatives must include or have a mechanism to trigger inclusion of the commercial and manufacturing base of the organization • who is going to buy? • how are we going to make? • do we have the required competencies?