How IBM does Innovation

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Delivering Successful Innovation depends on Diversity

CIFS, Copenhagen27th October, 2010

Tina [email protected] that Matters

IBM Global Technology Services – Innovation Team

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Agenda Items

Introduction Diversity is crucial IBM innovation programmes – used with clients Repeatable approaches to innovation Case studies and examples

Innovation that Matters


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“Today, innovation is about much more than new products. It is about reinventing business processes and building entirely

new markets that meet untapped customer needs.

Most important, as the Internet and globalization widen the pool of new ideas, it's about selecting and executing the

right ideas and bringing them to market in record time.”


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Reviewing the top-ten hallmarks of innovative companies

1. Active Flow of Ideas2. Excel in product innovation3. Developing in services innovation4. Embrace business model innovation5. Extensive external collaboration6. Balanced risk taking and management trust

7. Better integrate business and technology8. Innovation metrics/incentives and process9. People take responsibility for implementing

their own ideas10. Leading from the top

80%

http://www.whirlpool.com/go.jsp?url=http://www.whirlpoolcorp.com/acquisition/?link=64&wtpc=&wtcgn=Go%20Whirlpool%20Acquires%20Maytag

http://www.3m.com/

http://www.google.com/webhp?hl=en

http://images.google.com/imgres?imgurl=http://www.carbase.co.uk/image/toyota-logo.jpg&imgrefurl=http://www.carbase.co.uk/toyota.html&h=238&w=350&sz=13&tbnid=tCvg19_P9JoJ:&tbnh=78&tbnw=116&prev=/images%3Fq%3Dtoyota%2Blogo%26hl%3Den%26lr%3D&start=2&sa=X&oi=images&ct=image&cd=2


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Different Types of Innovation (scope)

Pragmatic / Tactical Strategic

Business

Infrastructure

Technology

Process

DeliveryInnovations

Business ModelInnovations

Process Improvement

InfrastructureInnovations

DeployNew Architectures

New products or solutions for the client

COST REDUCTION OPPORTUNITIES

CommercialInnovationsOperational

Innovations

Exploit new industry / business opportunities

TransformationActivities

LegacyTransformation

Blue = Opportunity for Revenue Generation


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CEOs see even more potential with informed and collaborative customers and are rapidly increasing their investment there

Investment* past 3years

Investment* next 3years

Rise of the informed and collaborative customer

“We must redefine our value proposition to customers. Information and advisory content are becoming even more valuable than traditional drivers.”H. Edward Hanway, Chairman & CEO, CIGNA Corp.

“The rise of the informed and knowing consumer will continue to have an impact regarding our go-to-market priorities. We must know how to leverage new media. We've been surprised by the impact that just a few consumers can have with their blog entries.”Rob Hurlbut, CEO, Attune Foods

22%INCREASE

16.7%

20.4%

No impact 14%

Positive impact 76%

Negative impact 10%


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Sources of New Ideas and Innovation

Academia

Associations, trade groups, conference boards

Competitors

Consultants

Customers

Business partners

0515253545% 45%3515 2550

Internet, blogs,bulletin boards

Other

R&D (internal)

Sales or service units

Employees(general population)

Think tanks

External Internal


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We have found that clients have a variety of business needs that drive innovation…

We want to implement the latest Remote Collaboration tools –

but we also need to make sure we can use them well and get

the benefits from them…

We want to make our processes less costly, more customer

focused, more responsive, but that requires innovative

behaviours through the whole organisation…

We want to exploit the potential for innovation in our workforce, but

we need to know how to direct this potential,

structure it, encourage, reward it

and enable it…

We’re a retailer developing an online sales channel

for the first time

We’re a distributor building a global supply chain

We’re a Pharmaceutical company needing to drive

both innovation and speed-to-market

There are numerous ways businesses choose

to innovate

… innovation knows no boundaries! Innovation for one client can be business as usual for another


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…and therefore require a variety of tools and techniques to define and implement ideas

Leadership Developmentfor innovation - top-down

behaviour modelling

Performance Managementto incentivise

innovation

Process & governance design

for innovation management

External collaborationProcesses & online tools

Internal cross-silo collaborationProcesses & online tools

Communities of PracticeProcesses & online tools

Talent management to get the most out of

great innovators

Coaching for Excellence method, for

simplified, customer aligned operations

Better Change method, for rapid adaptation

Ideas generation eventsFacilitated online “jamming”

Scenario envisioning method, to plan

effectively in a complex environment

We use a number of tools and techniques internally

and with clients

Business Model Innovation to

streamline/adapt the organisation


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Innovation Opportunities

Product, Service &

MarketInnovation

Operations Innovation

Business Model

Innovation InnovationAgenda

3. Underlying Enablers• Building the underlying

capabilities that support innovation – across all innovation types

2. Types of Innovation• Broad set of innovation types

that require different capabilities, processes and measurements to succeed

1. Innovation Agenda• Leveraging Insight to set the

strategic innovation agenda• Leading and managing the

innovation mix


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Benefits of adopting new technology early

£

% of companies using the

technology

ObsoleteStandardAcceptedLeading Edge

Pioneer

Benefit

Cost

Technology Maturity

£

% of companies using the

technology

ObsoleteStandardAcceptedLeading Edge

Pioneer

Benefit

Cost

Technology Maturity


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It is important to make time for other people’s ideas …

No! I can’t be bothered to see

some crazy innovation. We’ve got a

battle to fight!


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Agenda Items




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It’s all about People …


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Get a different perspective

Collaboration and Diversity within Teams

is important here


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Demographics and the Digital Divide

81% of the business population age 34 or younger are gamers 56 million are old enough to be employees 7 million are already managers in the current workforce

Sources: Merrill Lynch 1999, Beck and Wade, Got Game., Prensky, Digital Game Based Learning

The new generation is huge, 90 million people in the US alone. Already there are more of them around than there are

baby boomers. Beck and Wade

The new generation is huge, 90 million people in the US alone. Already there are more of them around than there are

baby boomers. Beck and Wade

Digital ImmigrantsDigital Natives


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Virtual World, Real Leaders

"If you want to see what business leadership may look like in three to five years, look at what’s happening in online games."— Byron Reeves, Ph.D., the Paul C. Edwards Professor of Communication at Stanford University and Co-founder of Seriosity, Inc.Online

Online gaming environments creates leaders who are good at:

1. Focusing on getting the problem solved and the associated incentive

2. Juggling multiple real-time sources of information upon which to make decisions

3. Taking into account skills and competencies among co-players

http://domino.research.ibm.com/comm/www_innovate.nsf/pages/world.gio.gaming.html


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Beyond the Organizational chart

Source: Cross, R., Parker, A., Prusak, L. & Borgatti, S.P. 2001. Knowing What We Know: Supporting Knowledge Creation and Sharing in Social Networks. OrganizatiSNAl Dynamics 30(2): 100-120. [pdf]

Organization charts are not the best indicator of how work gets done

Senior people are not always central; peripheral people can represent untapped knowledge

Making the network visible makes it actionable and becomes the basis for a collaboration action plan


04/10/202321

SNA enables improvements by making the issues that affect social networks visible

Implement metrics which promote teaming (e.g., sales goals that include combined offerings from each subgroup)

Create new communication forums to keep subgroups in touch with each other (e.g., status calls, e-mail updates, project tracking databases)

Improving Social Networks

Examples of Possible InterventionsTarget of Intervention

Staff project with people from each subgroup Distribute decision-making away from single point Create ways to engage the under utilized, loosely connected

people Improve breadth of awareness across extended team

Organizational Level

Leadership Level

Individual Level

• Boundaries create several distinct sub-groups within one network

Type of Issue (Examples)

• Highly central people are bottlenecks

• Expertise of peripheral people is not leveraged

Mentor people who are new to the company or group Promote interaction with people beyond departmental

boundaries

• Individuals are overly dependent on one person

• People are not reaching out beyond their department


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SNA applies to a broad range of business problems

Promote innovation Example: An R&D group seeking to improve innovation conducts

an SNA to ensure that key expertise inside and outside the group is being effectively leveraged

Enhance productivity Example: An HR group conducts a SNA as part of a new rapid

on-boarding initiative to speed the transformation of new hires into productive employees

Increase efficiency Example: A client facing team that needs to share information

across the geographies to respond rapidly to client needs conducts an SNA to find the information hubs and where information is getting stuck

Example: A senior management team concerned that decisions are not being followed through, conducts an SNA to understand where information and decisions are getting blocked


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Building Effective Virtual Teams

The Challenge… 2 weeks – time it takes to build trust in the

electronic comms world

4 times as long to communicate a message electronically vs face-to-face

64% of communication is non verbal. Without visual cues messages can be easily misinterpreted

17 weeks – time lag for culturally diverse teams to begin outperforming single-culture teams

Ref: Pearn Kandola (Occupational Psychologists) Research Report September 2006


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Cultural Differentiators

Monochronic/Polycronic Power Distance Individualism vs. Collective Masculine vs. Feminine Uncertainty Avoidance


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Agenda Items




IBM Research worldwide – 3,200 people in 8 labs

5 Nobel Laureates 8 National Medals of

Technology 5 National Medals of Science 6 Turing Awards 21 Members in National

Academy of Sciences 59 Members in National

Academy of Engineering 10 Inductees in National

Inventors Hall of Fame

Behavioral Sciences Chemistry Computer Science Electrical Engineering

Materials Sciences Mathematical Sciences Physics Service & Management Science

Famous for its science and vital to IBM1945 1st IBM

Research Lab in NY

(Columbia U)

1945 1st IBM Research Lab in NY

(Columbia U) Zürich 1955Zürich 1955

Austin 1995Austin 1995 Delhi 1998Delhi 1998

Tokyo 1982Tokyo 1982

1952San JoseCalifornia

1952San JoseCalifornia

Almaden 1986Almaden 1986Watson 1961Watson 1961

Haifa 1972Haifa 1972

Beijing 1995Beijing 1995


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Huge range of innovation and delivery capabilities

IBM Innovation Centres

IBM Software Labs

IBM Systems & Technology Labs

IBM Design Centres

IBM Benchmark Centres

IBM Innovation Centres for Business Partners

IBM Executive Briefing Centres


Global Innovation Outlook

Introducing the GTO and other tools to understand technology and business trends

Start a dialogue about innovation, business transformation and societal progress

Collaboration across a global ecosystem of experts

• Business, academia and political leaders

Publically available at ibm.com/gio

Global Technology Outlook

Identify top emerging technology trends & IBM business opportunityin the next 3 to 10 years

Direct influence on IBM’s technical strategy – lists IBM exec actions

Many versions (short / long – internal / external – industry-specific)

Not published externally, but client version available

Fact based thought leadership from IBM Global Services that help clients realize business value

3 to 10 year industry and/or functional area outlook with action oriented next steps

CXO Surveys and joint work with Economist Business Intelligence Unit

Publically available at ibm.com/iibv

Institute for Business Value

1970s 1980s 1990s 2000s

Centrally Funded

Joint Programs

Research in the Marketplace

Collaborative Innovation

• Corporate funded research agenda

• Technologytransfer

• Collaborative team

• Shared agenda

• Effectiveness

• Work on client problems

• Create business advantage for clients

• Industry-focused research

http://domino.research.ibm.com/comm/www_innovate.nsf/pages/world.gio.html

http://w3.ibm.com/articles/workingknowledge/2009/01/res_gto_2009.html

http://w3.ibm.com/ibm/resource/gbs_ibv.html


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Agenda Items




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One-Off InnovationActivities

Ongoing Innovationand Partnership

Range of Approaches to Joint Innovation with Clients

Limited Commitment(IBM/Client)

Standard IBM OfferingsIdeas from only one SourceSimple Innovation Projects

High level of Commitment(IBM/Client)

Full program tailored for the clientJoint Idea Management

Wide portfolio of innovation projects

Joint InnovationPartnership Programme

(e.g. VCC / iTeam)

TacticalLittle partnership

Full PartnershipStrategic

InnovationFacilitation Programme

(e.g. DVLA, DEFRA

Innovation Consultingand Assistance

InnovationWorkshops / Events

Joint InnovationCouncil with

Client

Specific InnovationDelivery Projects

Various progression paths possible

High level of partnership withdelivery commitment

Strong partnership butno delivery commitments

Small / Large projects but no program

Mainly thought leadership

One off Advice / Consultancy

Sponsorship, but no delivery commitment


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Innovation ideas, input and delivery from an extensive range of internal and external sources

Client CIO & GIS communities

Client idea management

Client Alliances and Partnerships

IBM Global Innovation Outlook & Global

Technology Outlook

Client business and technical teams

Client IDEATION and Innovation JAM

IBM Client Account Team

IBM VCC Briefings

Client Technology Vendors

IBM Extreme Blue Programme

IBM ResearchCentres

INNOVATION DISCOVERY INNOVATION DISCOVERY

Joint Innovation Discovery / Theme

Workshops IBM Institute for Business Value

VCC VCCResearch Advocate


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Innovation Sourcing – Putting Ideas into Action (rapidly)

Discussions Initiatives

Step 2Review &Discussion

Step 3Them eSelection

Step 4InitiativeDevelopm ent

Step 5Pro jectDelivery

Step 1Idea G eneration & Ide ntifica tion

ValueCreation

Em ployees

Custom ers

Partners

Core VCC Initia tive Development Activity

Delivery P roject O utp ut from VCC

Ideas Not Input into the VCC

Key:




Key:

Ideas are genera ted from various sources such as em ployees, customers and partners and input into the VCC

The VCC reviews the ideas input into it – filte ring selected ideas into them es

Ideas to be progressed are deve loped into themes w ith overlapping ideas interlocked

Them es are qualified into sized and scoped initiativesw ith positive business cases

Initiatives are deve loped into delivery projects to ensure business va lue delivered

Ideas DeliveryThemes Discussions Initiatives

Step 2Review &Discussion

Step 3Them eSelection

Step 4InitiativeDevelopm ent

Step 5Pro jectDelivery

Step 1Idea G eneration & Ide ntifica tion

ValueCreation

Em ployees

Custom ers

Partners




Key:




Key:

Ideas are genera ted from various sources such as em ployees, customers and partners and input into the VCC

The VCC reviews the ideas input into it – filte ring selected ideas into them es

Ideas to be progressed are deve loped into themes w ith overlapping ideas interlocked

Them es are qualified into sized and scoped initiativesw ith positive business cases

Initiatives are deve loped into delivery projects to ensure business va lue delivered

Ideas DeliveryThemes


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Key Areas of the Blueprint Document

Mission Guiding Principles Scope People – Roles and Responsibilities Process Tools The Innovation Agenda and Initiative

Selection Governance Funding Model Communication Plan


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VCC Critical Success Factors

Working as a Joint IBM / Client Team Effective / Staffed Core Team IBM, IT & Business Unit Involvement Client buy-in to the selected focus areas Working with the Strategy & Architecture Teams

Selecting the right ideas Appropriate Risk from an IBM and Client Perspective Strategic for IBM & Client Valuable from a Client IT or Business perspective Able to implement quickly – need some quick wins

Having an effective governance and decision making process in place Clear sponsorship for the specific initiatives to be progressed Setting the right expectations for the VCC Communicating the VCC vision, scope and activities

“Between the conceptionAnd the creation,

Between the emotionAnd the response, Falls the Shadow”

(T S Eliot)


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Agenda Items



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“SMS for Life”

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• Over 1m people die of malaria in sub-Saharan Africa each year– About 2.7m per year globally

• Tanzania has the highest death rate in all of sub-Saharan Africa– Around 380 per day– 80% of these are children under 5

• Anecdotally, 40% of health facilities are thought to be out of stock of anti-malaria drugs at any one time

“SMS for Life” … The Problem …

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Solution Overview

• Process flow documented on the poster provided to each of the health facilities

• Application provided by Matssoft under contract to Vodafone– UK company– Application hitherto used to

manage insurance quote workflows

• Vodafone manages Telco requirements– Vodacom Tanzania– PUSH, the local aggregator– And also the technical incident

management process• IBM provides project

management


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Agenda Items




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Fortune favours the brave !!

Do one brave thing today … then run like hell !

How IBM does Innovation

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