Archive for the ‘Innovation’ Category
This is the fifth in a series of articles that describe the unique traits of a corporate intrapreneur.
The next three habits, when practiced properly at a corporation, can often lead to the successful delivery of ideas. Idea delivery is characterized by the creation of a product or service that provides value to a customer.
These first stages of delivery occur as part of a technique known as 3-box time management, which is depicted below.
Vijay Govindarajan (VG) is a Professor of International Business at Dartmouth College. He is the author and evangelist of the 3-box strategic approach to corporate innovation. Three-box innovation strategy dictates that the majority of corporate resources should be invested in the Box 1 diagram listed below: Manage the Present. This box represents the continued development of existing products to yield most of a corporation’s revenue. Employees supporting this box focus on existing customers and processes, and they continue to leverage their existing competencies. In essence, this box “funds” the development of innovation within a corporation. Some companies fall into the trap of spending close to 100 percent of their resources in this box.
Vijay advises corporations to allocate portions of their resources to Box 2 and Box 3 as well as tried-and-true Box 1. Box 2 selectively abandons the past by “forgetting” most of what is known about the products built in Box 1, including why they were built and whom they were built to satisfy. This break from tradition enables an innovator to take existing products into completely different markets.
Box 3 is a more radical approach to innovation. It completely ignores current processes and products and prominently targets the future.
The figure below applies this 3-box corporate framework to an intrapreneur’s use of his or her own time (note that the box titles change when applied to an individual).
Intrapreneurs can be most effective when they are delivering products as part of a business unit (as opposed to being a member of a research team in an ivory tower). Why? They often prefer to be in the trenches, where they can be highly productive, visiting customers, and collaborating with others. They are respected within their organizations for doing those very things.
Perhaps their most significant contribution to their business unit’s product line is funding their employment and that of their collaborators. They are squarely positioned in Box 1.
Spending all of their time in one area of expertise does not enable intrapreneurs to achieve success. Their natural curiosity and passion will not allow them to stay in only one place. They practice the discipline of limiting the amount of time they spend in Box 1.
By limiting the amount of time they spend in Box 1, intrapreneurs make time for Box 2 and/or Box 3 activities. They set aside the time to learn about customer issues. They set aside the time to explore adjacent technologies. They regularly meet with experts in adjacent fields and collaborate to dream up ideas of what might be possible. Most importantly, they begin to build out their ideas.
It is worth pointing out the difference between Box 2 and Box 3 intrapreneurial behavior. Box 2 behavior is characterized by Venn diagram innovation. The intrapreneur collaborates in the context of a well-defined customer problem.
Box 3 behavior is characterized by blue sky innovation: taking the initiative to learn new technologies and collaborate without necessarily starting with the context of a defined customer problem. Blue sky innovators may ask themselves and others, “What might this capability be used to do?” Answers to this question can result in breakthrough innovation. It is often the case that breakthrough innovation can be applied to customer problems they don’t yet know they have!
It is a difficult balancing act to regularly spend time outside of Box 1. It takes passion and persistence. But it is the very first step that a new intrapreneur must take to prove his or her worth!
Subsequent steps build on the important ability to manage one’s time well. Please consider subscribing to this blog for a discussion of the next phase of idea delivery: managing one’s visibility.
This is the fourth in a series of articles that describe the unique traits of a corporate intrapreneur.
Productivity is the foundational attribute of an intrapreneur. Initiative is a required next step. Neither of these attributes necessarily results in new ideas, and new ideas are of course an essential part of innovation.
Breakthrough ideas are often generated during the third step, which is depicted below as collaboration.
Intrapreneurs are, by necessity, highly collaborative. The reason they practice Habit #2 (initiative) is because they fully recognize their need for new knowledge. They don’t know all of the problems their current (or future) customers are experiencing, and they lack comprehensive knowledge of an adjacent sphere of technology that just might light an innovative spark of how to solve a problem differently.
To overcome these limitations, intrapreneurs collaborate. Perhaps the best way to illustrate intrapreneurial collaboration is with an actual story.
The e-book Innovate With Influence describes a collaborative effort to produce an idea that translated into multiple billions of dollars of product revenue. The idea was instrumental in giving rise to the adoption of disk array technology by mid-range corporations (one notch below enterprise customers in terms of size).
The idea was originally motivated by the need to solve the most important customer requirement of an information storage system: data integrity. In the 1980s, a new technology known as RAID had arisen. RAID used mathematical techniques to re-create information from failed disk drives. If the math was wrong, the customer would receive corrupt data. Customers wanted RAID because it was faster than any disk technology previously available.
Thousands of lines of new software had to be written to implement RAID. Dozens of failure permutations could impact RAID systems.
How could this software be tested to prove that the math never failed? The intrapreneur in this case was highly productive and an expert in RAID. He had taken the initiative to understand the customer sphere. The diagram below highlights the need for an intrapreneur to find an adjacent technology and collaborate.
In this case, the adjacent technology was a very robust testing framework. This framework already verified data integrity, but it did not have a specific solution for verifying RAID disk arrays. Employees in the two technology spheres collaborated on new functionality that inserted tortuous fault events at every mathematical calculation point. This tool became internally known as the disk array qualifier (DAQ). The resulting disk array, known as CLARiiON®, achieved superior levels of quality that led to well over $12 billion of revenue generation in a 20-year period. The figure below depicts a Venn diagram of the DAQ solution.
These three circles represent the three basic habits of highly effective intrapreneurs. A highly productive employee becomes proficient in a particular expertise (in this case, RAID). The intrapreneur then takes the initiative to identify problems from the customer sphere (data integrity). Initiative spurs the search to find an applicable adjacent sphere (the test framework) and collaborate.
Collaboration between the two technologists yielded an innovative solution: the DAQ.
The next question becomes: how do you deliver upon these new ideas? The answer to this question will become apparent as we continue to work through the steps. Please consider subscribing to this blog for future updates.
It’s no secret that the population—and therefore the workforce—in many countries is aging, and that companies are struggling to adapt to some of the changes that reality necessitates. And those changes are likely to have a particular effect on companies that have traditionally relied on being able to replace aging workers with younger models.
One such company is German auto giant BMW, which is facing a particularly acute age-related crisis in its home country in the coming years.
BMW responded to this by experimenting with one of its production lines—typically places that require more youthful workers who can withstand the rigors of the workplace. The experiment: the firm raised the average age of one line to 47, and then asked the workers what the company could do to tailor the working environment to better suit their needs.
Based on that feedback, the company made around 70 improvements, including improving some of its tools and processes, installing extra furniture—particularly chairs and stretching areas—and even provided an industrial-sized magnifying glass.
While it’s not surprising that the experiment produced results–what employees can’t suggest ways to improve their workplace?)—there were still a couple of eye-opening findings. Attendance and sickness rates improved—likely a result of the increase in comfort—while productivity rose and the rate of defects “dropped to zero” (emphasis added). That’s right: it turns out that by considering the employee experience in the workplace, the company improved the performance of its employees. Even more surprising: the cost of the experiment was the relatively small sum of $50,000—a drop in the bucket for a firm the size of BMW, especially if it results in increased productivity and cost savings through defect reduction.
Watch the full video on BMW, courtesy CBS’ Sunday Morning.
–Phil Stott, Vault.com
Does your company have an HR handbook? Chances are, you’re thinking yes, of course. What about a culture book for employees? Zappos does.
The company, which started by selling shoes a decade ago, is today an Amazon subsidiary and has expanded to a multitude of merchandising. It is also probably one of very few companies to grow its brand around an idea of transparency, ethics and collaborative culture. For Tony Hsieh, cofounder and current CEO of Zappos, this was intentional from Day 1. In his recently released book Delivering Happiness: A Path to Profits, Passion, and Purpose—which I will be reviewing in the coming days on Vault’s CSR Blog: In Good Company—Hsieh devotes a whole chapter to the Zappos Culture Book.
In short, the book contains employee interpretations of what their company’s culture is all about and how it is different to other companies. And this is no mere PR exercise, designed to make the company look good: all of the entries received were inserted with minimal editing, even when they were anonymously submitted. Of course, Hsieh took a risk; no company is perfect and since culture is perceptional, the initiative could have resulted in a mudslinging session directed at Zappos management.
But it didn’t. While the majority of the entries were positive, not every employee was thrilled with the company’s culture—and that was reflected in the book. Hsieh, as promised, inserted both the criticism and the positive feedback when creating Zappos’ first Culture Book. His aim: To show existing and new employees what working there is all about, including the good, the bad and the ugly. In fact, much to his delight, the book has been downloaded by people who don’t even work at Zappos.
The company produces a new Culture Book every year. For Hsieh it epitomizes the evolution of the company’s brand over its short existence. “We wanted to be as transparent as possible, so we decided that none of the entries would be censored or edited, except for typos. Every edition of our culture book includes both the good and the bad so that people reading the book can get a real sense of what our culture is like. With each edition, it would also be a way of documenting how our culture was evolving over time.”
The idea of a culture book isn’t unique; it is Zappos’ treatment of transparency and accountability as a priority that makes this worth noting. Most companies conduct some form of employee survey to gauge problem points and get feedback on what’s working. However, publishing it without censorship in a publicly available document is what makes Hsieh’s approach sustainable. Even if it isn’t popular in every C-suite.
As a manager, how open are you to engaging your team in positive criticism? With new generations stepping into the workforce every year, ideas are bound to constantly evolve, but are management styles redefining and realigning accordingly? Whether you call it corporate responsibility, sustainability, or something else entirely, it doesn’t need highly designed websites and ad campaigns to work. It can start small: like spearheading a collaborative and transparent workplace culture. But it has to start from the top.
Hsieh puts it succinctly, “Even today, our belief is that our Brand, our Culture, and our Pipeline are the only competitive advantages that we will have in the long run. Everything else can and will eventually be copied.”