Supernova 2007: because technology is everyone's business

Thursday, June 22, 2006

Innovation in Established Organizations

Talking about how large-scale enterprises drive innovation (excerpts and paraphrases), with panelists:

Linda Sanford, IBM
Sean Park, DrKW
Kim Polese, SpikeSource

SpikeSource: We’re part of a new class of companies that aggregate content and make better sense of it for businesses. We’re finding different ways to work with customers, so they’re part of building the product.

DrKW: The challenge in large organizations is getting adoption on a non change of generation timeframe. There will be change with the next generation of employees, but you can’t wait 10 or 20 years for the guard to change. And some CEOs have their power bases attached to the status quo and aren’t interested in change. In the financial services industry, innovations outside the frameset of products is difficult.

IBM: At our research facilities, we can have four generations represented. What motivates each generation is very different. How they work and interact, what they look at is different. They each bring something valuable to the challenge of accelerating change.

Q: It’s a truism that it’s not the technology, it’s the culture. How do you evolve the culture?

IBM: We’ve developed a framework called the drivers of culture change. You have to change many aspects of the messages you send about your culture. It’s making sure you have leaders who model the new behaviors, and having tools that allow people to collaborate. Recognition and reward systems have to change to reinforce the culture.

DrKW: In any company, there are leaders and observers. We don’t need everyone to be on the cutting edge. Find the ones who do have a passion and ability to lead change and take risks.

SpikeSource: How businesses work and relate to their customers is changing. SpikeSource takes open source technologies and makes them palatable to companies. If they’re willing to experiment – even in a sandbox were they try new things – then they get it.

Q: As the lines between business and consumer technologies blur, are you seeing blogs, wikis, etc. have an impact in your organization?

DrKW: Online trading for retail investors is gaining adoption in part because people are comfortable buying books online at Amazon. The barriers are up front. Once you get people to try the technology, adoption become fast because the technology is powerful. Social software is a perfect laboratory, because real time proximity is important, but too many channels of information are hard to deal with. With phone, email, chat, blogs, wikis, RSS, one of the challenges is in introducing new things, is that it will disaggrate the communication. We do blogging and wikis internally, but the name wiki hinders adoption because it sounds like a toy or too geeky. Allowing people to collaborate in a time shifted way is the killer app of wikis.

IBM: These tools allow employees to connect with others with similar passions. Then communities of interest form to collaborate and work together. When we have a crisis, people come together to solve the problem, and they use blogs and wikis to do it. How do we make it something that they feel they can use to share expertise?

Q: This requires organization to give up some control. How do you deal with employees who don’t use the tools the way you intended? How do they make sense of the complexity?

IBM: We recently reassessed our set of values with an online jam session, letting the employees chat about the values. These values guide how we behave and what we do.

SpikeSource: The problem of choosing open source components can be frustrating. We built a business around making sense of the changes to open source components. We aggregate, test and apply the upgrades. The way we work with companies is, we say you don’t have to interact with several entities in the open source world, we’ll do that for you. So we’re a second generation intermediary (Red Hat was a first generation).

DrKW: We’re stuck in a command and control structure. But in the enterprise, we never really had control in that way. The multinationals have no choice but to use distributed intelligence. Then it’s about making that work for you so you don’t have rogue elements. You need someone from the top to set the tone, and not let local feudal barons be an impediment to change. It’s fear vs. greed, walking the line between scary change and pragmatic change.

Q: When it comes to intellectual property, what is the middle ground to get beyond the established companies that have a knee jerk reaction to these issues?

IBM: The fundamental principle is that there has to be a balance between protecting the creators rights, so they receive value for it; and, if it’s in their specific domain, getting the idea out. In the past we had the silo approach, where innovation came from one company, Now we’re seeing it come from distributed companies.

Q: Is there a dichotomy between routine and innovation?

IBM: Backend process innovation is critically important. This impacts the role of the CIO. That role is shifting not to ignore infrastructure, but to provide focus on the business process. In the end, the tech is just the automation of the process. Reinventing and transforming the process has to be the focus. Processes in most companies today are vertical, siloed, command and control processes. We need to parse the processes, take out the inefficient or irrelevant portions, and focus on the processes that are core to the business/value proposition. That is driving us to let go of the processes that someone else can do better. That frees up resources for innovation in what’s core to our value proposition. We’re not only looking to take cost out, we’re also looking to simply processes for the users. Business value metrics help you measure which processes to focus on.

Q: What is the link between a top-down driven R&D and bottom-up innovation?

DrKW: It’s a question of resource allocation. The best way forward is to allow emergent intelligence to drive where resources are applied. You need to make decisions faster, instead of waiting for budget cycles. We’re looking for ways to validate initiatives by putting in real time measures. In the financial services industry, which is highly regulated, it’s not just creative freedom vs. control freaks.

IBM: We’re reinventing the financial planning / resource allocation process because it was all cost controlled. There is a balance between controlling costs and shifting investments to where the growth is. Markets are not annual. It’s top down, because we have a business model to deliver against. It’s bottom up, to understand the reality that the client sees. And the middle view that says, here are best practices in other industries (based on business analytics). This is a fact based process, not emotional. And it’s aimed at maximizing revenue growth.

Q: How to you sell to large enterprises in the process of transformation?

SpikeSource: Find the point of pain that you can solve, Make the customer part of development.

DrKW: Find out who the right people are to talk to. They’re not necessarily the procurement officer. Don’t be afraid to sell at the edges. The risk-reward of aiming for the enterprise-wide rollout is not worth it.