Monthly Archives: July 2010

Pixar Embraces Collaboration to Power Innovation

Who amongst us does not love the work of Pixar? Very few I am sure. Pixar has succeeded as well as anyone in mastering the art of creativity. The company has produced one animated hit after another—including “Finding Nemo”, “Cars” and “The Incredibles”. Rather than being crushed by Disney, as many feared, Pixar has reinvigorated its parent company.

What is most interesting is how Pixar has embraced collaboration within the organisation, with a view, strongly supported by myself, that collaboration powers innovation. In his article in The Economist (June 17th, 2010), Schumpeter says the company devotes a lot of effort to getting people to work together. In most companies, people collaborate on specific projects, but pay little attention to what’s going on elsewhere in the business. Pixar, however, tries to foster a sense of collective responsibility among its 1,200 staff. Employees show unfinished work to one another in daily meetings, so get used to giving and receiving constructive criticism. And a small “brain trust” of top executives reviews films in the works.

Schumpeter continues that Pixar got the inspiration for this system from a surprising place—Toyota and its method of “lean production”. For decades Toyota has solicited constant feedback from workers on its production lines to prevent flaws. Pixar wants to do the same with producing cartoon characters. This system of constant feedback is designed to bring problems to the surface before they mutate into crises, and to provide creative teams with a source of inspiration. Directors are not obliged to act on the feedback they receive from others, but when they do the results can be impressive. Peer review certainly lifted “Up”, a magical Pixar movie that became the studio’s highest-grossing picture at the box office after “Finding Nemo”. It helped produce the quirky storyline of an old man and a boy who fly to South America in a house supported by a bunch of balloons.

Breaking down the barriers is key to successful innovation in any organisation. Pixar certainly sets an excellent example for others to follow.

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Does Collaboration Really Add Value?

Collaboration. Everyone now collaborates. Really. Or so the PowerPoint slides tell us. Did you not know that every organisation is now a collaborative organisation? Show me a CEO who does not have a slide in their deck talking about collaboration.

But what is the true value of collaboration?

Frost & Sullivan, supported by Verizon and Cisco, have published a paper Meetings Around the World II: Charting the Course of Advanced Collaboration. Frost & Sullivan surveyed almost 3,700 professionals in 10 countries on four continents, to determine a model for measuring a Return on Collaboration and the impact of IP-enabled advanced collaboration on business performance.

The study found that there is a continuum of performance and return at the intersection of communications technology and business processes. Performance increases as organizations employ progressively more advanced IP-enabled UC&C tools. Not only do these organizations perform better, but they also have a higher return on their collaboration investment.

The adoption of collaboration tools tools can help organizations achieve performance gains and returns because they can enhance the value that an increasing number of individuals, collaborating across a network, bring to business-critical processes. In those that involve many-to-many interactions, such as innovation and new product development, sales, and customer acquisition, the return on collaboration is highest, as the greatest numbers of people are working toward a common goal (e.g., creating a new product). In processes involving few- to- many interactions, such as corporate reputation and shareholder value maintenance, advanced collaboration tools tend to have a more muted impact, due to a correspondingly lower number of connected individuals involved in these areas. At a basic, functional level, line-of-business managers believe that advanced collaboration tools help them to do critical tasks faster, more effectively, and at a lower cost than when these tools are not used.

Of most interest is the finding that an organization’s Culture and Structure for collaboration is a strong determinant of collaboration quality, leading to high performance. The presence and use of collaboration technology is still important, but it clearly needs to be deployed in an organization that is open, with a decentralized decision making structure. All of this means that today collaboration-enabled performance is heavily based on the organizational structure and environment in which advanced collaboration tools are deployed.

It’s not just about the technology – if the structures for collaboration are not in place, no amount of technology will make the organisation able to be truly collaborative.

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Siemens and Open Innovation

P&G have long been held up as a flagship corporation when it comes to Open Innovation. After reading the Pictures of the Future document from Siemens, I really feel I can put Siemens up there with P&G. The message from Siemens is clearly that Open Innovation is vitally important to their future. The document highlights many of the projects that Siemens is undertaking around the globe that have Open Innovation at their core. It is exceptionally impressive. Siemens have taken the concept of Open Innovation and are truly making it a reality.

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CPG Companies need to innovate to grow

CPG companies, especially those in the food sector, have been long-term investors in Innovation. The consumer is constantly looking for the next flavor, the next tasty biscuit, or the next interesting soft-drink. A new report by PriceWaterhouseCoopers and the Grocery Manufacturers Association has just been released, and highlights that, under a scenario of long-term lower net sales growth, CPG companies will need to rethink the largely defensive actions they took in 2008 and 2009 to preserve shareholder value: divesting non-core brands, conserving cash, cutting costs. To grow revenues, companies either have to raise prices or drive volume—and that’s where innovation comes in.

Innovation goes beyond technical advances. Many CPG companies are looking to innovate by reaching customers in more places—for example, by expanding their product presence in the workplace or targeting demographic groups like Generation Y through smart social media campaigns. Others are looking to tailor their products for local customer tastes in emerging markets.
Understanding customer priorities is central to innovation. Consumers in the United States are buying more carefully, buying different pack sizes, taking advantage of volume discounts, and trading down to brands with a different value proposition. Diamond Foods CFO Steve Neil explains that one key to innovation is a willingness to approach an old problem with a new perspective: “We have been successful at bringing product innovation to categories that historically have not been very innovative, and that has differentiated us,” he says. For example, “We work with our retailers to help them position their private label. We want them to be able to offer the bulk big-value proposition, since we are not going to price at parity with them.” Helping retailers help themselves is just one way that CPG companies can bring a different mindset to their business.

Suppliers are also racing to gain a foothold in emerging markets like China, Russia, Brazil, India and Southeast Asia, according to the report.

It was compiled from interviews with senior leadership of GMA members, publicly reported company financial data, government statistics, analyst reports and other published material on 152 companies in the food, beverage and consumer products sector.

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You must watch Hans Rosling!

If you have fifteen minutes, please watch this video. Even if you don’t, you need to watch it anyway. Make the time!

Not only is it an eye opener about the rise and rise of India and China as economies, Hans’ presentation is unbelievably stimulating. Forget the tie and suit PowerPoint presentation – I wish every talk I went to (and gave) was just like this one.

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Ideas on Smartgrid, anyone?

Certainly interesting to see GE joining the crowdsourcing challenge community.

GE announced  a $200 million open innovation challenge that seeks breakthrough ideas to create a smarter, cleaner, more efficient electric grid, and accelerate the adoption of more efficient grid technologies. GE Chairman and CEO Jeff Immelt unveiled the challenge, the “GE ecomagination Challenge: Powering the Grid.”.

The global challenge invites technologists, entrepreneurs and start-ups to share their best ideas and come together to take on one of the world’s toughest challenges – building the next-generation power grid to meet the needs of the 21st century. The challenge is one of the largest ever and is open at www.ecomagination.com/challenge.

What is significantly interesting is that GE did this in partnership with a bunch of venture capital companies. Not sure if I have seen this before. The Challenge was launched in collaboration with venture capital firms Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byer and RockPort Capital, and Chris Anderson, Editor-in-Chief, Wired magazine. So if the ideas are relevant, there is significant funding there from the VC community to power (no pun intended) them ahead.

An interesting twist! I wonder who owns the IP?

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Excellent series of podcasts on Open Innovation

There are an excellent series of podcasts produced on EnterpriseLeadership.org. I am bringing links to these here.

Dr. Joel West, Academician and Author, Talks about the Open Innovation Paradigm for Technology Development In this podcast, Dr. West explores what powers the concept of open innovation and how it differs from traditional innovation efforts, such as research and development.

Tom DeGarmo, a principal at PricewaterhouseCoopers, Makes a Case for Open Innovation in Economic Downturn DeGarmo provides insight from his research experience with open innovation, gives examples of open innovation communities, and gives CIOs and CTOs several takeways for using technology to carry out open innovation initiatives.

Steve Shapiro, InnoCentive’s vice president of Strategic Consulting, Talks about Using Open Innovation to Solve Tough Problems Shapiro explains the reasons for using open innovation to solve tough problems, InnoCentive’s business model for generating revenue, some of InnoCentive’s most successful challenges, the benefits of using InnoCentive, and the challenges the company faces in this economy.

How CIOs Can Reshape Their Company’s Business Model: C.K. Prahalad, Best-selling Author and Academic Prahalad provides specific examples of how senior IT executives can address new business opportunities for their companies, how new technology initiatives can drive business opportunities at the bottom of the pyramid, why companies should embrace the concept of open innovation, and what the CIO role will be like 10 years from now.

Dr. David Tennenhouse, partner at New Venture Partners, Talks about Different Approaches to Open Innovation In this podcast, Tennenhouse talks about the need for companies to turn to open innovation, the way open collaboration enhanced open innovation at Intel and other organizations, the emergence of innovation that venture capital firms are seeing, and the takeaways CIOs need to be aware of if they want to promote innovation and open innovation.

Former Air Products Research Executive Talks about Establishing Successful Corporate Innovation Programs Why are some major companies good at driving corporate innovation in technology? For some answers, Enterpriseleadership.org turned to Dr. Ron Pierantozzi, who built his entire career on driving corporate innovation in a technology-related company and doing research in this area.

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