Tuesday, October 29, 2013

Global Innovation 1000 Study, by Booz

Booz & Company Partner John Loehr talks about the companies that made this year's 10 Most Innovative Companies list and tactics that lead to innovation success. This ranking comes from Booz & Company's 9th annual Global Innovation 1000 Study, which analyzed the world's 1000 largest corporate R&D spenders and surveyed 400 global executives about which companies they believe are the most innovative in the world and their companies' use of digital tools in innovation.
There are key factors that we ought to tease out, and unpack, from Booz's study, which definitely make for an intriguing, complex picture on innovation.

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Technology enables deep customer insight

Steve Jobs was known to eschew market research.  Calling upon Henry Ford, he spoke about how innovating on products that customers in particular don't even know (yet) that they want or need.  What they say they want or need may be positively conventional.  Ford apparently remarked that if he had ask customers what they wanted his company to do vis-a-vis transportation, they ask them to build a better horse.

But the reality is, only a few of us can match the visionary pulse of Jobs or Ford.  So we do have to research the market and we do have to ask customers to gain insight on what they want and need.  But the sort of customer insight that Booz highlights goes deeper indeed.  

Enter: Big Data.  With better sensor technology, monitoring devices, and analytic tools, companies can gain a comprehensive, direct pulse on what customers are doing and how they deploying their products or services.  With descriptive and inferential statistics, they, they can then discern underlying patterns on such behavior and grasp what these patterns mean vis-a-vis customer-focused actions.   

Enter: Immersion Labs.  For the longest time, I thought that realistic simulations of operations or process were crucial for training and diagnostic purpose (rf. flight simulators for improving pilot performance and testing capability).  But Booz shares case studies of client who create simulations for customers.  

Innovation efforts must arise from business purpose

It may be just semantics, but to me alignment is on the right track but it falls short of how innovation must be positioned among company initiatives and efforts.  Alignment is akin to taking any two objectives, for example, and making sure their both on the same line.  Whether those objectives have any sort of relationship, connection or shared utility is an open question.  

Instead, innovation must be defined by, must be created from, must be founded upon business purpose, vision and priority.  For example, Google didn't just acquire Android for the sake of competing with Apple or Microsoft on operating systems.  Rather, Android is essentially part of the fabric of its expanding and evolving business model: To follow us via our mobile devices, so they can gain even deeper customer insight about us (i.e., beyond just search), and thus position us better for their advertisers.

In contrast, I worked with a company that persuaded top executives to launch a sales academy, focused on building the knowledge and skills of the sales force.  It was definitely aligned with company priorities around ramping up the sales organization.  The trouble was, however, this sales academy was conceived, then implemented, without sufficient grasp of company issues and without sufficient insight into sales performance.

Challenge of using digital tools effectively

Booz & Company Partners Barry Jaruzelski, John Loehr, and Rick Holman talk about how companies are using—and should use—digital tools to enable innovation. In its 9th annual Global Innovation 1000 Study, Booz & Company analyzed the world's 1000 largest corporate R&D spenders and surveyed 400 global executives about which companies they believe are the most innovative in the worldand their companies' use of digital tools in innovation. 
In their study - Embracing Digital Technology - MIT Sloan Management Review and Capgemini Consulting found that while executives and managers saw the value of Booz-termed digital enablers, the planning for and the adoption of these were quite challenging for their CEOs.  The fact that a good many of these CEOs didn't prioritize digital enablers too highly on their agenda suggested that their sense of urgency was modest at best, but at worst concerningly low.  Bob Morison, a speaker at an IBM Summit that I attended, spoke about the dual aim to build capability, along with appetite, in rolling out Big Data and Analytics, in particular, in the organization.
[Caterpillar] Chief technology officer Gwenne Henricks says that the company “makes significant use of immersive visualization, where we can bring in customers, service technicians, or assemblers from the assembly line and expose them to three-dimensional, real-time virtual depictions of new product designs. It’s here that we are able to capture their feedback [in terms of] usability, serviceability, manufacturability, and the like—all of those design aspects of our product that involve interactions with humans.”
Reference: The Global Innovation 1000: Navigating the Digital Future.

At first blush, Henricks speaks well enough about people, as it relates to use of Immersion Labs.  Yet, I think she misses the point: that all aspects of any product or service involves human interaction.  There is absolutely no such thing as using products or services which doesn't involve people.  Robotic, drone or weapon technology may appear to go off on their own, but every single one of these is operated by someone, albeit remotely.

Here is a quick rundown of people factors and activities, that companies must account for if they're going to innovate successfully and if they're going to drawn on digital tools effectively:
  • Building shared vision
  • Collective understanding
  • Getting buy-in and commitment
  • Training and development
  • Coaching and mentoring
  • Supervision and support
  • Monitoring and accountability
  • Error management
  • Safety guidelines and requirements

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It goes without saying that these digital enablers are crucial in company performance.  But to re-emphasize Booz's point, it's the significant and effective use that matters the most:
[Bob] Esmeijer of Philips Lighting cautions that people must focus on the insights they desire from the tools, not simply the process of using them. “We have all kinds of tools at Philips that you can use to calculate or play with things. People very quickly jump on them, sometimes before they get the problem they’re trying to solve right. We want to make sure people think about the bigger picture—what we want to learn, or what we’re trying to manage—and then use the tool,” he explains. “In the end, lighting is a human experience.”
Reference: The Global Innovation 1000: Navigating the Digital Future.

Well-said by Esmeijer (emphasis, added).

Thank you for reading, and let me know what you think!

Ron Villejo, PhD

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