Innovation Acceleration

Innovate and thrive, or stagnate and die. It's that simple. But how can organizations create an environment that effectively stimulates and supports meaningful innovation?

"Effectively" is the operative word, because not all good ideas translate into more innovative products or increased revenues. Alcatel-Lucent Belgium learned this after its "Stretch Your Mind" contest in 2005. The prize for the best idea was a new car, prominently displayed at the building's entrance and awarded by Belgium's Minister of the Economy. "It was a big event, but a bad practice," according to Guido Petit, Ph.D., senior director. "It created more negative energy than positive energy because there was one happy person and 149 unhappy people." And although the contest tripled the ideas generated, none of them became products.

Meaningful Innovation

"We're interested in big wins—ideas that can generate between 50 and 100 million euros within three to five years," Petit says. To get those big wins, "we needed to do something differently." So executives met with the Flanders Business School and developed the Alcatel-Lucent Entrepreneurial Boot Camp to help innovators develop big ideas into viable business plans. Each boot camp cycle begins with a "dating event" to match idea generators with others who can help develop the idea into a product and who are willing to commit at least 10 percent of their available time to the project. The five best ideas and teams advance to the boot camp itself. Because different skills are needed at different stages in product development, Alcatel-Lucent insists on multidisciplinary teams of experts in engineering, research, marketing, finance, and sales. "Only in a team can you overcome the organizational barriers in your company," Petit says.

During three weekends in a three-month period, boot camp teams learn to develop a successful business plan, and learn about new venture creation, opportunity development, entrepreneurial marketing, the principles of new product growth, entrepreneurial finance, and legal concerns.

Flanders Business School professors lead the sessions. "Senior managers act as coaches, help with planning, put teams into contact with people inside and outside the organization, and help find needed data," Petit says. Each boot camp culminates in "Super Friday," in which the business opportunity plans are presented to a jury composed of Alcatel-Lucent senior executives, professors from the Flanders Business School, and venture capitalists.

At the conclusion of the boot camp, the one business plan judged most likely to succeed goes on to the incubator stage for market validation and prototyping. The others are evaluated carefully, and team members receive detailed feedback so they understand why the project didn't advance, and to encourage them to continue innovating. Teams may decide to continue on their own, Petit says. "This is a stage-gated process, so there are several go/no-go decisions," and the business plans change dramatically throughout their incubation.

Since its inception in 2006, approximately 30 projects have been evaluated, 80 percent of which addressed new markets. The boot camps are considered so successful that they have expanded to Alcatel-Lucent divisions in France and the U.S., with plans to also launch in India and China.

Innovation Transformation

In contrast to Alcatel-Lucent's emphasis on new products, Pfizer's innovative thought is directed toward transforming itself from a pill company to a health and wellness company. That required a new mind-set.

Pfizer's employees know the realities: It takes 10 years and $1 billion to bring a drug from discovery to market; even minor changes in the process are expensive, time-consuming, and heavily regulated; only a few new drugs are approved each year industry-wide; blockbuster drugs are coming off patent, so revenue streams will dwindle. Therefore, as an industry, "we need to think outside the box," insists Roopa Unnikrishnan, senior director of world strategy and innovation, Pfizer.

Two years ago, Pfizer committed itself to building a culture of focused innovation. Transforming the company requires conversations about opportunities and how to maximize them. Pfizer started the conversations two years ago by making innovation an overarching goal that should permeate every aspect of the organization. The key points in its path forward were to "recognize the big questions we need to solve and then ask researchers what's happening in their experiments to help answer those questions," Unnikrishnan says.

To advance the conversations, Pfizer developed the online "Idea Site." It asks "a couple of large questions, such as 'How can we establish revenues past 2012?' and posts responses on a discussion board," Unnikrishnan explains. Those with the best ideas, determined by respondents, are recognized with a check for approximately $100. The discussion board brings multidisciplinary insights to more fully develop ideas so they are worthy of serious notice, helping advance good ideas that otherwise may have been disregarded.

Generating good ideas is only one part of innovation, she emphasizes, so Pfizer also hosts events to help people build the skills needed to implement innovative ideas.

Managing Innovation

To embed a culture of innovation throughout a traditional, century-old company with manufacturing and research centers in 69 countries, Whirlpool began with defining what, exactly, "innovation" meant to the organization, explains Tammy Patrick, global director of Whirlpool University. It also defined the drivers for shareholders and customers, and the necessary governance and accountability frameworks that help innovative ideas take root.

With that groundwork laid, Whirlpool now places goals in everyone's performance metrics to drive innovation," notes Moises Noreña, global innovation director. Whirlpool also took 75 individuals off their jobs full time and trained them to become "Masters of Innovation." When they returned to their jobs, "they became trainers for the rest of us," Patrick recalls.

Whirlpool's competency-based innovation system has three levels: basic (employees understand innovation), proficient (they can implement innovative ideas), and mastery (they can teach innovation skills). The skills learned in these three levels, via online resources and face-to-face classes, often involve frameworks people can use to help them think about projects from other perspectives, and ways to tap new or unexpected resources. The training also develops leadership skills, global operations competence, and functional completeness.

To foster diversity of thought, Whirlpool also conducts five-question social networking analyses for project teams to help them understand their professional networks, identify central connectors among networks and fragile areas in their networks, and develop action plans to strengthen their networks and leverage those connections.

The effectiveness of this approach is hard to measure, Noreña admits. Whirlpool tracks the number of projects in the developmental pipeline and their expected revenue and the actual revenue from projects on the market, and assigns goals to teams each year. Pipeline projects weren't tracked rigorously before 2002, he says, when the focus on innovation began.

Quick Tips

- Set focused goals
- Share ideas across disciplines
- Tap informal networks
- Prepare people to accept and implement innovative ideas
- Train innovators to take their ideas to the next levels