5×5: Digital Tools, R&D and Innovation

by | Friday, October 25th, 2013

Every Friday RE:INVENTION’s team reviews a recent news article or research study and provides unique analysis and insights from each of our team members. We call this weekly blog feature, 5×5.

UP THIS WEEK: DIGITAL TOOLS AND INNOVATION

This past Tuesday, Booz & Company released its most recent report, The 2013 Global Innovation 1000 Study: Navigating the Digital Future. This study assesses the world’s top 1000 publicly listed companies in terms of R&D spending. The conclusions of the report denote that the top spenders are not necessarily the top performers, and that how these corporations allocate their R&D funds is a more accurate determinant of success. A firm’s focus on its digital toolkit is proving influential in every stage of innovation, from concept to creation and analyzation. Companies that fail to embrace digitalization where it applies to their needs will fall behind their competitors. In this week’s 5×5, the RE:INVENTION team will share experiences with companies that have successfully integrated digital tools and recommendations for those that should consider implementing them.

This Week’s Reference Articles:

THIS WEEK’S QUESTION

Can you share an example of a company that has or could increase success using digital tools to support R&D and innovation?

OUR TEAM’S RESPONSES

Joe Barrus (“The Technologist”)

I think this study is spot on. With accelerating change and shorter windows of opportunity, one key characteristic that innovative companies will share is speed. Successfully innovative companies are able to discover new ideas that meet evident or hidden demand of their customers and execute development and deployment of these ideas within the window of opportunity to reap the benefits. They are able to execute the Lifecycle of Change effectively with speed, accuracy and quality.

Digital tools play no small part in enabling these companies to succeed.  Digital tools can tackle and manage complex tasks such as determining the desires of your customers or managing dependent efforts in parallel to speed up execution, etc.  Smart companies have come to realize that investing into these digital tools is the key to speed while getting it right.

I previously worked for a young but significant online higher education company undergoing rapid growth.  After having early success in developing a prototype learning technology, our CEO wanted to embed Innovation as a core value in order to spur additional creativity.  However, we had undergone rapid growth to about 5000 employees within a few short years and the organizational structure was not very supportive of rapid change.  We had developed a typical command and control culture with silo-ed organizational units even as a young company.  I recognized that this was going to get in the way of developing a successful innovative culture.

I sold the CEO on 2 programs:  One an idea crowdsourcing solution and the other a broad social collaboration platform to replace our standard Sharepoint Intranet and email as the primary communication/productivity toolset.  We chose Spigit as the ideation platform and Jive as the social intranet and made a significant investment in both in terms of licensing and resources.

The ideation platform was to replace the recommended “suggestion box” approach for employees to promote ideas.  Creating an open platform spurred collaboration amongst employees to improve upon each other’s ideas, created transparency and promoted the development of a sharing culture as opposed to a protective culture.  We incentivized the employees to participate by creating contests where the top 6 idea community rated ideas got slated for production.  The winners received intrinsic rewards such as being recognized in a video shown at our annual conference to having a private lunch with the sponsoring C-level executive, not to mention being allowed to participate in the development process of his or her idea.  With proper development, promotion and execution of the idea platform, we had a stellar participation rate of around 3000 out of 5000 employees in the first 2 weeks of the first challenge!  We continued to run this program over the course of the year and it resulted in many great ideas that received funding not to mention the positive impact on company culture and employee engagement and satisfaction.

We also recognized that organizational complexity was creating an issue with execution of change.  One of the main problems in a command and control culture is the point-to-point nature of communication.  Information must run up and down the command chain and that can drastically slow down change.  The best way to overcome that is to replace a vertically oriented point-to-point communication structure with a horizontally oriented publish/subscribe communication structure.  Essentially employees can publish what they are working on in an open forum seeking feedback with activity streams keeping everyone up to date on the latest happenings amongst their connections.  This not only promoted better collaboration that improved execution but it also reduced redundancy of effort by bringing transparency across the organization.  Tools like these drive up individual accountability.  It’s hard to be the only one not participating when everyone else’s participation is highly visible.  There becomes no valid excuse to not know about something going on within the organization.

The moral behind the story is that the success of these 2 programs to achieve the desired outcomes would not have been possible without these powerful digital tools upon which each program was built.  These tools with the automation and algorithms powering them were able to overcome the organizational complexity that had set in.  There was some initial hesitancy to using them as they were completely counter to what our employees were used to.  However, we were able to get support across the entire C-level management by getting them to engage in the activities themselves to set the example and encourage employee participation.  Both these programs continue to be successful today.

Kirsten Osolind (“Change Catalyst”)

Digital tools spur innovation. According to Booz’s Report, companies using immersion labs, rapid prototyping, market intelligence tools, and enhanced product life-cycle management systems are 77% more likely to outperform their competition than companies that use digital tools infrequently.

During my days leading innovation initiatives at Whole Foods Market, my team partnered with our (incredibly brilliant) IT department, Hartman Interactive, Valuelink, Spectra Data, and Gaiam to define and structure the company’s first customer database and business intelligence initiatives. The big data and predictive analytics insights were invaluable and actionable in terms of customer engagement and new product development, even though Facebook was still two years shy of launch. In under a decade, digital intelligence tools have advanced dramatically…

Phillips Lighting now has the ability to create new product prototypes in under an hour with 3D printing. And smaller companies can leverage cloud-based digital tools to go up against industry giants with multimillion dollar budgets.

Some thought-provoking small company examples:

  • Jimbo’s…Naturally, a San Diego based organic foods grocer, recently opened their 5th location at Horton Plaza Mall. Social intelligence, intelligence business alerts, and a low-cost knowledge management platform (created using a mashup of third party applications) could help Jimbo’s better engage/educate employees across multiple locations in 2014.
  • VetDepot, an online pet pharmacy, could combine their existing product ratings with social recommendations, customer sentiment analysis, and a collaborative community engagement platform to prioritize seasonally-themed monthly product bundles and mobile flash sales.

Want to get started? It begins with knowing the audience you want to reach…gathering empirical, real time, and predictive data…determining the information you want to share…and defining the action you want to come out of it.

Big data is useless unless it provides actionable insights. And sharing data across an organization only works if the organization is prepared to effectively manage it. Still, intelligence-driven businesses can generate new revenue streams, use insights to make better business decisions, and ultimately make quicker, more agile moves.

Dennis Jarvis (“The Marketeer”)

Booz & Company’s just released Annual Study of R&D hit the nail on the head with regard to the value of digital tools to drive innovation.  These smart tools provide greater assurance of R&D success, which as Dilbert attests can be disappointing.

Following is a brief case example of a medical device company that is leveraging digital technology to benefit patients, practitioners and its own R&D efforts.  Earlier this month, Zeltiq Aesthetics announced the introduction of a unique digital feedback system that offers potential on two fronts:  (1) enhancement of the company’s R&D efforts; (2) aiding dermatologists and plastic surgeons with their clinical protocols, and analyzing localized strategies for reaching new patients.  The new digital tool is designed to be fitted to the medical device already installed in practices.  It will deliver real-time insights to practitioners regarding device utilization on various parts of the body and their correlation with patient profiles.  This information can be used by physicians to improve patient outcomes and monitor the impact of programs designed to attract specific types of patients who are ideal candidates.  Additionally, the data generated by this digital tool can be filtered to meet HIPAA guidelines and employed by the manufacturer to monitor quality, as well as aiding its innovation and device improvement programs.

Jorge Barba (“The Culture Guy”)

There isn’t a “all-in-one” digital tool that does it all. But, any company can create their own digital tool toolkit. For example, companies can use Yammer to communicate internally with people on the project, while also sharing documents or any material necessary for said project. For knowledge management, they can use Evernote Business to share important notes that they clip as part of ongoing research, either offline or online data, that they capture.

People who are responsible for social intelligence can share their notes and thoughts on the above platforms.

Whether their responsibility says so or not, I believe people should be trained on the use of these tools. In a world where everyone, and everything, is connected, everyone is responsible for innovation. The younger generations were born with these tools in their hands, companies have to catch up.

Kane (“K-9 Intern”)

Digital tools can be used to engage customers and reduce uncertainty. The more intelligence you possess, the more effectively you can prepare for market shifts. That being said, having a very involved customer base means you’ll receive lots of suggestions and ideas. Sorting the wheat from the chaff is the key to successful innovation — and new social intelligence tools can help you do that more effectively. For the record, I dislike both chaff and wheat. I prefer my dog food grain-free. And steak. Mmm steak. Time for lunch.

THE FINAL WORD

The arising digital revolution will require companies that want to retain competitiveness to rethink their digital toolkit. Companies that want to avoid falling behind will need to adapt in order to keep up with the changes in innovation that will be caused by digitalization. When companies understand how to adapt, evolve and commercialize products rather than merely invent them, they survive and thrive. Digital tools are a big part of what supports the lifecycle of continuous transformation a company needs in order to avoid falling behind. The Booz & Company study validates much of what RE:INVENTION promotes; take a look at our Everyday Inventive and Reinventive presentation.

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