Posted by: Steve Hamm on July 27, 2006
Innovation is in grave danger of becoming the latest overused buzzword. We’re doing our part at Businessweek. And so is IBM with its big innovation marketing campaign. The danger is when you use a word too much it starts to lose its shape. So I was brimming with skeptism a couple of days ago when I was visited by Curtis R. Carlson, chief executive of SRI International and co-author of a new book, Innovation: the Five Disciplines for Creating What Customers Want. Could a book with innovation as the title get beyond platitudes and actually be worthwhile? Well, I was pleasantly surprised. Of course, SRI itself has a tremendous amount of credibility built up over 60 years of being a lab for hire to corporations. But Carlson’s deceptively simple thesis for bringing discipline to innovation makes solid sense—and could make a difference for companies that, indeed, are under the gun to innovate or die.
First, a little about the background on book. Carlson, who has headed SRI for seven years, wrote it in collaboration with William W. Wilmot, director of the Collaboration Institute and co-creator of the SRI Discipline of Innovation workshop. They penned the book partly to brag about SRI, but also to help other companies innovate more effectively. One of the rules at SRI: "If it's not written down, it's not real," says Carlson.
Back in the 1990s, SRI's revenues had stagnated, and when Carlson came in as CEO, he deconstructed the place and decided that it needed a lot more discipline. Back then, innovation was ad hoc, there wasn't a lot of team work, and there wasn't a single process discipline spanning the entire organization. He remodeled SRI, creating common practices and processes for all of the business units, encouraging teaming, and making everything more quantifiable. Out of that came the five disciplines: identifying customer needs, spotting technologies and solutions that best meet them, empowering innovation champions, building teams, and aligning the entire organization around value creation for customers.
Just writing this list makes me feel a little queasy. These "disciplines" seem so obvious. But, I soldier on. The proof is in the results, and SRI now grows revenues at about 10% per year, so, clearly, Carlson's approach has been successful.
Some interesting bullet points from our conversation:
--Early on, to engage his colleagues in the necessity of having more process discipline, he led them on a tour of the NUMMI auto plant (JV of Toyota and GM, but run on Toyota principles) in Fremont, California. The lesson there was the importance of continuous incremental improvements.
--But process improvements that focused on quality didn't tell the whole story. What about exponential innovations? The popular myth is that these things happen in garages in a phenomenon akin to spontaneous combustion. But Carlson didn't believe that was the only or best way to achieve breakthroughs. He sought out Doug Engelbart, who, when at SRI in the 1960s had pioneered some of the innovations that became foundation pieces of the PC revolution (The mouse, for one) At the time Engelbart, was working at Logitech, in Fremont. Carlson lured him back to SRI and picketed his brain for ideas that would help the company make major innovation breakthroughs in a disciplined way.
--One thing they came up with is regular meetings they call "watering holes" where scientists from particular business groups meet every two to six weeks for some highly structured brainstorming. Rather than just throwing out ideas--many of them to soon disappear into the air--they subjected each promising idea to a formal evaluation process. What was the need? What were the alternative approaches to meeting it? What was the cost-benefit analysis? What was the competitive landscape? Rather than developing an idea at one of the sessions and then moving on to something else, they'd keep coming back to it at subsequent meetings. Engelbart preached that from iterations of these kinds, great big ideas could come to fruition.
--One big idea that came out of this process was a potentially better way to make titanium that would bring its cost down closer to aluminum. It's an idea that, if it proves out, could revolutionize industries. The idea came from Angel Sanjurjo, director of SRI's materials research group. SRI has built a prototype, called a fluid bed reactor, to test it out.
--The workshops. SRI has been putting these on for six years, inviting in executives from companies large and small. He says most companies that participate don't have disciplined innovation processes. They may think they do, but, under questioning, often they discover that they don't even have a common language internally for discussing the how they go about creating new products and services. The participants learn from each other, and SRI learns from its clients successes and mistakes to refine its own processes.