Going beyond idea contests

Idea contests: Looks like idea contests are in vogue these days. I must have met at least half a dozen innovation champions from different organizations who said they had idea contests in the last 6 months. Some had specific fund allocated for this contest and they funded select few projects for Proof of Concept (PoC) development. Some said the initiative got choked when they received several hundred ideas and they weren’t ready with the idea selection criteria. Some cribbed about 99% ideas being incremental improvements. No matter what each of them said, I felt it was a good way to get the engine started.

Innovation wave: 5 years back if you were an IT company and if you had not assessed yourself for CMM level-5 or if you are not running a CMM initiative, you would be looked upon as a laggard. Looks like it is time for an innovation wave now. However, there is a difference. ISO, CMM, PCMM or any other quality certification comes with clear-cut guidelines as to what steps are to be taken and what artifacts to show to get there. Unfortunately, innovation is on a much murkier ground. NASSCOM has been playing the “innovation” trumpet for a few years now. However, most organizations are still lost as to where to start. Well, idea contests certainly seem to fit the bill, at least for now.

Where is the catch? You may say, “Where is the problem?” Well, the experiences most narrate seem to remind me of my graduate school days in Buffalo, New York. When we used to come back from an India trip during December vacation, starting the car was a dreadful experience. First, you don’t know whether the engine will start at all. Remember these were graduate student cars, either second-hand or more likely third-hand cars. If you are lucky and the engine starts, chances are high it will stop in the next few minutes. No wonder many of us became good at jump-starting cars by connecting cables to friend’s car’s batteries. Idea contests seem to resemble starting the engine which soon go back to its natural state – which is at rest. Real challenge is, how do you keep the engine running?

Basic unit of analysis for innovation capability: Doesn’t all this: idea contest, number of ideas it generates, number of employees who log ideas, what kind of ideas finally get prototyped or even make to product or offering definition, give an indication of organization’s innovation capability? Brown and Duguid say “No” in their paper titled “Organizational learning and communities of practice: Toward a unified view of working, learning and innovation” (published in 1991). These researchers and some others feel that basic unit of analysis for innovation capability should be self-governing passionate communities within the organization. In Google, these are called “intergrouplets” (see Sergy Solyanik’s blog),in KM circles these are called Communities of Practice, some places they are called SIG and McKinsey studies them as informal knowledge networks. Unfortunately, many organizations don’t know how to detect these networks, how to support them and of course, how to leverage them.

Will you hire a BCom architect?

Hiring a BCom: I was talking to a business leader at one of the large MNCs in Bangalore. The topic was challenges and approaches in moving up the value chain. He mentioned our fixation on educational qualification as one of the challenges. Apparently, the organization was trying to hire for an architect position and one of the suitable candidate was only BCom. The person did very well in all aspects of the interview. However, managers and existing architects were unwilling to consider him for the position. Many must have done MTechs from prestigious institutions. Hiring a BCom as a peer may suddenly make their efforts to get into these institutions and slogging during their engineering days appear futile.

Fixation on educational qualification: I lost interest in degrees and formal education, in general, quite some time back. But then I don’t talk about it much as I get back a response, “It is ok for you to think like this as you have a BTech from IIT and a PhD from a US university.” Well, I understand that formal education has a role to play in the whole game. For one, it certainly tells you about certain analytical and problem solving ability when one goes through engineering education. Moreover, cast system among various courses (engineering, pure science, commerce, arts) is very strong in our society. However, I feel that we give far too much importance to it. Moreover, we use it as a crutch to shrug off responsibility in actually probing competence deeply.

Social learning: Social learning theory takes an interesting stand. It says that in a social system (such as an organization or a community of architects etc) competence is historically and socially defined. Knowing, therefore, is a matter of displaying competences defined in social communities. So it is not important whether you know something or not. What is important is whether you can articulate it in language understandable by the community to which you wish to belong. Of course, you can’t articulate something unless you understand it. But then we know in how many interviews you really get probed deeply. Degrees make it easy to assume that you speak the same language as the rest and hence you are competent. No wonder diversity is a rarity in organizations.

Top challenges in developing technical leadership

In earlier articles I have written about challenges from engineer’s perspective in becoming a technical leader and also about demand and supply side drivers in developing technical leadership. Here I would like to summarize what I believe are the challenges Indian IT organizations are facing in developing technical leadership:

· Cost-based business model: Most of the Indian IT organizations work on the cost based business model. This is irrespective of whether it is an India-headquartered IT services firm or a subsidiary of a global MNC firm. Every project is estimated based on number of person-month effort it takes and budgeted accordingly. Many times there is an average billing rate associated with the relationship independent of the experience level or value an expert brings to the table. This equation dis-incentivizes growing experts in the team (as your profitability goes down). I have written earlier about Rs.15 Lakh salary dilemma which articulates this challenge. There are leaders who are trying to play with this model. They are hiring domain experts and trying to show how productivity of certain teams is much higher than the rest and hence pricing should be “value-based” rather than “cost-based”. I would call it “prototyping phase” and we have yet to find “early-adopters”.

· Lack of meaningful roles: Even if organization feels the need to develop technical leaders, it needs to create such roles where a person should feel valued. Creating a role with “architect” in the title and without providing meaningful job content leaves the person even more frustrated (see Beware of technical ladder roles). Most of the time, resources are dedicated to accounts (or product lines). At senior levels, the roles should involve influencing multiple projects or programs and this may need re-negotiating contract terms to ensure that there won’t be any breach of confidentiality or dilution of value added.

· Lack of role models: Role models make a lot of difference in motivating juniors to choose a particular career path. In Indian IT industry there is severe shortage of technical leaders. Even those who are doing serious work double up as managers due to either social or political reasons. When I facilitate technical leadership workshops, I realize very strongly that many participants look at the “technical leader” role more as a hypothetical role.

· Lack of maturity in talent market: It is only recently that jobs with “consultant”, “architect”, “Systems engineer” titles have started showing up. However, it will take a few years before engineers look upon these “secure” roles.

Copycat award: A step towards addressing NIH syndrome

Fourth India Innovation Summit: I attended Fourth India Innovation Summit at Leela, Bangalore last week organized by CII. Like the previous one I attended three years back in 2005, I enjoyed the conference where a number of innovation champions spoke on various themes like innovation in emerging markets, systematic innovation, innovation ecosystem, and innovation in rural India etc. In the next few articles, I will write about the themes which I found interesting.

Copycat Award: Madhabi Puri Buch, Executive Director, from ICICI Bank spoke about innovation management efforts at her organization. According to her, the topmost hurdle in keeping innovation going at ICICI is the “Not Invented Here (NIH)” syndrome. This mindset makes it difficult to implement an idea in one department when it has actually come from some other department. Well, this is what ICICI Bank has done. They have introduced a prestigious award called “Copycat award”. This award is given to the team which demonstrates successful implementation of an idea which has come from somewhere else.

Creativity and Execution: At the root of NIH mindset is the belief that “creativity” part of innovation is “cool” and “execution” is uncool. If I haven’t done the “cool” part, why should I do the “uncool” part? To quote Prof. Vijay Govindarajan from his book 10 Rules for Strategic Innovators: We think of organization’s capacity for innovation as the product of creativity and execution. Some quick math: which is more effective – lifting your creativity score from 6 to 7, or doubling your execution score from 1 to 2? Nonetheless, most companies, when hoping to improve innovation, focus on generating ideas. Managers obsess over the front end of the innovation. But the real leverage is in the backend – in execution. It is not the idea that counts; it is what you do with it.

Well, how about copying the “copycat award” process to begin with?

Knowledge management and Innovation management: Is the relationship more like live-in, marriage or divorced?

I wrote about some of the top challenges and non-challenges in innovation management in an earlier article. I facilitated a deep dive session on one of the challenges in our last k-community meeting hosted at Perot Systems, Bangalore. The topic was: “Knowledge management and Innovation management: Is the relationship more like live-in, marriage or divorce?” We had a good discussion with participants from Bosch, Honeywell, IISc, Mercer, Mindtree, TCS, Titan, Wipro apart from our hosts at Perot Systems. Here is a gist of the session:

There were primarily 2 schools of thought: one expressing the classical KM view where knowledge creation is considered an integral part of knowledge management. And the others feeling that knowledge management as it is practiced is primarily about improving the operational efficiency in the organization. And hence, it is more suitable for incremental innovation but not for radical innovation.

Advocates of the classical view stressed that collaboration both formal (through CoPs) and informal (coffee table discussion) are essential for creating radical ideas. And knowledge management function owns the responsibility to create an environment where such collaboration fosters. Many others felt there is a big gap between this view and where things stand today.

All agreed that there is a lot that can be leveraged by finding synergies among these two initiatives in the organizations. Unfortunately, many times these initiatives are under two different departments: KM comes under either quality or HR and IM under research, marketing or strategy dept. When both have their own sources of funding, and perhaps a purpose independent of each other, why marry?

Bangalore 10K run and a (N=1, R=G) model

Bangalore 10K run: It was a sheer joy to be part of the Sunfeast Bangalore 10K run a couple of weeks back. The amount of time I took to complete the run (1 hr 10 min) was almost 4 times my usual jog. However, the spirit of crowd gives so much energy; I did not even realize when the finish line came (it took me the next 3-4 days to recover though). There was another reason why the experience was very satisfying. The person who took the initiative to register me – my wife Gauri – completed the run in almost the same time as me and she had happiness all over her face for the rest of the day. What I did not know was that there would be a business associated with the race exemplifying C. K. Prahlad’s (N=1, R=G) business model that is going to generate a smile again on Gauri’s face in a week’s time. Before we look at the business, let’s take a short detour and understand what (N=1, R=G) is all about.

(N=1, R=G) model: In their latest book, “The new age of innovation” C. K. Prahalad and M. S. Krishnan present evolution of business models over the past century. The two pillars of this model are: (1) How many consumers does one product target? (2) Where all does the firm mobilize resources from? For example, let’s look at Ford’s Model-T which came out in 1908. It was a product based on “one model fits all” principle (“Any color is ok as long as it is black”). Moreover, the resources producing the car had to be with the firm all located in and around Dearborn, Michigan. Ford was one of the most vertically integrated firms. Now, compare this model to Amazon’s model. When I log-in to amazon, it displays the books (say, on innovation) which interest me. When I e-browse a book, it also shows me the reviews and also other books which are related to the topic. I certainly feel it is an experience unique to me. Where all does Amazon pull the resources from? From a number of bookstores across the world, developers in US, Europe, Asia, in short, all over the world. Prahalad calls this model (N=1, R=G) i.e. value is based on unique & personalized experience and is based on access to resources across the globe (as against ownership of resources co-located).

Marathon-photos.com: Coming back to Bangalore 10K run. Both I and Gauri got emails from marathon-photos.com saying that to see our photos from the run, we need to go their website and type our bib-number. When we typed Gauri’s bib-number, there were 7 photos with Gauri in the centre (and my bib-number showed only one photo, I guess looks matter). Clearly an N=1 model. The firm is headquartered in New Zealand and is market leader in event photography. However, the people who took our photos were locals sitting back-to-back on a motorcycle while taking the snaps. I am sure the project was contracted to them. An R=G model.

You can read more about the book and C. K. Prahalad videos in this recent businessweek article.

Related article: My second 10K run: finding a rhythm & black-n-white goals

Assessing efficiency of your internal innovation bazaar

Bringing Silicon Valley Inside: I read the paper “Bringing Silicon Valley inside” by Gary Hamel (HBR Sept-Oct 1999) after Prof. Krishnan mentioned it in his talk last week on “Efficiency vs. Innovation” at k-community meeting. Hamel and Valikangas have presented an extension of this work in the paper “Internal Markets: Emerging governance structures for innovation”. In this article, I present my understanding of the idea presented in the paper and also a tool for assessing your “internal innovation market”.

Limitations of Hierarchy: After studying Silicon Valley as if it is a giant organization with its own capital and resource allocation decisions, Hamel concludes that valley thrives on resource “attraction” rather than resource “allocation”. Traditional management hierarchy achieves “sustaining” innovation through exploratory activities aligned with and exploiting existing competencies and businesses. Hence, ideas which are not aligned with current businesses are likely to be ignored or suppressed. After all, if all ideas from Valley went to Bill Gates for approval, only those supporting Windows platform would have survived. According to Hamel, 3 markets are critical for radical innovation: (1) Market for ideas (2) Market for capital (3) Market for talent.

What are markets? A market is a place where buyers and sellers find each other, players compete for best goods & resources, where individuals exercise choice. It is also a mechanism for resource allocation and it is supported by social network of brokers, buyers and sellers.

Assessing your internal innovation bazaar: Do you have a market for ideas? Well, it will depend upon who is suggesting the ideas and who is selecting them. If only senior executives from current businesses suggest ideas and they are the ones who select them, result is known before the exam. On the other hand, if you have an ecosystem of customers, suppliers and employees who suggest ideas and a panel separate from current business selects them there is a good chance that radical ideas will survive. Extending these questions for the other two markets (capital and talent) I have created following three dimensional dashboard. Can you assess efficiency of your internal innovation market?