Larry Huston on Building Networks for Innovation
BIF Research Advisor Larry Huston (former VP of Innovation at P&G, architect of Connect + Develop, and now founder of consulting firm 4Inno) in on the Wharton Channel talking about how innovation networks function, the ways they can be nurtured, their potential downsides and the impact they will have on how firms bring products to market.
He should know. The Connect + Develop business model he created for P&G helped the company realize tremendous results: R&D productivity increased by nearly 60%; R&D investment as a percentage of sales is down from 4.7% in 2000 to 3.4 % in 2006; in the past several years, the company launched more than 200 new products attributed to its external networks; and, today, the company gets 50% of its innovations from external sources.
Larry has always been very clear about the first step companies need to take in developing an external network: you've got to be exceedingly clear on what you're looking for. Strategic intent means everything.
From his interview:
So, the very first step is to get very clear about why you're doing it, and what your strategic intent is. And then begin to really design the network around the strategic intent. Do you need just incremental problem solving? Do I need to build idea nets? Do I need to build solution nets? Do I need cost innovation networks? Am I looking for disruptive innovation? Do I need to reach from one domain into another domain of knowledge outside of my industry where I might find more disruptive innovation?
This reminds me of another BIF research advisor - Ellen Levy - who believes that everything we do should be modeled around the question. She tells a great story about spending 3 months to design a one-page RFI to help facilitate an industry/academic collaboration. It's a time-consuming process but to her point, and Larry Huston's as well, building networks for innovation is not a fishing expedition. It's not about throwing out the net in the hopes of catching something good.
Experimenting with new ways to deliver value is one of the most important things an organization can do. But to find the next big idea, innovators need more than just a network - they need an environment where they can explore, experiment and implement with less risk and less cost. Here at the Business Innovation Factory, we've developed an architecture of participation that enables collaborators to capitalize on our state's real-world test bed for experimentation.
Companies come here with strategic intent and we help build both a network for participation and a platform experimentation. Because one thing we truly believe is that in our global, networked economy, new business models and customer experiences can't be tested through traditional market research methods. Welcome to Rhode Island!
Read Larry Huston's transcript
Listen to his audio podcast
Posted November 15, 2007 12:32 PM by Chris Flanagan | Permalink
