10. helping HEROes innovate

Jon Bidwell is the chief innovation officer of the Chubb Group of Insurance Companies, a 128-year-old, multinational, $11 billion company with ten thousand employees.

Read that sentence again. Imagine for a moment you were in charge of facilitating innovation for a huge, old insurance company. How would you generate innovation? Is it even a good idea for an insurance company to innovate?

According to Jon, it’s essential. “Most companies that die in this business, die because they become irrelevant, competing on price,” he explains. “We want to have the best stuff out there.” So Jon helped Chubb to launch an open innovation challenge.

Open innovation is a philosophy that says that the most productive innovation comes from opening up a company to ideas from anywhere, not just from R&D. Among the tenets of open innovation is that innovators are often hatching ideas out in the trenches, where they see the problems customers have. In other words, the job of innovation is to empower those highly resourceful operatives. HEROes again.

Chubb structured its innovation challenge very carefully, to give it the highest likelihood of generating ideas that would move the business.

First, the company selected a limited time period of thirty days and ran, basically, a contest. Using email and the home page on the Chubb intranet, which gets an awful lot of traffic, the company drove employees to a page where they saw messages from Dino Robusto, Chubb’s chief administrative officer, and from Jim Cash, a board member and former professor at the Harvard Business School.

Second, Chubb used a software package called Idea Central from Imaginatik, specially designed to present and capture ideas. If you’ve ever seen idea-generation sites like MyStarbucksIdea or news-ranking sites like Digg, the concept is similar: anyone can create an idea, and others can rate it or comment on it. The rating and commenting is crucial, because for every person who submits an idea there are probably a hundred who have useful opinions on those ideas, even if they don’t have the nerve to submit their own. This stirs the pot and gets more people involved, even as it helps the most promising ideas rise to the top.

Third, and just as crucially, Jon involved twenty-four mid- to high-level executives in facilitating the process. They used an Idea Central feature that allowed them to forward ideas to various kinds of experts within the company, with suggestions that those experts comment (as in “Is this legal?” or “Have we tried this before?” or “Can our underwriting systems handle this?”).

The process generated 608 ideas. Of these, twenty-four were both ranked highly by their peers and rated as feasible by the company experts. The twenty-four potential HEROes presented their ideas to a group of executives for fifteen minutes each; the group reviewed them all and chose four for further development. Those four teams put together full plans for review by an internal venture capital team.

Of the three ideas that came out of Chubb’s first innovation event, one was from Frank Goudsmit, an underwriter in Chubb’s life sciences division with twenty-one years’ experience. Frank wanted to solve a big challenge faced by the company’s biotech and medical device clients. Life sciences clients who run clinical trials of drugs or medical devices in multiple geographies need approval from local institutional ethics boards in each country. The local ethics boards require proof of insurance in the local language and in compliance with local regulations. When time gets tight, the life sciences companies may not allow enough time for insurers to prepare the necessary paperwork, potentially resulting in inaccurate or missing paperwork, delays in running trials, and lost profits.

Frank’s idea was to create Web forms and software to automate the process of securing the insurance binder. Instead of human-driven cut-and-paste jobs with Microsoft Word—a process that often ran afoul of time zones as well as deadlines—Chubb would build a system that could generate the insurance binder on the fly.

Once the project was funded, Frank worked on it with Chubb’s IT group. While the budget was around a million dollars, the results promised to make Chubb an indispensable international partner for huge multinational life sciences companies, well worth the cost of the investment.

Frank’s impression of Chubb is instructive, since it reveals that this sort of change reinforces that innovation is part of the company culture. “I think Chubb has always been a company that recognizes people have good ideas and wants to promote the concept of advancing ideas,” he says. “Every organization says it wants to be innovative. But when you see that level of commitment from John Finnegan, our CEO, and all the ideas readily available to anyone to vote or comment on, that proves it.”

innovation is about speed, collaboration, and systems

Every worker has ideas. Some of them grow up to be innovations, products, methods, or businesses. Others just stay ideas. How often have you seen an idea and said, “I already thought of that!” How often have you seen a competitor develop an idea that you or your colleagues came up with?

The problem in a HERO-powered business isn’t coming up with ideas. The problem is figuring out which of those ideas should be nurtured and which should not. Can you be systematic with idea development? As we look at companies that embrace HERO-driven innovation, we’ve identified three elements that companies need to turn the best ideas from a notion into a project.

While events are great for surfacing ideas, many companies need ways to keep innovation going continuously—a discipline that happens only when people connecting with others around ideas becomes part of the culture. That’s what happened at the Australian operation of the global consulting and accounting firm Deloitte.

CASE STUDY

Deloitte Australia Yammers its way to new ideas

Pete Williams is not your typical accountant. He started his career with fourteen years as a chartered accountant and then followed that up with sixteen years in Web development. Now he’s the CEO of Deloitte Digital in Australia, the online business of Deloitte Australia.

Deloitte Australia includes Web development and management consulting businesses, not just accounting. Deloitte Australia’s forty-five hundred people must cover a continent with widely spread population centers and companies with widely varying needs; as a result, its specialists have diverse skills, from Flash programming to online accounting, and are located all over the country. It has to somehow be big and small at the same time.

With these demands, Deloitte Australia needs—and has—a culture where people are accustomed to helping each other innovate. Pete Williams says there’s a phrase that comes up all the time in conversations at the company: “Can I borrow your brain for a minute?” As in “Can I borrow your brain to learn about changes in financial regulations?” or “Can I borrow your brain to help me understand Web analytics?” When you work at Deloitte, you know that people will need to borrow your brain from time to time, and that next week you might need to borrow theirs.

The culture of sharing was present, but the technology for sharing wasn’t. Pete changed that.²

Pete knew that in a large organization, email is too clogged up and not fast enough for the sharing he needed. A static intranet site can hold known and settled documents, but not the contents of all the brains at Deloitte Australia. So when it came time to figure out how Deloitte could take innovation to the next level, Pete turned to the simplest, lightest-weight, fastest thing he could find: Yammer.

Yammer is basically Twitter for enterprises. You sign up and start sending out short updates, but only people within your company can sign up to see those updates. As with Twitter, many of those short messages include links to other sites—news items, blog posts, or content on the company intranet. It’s free to start up, but if it becomes a serious enterprise tool, you’ll likely want the paid professional version. People sign up to follow individuals or groups with whom they share an affinity, or sample the whole company’s stream (which is a bit like drinking from a fire hose, with thousands of participants). It’s perfect for the “Can I borrow your brain?” culture of Deloitte Australia.

People need a spark to get them to pick up a tool like this. For Deloitte, that spark came from a campaign to generate a tagline for the company. Pete sent out an email asking for tagline ideas, with discussion to follow on Yammer. Adoption of Yammer within the company exploded. The original sixty people who had been testing Yammer grew to hundreds as over fifteen hundred tagline suggestions got posted over a twenty-four-hour period.³

Yammer works because it’s not just an undifferentiated feed. By subscribing to people you work closely with or to groups, you can make sure you stay connected with what’s important in your job. At Deloitte Australia, there are groups for people working on online accounting, groups that keep accountants up to date on the latest changes in accounting rules, and groups that help frequent travelers with tips on how to survive on the road. In eight months, one hundred forty different groups have sprung up.

Yammer supercharges innovation by connecting people who can help. For example, one staffer at Deloitte Australia identified a need to create a benchmarking tool for clients to measure occupational health and safety. “That idea came in and, by the time I got to look through the comments on it, the people who can build it had already hooked up with the people whose idea it was,” Pete says. With Yammer greasing the connections, Deloitte was able to get the product ready and into the market in six weeks.

Yammer has now reached over half of Deloitte’s Australian operation, and it has met Pete’s goals. “Since we incorporated Yammer, the number of ideas has gone through the roof,” Pete says. Worried about productivity drain from people yammering on all day long? Pete explains that since it does not require in-the-moment responses like a phone call or an instant message session, Yammer can fit easily into empty moments in the day, as email does; when waiting around for an elevator, for example, people can respond on their mobile devices. Reading and responding to posts takes just a few minutes a day. The flexibility that comes from starting a new group for any problem within or across departments more than makes up for the time spent.

Pete Williams says, “In large organizations, you need to break down silos, create better community, and speed up sharing and collaborating.” With Yammer, he’s found a way to do that for Deloitte Australia.

big innovations and sustaining innovations

Companies are fond of differentiating between big innovations—hundred-million-dollar ideas—and sustaining innovations—the little fixes and tweaks that HEROes come up with. But in fact, it’s often the little HERO innovations that turn into the big ideas over time. Deloitte Australia’s Yammer experience and Chubb’s innovation contests may have spun off new products and processes, but they also generated hundreds of little innovations as well. While these may not get big funding, they can still move the company forward, and more importantly, they change the culture to be more innovation focused.

Cisco may be the world’s best company for fostering innovation. Guido Jouret, a chief technology officer there, makes it his job to find and nurture businesses with billion-dollar potential—businesses that can make an impact on a company as huge and fast-moving as Cisco. But interestingly, Cisco bubbles up ideas from HEROes at the bottom, just like Chubb and Deloitte Australia. Cisco runs software internally called iZone that enables people to suggest ideas and comment on ideas from others. Guido’s team pores over the ideas, looking to see which ideas are worthy of investing more effort.

We learned a couple of things from Guido that every company should know. First, he says that “there is a 98 percent attrition rate from ideas to investment.” Guido ends up sorting through four hundred to five hundred ideas every year to find just a few whoppers. Cisco’s collaborative, innovation-focused culture makes this possible—it’s a company of engineers. But without a mechanism to surface and vet hundreds of ideas, there would be no way to find the huge ones. Luckily for Cisco, many of the ideas that aren’t big enough for Guido to invest in still get funded at departmental levels. The exhaust from Cisco’s HERO-powered culture supports sustaining improvements in all the company’s products.

Second, as Guido says, “If you ask employees, you can’t expect a fully formed business plan to leap off the page.” Guido has a team of ten people helping to develop these ideas to the point where they can be seriously evaluated. Your company probably doesn’t need a team of ten. But if you don’t dedicate some resources, you’ll never know if one of those ideas is the big idea that could change your company. Systems and managers who regularly participate in evaluating and supporting innovation are what makes the difference between a culture that is just innovative and one that creates innovations that can power their business.

innovation, collaboration, and the HERO Compact

Innovation systems are another great example of the HERO Compact. Management needs to supply the culture, the incentives, and the direction to potential HEROes. The IT group is typically responsible for deploying the software system, like Imaginatik or Yammer in the examples we’ve shown here. The HEROes need to put their ideas through the system to benefit from the counsel of others across the organization. Unless all three approach innovation with a new mind-set, the results will be disappointing.

But once the ideas have begun, there’s another need—a need to collaborate. The most interesting and most valuable HERO projects typically involve cross-functional teams from across the organization. Traditional tools like email aren’t sufficient for the intensity of collaboration that’s required.

In fact, the best collaboration tools are those that mimic what’s going on outside the enterprise, in the consumer groundswell. Internal sharing tools are social networks whose members are employees, not consumers. Those collaboration tools are the topic of the next chapter.