«Interviewer: David Poole Interviewee: Irving Wladawsky-Berger IRVING: My name is Irving Wladawsky-Berger, Vice President of Technical Strategy and ...»
INNOVATION IN THE MARKETPLACE
A podcast with Irving Wladawsky-Berger
Interviewer: David Poole
Interviewee: Irving Wladawsky-Berger
IRVING: My name is Irving Wladawsky-Berger, Vice President of Technical Strategy
and Innovation at IBM.
DAVID: Can you give us a working definition of innovation in today’s business world?
IRVING: Yes. To me the definition of innovation that rings the most true is that invention
takes place in the laboratory; innovation takes place in the marketplace. In today’s world there is so much activity in the marketplace. There are so many possibilities in the marketplace that innovation to me means taking all of this invention, all of these advances in technology, the Internet and everything else, but then doing something really nifty in the marketplace with all that stuff.
DAVID: What myths or misconceptions exist around innovation?
IRVING: I think that one of the biggest myths around innovation is to look at it as something
and, you know, just think of innovation as some kind of New Yorker cartoon with the words in the sky. In the end we have to talk about innovation in something. So if you have a great restaurant, you may talk about innovation in the food that you serve in the restaurant. If you have a great product, you talk about innovation in that particular product. If you offer a service to clients, you want to talk about innovation in the way you offer service to clients. If you want to worry about new ways of managing your intellectual property, you talk about innovation in intellectual property.
Invention is more unique, more centered in the lab. Innovation means you want to solve whatever problems are there so that you can be very successful in the marketplace.
And, of course, make your own clients very successful in the marketplace.
DAVID: What are the characteristics of a corporate culture that fosters innovation?
IRVING: Well, first of all, a corporate culture that fosters innovation is very externally focused, it is out there trying to understand what are the most important problems to be solved in business and society that are good for us, that we can bring value out there, but the problems are out in the real world. Culture of innovation will move very quickly, will realize that whatever problems need to get solved, you want to get out there in a hurry. And then you want to keep looking at your decisions over and over again because the marketplace keeps changing, the real world keeps changing, so something that may have been the right answer three months ago may no longer be the right answer. So you have to keep re-asking the same questions over and over again.
A culture of innovation is so focused on solving real problems that it is very happy to collaborate with anybody that can help you solve that problem. So as opposed to saying, well, I have to do this all by myself, you say, boy, if working with this open community helps me do things faster, be more efficient, more focused, if having an equal system of partners helps me do things better, let them come with me and together we will solve the problems. Because that’s the key to a culture of innovation, go solve problems out in the real world in the marketplace.
DAVID: What are proven ways to accelerate the innovation process or to innovate more efficiently?
IRVING: You know, there is no one answer to how a business can innovate more efficiently. There are many things you need to do. First of all, I really think that investments in R&D are very important because by doing the necessary research you are getting ready for the future. You are looking out, especially a company like IBM, or another company that is involved in technology, you are looking ahead and trying to see what is likely to come, and developing the right technologies and the right products based on those technologies in the laboratory, so you are ready.
You have to be very open-minded. I think one of the biggest mistakes companies make is that they often keep things that make them successful too long and maybe this is the way you were successful ten years ago but ten years ago is ten years ago and the world has changed and you are still clinging to what made you successful in the past and you don’t want to let go and moving into the future. So being very open-minded and accepting change is very important.
You have to be very realistic. You have to look at the marketplace, you have to look at your capabilities, you have to decide what can I do, what can I not do because once you decide this is what I am really good at, this is what I am not good at, the next step is, okay, so how do I partner so that I can complement areas where I am not as good, and work with people who are very good in those areas and together we can solve and address this problem. But then you need a certain humility in having a culture of innovation, because the marketplace is just, especially today, so complicated. It is moving so fast and if you think you can do it all yourself, you are just going to fail.
So it is not one thing, it is a whole approach that you need to bring to everything that you do.
Necessity is not just the mother of invention; it is also the mother of innovation. The electronics industry, I think, it is pretty far along the curve because such a brutal industry as we know from IBM itself the competition is so intense, there are new technologies, new products, you have to be taking things to market in months and if you don’t innovate, well, you are done.
So the electronics industry has done a very good job in areas like supply chain integration, in running worldwide businesses that have suppliers from all around the world with just-in-time manufacturing, a lot of attention in inventory costs and ways of designing new products very quickly, bringing them to market and on and on and on. So that is an industry that is moving very, very rapidly.
The pharmaceutical industry, they have a lot to work with. You know, a lot of people think that the 21st century is going to be, let’s say, the 20th Century was the century of physics, where we saw the biggest advances in physics. The 21st century will be the area of biology and, in particular, bioformatics, genomics, whole new ways of all new pharmaceuticals, all new drugs. So there is tremendous activity in how do you bring new drugs to market. They are struggling with intellectual property questions, that maybe the way they have worked in the past may not work the way they need to go. But then the costs of developing drugs and testing are so high, so the intense pressure of the pharmaceutical companies are under and all the opportunities are also causing them to do a lot of work in innovation.
I mean, you see that everywhere, you know, the aspects of the entertainment industry are doing very innovative things, all new. You know, satellite radio comes along, obviously all kinds of portable entertainment devices, all new ways of distributing music.
Others are hanging back saying, can I retain what I had, and obviously what happens is one company tries to retain what it has, other companies zoom right along. So you are here defending the old fort and the barbarians are gone. I mean, they run away with your customers. Not a good business model.
DAVID: How can listening to customers help the company be more innovative?
IRVING: Well, listening to customers is everything, because once you sort of make the cultural switch that the focus is less the inventions in the lab, wonderful as they are, the focus is solving problems in the marketplace. It is your customers that have the problems. I mean, if you can understand their problem, and if you can bring them a solution based on your technologies, your products, your services, then they will pay you money. And if you can bring them a really valuable solution, they will pay you more money and you can make a bigger profit. But the way to figure out those problems your customers really want help in is not back in the lab, and it is not lots of stories, although one should do some of those, is to listen to them. And if you listen to them, pretty soon they will tell you, and then you can start saying, what do I have that can help him do this, and before you know it, you are making quota.
DAVID: Who else should a business listen to if they want to innovate?
IRVING: You want to listen to your customers, of course, and they are perhaps the biggest source of information. You want to listen to your employees, especially and I, myself, I am in headquarters, so this is directed at me. Less of those people in headquarters and more of those people in the trenches, the people in the labs working with technologies, building products, the people that are working with customers, solving problems for them, selling them stuff, performing services because these people get to see firsthand what is going on. And if you listen to them and if you can take advantage of their knowledge, you will do so much better.
Of course, the Internet is full of information. Now, with blogs, you can get all kinds of new sources of information, the press, the analysts, financial analysts. It is not that any one of them has the answer, but, you know, if you have your ear tuned to the world, to the marketplace, and you listen carefully, you start getting feelings and you start getting the answers.
DAVID: How can a company make sure they are quick to spot a great idea?
IRVING: Well, the first step for a company to spot a great idea is to be out there in the real world where the great ideas exist. Now, great ideas, depending on where they are, come up in different ways. In IBM one of the reasons we so value our research communities is not just because of the great work they do back in our labs but because they are part of the world’s research community. They have a very externally focused research community. So they are not just aware of the great ideas our research people have in IBM, they are aware of the great ideas in the world period. Of course when there are great ideas you are going to say, gee, maybe we should be working on that.
And then we start working on that.
You want to have very good people in marketing that are constantly watching the marketplace and analyzing it, doing market research, conducting surveys to begin to spot trends, what is going on, what new business models. Really good salespeople are always listening to their customers, to other customers in their industry, to other customers in the geographies where they do business to find out how is the market changing and what should we be doing.
So I think that when all is said and done, more than anything, you want an open mind, and you want everybody to have an open mind and if you have an open mind, then you will be able to figure out what is it out there that has changed that now presents either a new threat, and you need to react to it or a new opportunity, and you need to go for it.
DAVID: How do you distinguish between innovation and creative thinking?
IRVING: Creative thinking is a necessary condition for innovation. I mean, maybe every so often somebody closes their eyes and the bat hits the ball, but that doesn’t often happen. Usually you want to be out there working hard and thinking hard. So creative thinking is very, very important for innovation, but it is not enough because if creative thinking was enough, you just have an idea, you write it down and life is good. You know, hard work perseverance. Any idea that is going to be big is usually going to require a lot of hard work and there are going to be a lot of obstacles, there are going to be people who say this is not a good idea, you have to go through brick walls, you have to get communities, you have to sell it, on and on and on and on. It all starts with the creative thinking. I really do think that that’s at the root of it, but that’s just the beginning and now you have lots and lots to do to translate that great creative thinking into a true successful innovation in the marketplace.
DAVID: How do you maintain creative thinking on an ascending curve?
IRVING: You know, I think that the best way to keep creative thinking going in spite of the obstacles, the fact that there is a lift, plateaus, is to work in teams. If you have to do it all yourself, then when you hit the plateau, the idea hit a plateau, the innovation hit a plateau. If there is a team, if there is a group of collaborators ~ not just within the company but across the industry, across the research world ~ maybe while you are having your plateau, maybe you need a vacation, other people are lifting off and then you come back and their idea gets you going again.
So the reason we are emphasizing so much collaborative innovation, especially for the very sophisticated problems that we in IBM tend to work on, is because you want a team to collaborate in solving these complex problems where everybody brings what they can to the table and where people will at different times be in different spaces, and then, you know, people pick each other up and push each other. And I find that when working on tough problems, it makes all the difference in the world if you think you are alone, than if you think you have a great team behind you or with you.
DAVID: How do you build teams focused on innovation?
IRVING: Well, you want to build teams focused on innovation by having agreement on a very important problem that as a team we want to solve. And the problem and the excitement of solving a problem, designing something for a client, addressing some need, that’s what drives everybody together in the same direction and that’s how people come together as a team. So the problem to be solved becomes the focus of the team.
DAVID: How does cross silo collaboration promote innovation?