Yoon: Why are Fortune 500 companies so focused on innovation, and why is leadership so important?
McKinney: Most companies are focused on seeking growth through innovation, as doing business as usual will not be sufficient in the face of global competition, technological disruptions and the dynamics of emerging economies. Leadership is key in successful corporate innovation, as change and disruption cannot happen without the critical support of top leadership. Leaders inside innovative companies need to provide the resources, air cover and the culture to drive new ways of approaching markets, products and services.
Yoon: Do you think the key success factors of corporate innovation programs vary, depending on size, industry, geography and culture?
McKinney: The dynamics of innovation are similar, whether you are trying to create innovation and change within a 100-person company or a Fortune 500 company.
Successful strategies include effectively countering resistance to change, countering the not-invented-here syndrome, sustaining innovative practices, as well as creating a culture that embraces, believes in and practices innovative processes.
At HP, my group develops adjacent or fundamentally new products and ideas. Every year, we evaluate more than 2,000 ideas, which get funnelled into 150 investable concepts. This group gets honed to 20 new, funded initiatives, where we invest $50,000 to $150,000 to validate the new concept, enter into customer validation, and market launch.
This can take 18 to 36 months, but we stay focused on ensuring new idea generation as well as actually getting real products into the markets. We also have a compensation system that rewards failed initiatives as well as the successes to keep the risk-taking behaviours consistent within the innovation group.
Yoon: How have you tackled communicating change initiatives within the organisation, and creating a common language of innovation?
McKinney: The most effective changes have been executed and embraced through telling stories that resonate with the personal motivations and goals of the people I engage with. Understanding the company culture and communicating in a manner that is effective within that culture is key to success.
Yoon: As creativity quotient is needed now even more than a person’s emotional or intelligence quotient, how well can people, teams and organisations enhance and strengthen their creativity quotient?
McKinney: Human creativity can be developed and taught. It is not God-given, as many believe. Learning to ask key questions can unlock new ways of perceiving problems and formulating new solutions to real needs.
The best way to come up with new and creative ways to innovate is through direct customer and market observation. For example, I spend many Saturdays at [electronics retailer] Best Buy stores whenever I am travelling, observing and talking to real customers. At HP, we also conduct "trend safaris" into the field to find unmet product needs. Dream Screen is a good example of a new product for the Indian market that was developed though this process.
My teams actually lived inside 2,600 homes throughout India to observe what was needed, how they made buying decisions and what was valued in a communication device. The result was a simple, easy-to-use screen with no operation system that could dial a phone number with one touch of the screen. The key to innovate successfully inside large organisations is constantly to drive innovation evangelising messages and missions, and to have a process for driving change. Yoon: What are the key traits of successful innovation leaders?
McKinney: They are diversity of experience, combined with core knowledge and competencies. The best innovation talent for my team can be described as a T-shaped professional. I look for deep expertise in technology, marketing or other relevant functions, but then also make sure they bring a wide range of diverse experiences. Passion and the ability to deliver the message of innovation are also critical to successful leaders in corporate innovation.
McKinney was interviewed at the 13th Annual IBF Corporate Venturing and Innovation Partners Conference. He also reaches a regular audience of more than 40,000 with his weekly podcast (www.killerinnovations.com), and his blog (www.philmckinney.com) on innovation and its impact on business, industries, economies and society.