Product Innovation 2.0 - The new facets of innovation in a virtually boundaryless enterprise

It is no unwritten fact that organizations are actively seeking ways to harness the collective intelligence of its employees and customers for product innovation.

The Knowledge Worker

Much of the value added today to products and services comes from knowledge work. This could be streamlining operations for better supply chain management or synthesizing organizational cultures in mergers and acquisitions. Enterprises are looking for opportunities to increase the productivity of workers involved in such complex interactions that constitute 41% of the workforce in the US (according to McKinsey).

The Informed Customer

With information more easily accessible and readily available, customers are getting smarter about products and demanding a say in the design of products. It has become challenging not only to gain the trust of new customers but also retain the loyalty of existing ones. Predicting buying patterns and satisfying the demands of today’s customers are complex business issues that are difficult to define in advance.

Three New Facets of Innovation from the Long Tail

Traditionally, innovation has been internally-driven with a top-down approach where leadership bears the structural authority and controls interactions within the enterprise. Also, traditional innovation is driven by a “go to the customer” corporate strategy and based on market research, surveys, and focus groups. Legacy business models that use such a reactive, structured approach to innovation have failed to effectively address today’s business issues.

Enabled by Web 2.0-based collaboration platforms, today enterprises are seeing the birth of a vibrant, unstructured collaborative ecosystem as entities, within and outside the enterprise, interact with each other (refer to diagram above for a graphical representation of these enterprise interactions). Collaborating, sharing, and learning are rapidly becoming the norms for the next generation enterprise. These interactions are shaping three new facets of innovation:

• Intranovation – employees in the organization collectively provide ideas on products and services in an unstructured yet guided (and not controlled) format
• Internovation – innovation with customers and the enterprise collaboratively design products and services
• Extranovation – innovation with customers designing products and services
  

The table below further describes these new facets of innovation and explains how sustainable value can be created.

	Intranovation	Internovation	Extranovation
Description	This innovation technique will cause innovation, content creation, and control to exist at the bottom of the enterprise. It will turn control upside down. Bottom up innovators usually will not have the structural authority to order people to join a team; instead the innovator will succeed by influencing them and leveraging a personal network – collaborating, sharing, inspiring, and leading.	Customers and the enterprise will collaborate to create new products and services. The size, needs, and engagement of customers in product design and promotion will build a vibrant ecosystem that would continuously help the enterprise to create and improve products and services.	In such an outwardly driven innovation technique, customers come together to define the products and services they need, without interference from the enterprise. The enterprise may provide the platform and facilitate such an innovation.
Innovator(s)	Employee	Employee and Customer	Customer
How is sustainable value created?	Value creation through improved employee productivity and greater employee satisfaction, significant internal shift of control when employees have greater control to easily create or change business processes	Value creation when customers and employees collaborate to build a vibrant ecosystem leading to greater customer loyalty and retention	Value creation with greater customer satisfaction and loyalty when customers create products/services causing a significant external shift of control to customer

These new facets of innovation represent new opportunities for open, continuous innovation driven by the enterprise’s intellectual capital of its employees and demands of its consumers. The fact that the outcome does not tend to have an end state and there is always potential to improve existing products and services, causes the business value generated to be truly sustainable.

The next generation, virtually boundaryless enterprise will leverage these innovation techniques to support unstructured, complex interactions and gain competitive advantage from the knowledge of its employees and customers. The enterprise will become more competitive in the market, build and maintain customer stickiness, be able to respond to market changes and improve employee productivity. Tactically, enterprise applications will need to increase access to data and information, support decisions, improve communications, and support multi-party workflows and collaboration.

So does your enterprise currently employ any these techniques? In what organization functions do you see the potential of these new facets in revealing untapped innovation for your enterprise?

Convergence of Forces are driving Consumer Innovation! (Updated: May 2012) 

Three years after I wrote the above article on the new facets of Innovation, we are seeing forces come together to redefine how business will be conducted, keeping the consumer in the center of all decisions. 

Multimedia, social media, and the Internet of Things is fueling exponential growth in data for the foreseeable future. To enable the next frontier for innovation, competition and productivity, companies will need to leverage big data. Companies will need to change their systems to conform to the nexus of converging forces - social (behavior), mobile (access), cloud (delivery), information (context) - and shift control to the consumer / end user. 

Developing a discipline of innovation through information will enable organizations to respond to customer, employee, product or environmental changes as they occur. It will enable companies to leap ahead of their competition in operational or business performance. 

In the foreseeable future, companies who do not leverage big data to innovate will be forced to seize operations!

I recently provided thoughts to the CIO community on how Big Data will drive innovation and beat competition:

Indian CIOs: Big data analytics help beat competition

What's driving business analytics? CIOs ponder

So is leveraging big data a part your company's innovation strategy? How is your company leveraging data coming from social networks and pervasive technologies? 

Web 2.0 is NOT the new Coke: Understand its value and get your enterprise ready

Can Web 2.0 positively impact business value?

CIOs and CEOs listen up! Web 2.0 is not going anywhere. This is NOT the new Coke that many hope it is. This is the beginning of digital socialism. The sonner IT realizes this, the faster it will be able to truly become a strategic partner of the business. Agreed that it is difficult to measure ROI for Web 2.0 or social media implementations but can you afford to not leverage the underlying concepts and technologies to empower your employees, untap hidden networks, enable better collaboration, and foster innovation?

Business today requires change and Web 2.0 has the potential to positively impact your business. So stop making excuses and just go for it!! And here's why (in business terms) -

Web 2.0 technology	What does it do?	Impact	Value Driver
Wikis	Allow users to contribute and share information available in real-time	Improve corporate/shared service efficiency	Reduce cost of internal business interactions > Lower Operating Margin
Social networks	Decentralize decision-making and let solutions evolve through collaboration	Increase staff productivity	Improve asset productivity > Higher Asset Turns
Mashups	Aggregate online content sources within and outside the enterprise to create new, richer services or situational applications	Increase integration efficiencies	Reduce total cost of integration > Lower Operating Margin
Blogs	Improve the ability to provide instantaneous feedback on products and services	Acquire new customers and retain current customers	Higher volume > Grow revenue
RSS feeds	Subscribe to digital content, such as news feeds, podcasts, or blogs	Improve customer interaction efficiency	Reduce cost of external business interactions > Lower Operating Margin
Web services	Help analyze and make decisions faster by making it possible for different business systems to talk to each other	Improve execution capabilities and increase business adaptability	Improve information utilization à Grow revenue
Rich internet applications	Rich user experience by bringing the interactivity of desktop applications to the web	Retain and grow current customers	Higher volume > Grow revenue

*Note: The table lists one benefit for each Web 2.0 technology in order to demonstrate its business value. The benefit may not necessarily be the most popular application of the technology.

The democratization of supply and consumption may threaten the traditional enterprise, thereby classifying Web 2.0 as a disruptive trend. However, enterprises that leverage the long tail will reap the benefits of open, continuous innovation – a sustainable competitive advantage.

So what will it take? And is your enterprise really, really ready?

As consumers and knowledge workers become more internet savvy and collaborate for information, enterprises should be better prepared to adopt Web 2.0. Today’s mainstream consumers are taking control – wanting to help each other and solve each others’ problems. Not only are consumers demanding intuitive, engaging, and relevant digital experiences, knowledge workers (consumers within the enterprise) are also demanding richer user experiences with customizable business process applications that can talk to each other. Gone are the “green screen” days of the mainframe within the enterprise. The confidence around web based technologies to run the business and the maturity and comfort of the work force using these technologies are compelling drivers for early adoption of Web 2.0.

To fully benefit from Web 2.0 technologies within the enterprise, the enterprise will not just need to be comfortable with web-based technologies, but will also need to adopt the following socially-driven business principles:

• The enterprise leverages the web to diffuse enterprise boundaries, resulting in –

a) less vertical boundaries (flatter organization structures),

b) loose horizontal boundaries (more cross-functional interactions),

c) external boundaries (customer and enterprise interactions), and

d) shrinking geographic (global business units) boundaries

• The enterprise considers open innovation as a key strategic driver to leverage the wisdom of the knowledge worker and needs of the customer for sustainable growth
• The enterprise promotes the culture of collaborating, sharing, and knowledge creation.

Once bitten by the internet revolution, the enterprise will be shy to take advantage of the Web 2.0 trends and welcome it within the enterprise. Also the decentralization of control may cause reluctance in Web 2.0 adoption, however the value created by improving the productivity of the knowledge worker and building customer loyalty far outweigh such risks.

As Web 2.0 revolutionizes innovation with its emergent, unstructured, collaborative approach, this will probably need to be one of the most influential strategic initiatives for web-based innovation within the enterprise. To reap the benefits of Web 2.0, the management needs to create a receptive culture and a common platform for a collaboration infrastructure. Interactions should be guided and not controlled. A transitional, informal rollout of the technologies is recommended more than a formal procedural change. Web 2.0 will definitely need the support from leadership but this [unstructured, let it collaboratively evolve] path to value should not be treated like just any other strategic initiative. This path does actually pledge a truly non-replicable, sustainable competitive advantage for the enterprise.

Data Visualization 2.0 from IBM Alpaworks

Imported data from CDC's National Health Statistics, selected a Visualization (line chart), and created the visualization below. All this in 30 min. Pretty good deal!

Talent Management 2.0: How HR can use Web 2.0 to attract and retain Talent

Attracting and retaining talent are two major challenges for HR these days.

If you think about it, talent managment really starts from recruiting through on-boarding; and carries on until the employee is comfortable with the culture, is made to feel at home in the organization, and is equipped with the tools to be productive.

Talent attraction
Some thoughts around how HR can use Web 2.0 concepts and tools to attract talent:

1. Use employee-generated videos to describe a day in their life or what the company really means to them. These videos are able to establish a more "real" connection with potential recruits.

2. Create company's external-facing social networking platform where candidates can ask questions or chat live with recruiters about the company and recruiters can share experiences more than formal facts about the company. They can also meet other candidates. E.g. companies use Facebook as a social networking platform for potential recruits.

3. Create a virtual / rich 3D experience for employees to learn more about the company using cool self service features, have walk in interviews or interactive info sessions, get a virtual feel of the culture, and overall learn more about the company through rich media interfaces. E.g. companies can use SecondLife to provide such a rich and close to real experience.

4. Conduct video conferences or virtual interviews, and accept multimedia/video resumes.


Talent Retention
The real work for HR really begins once the offer is accepted. Promises made during the interviews need to be fulfiled. Many times a company hires a person for a specific role but what really keeps that person in his chair is not merely the role he was hired for. For large companies, it is difficult for HR to provide every employee the attention they deserve. Therefore HR needs to consider providing 'self-service' tools and methods to retain employees.

To retain an employee it is important to provide him the right tools to be productive, and that includes providing the ability to quickly establish the social connections that he needs to be successful in job. We all know that work is really done through informal networks and with the tacit or unstructured type of work these days, structured tools and systems that exist in organizations today do not help.

Some thoughts around how HR can use Web 2.0 concepts and tools:

Once the offer is accepted, HR provides the new employee with a URL to access the intranet for the following:

1. Provide the ability to create his/her own profile on a social networking platform on the intranet.

2. Start with searching employees in the company who may be a friend, classmate, or worked with him before. This can be done using web services that read directly from the employee's personal address books in Yahoo, Gmail, MSN, etc. and finding employees from the company's address book and social networking portal - similar to the Friend Finder feature in Facebook.

3. Also by feeding his interests into the portal so that he can quick find others with similar interests.

4. Provide the ability to search and join online groups. Suggest online groups based on his interests, such as volunteer / social service groups - an important criteria to select an employer these days.

5. Allow personal blogs, wikis, and ability to tag employee-generated content.

Social networking can specifically turn new hires into star performers, and should also be considered for faster onboarding. Such web-based onboarding, also known as 'relational onboarding', is a shift from adminstrative onboarding.

These methods can particularly be useful in tough times, i.e. when resolving issues at work. They can particularly prevent employees from leaving the company when they are not satisfied with their current roles by letting them search and apply for internal job postings.

Wondering whether these methods really add any business value. Watch slide 4 at this link! And click here for on-going research on HR and Web 2.0.

Would love to hear your thoughts on talent management using Web 2.0 and next generation internet trends.

Non Profit 2.0: How Web 2.0 can change the game for Non Profits

It's not until you read a book like the 8th Habit or like Muhammad Yunus' book on Social Business you realize that there can be a better, more sustainable way to conduct business.

What better opportunity for me to merge my on-going attempt to build eminence in Web 2.0 with my interests in non-profits and social business. Yep.. I have been invited to Boston to present Web 2.0 to Non Profit executives. I am tag teaming on this topic with a Professor from Bentley College - Mark Frydenberg. We plan to have plenty of discussion around this topic. I am planning to cover the trends and applications of Web 2.0 to Non Profit that can be found at the end of this posting.

Let me just clarify that I believe non profit organizations face a lot of technical challenges - in terms of technology aptitude and adoption. Web 2.0 is good news for them because the technology behind Web 2.0 is not as important as the underlying concepts and themes that can be seen on the internet today. Also I do not believe NPOs need to necessarily create a Web 2.0 platform on their web sites to build cohesive online communities, user generated fundraising pages, etc. They can leverage sites like Facebook.com, Firstgiving.org, etc. to overcome technology hosting and user adoption.

Hopefully the slides will provide some insight and get you excited about why and how Web 2.0 can make the difference.

Would love to know your thoughts. Also if you do come across any useful sites or information on how NPOs are using Web 2.0 / social computing concepts and technologies please let me know. Cheers!!

Enjoy the presentation below:

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Your city is waiting - Web 2.0 meets GREEN

Harnessing the power of collaboration for sustainability or to resolve energy issues has never been as powerful or altruistic as this.

The time has come! Enterprises are changing the way they market their products and services as consumers are demanding more than just good quality products. Going green is core to the business model of many large companies, and consulting companies are also green-ifying their service offerings to put sustainability on their list of hot topics.

As we all know, addressing energy issues and reducing carbon footprint are on the minds of most CEOs and CIOs these days. As much as we know that resolving these green issues cannot be resolved overnight, many companies are still looking for that silver bullet.

We need to realize that improving the company's image in the eyes of the investor by resolving such global issues requires the co-operation and collective intelligence of the common crowd. The underlying concepts of Web 2.0 can be pave the path to a greener future.

Do you agree? What are your thoughts?

Gen Y lives on Web 2.0

I met two very interesting women from Gen Y (Gen Y are today's young kids waiting to get into the workforce, Gen X who are the junior level working crowd, and baby boomers are those who are senior menagement type of crowd). I took my two minutes to glorify my interest about the social computing trends these days, but it took even lesser time to know (or should I say feel good to hear) that they dig the web. We instantly connected!

They couldn't imagine a life without the internet. One of them, studying public health, kept talking about how she used the web to research, while the other studying international business, talked about how she used MySpace to connect and keep in touch with friends. Just by the way, "Search" and "Social networking" are two of the five underlying concepts of Web 2.0.

They were excited, or at least they showed the interest, to know that I was bringing Web 2.0 inside the enterprise. They also raised their eyebrows to the fact that the lives that Baby boomers are living is so stereotypically money minded and usually lacked the passion for what they did. They would swear they never take up anything that did not motivate them. What they didn't realize is that people like us, i.e. Gen X, constantly live in a state of confusion -- not being able to reconcile with the fact that we are not always doing what we want to do with our lives. The former lady had served in India at a few villages that aided her research and wanted to continue serving the needy. She wouldn't, however, want to let go of her world pleasures of partying once in a while :) This one disliked MySpace though as she felt her life would be a little too revealed if she acted as one of her friends on the site. When we talked about Kiva, the public health lady hadn't heard of it when it actually affected her career more than the international business lady who had heard about Kiva on the Oprah show.

Anyways, it also felt nice to share with them about my work in the enterprise context, which is not as important to note as much it is to mention the takeaways from this meeting with strangers from Gen Y (two in mumber, not a statistically significant number but still noteworthy):

1. Gender: Women are as excited, if not more, about social computing. Popular belief says that usually women aren't as tech savvy as men, so does that mean that "men as well as women equally enjoy social computing"!

2. Web 2.0 in the enterprise: Definitely, they would prefer having to work with Web 2.0 technologies and be more productive as they are used to these technologies outside the enterprise. So as a business, wouldn't you want to provide the tools to your employees that they are most familiar with!

Conclusion: Gen Y will prefer to use the Web 2.0 tools at work. The question is not when but how ready or how fast will leadership introduce these tools in their organization. Read more on what Gen Y really want.

Do you think Gen Y will choose to work with a company that empowers them with Web 2.0 tools? What do you think about the willingness of leadership to welcome Web 2.0 inside the enterprise?