Using the IBM Innovation Factory Idea Management Solution to focus your company on innovation and ideation for strategic issues

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1 Using the IBM Innovation Factory Idea Management Solution to focus your company on innovation and ideation for strategic issues Authors: Lu Sheng, Sophia Li, Jinzy Zhu Management contact: Ye Meng Organization: China Research Lab, IBM Research High Performance On Demand Solutions, IBM Software Group, Strategy Web addresses: www-900.ibm.com/cn/crl/ Date: 15 January 2008 Status: Version 1.0 Abstract: An innovation life cycle is a common process that IBM has observed across a wide variety of customers and industries. In the beginning of the life cycle, ideation and idea selection are critical phases that can be supported by the Innovation Factory Idea Management solution. This paper describes the values, processes, and functions the solution provides to manage ideation and idea selection. Idea management enables the collaborative innovation for organizations facing the competitive market. To receive information about future workshops and seminars pertaining to this solution, send an to hipods@us.ibm.com. Copyright IBM Corporation 2008

2 Executive summary In today s competitive global economy, companies must differentiate themselves from their peers to survive and thrive. With competition no longer limited by national borders and geography, companies need to stay ahead of the curve to offer products and services that their competitors have yet to produce. Even if distribution of advanced technologies render the separation of firstto-market from followers by merely months or even weeks, the economical implication of first mover s advantage can be measured in millions of dollars in revenue and stock value, as evidenced by companies with innovation focus such as Apple and Google. The global investors reward these companies with increasing valuation, rooted in the market s trust that these companies will continue to be transformationally innovative. Driven by such market needs for a continuous output of innovation breakthroughs, companies pour substantial investment into new ideas and talent to expand their product offerings and market reach, while transforming their cultures and business models to match the ever changing industry climate. The kind of growth and innovation that they are looking for, however, can no longer be sustained by relying on the marketing department or research division or any number of units within the company. Instead, it requires a collaborative effort unifying all the company s resources: its employees, business partners, and even customers, to produce innovation. In turn, such kind of collaborative effort needs a collaborative support platform, with the right tools and processes. The IBM Innovation Factory Idea Management solution is an implementation of this platform that can help expand winning ideas for companies 1. Innovation Factory is an Enterprise Web 2.0 solution that accelerates the innovation life cycle, which includes five phases: ideation, idea selection, development, incubation, and graduation. Innovation Factory Idea Management concentrates on the first two phases of this life cycle. This paper shows the process to systematically harvest ideas from the innovators and select from these ideas the investment candidates with the most market potential. The Idea Management solution can help companies: Implement a cultural process to harvest ideas from innovators either continuously or through a single event, such as an innovation contest. By systemically stimulating and rewarding the creativity of a company s own employees, business partners, or even customers, Idea Management helps a company interweave innovation into its DNA. Manage ideas more efficiently. Not all ideas are born equal. Idea Management helps innovators improve their ideas through collaboration and peer review, or create new ideas by combining existing ones. Select ideas from many possible ideas. Winnowing through all the ideas is a time consuming and subjective task, with a potentially substantial opportunity cost from investing in the wrong ideas. Idea Management provides decision tools to help a company s management select the right ones to invest. From a company s perspective, using an innovation platform such as Idea Management can help harness its collective power of innovation and significantly reduce the cost and time to grow and move winning ideas through the innovation life cycle. 1 To understand the Innovation Factory solution better, see the white paper Creating a platform for innovation by leveraging the IBM Innovation Factory solution. IBM Corporation 2008 Innovation Factory Idea Management 2

3 Note: Before using this information, read the information in Notices on the last page. Contents Executive summary... 2 Contents... 3 What is innovation?... 4 Collaborative innovation... 4 The innovation life cycle... 5 Roles in Idea Management... 7 Collaborative ideation and idea selection... 8 Fundamental functions of ideation and idea selection... 9 Major scenarios implemented in Idea Management Values of Innovation Idea Management How to use Idea Management Flexible multitenancy Deployment What makes Idea Management different -- extended functions Enterprise search Idea clustering Innovation methodology for ideation Innovation methodology for idea improvement Summary References Acknowledgements Notices IBM Corporation 2008 Innovation Factory Idea Management 3

4 What is innovation? Innovation can mean many different things. In this paper, innovation is defined as new ideas or new ways of applying conventional thinking that leads to significant changes in a company. IBM has long been a leader in leveraging innovation as a transforming business strategy, both internally and for clients. Our innovation asset, Innovation Factory Idea Management, results from that tradition of continuous innovation as a solution to help expand and accelerate the innovation process. Our client engagement experience has led us to conclude that there are five major types of innovations within a company: Product and offering creation Market expansion Operational process improvement Organizational culture shift Business model transformation Depending on its position in the market and its maturity curve, a company may require one or more of these types of innovations to stay competitive. Collaborative innovation In 2006, IBM surveyed 765 CEOs from world s top enterprises on their views of innovation. The study concludes that, in general, companies that focus on collaboration and innovation consistently outperform those that do not. As shown in Figure 1, the top three contributors to innovation are a company s employees, business partners, and customers. Figure 1. Most significant sources of innovation - IBM CEO Survey (2006) IBM Corporation 2008 Innovation Factory Idea Management 4

5 While any one of the three sources of innovations can be a reliable producer of ideas, collaboration among all three would be an even more powerful force, as illustrated by Figure 2. CEOs identified collaboration as the key to unleash the innovative power of their constituents and produce a multitude of business benefits, including wider range of skills, increased revenue, and speed to market. Figure 2. Collaboration benefits IBM CEO Survey (2006) The innovation life cycle The innovation life cycle refers to the process that companies go through when creating or refining offerings. Streamlining the innovation life cycle is necessary to nurture the innovation process. The major benefits of improving this process include: Faster time to market Reduced cost Qualifying winning ideas to properly allocate resources Gaining customer insights Identifying and leveraging skill from subject matter experts The process can be described in five high level phases with as many optional phases/subphases as beneficial to a given company or situation. Figure 3 shows the five high level phases including ideation, conceptualization, development, incubation and commercialization. We describe the innovation process as a life cycle because there is a beginning (ideation) and an end (commercialization). After commercialization, the idea may be enhanced in minor ways, or reenter the life cycle for significant enhancements. Ideas can come from employees, customers, vendors, and business partners and, depending on the company, be released for trial to those same groups. If desired, companies can include one or more of the nonemployee groups in the development phase. IBM Corporation 2008 Innovation Factory Idea Management 5

6 Figure 3. Innovation life cycle Table 1 defines each phase. Table 1. The phases of the innovation life cycle Innovation This phase involves creating a context for innovation -- laying the context and foundation and environment for creating ideas -- and generating ideas. To ideation succeed, new products, services, business designs, and processes must align with business strategy and goals. This is often described as market research Idea selection and conceptual Development Incubation Graduation and commercialization and positioning. In this phase, strategic ideas are filtered using community defined criteria to allocate investment to winning ideas. After selection, more effort refines the concepts. And team communication may occur to determine if the idea should be developed. Ideas require less funding during the conceptual phase and this phase gives a good look into the future of the idea. In this phase, viable ideas are developed into new offerings. Traditionally development is the most costly phase. Many clients are looking to reduce development costs. One IBM client described this as a spiral process, where there are multiple decision points and iterations through the phases before commercialization. Each time around the spiral costs more but information from previous passes enables better decisions. These decisions are based on facts. Ideas that are not promising can be discarded. Incubation can add significant value to the success of the idea. Incubation focuses on testing ideas in the market and reworking them to address user needs and wants. Clients want better user feedback before commercialization. Incubation is a useful mechanism to make sure the idea succeeds. Incubation may include market trials, focus groups, or beta tests. Google made the concept of perpetual betas an accepted practice of easing offerings into the marketplace. This can also be described as a soft launch, which is accompanied by setting users expectation with minimal cost for support. Another opportunity to incubate ideas is to try them within the company. IBM uses this approach internally by using its innovation portal, which allows IBM innovators to connect with early adopters and develop ideas. Offerings that succeed in incubation graduate and are launched as official products or services. IBM leverages valuable user feedback to graduate ideas from the IBM innovation portal and commercialize the graduates. IBM Corporation 2008 Innovation Factory Idea Management 6

7 Companies often support an idea longer than they should. Increasingly, they recognize that by weeding out bad ideas early, they can instead invest in the development and commercialization of winning ideas. This helps avoid costly commercialization efforts. The innovation life cycle represents the steps that ideas go through to become products, offerings, or services. It does not describe how the people that work through the process accomplish the task. When working with clients, the problem of fostering innovation within the company and with partners is often the biggest challenge. Fostering innovation requires getting the people with the good ideas in contact with each other and with the consumers of those ideas (the users). Fostering innovation is all about reducing the costs of the innovation life cycle so that more ideas can reach soft launch and commercialization faster. Some of the basic concepts for an innovation platform focus on making it easier for the innovators and enabling the building of communities around the ideas. This paper discusses the Innovation Factory Idea Management solution, which supports the process and functions used in the ideation and idea selection phases. [1] introduces specific tools and techniques to support the other phases. Roles in Idea Management Idea Management is not a forum in that it doesn t support anonymous login thereby protecting intellectual property and preventing baleful input. Every legitimate user of Idea Management must have at least a role. The user of Idea Management may only be the employees of the company. The company may invite their partners or customers to be Idea Management users. All users of the Idea Management are called inventors. Some of them publish ideas; some of them review ideas and help other inventors to improve their ideas; some of them may only be observers, but they are a part of the innovation activity. Different roles have different privileges in the Idea Management process. System administrator is the root of all roles and is authorized to define roles according to company policy. In a hosting scenario, the system administrator sets tenancy administrators and sets their permissions. Tenancy administrators set other roles of their tenancy and set the permissions of these roles. See Figure 4. Figure 4. Roles of Idea Management by hosting IBM Corporation 2008 Innovation Factory Idea Management 7

8 System administrators can define roles as they wish. From the innovation best practices of IBM, three roles are recommended: user, subject matter expert (SME), and innovation administrator. Table 2 summarizes the rights associated with each role. Table 2. Idea Management roles and rights Role Rights User Publish ideas; edit and delete ideas that he authored or co-authored; view ideas of other inventors; give comments or rates to other ideas. Users are part of employees, partners, and customers. The users in Idea Management are also called innovators. Subject matter Give expert review to ideas; give expert comments and expert rates. SMEs are expert (SME) experts of a specific domain; they use their knowledge to help the company Innovation administrator select winning ideas. Maintain innovation process and innovation settings, for example, change idea status, remind experts to review ideas, and analyze ideas. Tenancy administrator is a role used in an Innovation Factory hosting scenario. The tenancy administrator can define other roles as needed. For example, innovation sponsor may be defined as a special role that can view innovation dashboard and statistics results. Collaborative ideation and idea selection To enable innovation, companies need policies and strategies that are embodied in their innovation management scheme. The innovation scheme defines the ideation and idea selection process, idea scoring criteria, incentive scheme, and forms of innovation, either continuously or through a single event, such as an innovation contest. This section describes two idea management processes to give a better understanding of how to perform ideation and idea selection. Figure 5 may be the simplest process for ideation and idea selection. After an inventor publishes an idea to Idea Management, his/her teammates review the idea and collaborate with the author to improve the idea. The other users give comments and rate the ideas. At some point, the innovation administrator should select ideas based on idea ratings and comments. Figure 5. A simple innovation process Figure 6 shows a more complex innovation process. There are four roles: user, innovation administrator, subject matter expert, and innovation sponsor. These roles work together enable innovation. A company sponsor initiates innovation activity and presumably funds selected winning ideas. Users publish ideas and collaborate with others to improve ideas. Subject matter experts review ideas to assure the quality of selected ideas. Innovation administrators keep the innovation process going. IBM Corporation 2008 Innovation Factory Idea Management 8

9 Figure 6. Example of internal innovation If a company wants to involve partners and customers who are also ranked as the top contributors of the innovation, the company needs to make another process. Fundamental functions of ideation and idea selection The innovation life cycle has five phases: ideation, idea selection, development, incubation and graduation. Idea Management focuses on ideation and idea selection. From the innovation practice, ideation covers the function of publishing original ideas and improving idea quality through collaboration. Idea selection covers idea classification and evaluation. Figure 7 lists the key functions of ideation and idea selection. Figure 7. Fundamental functions of Idea Management Idea Management provides a collaboration environment to link the innovation ecosystem including enterprise employees, business partners, investors, and customers. Using Idea Management tools, processes, incentive schemes, and evaluation criteria, individuals and organized communities can browse interesting ideas, make comments, rate ideas, and co-create content -- all made possible by the implementation of Web 2.0 features and facilities. IBM Corporation 2008 Innovation Factory Idea Management 9

10 Table 3 summarizes Idea Management functions that support ideation and idea selection. Table 3. Functions of Idea Management Publish idea Publish idea: Idea Management provides a rich Web-based editor and flexible template for publishing ideas. Different idea categories may have different idea templates. Templates guide the innovator to think over ideas from different perspectives, such as technical feasibility and business value, so as to improve idea quality. Announcement: Aspiration from a company s innovation sponsor can promote more ideas and guide innovation toward the company strategy. Announcement is a channel for a sponsor to deliver aspiration to innovators. Administrators could send notice and key information to innovators with this channel. Announcements are shown in real time. Idea versioning: Ideas can be edited and improved by innovators. A group of authors could edit ideas and the edit history can be managed by authors. Innovation history: Provides a personal space to record the activities of one innovator. An innovator may publish many ideas under different categories. He may comment and rate the ideas of others. This information is kept and can be track by innovators. Collaboration for Idea browsing: Ideas are organized by hierarchical categories. Users improvement can easily browse ideas by type. Idea searching: Users can search ideas by title, author name, time, category, author department, rating score, and idea status. Idea rating: Users can rate ideas of others. Different companies may have different criteria to rate an idea. Idea Management allows companies to define their own criteria and corresponding weights. The rating score can be a factor in the matrix of idea selecting criteria. An idea with higher rates has a higher possibility of being selected to go into development phase with funding from company. Idea commenting: Users can comment to support the idea, suggest refinements, or suggest against. Innovation group (co-author): Some ideas may be generated by a group of persons by brainstorming or group analysis. In Idea Management, the innovator who publishes the idea is the primary author. He can define other inventors as co-author to authorize them the rights to edit the idea and share the credit if the idea is selected. Favorite idea: The function is also in user s personal work space. Users can save the ideas that he is interested in as a link in their own space for future use. IBM Corporation 2008 Innovation Factory Idea Management 10

11 Classification and evaluation Common functions Evaluation process: Idea Management includes an evaluation process based on an IBM best practice for innovation. A company can also define their own processes. Expert rating: Subject matter experts (SME) can comment on and rate ideas. The company defines the weighting. Dashboard: Innovation sponsors and administrators can view statistics analysis reports. Idea status changing: The parameter of idea status is associated with the evaluation process. Administrators are authorized to change the status of ideas. Incentive scheme: An incentive scheme is a good way to encourage employees to innovate, according to IBM practice. Idea Management supports incentive schemes defined by the company. Authentication and authorization: Users must have an account before using the innovation platform. With this account, company can identify innovators to avoid spiteful comments, protect originality, and protect intellectual property. Multitenancy: Idea Management can be deployed in two ways, on-site and hosting. Multitenancy is a function required by the hosting model. Every company can define their own view of Idea Management, which is isolated from other companies. Major scenarios implemented in Idea Management When the Innovation Factory solution is ready, a company can use it as they like, for example, idea management or project proposal selection. Companies of different industries have typical use scenarios, all of which relate to the five typical innovations. And companies will discover and/or develop new scenarios for their special requirements. Telecom: business model innovation, new service offering, new product development, new market opportunity Government: university research results to market, venture investment call for candidate Banking: cost reduction, remote training, new service offering, process improvement, customer suggestion Media: naming, TV program, beauty contest Retail: training program, communication improvement, cost reduction Idea Management users can use it in many ways: Idea publishing (idea author) Innovator can publish new ideas based on template format Innovator can select idea category and add keywords Idea reviewing (other inventors) Authorized users can view published ideas and give comments Users can rate idea and save ideas to favorite Users can be invited to be idea co-author Idea screening (innovation administrators and experts) Subject matter expert can review ideas and rate ideas Administrator can customize the review process Ideas can be analyzed and compared by statistics tools IBM Corporation 2008 Innovation Factory Idea Management 11

12 Values of Innovation Idea Management Innovation is one of the top strategic priorities. Idea Management is key in a company s innovation strategy because it: Drives economic growth Creates wealth Enhances lifestyles Increases competitiveness Because of the values, 74% of CEOs plan to increase investment on innovation, despite their dissatisfaction with the return on investment from innovation. Idea Management can help: Refine an idea by innovator collaboration (rating, group review, voting, editing) A corporate management team screen an idea using a customizable review workflow Promote great ideas to corporate management team using idea dashboard Combining Idea Management with other Innovation Factory components can provide a company with support for the whole innovation life cycle. How to use Idea Management Flexible multitenancy IBM can host Idea Management for companies who wish to avoid the maintenance work. IBM can deploy Idea Management to standalone servers in a cloud infrastructure to satisfy the requirements of companies that want their ideas kept in separate servers or isolated with others. For companies who simply want their ideas well protected from other users, their system administrator can create a new tenancy. Idea Management has flexible multitenancy support and lets companies customize their own environments. Tenancy administrators can customize: Application name Logo User interface layout CSS (cascading style sheets) Language Idea template Idea rating criteria and weights Rewarding policy (incentive policy) Evaluation process Category Two companies may have different experiences even when they use Idea Management with the same application instance. Deployment Companies that want to host Idea Management themselves have to deploy it to their server(s). Companies with less than a thousand users can deploy to one server, which is the cheaper alternative. Companies that require higher performance and have more users can deploy the more IBM Corporation 2008 Innovation Factory Idea Management 12

13 expensive two servers. Large companies or enterprises may require a clustering solution. Figure 8 shows two deployment schemes. Figure 8. Two deployment schemes of Idea Management What makes Idea Management different -- extended functions Using the fundamental functions of Idea Management, companies can manage their ideation and idea selection phases of the innovation life cycle. Innovation activities such as an idea contest can be managed well. Beyond these fundamental functions, Idea Management has extended functions for advanced users. These functions can be added to the solution as plug-ins. To better support ideation and idea selection, four plug-ins are available: enterprise searching tool, idea clustering tool, ideation tools, and idea improvement tools. This section introduces these extended functions. Enterprise search The fundamental idea search function can help users look for ideas by title, author name, time, category, author department, rating score, and idea status. An innovator who wants to search ideas by keywords needs the enterprise search plug-in. Idea Management enterprise search uses the IBM Omnifind engine. When the enterprise search plug-in is enabled, a simple search input box appears in the Idea Management interface; a user enters keywords to search on. An enterprise may want to integrate their internal data sources to Idea Management if the enterprise doesn t own an enterprise search. Idea clustering When hundreds of ideas are submitted to Idea Management, they may not match predefined categories well, and, even in one category, there may be some subtypes of ideas. If there are thousands of ideas, how can a user find great ideas and similar ideas? Users keep submitting ideas to Idea Management. When there is a checkpoint, innovation administrators can run the clustering tool plug-in to generate clusters automatically. If they aren t satisfied with the clustering results, they can add new words into the word list and rerun the IBM Corporation 2008 Innovation Factory Idea Management 13

14 clustering tool. When they are comfortable with the clustering results, they can make some trivial changes by the tools provided by Idea Management. When the clusters are generated, users and experts can use the clustering results to help them, for example, look for similar ideas or identify great ideas. The categories are static classes and clusters are dynamic classes. Both are useful in specific circumstances. Innovation methodology for ideation The biggest challenge a company faces is how to make their employees more creative. In some areas, innovation is characteristic of inventors; but in most circumstances, innovation can be trained. Idea Management provides ideation tools to help employees get more ideas from their daily work. With the ideation tools, they can know the real problem they face and they can try to solve their problem. The solutions will yield new ideas. Innovation methodology for idea improvement When an idea is published to Idea Management, it may not be promising and sound. Authors and other inventors need to improve the idea. The comments and ratings from other inventors are definitely helpful, but may not be sufficient, particularly for ideas that need to be funded by the company. The company needs to know whether they selected the most promising ideas. In this case, idea improvement tools are available. Three types of idea improvement tools help authors analyze their ideas and improve them: Market intelligence tools help analyze the market trend of ideas Business modeling tools help understand the possible business models of the idea Technical assistant tools help identify intellectual properties of the ideas Summary The innovation life cycle is the process a company offers its employees to create and refine ideas. Of the five-phase life cycle, the first two phases focus on ideation and idea selection. The Innovation Factory Idea Management solution can help support these two phases. Idea Management is not only a solution, but also a platform of many useful functions. This paper describes scenarios for using Idea Management. To support ideation and idea selection, some functions are fundamental. These functions support idea creation, idea collaboration, and idea evaluation. Beyond fundamental functions, more functions can be plugged-in to Idea Management to make it more powerful. With Idea Management, inventors have their platform to generate, publish ideas, and collaborate with others to get promising ideas. Companies may use Idea Management to support idea contests or continue innovation activities of their inventors. The resulting increase in the company s creativity can improve the company s position in the competitive world. IBM Corporation 2008 Innovation Factory Idea Management 14

15 References [1] John Reif, Linda Legregni, and Jeffrey Coveyduc, Creating a platform for innovation by leveraging the IBM Innovation Factory solution, IBM HiPODS white paper, [2] Greg Boss, Padma Malladi, Dennis Quan, Linda Legregni and Harold Hall, Cloud computing, IBM HiPODS white paper, [3] Omnifind, IBM product, Acknowledgements This white paper is a complement to and based on the white paper Creating a platform for innovation by leveraging the IBM Innovation Factory solution by John Reif, Linda Legregni, and Jeffrey Coveyduc. This paper would not have been possible without their help. We would like to express most sincere thanks to Susan Holic and Ye Meng for their help and knowledge. IBM Corporation 2008 Innovation Factory Idea Management 15

16 Notices Trademarks The following are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both: IBM, IBM logo Other company, product, and service names may be trademarks or service marks of others. Special Notice The information contained in this document has not been submitted to any formal IBM test and is distributed AS IS. The use of this information or the implementation of any of these techniques is a customer responsibility and depends on the customer s ability to evaluate and integrate them into the customer s operational environment. While each item may have been reviewed by IBM for accuracy in a specific situation, there is no guarantee that the same or similar results will be obtained elsewhere. Customers attempting to adapt these techniques to their own environments do so at their own risks. Performance data contained in this document were determined in various controlled laboratory environments and are for reference purposes only. Customers should not adapt these performance numbers to their own environments and are for reference purposes only. Customers should not adapt these performance numbers to their own environments as system performance standards. The results that may be obtained in other operating environments may vary significantly. Users of this document should verify the applicable data for their specific environment. IBM Corporation 2008 Innovation Factory Idea Management 16