Business Case Studies, Executive Interviews, Curtis R Carlson on Innovation

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Executive Interviews: Interview with Curtis R Carlson on Innovation
November 2006 - By Dr. Nagendra V Chowdary


Dr. Curtis R Carlson
President and CEO of SRI International


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  • What according to you is an innovation? What are the different types of innovation?
    Innovation is the process of creating and delivering new customer value in the marketplace. Innovation requires creativity, invention and often includes a new business model, design or production process. But those ingredients alone do not define innovation there must be new customer value in the marketplace.

  • In books like Built to Last, Good to Great and In Search of Excellence, etc., the authors have concluded that the superior performance and long lasting existence

    was attributable to some key factors. Where does innovation figure in these factors?

    It is critical that organizations focus on important problems that fill an unmet customer andmarket need. Especially in an exponential economy, product life cycles are dramatically compressed. A factor of two improvements by a competitor could make your product obsolete that is why its important to focus on important vs. just interesting work.

    It is also important for a business to have a sustainable competitive advantage that will last for many years and can create a barrier for a competitors entry. This advantage, or "golden nugget," might come from a new technology, relationship, manufacturing process or business model.

  • In your book, Innovation: The Five Disciplines for Creating What Customers Want, you have outlined a disciplined approach to identifying and then delivering new products or services that fill a societal need.What is this disciplined approach all about and how should the companies plan for a road map?
    Our approach to innovation focuses on the development of a value proposition. In order to provide true customer value, it is important to ask the NABC (Need, Approach, Benefits per cost, Competition) questions:

  1. What is the important customer and market need?
  2. What is the unique approach for addressing this need?
  3. What are the benefits per cost that result from this approach?
  4. How are the benefits per cost superior to the competition and alternatives?
  • Does this disciplined approach require any realignment of organizational settings? (For example: changes in the organizational structure, change in performance evaluation methods, etc.)
    Continuous Value Creation (CVC) develops an enterprise wide culture that focuses on the rapid creation of new customer value. CVC allows for both top down and bottom up approaches organizations must do both. Bottom up is essential because employees are most knowledgeable about customer needs, changes in business models and revolutions in technology. Top down is essential because major new initiatives are often required.

  • What has been the experience at SRI International?
    Like many organizations, SRI has had to make adjustments in order to succeed as an innovative organization. When I became CEO of SRI, one of the worlds leading research and development institutes, it was a dream come true for me. There was a problem, however: SRI's business model over the past 50 years was not keeping up with the demands of the exponential economy. Working together with senior staff and employees at SRI, we deployed innovation best practices in order to stay competitive and to deliver value to our customers.

  • Lets look at the five disciplines.What is the efficacy of these five disciplines when the product life cycle (in some cases industry life cycle themselves) are getting shortened? Would this disciplined approach therefore not lead to extraordinary delays?
    A disciplined approach to innovation addresses questions of how to create a process that will be more effective and offer customer value. Successful companies have a broad definition of customer value and are always looking at new ways to deliver.

  • Can this disciplined approach be applied equally well to old economy companies like steel, cement, electricity generation, automobile industry, etc.?
    All organizations, and all employees, can improve their value proposition by adopting a disciplined approach that addresses the NABC questions.

  • In the book you also advocate a new practice you call "watering holes". Do you think that the potential of this initiativemay not be realized in multi business companies and also highly global companies?
    Thewatering hole concept is just one method for companies to improve their innovation methodology. Creating new technologies, products and businesses requires new vision, business models and unconventional solutions. A different perspective and useful feedback can often provide powerful insight about what is possible.

1. ICMR Innovation Case Studies
2. ICMR Case Collection
3. Case Study Volumes

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