1. Leader or Laggard: Innovation as a Competitive Success Factor During Recession Capgemini World Innovation Forum Survey Spring, 2009

2. “Every organization needs one core competence: INNOVATION” ~ Peter Drucker

3. Contents Introduction Drivers of Innovation Barriers to Innovation The People Principles of Innovation Importance of Inspiring Leadership Profiting from Partnerships Tools and Techniques Business Model Innovation Implications and Opportunities

5. Highly successful innovators: 51-75%

6. Moderately successful innovators: 25-50%

7. Innovation laggards: Less than 25%Construction OEM Energy Automotive Utilities

8. 0 Most respondents have continued to innovate during the recession and leaders are using it as an opportunity to transform Impact of recession on innovation efforts “Our management team is using the current recession as an opportunity to fundamentally transform our business” We have had to cut back on our efforts at innovation 13.7% We are continuing our efforts, but have changed focus / direction 24.6% We have no plans to change our innovation strategy or approach 28.1% We are using the slowdown as a catalyst to increase our efforts 33.6% Innovation Leaders Highly Successful Innovators Moderately Successful innovators Innovation Laggards

9. Respondents were consistent in their definition of successful innovation – “newness” is a necessary but not sufficient condition Shareholder Value Creation Innovation Success Customer Intimacy Intentionality Successful Innovation is Customer Focused “Redesigning new ways of thinking, processing and delivering that achieves greater results and resonates with our customers” “Co-creation of new experience, product / services, market, network and sustainable development with clients and customers.” “The most important measure of success for innovation is user adoption” Intentional and Future-oriented “Successful innovation is not only about introducing the idea; it’s a process” “Building discipline in the team to make time for the future in order to lead the industry ...” “Just having new technology is not innovation; it’s about what we do with the technology to change human behavior and create a new future” “There has to be a reason for what we’re doing; we believe in purpose-driven innovation, rather than innovation for innovation’s sake” Value Creating “Successful commercialization of game changing products (and / or business practices) that deliver in a significant way to the bottom line” “Successful innovation creates wealth, market share and the confidence to compete against new competitors” “… increases the likelihood of the long-term growth and sustainability of the company.” TheCornerstones of Successful Innovation

10. 8 Companies recognized as leading innovators significantly outpace the financial performance of the market as a whole Five Year Earnings Growth Rates Five Year Net Income Growth Rate S&P 500 S&P 500 Apple Apple Research in Motion Research in Motion Google Google Hewlett-Packard Amazon Amazon Hewlett-Packard Nokia Procter & Gamble Microsoft Microsoft Procter & Gamble Novartis Novartis Nokia 60% 80% 40% 0% 20% -20% 100% Source: MSN Money, June 2009; Business Week 25 Most Innovative Companies, 2009

12. Open the process to new, non-traditional partners

13. Form alliances / partnerships to draw on outside ideas or access new customer bases

14. Consider smart competitive collaborations

16. Use ethnography and anthropology to understand how customers behave and what problem they are trying to solve

17. Adapt existing products / services to serve new markets; consider non-traditional options

19. Take advantage of options like virtualization to support prototyping and experimentation

20. Collaborate with the multiple partners by using social networking and cloud technology

22. Develop an environment that cultivates curiosity, creativity, tolerance for risk

23. Restructure hierarchy to encourage idea flows (top-down, bottom-up, outside-in)

24. Increase collaboration across functional groups

25. Recruit and train with an eye to innovation, regardless of business function

28. The role that technological advances play in innovation supports Capgemini’s Technovision 2012 approach, which identifies many of the key technology enablers for innovation, e.g. social networking, cloud computing, collaborative tools

29. Firms continue to innovate in response to the evolving macroeconomic environment and its impact on internal business conditions 1 Does not sum to 100% – respondents could select more than one response

31. Globalization is a catalyst for innovation in three major areas

32. New customers and markets

33. New partners and sources of insight

34. New talent and labor with diversity of ideas and capabilities

35. The extended ecosystem expands the context within which to innovate new business models

36. Greater engagement with the developing world is spurring increased “bottom of the pyramid” innovation to the developed world

38. “We search the globe for new technologies, and to evaluate demos and pilots that we can use in our home market.”

39. “We actively seek out cross border collaborations – finding people everywhere who want to learn together.”

41. Contents Introduction Drivers of Innovation Barriers to Innovation The People Principles of Innovation Importance of Inspiring Leadership Profiting from Partnerships Tools and Techniques Business Model Innovation Implications and Opportunities

43. Most companies point to day to day business pressures as a key constraint; therefore, additional on-demand support (new labor models) can help to strengthen innovation efforts

44. But equally important, innovation efforts should be built into the corporate DNA as a regular part of the business, rather than being treated as an extra or “add-on” separate from the organization’s core activitiesNote: Does not sum to 100% – respondents could select more than one response

45. Contents Introduction Drivers of Innovation Barriers to Innovation The People Principles of Innovation Importance of Inspiring Leadership Profiting from Partnerships Tools and Techniques Business Model Innovation Implications and Opportunities

47. Many innovation leaders speak about the importance of hiring the right mindset (risk-taking, open to the art of the possible, resilient ) and building skills as part of the organization’s overall mandate

48. “Creating creativity” is a learned skill; innovation leaders teach formal innovation development and management skills to people across the organization, regardless of function and title

50. However, specialized support is not enough; the organization must also build internal capabilities with appropriate training, performance management and incentives

51. Additional challenges include: inability to articulate the value proposition, regulatory concerns and lack of leadership commitment 1 Does not sum to 100% – respondents could select more than one response

53. Developing an innovation ethos means providing employees with the skills needed to be successful; creativity can be a learned skill, but it requires practice and reinforcement

54. Collaborative tools provide new opportunities for employees to interact and engage across functions, divisions & locations

56. Greenhousing: Protect ideas when they are most vulnerable

57. Signaling: Tell others how you want them to react to ideas – challenge? Build?

58. Realness: Share, be open and embrace learning opportunities and teachable moments

59. Momentum: Momentum is contagious; but so is inertia

61. Promote transparency

62. Put structures in place to reward innovation

63. Leaders must walk the walk

65. Foster confidence and an appetite to do things differently

66. Recruit for attitude – curiosity, courage, resilience, risk appetite

67. Instill a sense of passion – give people something to care aboutNote: Adapted from: ?WhatIf! Consulting, World Innovation Forum 2009

68. Contents Introduction Drivers of Innovation Barriers to Innovation The People Principles of Innovation Importance of Inspiring Leadership Profiting from Partnerships Tools and Techniques Business Model Innovation Implications and Opportunities

70. The formal role responsible for innovation is not necessarily defined as innovation-specific (though some are, such as the Innovation Chief, Director of Foresight); in many cases the innovation lead is the CEO or a high-level line executive in the organization

71. Although embedding innovation in the organization may be more effective than trying to create a separate division, having a formal innovation organization increases focus and resource commitment

74. To ingrain a commitment to innovation, KPIs must be designed to measure and reward the desired behaviors, e.g. creativity, risk-taking, creating a learning culture

76. Contents Introduction Drivers of Innovation Barriers to Innovation The People Principles of Innovation Importance of Inspiring Leadership Profiting from Partnerships Tools and Techniques Business Model Innovation Implications and Opportunities

78. The use of open innovation and collaborative business tools and techniques provides enhanced innovation capability

80. Social networking technology creates new avenues to engage customers as participants in the innovation process

81. Social anthropology, ethnography, and user experience / user-designed innovation are growing in importance – the key is to understand how customers behave, why they do what they do, what problem they are trying to solve, not what they say they want

82. More systemic and business model changes are being driven by customer insights, e.g. Tesco

85. Innovation processes should be: intentional, clearly defined, action-oriented, easily understood, accessible, repeatable

87. To be effective the prioritization system must be aligned with overall corporate objectives as well as individual divisional goals

88. Defining success criteria, key metrics and measures a priori provides a mechanism to “fail fast” while leaving room to continue to explore promising ideas

90. Business model innovation fundamentally redefines the business elements that shape the company’s value proposition Resources Customer Offer Co-creation CustomerRelationship PartnerNetwork BusinessFunctions Distribution Channels Value Proposition CustomerSegment Core Capabilities Financial Performance CostStructure RevenueStreams PROFIT Note: Adapted from Alexander Osterwalder, The Business Model Ontology, a proposition in a design science approach

92. Business model innovation is driven by companies’ answers to known unknowns

93. “What does my customer want that today they cannot get from anyone at any price?”

94. “If the current governmental or regulatory environment were to change dramatically from today, what would it take for my business to succeed?”

95. How would my business be different if the margins or cost structure mirrored those of a radically different industry?

96. Which company that is not currently my competitor has the potential to completely reshape the environment and take my most profitable customers away?”

98. Benchmark and address performance gaps

99. Perform corporate restructuring

100. Dedicate 50-55% of corporate effort

101. Address the steps to create the future

102. Create fundamental business model changes

103. Requires bold strategic intent: direction, passion, challenge

104. Dedicate 10 -20% of corporate effort

105. Identify “next practices” not best practices

106. Expand into areas adjacent to existing business

107. Dedicate 10-25% of corporate effortSource: 1. Vijay Govindarajan, Tuck School of Business, Dartmouth

109. Co-create product / service with each consumer based on individual preferences

110. Focus on one customer at a time through

111. Flexibility

112. Collaborative networks

113. Simple customer interface

114. Anticipating evolving customer needs

115. Second pillar of innovation enables co-creation

116. Access high quality resources at low cost from multiple sources globally

117. Shift from owning all necessary resources to ability to access specialized suppliers as needed

118. Results in

119. Quick turnaround

120. Scalability

121. Innovation arbitrageR=G N=1 Source: Prahalad, C.K., Krishnan, M.S. The new age of innovation. 2008

122. Contents Introduction Drivers of Innovation Barriers to Innovation The People Principles of Innovation Importance of Inspiring Leadership Profiting from Partnerships Tools and Techniques Business Model Innovation Implications and Opportunities

124. Take advantage of web 2.0 (collaboration, social networking) and web 3.0 (open innovation, connectivity, “relationality’ to engage in customer-driven conversations

125. Use analytics to identify customer behaviors that suggest new opportunities for innovation

127. Explore opportunities for smart competitive partnerships or industry colloquia

129. Institutionalize involvement form employees at all levels

130. Develop a simple model to incorporate the key elements of innovation: ideation, selection, experimentation, commercialization

132. Take advantage of purpose-built experimental environments – experience labs, innovation factories, solutioning centers

134. Encourage bottom-up innovation – support efforts from employees at all levels and functions

135. Align performance measures and KPIs to reward smart failures as well as successes

137. What problems do our customers’ behavior suggest they are trying to solve?

138. What macro changes are shaping what our industry and our customers will look like five years from now? Ten years from now?

139. How should our business model change to support more effective innovation?

140. Do we have a balanced portfolio with an appropriate mix of incremental improvements, intermediate opportunities and visionary long-term innovation?

141. Is there a defined way to identify what projects we should terminate?

142. Can we define and learn from smart failures?

144. hat are the most effective ways to engage partners and customers in our innovation efforts?

145. What tools are available to support more effective innovation?

146. How can we strengthen our approaches to ideation / portfolio management / experimentation?

147. Do we have a culture that supports innovation?

148. What are the most effective ways to engage employees at all levels?

149. How do we build a curious, learning organization?

150. What metrics and KPI’s can be used to support more effective innovation?Innovation Processes People Principles

153. Process creates a large enough pipeline and manages failures effectively

154. Process routinely evaluates lessons learned and measures successes

155. Individual(s) made responsible for providing innovation tools and techniques

156. Oversight and monitoring implemented

157. Leadership show commitment

158. Input sought from all employees at all levelsDegree of Complexity

160. Conduct environmental scan

161. Conduct customer experience evaluation

162. Define strategic platforms

163. Conduct alignment workshops on strategic intent

164. Refine strategic innovation platforms

165. Define business model required to support strategic platforms

166. Ensure shareholder value management by reviewing and monitoring platforms and strategy

167. Identify new opportunities based on strategic innovation platforms

168. Assess portfolio balance (Box 1-2-3)

169. Review investment and value projections

170. Evaluate “kill criteria” and “fail fast” approach

171. Maintain transformation management office for portfolio management

172. Develop failure feedback loop and incorporate learnings into revised portfolio and updated strategy

173. Revise portfolio in line with strategic platforms; identify new opportunities

174. Develop portfolio evaluation and kill criteria

175. Define smart failure

176. Perform culture assessment

177. Conduct employee interviews

178. Conduct capability assessment

179. Evaluate innovation org structure and diffusion / .execution models

180. Identify performance blocks and design interventions

181. Perform leadership coaching

182. Conduct organizational change management in support of revised organization design

183. Facilitate “creating creativity workshops”

184. Redefine performance metrics and KPIs – reward risk & curiosity

185. Design recruitment & development plan

186. Evaluate processes related to ideation, assessment, experimentation and rollout

187. Assess technology capabilities and strategy

188. Build influence and diffusion maps

189. Define technology strategy and processes to support strategic intent

190. Establish breakthrough operating model

191. Configure and implement supporting tools

192. Roll out revised processes

193. Design and coordinate CLM pilots and living lab experimentation

194. Revise processes based on strategic objectives and existing gaps

195. Design experimentation models, e.g. CLM, virtual prototypes

196. Conduct package selection for appropriate tools

198. Pilot, learn, adjust – build experimentation and iteration into the process

199. Break down functional silos

200. Use a different perspective

201. Engage outside help

202. Customers

203. Partners

204. Suppliers

205. Competitors

206. Independent third parties

207. Identify options most aligned with strategic goals

208. Gain team alignment / management buy-in

209. Commit the necessary talent and financial resources

210. Break old habits

211. Put reward structure in place

212. Put a repeatable process in place

214. Consumer Relevancy

215. Customer Experience Transformation

216. GrowthWorksTM

217. TechnoVision 2012

218. GrowthWorksTM

219. Customer Experience Transformation

220. Consumer Relevancy

221. Mergers and Acquisitions Strategy

222. Product Lifecycle Management

223. Accelerated Solutions Environment (ASE)

224. Business Innovation Center

225. Closed Loop Marketing

226. Product Lifecycle Management

227. Rapid Innovation Centers (RAIN)

228. Rapid Design and Visualization (RDV)

229. TechnoVision 2012

230. Accelerated Solutions Environment (ASE)

231. Business Transformation

232. Employee Transformation

233. Organizational Change Management

234. Product Lifecycle Management

236. Appendix – Capgemini Capabilities and Tools

240. Inducing an intensely productive atmosphere designed to foster creative thinking and collaboration

241. Delivering implementable solutions weeks or months faster than of conventional approachesA radically different way of collaborative work

242. The ASE promotes the spirit of creativity in innovation by promoting new ways of thinking about problems Use Different LensHow would either someone else view this problem or if so-in-so were here how would they see it Use Analogiesby asking if there is an analogy you change the context of the problem and bring solutions that are different Change Focusby refocusing the problem you generate different thought Take Excursionsby getting away from the problem, you facilitate incubation Force Fit by explicitly combining something random with the problem you generate different thought Change Scale by changing scale (either larger or smaller) you cast the problem in a different light

244. Consumer Needs

245. Capabilities

247. Competitive Position

248. Economic Value

249. Strategic Fit / ValueMed. Risk High Risk Growth Platforms Low Risk Med. Risk Market Offerings New Markets New Channel New Product New Business Evaluate andPrioritize Growth Opportunities Make Intentional Choices to Balance Portfolio Identify Growth Platforms and Fill the Pipeline

252. If the company differentiates, the customers prefer them and will literally go the “extra mile” to do their business

254. Behaviors (segmentation)

255. Journeys (based on needs)

256. Channels used

257. Cost to serve (by channel by CJ)

258. Traffic light the Customer Journeys

260. Competitors

261. Industry changes

262. Legal constraints

263. Policy principles

264. Clear company direction

265. Marketing position

266. Innovation strategyI want my provider to: Be simple § Be reliable § Know and understand me and § anticipate my needs Be friendly and easy § Keep promises and delight me … § Successful innovators continue to move from a product-oriented focus to a customer-oriented focus; customer experience transformation provides the tools to identify and meet unmet needs.

268. Analysis of channel feedback, sales and demographic data stored in vast central repository

270. Messages, channel and product mix tailored to narrow segments

271. Increased accuracy in resource allocation

274. Feedback cycles greatly accelerated

275. Immediate, high quality feedback is generated, resulting in almost real-time market research from channels; who is using them and howFeedback Execution Customer Centricity With CLM, companies can combine their marketing communications with automatic data-gathering and analysis techniques to develop highly targeted campaigns based on customer behavior.

277. Use an evolution process with clear deliverables for each stage

278. Gain and align key stakeholders to support the innovation vision

280. Recruit your vision

281. Install collaboration at peer level

282. Push for co-creation

283. Establish capabilities to coordinate insourcing and outsourcing

285. Create networks inside and outside R&D to support change and innovation

286. Engage the hearts and minds

288. Permanent market screening for identifying opportunities

289. Introduce organizational elements to foster innovation (e.g. idea generation process)

290. Manage risks through a portfolio approach

292. Be measurable to beat defined benchmarks

293. Use capacity restrictions as opportunitiesE E

296. Inspire Leaders

299. Retention

301. Plan for the future

302. Design the optimal workforceWorkforce Analytics and Strategies HR Transformation

303. Manage creation, approval and deletion on of specification information and documentation Capgemini’s approach to product lifecycle management (PLM) uses multiple ‘modules’ to create a holistic solution Product Data Management Lifecycle Program Management Design and Sourcing Management Integrating design and sourcing functions internally and externally within the supply chain to optimize component selection and cost of procurement Effective project program management within product lifecycle of innovation, growth, maturity and decline Product Lifecycle Management Portfolio Management Collaborative Design and Visualization Rationalization of product and project portfolios to control complexity Sharing of design data for increased innovation success Product Requirements Management Managing consumer aspirations around product for design and lifecycle

304. Technovision identifies the 17 information technology trends that we believe will be most relevant to business going forward From transaction to interaction Mash-up Applications Mashup applications Real-Time Business Process Control Real-time business process control Youexperience Real-time Integrated Business Intelligence Real-time integrated business intelligence Composite Applications Composite applications Sensing Networks Sensing networks Process-on-the-fly Thriving on data Packaged Sector / Segment Solutions Packaged sector / segment solutions Smart Business Networks Smart business networks Free Agents Nation Free agents nation Role Based User Portals Role-based user portals Social Collaboration Tools / Wikinomics Social collaboration tools / Wikinomics iPodification iPodification Software as a Service Software-as-a-service Google-fication Google-fication Utility Business Infra-structure Utility business infra-structure Mastered Data Management Mastered data management Jericho Style Security Jericho style security Sector-as-a-service Rich Internet Applications Rich Internet applications Invisible infostructure

305. Appendix – Additional Perspectives from Academia

307. Focuses on 4 key business anchors, and embeds 8 other avenues of pursuit

308. Comparative assessments help determine how firms compare with regards to innovation. With this assessment a company can identify opportunities and prioritize dimensions on which to focus efforts

309. Allows for the identification of key innovation avenues that have been overlooked by the industry as a whole

310. When companies identify and pursue neglected dimensions, it can change the basis of competition and leave other firms at a distinct disadvantage

311. Successful innovation strategies tend to focus on a few key, high-impact dimensions, rather than a multi-dimensional approachOfferings (What) Platform Brand Solution Networking Presence (Where) Customers (Who) Customer
Experience Supply
Chain Org. Value
Capture Processes (How) Source: 12 Different Ways for Companies to Innovate, Sawhney, Wolcott, Arroniz, MIT Sloan Management Review, Spring 2006

313. 50% core improvements

314. 30% logical extensions

315. 20% new growth initiatives

316. Articulating what the organization “wants to be” and allocating resources to achieve that vision

318. New growth initiatives need to go through a more iterative development process, with a focus on identifying and addressing key assumptions and risks

319. Structure for success

320. Deep senior management involvement

321. A common language

322. Extensive external input

323. Supportive human resource policiesSource: Institutionalizing Innovation. Anthony, Johnson, Sinfield, MIT Sloan Management Review, Winter 2008

324. The right approach to institutionalizing innovation is determined by the company’s strategic objectives and internal capabilities Support Low Low Create High High Source: Institutionalizing Innovation. Anthony, Johnson, Sinfield, MIT Sloan Management Review, Winter 2008

325. Innovation in management principles can create sustainable advantages and dramatic shifts in competitive position Why Management Innovation Matters … What Management Innovation is … Competitive advantage: A management breakthrough can deliver a potent advantage to the innovating company and produce a seismic shift in industry leadership Marked departure from traditional management principles, practices, and process Management practices: Management orthodoxies have become so deeply ingrained in executive thinking that they are nearly invisible and are so devoutly followed that they are practically unassailable, breeding complacency Departure from customary organizational forms that significantly alters the way work is performed Changing how managers work to reinvent the process that governs the work they do Commitment to development: For every truly radical idea that delivers a big dozens of competitive advantage, there will be dozens of other ideas that prove to be less valuable. Innovations is a numbers game – the more of it you do, the better your chances of reaping a pay-off Source: The Why, What and How of Management Innovation, Hamel, Harvard Business Review, 2006

329. Subject each management belief to 2 questions

330. Is this belief toxic to the ultimate goal?

332. Your challenge is to hunt down unlikely analogies and suggest new ways of tackling thorny management problemsExploit the power of analogy Source: The Why, What and How of Management Innovation, Hamel, Harvard Business Review, 2006

334. Firms tend to become risk averse and opt for incremental product and service improvements instead of major initiatives

335. Risk is an inherent aspect of innovation, and is proportional to the pay-off: bigger risk, bigger pay-off

336. Long-term investments in innovation may decrease when companies use time and resources to react to urgent, short-term requests from customers and salespeople

337. Companies can avoid lackluster growth by better understanding the risk inherent in different levels of innovation and achieving a balance Big ’I’ Innovation 14% 86% Small ’i’ Innovation Revenues
generated
by small ’i’
innovation 39% Revenues
generated
by big ’I’
innovation 61% Source: Sustaining Corporate Growth Requires 'Big I' and 'small i' Innovation, George Day, Knowledge @ Wharton, February 2007

339. Reviews are completed individually and then reviewed as a group – team members explain the rationale for their scores and open for discussion

340. A series of questions are used to score degree of risk based on

341. Intended market

342. Customer behavior

343. Sales and distribution

344. Competition

345. Brand promise

346. Product and technology

347. Current capability and technological competency

348. Intellectual property protection

349. Manufacturing / service ability

350. Product and service functionality

352. Can the customer buy it?

353. Is the size of the potential market adequate?

355. Can the product be made?

357. Can the advantage be sustained?

359. Do we have appropriate management?

362. Will top management support it?Source: Managing Risk and Reward in an Innovation Portfolio, George S. Day, Harvard Business Review

364. Become comfortable acting on informed intuition

365. Prototype; iterate quickly and gather “risk-killing” information

366. Think big, but start small – use constraints such as schedule, headcount and scope to learn what it will take to execute the big-picture value proposition

367. Treat money as a positive constraint – limited budgets spur creativity

368. Make a list of the best things that could happen

369. Seek challenges – balance clear, achievable goals with just enough task challenge to create a risk of failureSource: “Embracing Risk to Learn, Grow, and Innovate”, Rodriguez, Jacoby, Rotman Magazine, Spring 2007

370. Appendix – Case Studies

372. The machine weighs less than 7lbs, compared to traditional ECG machines which weigh over 65lbs

373. In the past development time for a new ECG machine was as much as 5 years, and development costs were up to eight times higher

375. The MAC 800 will opens new targets beyond GE’s 34% share of the seemingly tapped out US conventional ECG market (hospitals and large health facilities)

378. The hospital will be constructed with the concept of sustainable design, with design elements being tested and validated by “champion teams” of physicians and employees

379. Before beginning physical construction, the company has constructed a virtual facility in secondlife.com

383. The company created the “No Limits” platform as a result

388. When drug therapies prove successful in one small patient group, the company expands them to other potential therapeutic areas

391. Researchers use “Living it” immersion process: researchers live with shoppers for several days to come up with product ideas based directly on consumer needs

392. The company is a member of four open networks (Nine Sigma; Innocentive; YourEncore; Yet2Com) to solicit solutions for defined science problems

394. Doubled success rate of P&G research & development efforts to about 85%

395. More than 100 new products introduced in the last 2 years

396. 45% of initiatives contain key elements discovered externally

398. Innovation leaders have a highly customer-centric focus on innovation

400. Methods include observation, prototyping, building, and storytelling, and are used across industries and with multiple functional and skills groups

402. Kidney transporter

403. New vaccine delivery method

404. Kraft supply chain improvement which led to 162% increase in sales

405. First Mac mouse

406. IDEO has received over 1,000 patents issued since 1978

409. Slow-moving HP Labs (R&D group)

410. Inefficient project process

411. Project approvals mainly relied on personal relationships between 600 scientists

412. Few formal milestone reviews

413. Excessively long projects hinder new project staffing due to lack of available resources

414. Link HP Lab’s annual $150 million budget to 20-30 major projects with high expected pay-offs

415. Implement business plan review process

416. Compile business plans to compete for budget and staff

417. Instigate central review board to approve ideas and monitor progress of projects

418. Implement technology transfer office

419. Speed promising projects into product groups

420. License projects HP cannot use through “entrepreneur in residence” program with venture capital firm to commercialize technology

421. Measure productivity across product line by measuring research spending as percentage of gross margin

422. Flatter hierarchies

423. Seven global outposts report directly to HP Labs director

424. Focus on five key strategic areas

425. Intensive data analysis

426. Build clusters of machines for complex problems

427. Transform analog into digital content

428. Mobile computing

429. Environmentally friendly machines

430. Increased accountability

431. Termination of projects with insufficient progress

432. Transfer unproductive researchers

433. Overall company stock price tripled in two years to beat Dell as leading PC maker“We [are] trying to get innovation to the highest level we can” – Mark Hurd, CEO HP Source: Business Week, Apr 2008; Business Week Mar 2009