An Innovation Strategy is Critical
Interview – Susan Harman – Intuit
I had the opportunity to interview Susan Harman, Manager of Open Innovation, about open innovation strategy, importance of an innovation culture, some of the barriers to innovation success, and even some thoughts on the educational system.
Here is the text from the interview:
1. Do you feel that companies need an innovation strategy? If so, where does open innovation fit in?
An innovation strategy is critical for all companies. At Intuit, innovation is core to everything we do, and our approach has three elements: Build, Buy and Partner.
We innovate and build ourselves, which includes:
- Innovating in our existing offerings by reimagining core products like TurboTax, and gaining share across our major business lines
- Creating brand new offerings, like ViewMyPaycheck, an application that allows employees to view their pay stubs on any mobile device with a browser.
The second form of innovation for Intuit is through strategic acquisitions. Intuit has a rich journey of acquiring entrepreneurs and innovators to accelerate our progress, seizing opportunities we identify. By bringing in technology and talent to help us all move faster, we get the best outside thinking, which helps us continue to innovate and accelerate progress. (Mint, Paycycle, Medfusion)
Lastly, partnering through open innovation. No company can do it all on their own today. Technology moves fast, and while Intuit understands that we have great minds at the company, there are many outside the company. By opening up communication and technology with academics, partners, thinkers and customers outside of our company, we can maximize the best, brightest and informed ideas.
2. Why is it important for organizations to consider participating in open innovation or why did your organization begin its open innovation effort?
At Intuit, we believe that a company can’t rely solely on internal innovation.
During the last decade, two developments have highlighted the limitations of the traditional innovation model.
First, the speed at which innovation occurs is constantly increasing to the point that the delays and inefficiency at the boundaries between different functions within the company and between the company and its partners can become a major inhibitor for the free flow of innovations.
Second, as our understanding of innovation develops, it becomes increasingly clear that invention is only a small element of the overall innovation process and that creating value and growth is a multi-faceted challenge that requires skills way beyond the technical ones.
Open innovation can help solve for the internal innovation limitations. Specific benefits of open innovation include:
- Speed: Rapid development and deployment of solutions by partnering.
- Skills: Complement the company’s skill sets with those of partners (including suppliers), especially around technology, but also concerning alternative business models, customer community, etc.
- Focused R&D investment: With each partner contributing its resources in the area that can be considered its core, the company can reduce spend on non-differentiating (context) functionality and can have more innovation initiatives ongoing in parallel.
- New strategies require extensive partnerships: Innovative strategies often require solutions as part of their architecture that are not available inside the company. Partnerships can help the organization learn about a new domain at a lower cost than it would take an internal team to get up to speed.
- BIG disruptive ideas: Organizations suffer from myopia and tend to fail to identify breakthrough concepts. Open innovation can bring the diversity necessary to identify these ideas.
- New markets: New markets, such as emerging markets, often have particularities different from the home market and partnering can increase the chances of success.
3. What should an organization be aware of if they decide to pursue open innovation?
Open innovation requires a culture of innovation and collaboration, and a mindset change that “not invented here” is critical to growth – and this needs to start with the executive team and roll out to the entire organization.
4. Which companies do you look to as leaders in open innovation?
P&G is a leader in the consumer goods space; proving so through its incredibly successful connect and develop strategy and operations. Intuit’s founder Scott Cook was a former P&G employee and learned there the importance of collaboration beyond company walls, specifically with customers. This type of innovation, and focus on customer needs, led Scott and his team to create one of the most successful and enduring consumer software products of all time. He has taught us open innovation doesn’t stop with customer feedback and collaboration.
Intuit has made great progress in its open innovation journey and the many ‘hows’ that we have to support it. As a result of our open innovation work, we are seeing success in new product revenue.
5. What are some of the biggest barriers to innovation that you’ve seen in organizations?
The biggest barriers I hear about time and time again from other organizations trying to incorporate open innovation are: Lack of executive buy-in and desire by engineers to build everything in house – where engineers say ‘of course we can build it’ and it can take two years, rather than partner and have something in market much sooner.
6. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?
It’s less about skills and more about mindset. To succeed in an innovation-led organization, managers need to be able to facilitate an open mindset to collaboration and a willingness to experiment rapidly.
7. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?
More team collaboration on projects – where members of the team aren’t all in the same class or course – where members represent different courses, maybe different schools, and may even be global. Less reward on the individual and on ‘getting it right the first time’. More reward and recognition for collaboration, on failing fast, and iterative and rapid experiments.
Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising an early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John Wiley & Sons. He tweets from @innovate.
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