In an interview for IDG News Service, Xerox chairman and CEO Anne Mulcahy discusses the importance of innovation to the company:

“I would say the most important way that we foster innovation is our funding of research, which so many companies have walked away from. We have four global research centers around the world that do everything from very upstream futuristic kinds for research, like [in] Palo Alto, to a media research center, like we have in Canada. There’s a pipeline that has to be supported to get to innovation in the marketplace, and the commercialization of it begins with the stimulation of innovation proposals, and that’s been a huge focus.

We have a head of technology today, her name is Sophie Vandebroek; she runs an innovation process in the company that I think yields really extraordinary results. She has upped the ante on the amount of innovation proposals, the amount of patent applications…”

Usually, the word “innovation” connotes some type of world-changing technological innovation. Yet, innovation occurs within each and every industry in deceptively simple ways that can impact hundreds of millions of consumers. For example, Pilgrim’s Pride - the company that came up with such innovations as the world’s first-ever boneless whole chicken - is celebrating a 60-year history of innovation and thought leadership within the processed poultry industry:

“Over the years, Pilgrim’s Pride has established a reputation for industry-leading innovation. It was one of the first in the poultry industry to produce individually quick-frozen cooked and fresh chicken products. In 1984, the Company developed the world’s first boneless whole chicken. In 1997, after years of research into the role of certain vital nutrients in fighting heart disease and promoting wellness, the company introduced EggsPlus, a healthier alternative to the ordinary egg that contains extra Vitamin E, Lutein and Omega-3 essential fatty acids.

More recently, Pilgrim’s Pride introduced its EatWellStayHealthy Kids line of heart-healthy products, the first in the industry to feature the USDA-regulated word “healthy” on its packaging, as well as the American Heart Association’s “heart check-mark” seal of approval.

These innovations have earned Pilgrim’s Pride numerous awards for quality and service from its customers, as well as accolades within its industry. Recent awards include the Distinguished Supplier Award from Darden Restaurants, the 2005 Vendor Partnership Award from Jack in the Box; the Poultry Supplier of the Year Award from Zaxby’s, and the Outstanding Vendor of the Year Award from Fry’s Food Stores, a division of The Kroger Co.

In addition, Pilgrim’s Pride has been named among the “Most Admired Companies in America” by Fortune magazine for four consecutive years.

[image: Pilgrim’s Pride]

Based on his analysis of companies commonly cited in the mainstream business media as being paragons of innovation goodness, Daniel Montaño of the User Experience + Innovation blog has just released an e-Book on Innovation Strategies. The book, which is currently available only as a 156-page PDF document, examines the innovation strategies at companies like Apple, IBM, GE, Target and Toyota:

“Rather than debate if those are really the most innovative companies in the world I decided to take a look at how each of these companies is innovating. The result is this book, where we find out some methods and strategies they are using, the kind of design awards they are winning, the type of criteria they’re focusing on, where they’re headed next, etc. The goal is to learn from those companies that spend thousands of dollars learning how to innovate, so others who don’t have the budget can save some money and still innovate on the same tracks. Innovation is no longer just what happens in R&D, nor in the design shops, innovation is happening at every level of the organization. Every staff member can contribute to the innovation efforts.”

Tags: innovation strategy tactics

Of late, the Wall Street Journal has been beating up on Viacom and its various media holdings. It’s not hard to do, especially with the ongoing, highly-publicized spat between Sumner Redstone and Tom Cruise, the firing of CEO Tom Freston earlier this week and the growing realization that MTV Networks, the flagship cable network for the company, has lost its way. Today in the Wall Street Journal, there’s a story called “Does MTV Still Rock?” that traces the slow, sad decline of MTV into a has-been network that doesn’t even register on the radar of the MySpace/YouTube generation. Whereas once MTV was a poster child for the 18-to-34 demographic, it has apparently lost its creative mojo:

“MTV grew into a cultural juggernaut not just because it took risks on innovative content, but because its own culture was innovative, even subversive, say former MTV Network officials. Executives came to work late because they had been out partying with rock stars until the early hours - and that was fine because it fostered an atmosphere of creativity.

Many visitors to Viacom’s 54-story Times Square headquarters are startled by the near total absence of corporate decorum. MTV Networks has no dress code and lacks many of the other regimens of corporate life. Mr. Freston (the departed CEO) believed that a relaxed atmosphere fostered creativity in his staff. As long as MTV was successful, the approach was embraced, even celebrated. But as the company grew older and larger, some former executives say it has become allergic to criticism. Management’s decentralized approach has, at times, allowed problems to fester. The cadre of executives who founded the network have been reluctant to open their ranks to outsiders, institutionalized thought has crept in and management fiefdoms and silos have been created, former executives say.”

Tags: MTV Viacom

[image: The day before the MTV Video Music Awards]

Just days after CEO Bill Ford acknowledged that Ford Motor Company was desperately searching for a new business model, the company may have found an innovation savior. After the markets closed yesterday, Bill Ford announced that he was stepping aside to make room for new CEO Alan Mulally, a longtime senior executive at Boeing who is largely credited with turning around the company’s ailing commercial aircraft division. What’s good for Boeing is apparently good for Ford. By bringing in an outsider with recent experience turning around a major company, Ford Motor hopes to dig its way out of a very deep ditch.

Investors were mixed, though, on the appointment of Mulally as the new CEO of Ford: “Some analysts predicted that Mr Mulally would bring more discipline to Ford, but they expressed concerns about his lack of experience in the automotive industry, and about his precise role at the carmarker.” On one hand, Mulally has the credibility, product design chops and cost-cutting skills to turn around the company. On the other hand, it will be awfully hard to ramp up his knowledge of the automobile industry in a limited amount of time. With Ford posting more than $1.3 billion in losses over the first six months of 2006, there’s concern that Mr. Mulally’s learning curve might just not be steep enough:

“Himanshu Patel, analyst at JP Morgan, said on Wednesday that Mr. Mulally – the first outsider to serve as chief executive in Ford’s 103-year history – might have difficulty making his presence felt in the near-term. Noting that details of the latest recovery plan have probably already been finalised, Mr Patel said that “longer-term changes in product cycle decisions by the new CEO could clearly take some time to yield results.”

Tags: Ford Boeing Mulally

[image: Alan Mulally becomes CEO of Ford Motor Company]

With only two weeks to go until Ford Motor Company unveils the new details of its restructuring program (i.e. The Way Forward), it looks like the company is willing to consider just about any alternative under the sun. In the weeks leading up to the Labor Day weekend, rumors circulated constantly about all kinds of M&A deals involving Ford - including the possibility that Nissan’s Carlos Ghosn might take over some part of the company or that the Ford family might take the company private. Now, a Bill Ford memo leaked to the press admits that the automaker is badly in need of a radically new business model:

“Ford needs a new business model in order to turn the automaker around, according to a memo addressed to staff by its Chairman and CEO Bill Ford and seen by Reuters. On Thursday, Ford said it wanted to sell its Aston Martin luxury unit to free up funds to invest in its other brands amid a sharp downturn in sales. In the memo, dated Friday, September 1 and published by the Detroit News on Saturday, Bill Ford outlined the problems facing the company and his aims to turn it around. “The business model that sustained us for decades is no longer sufficient to sustain profitability,” the memo, shown to Reuters by a representative for the company, said. “We must change to a new business model that requires greater bottom-line contributions from cars and crossovers, continued leadership in pickups in North America, healthier profits from all other business units, growth in Asia, greater integration of our global operations and an evaluation of strategic alliances.”

What do you think? Do you have any innovative ideas for overhauling Ford’s business model and moving the dial on the company’s stock price?

Tags: Ford innovation Way Forward

[image: Bill Ford via Reuters]

In a world where the vast majority of books and articles about business innovation focus primarily on product innovation, Virginia-based consulting firm Peer Insight has released a breakthrough new report on the emerging area of services innovation. According to Peer Insight, the post-Six Sigma era calls for new thinking about services innovation, customer experience innovation and design-led innovation. Chuck Frey of the Innovation Weblog highlights several of the findings from the report:

(1) Services follow a less well-defined development path than products;

(2) Because of this lack of a development path for services, successful innovations tend to rely on a strong guiding hand from senior management;

(3) Prototyping, which is a well-accepted way to pilot test new product ideas, has not made the transition to modeling potential new services and business models;

(4) Successful service innovations tend to be firmly rooted in customer experience design - incorporating techniques such as empathic research methods and service artifacts;

(5) Companies that use a single innovation model to deliver both incremental and high-impact innovations tend to get only incremental innovations.

Tags: services innovation

[Image: The Post Six Sigma Era]

After analyzing ten IBM case studies of innovation at work, Palo Alto-based innovation consultant Michael Osofsky has constructed a mathematical equation for innovators that takes into account the importance of market insights and technological know-how. As Osofsky explains, IBM demonstrates this equation empirically through 10 examples.

For example, consider Cemex, ranked #451 in this year’s FORTUNE Global 500. The company understood that a key business driver was the amount of idle time for its expensive equipment. By leveraging a satellite-based technological solution as well as state-of-the-art scheduling software, the company was able to reduce its cement delivery window from 3 hours to 20 minutes.

Tags: innovation equation

[graphics: Michael Osofsky]

The current issue of FORTUNE magazine features a great story about the “lunatic fringe” and the culture of innovation at tech industry pioneer Texas Instruments. Apparently, the key to innovation success at the company has been the ability to create an environment that is supportive of “managed chaos.” As Peter Lewis of FORTUNE explains, it all started with “a small group of crazies” (the lunatic fringe, if you will) who are convinced that giving free rein to “wild-eyed optimists” is the secret to innovation success:

“Gene Frantz [a business development manager in the digital signal processing group] is the dean of an informal and amorphous group of TI engineers (and their peers and contacts outside the company) who call themselves the Lunatic Fringe. They are senior people who have been given free rein to follow their curiosity wherever it goes. “There’s this continuum between total chaos and total order,” Frantz explains. “About 95% of the people in TI are total order, and I thank God for them every day, because they create the products that allow me to spend money. I’m down here in total chaos, that total chaos of innovation. As a company, we recognize the difference between those two and encourage both to occur.”

Basically, the ideology of the Lunatic Fringe can be distilled down to two basic concepts: (1) Look everywhere for good ideas and (2) Worry about turning them into products later. Anyway, if you’re like me, it’s impossible to hear the phrase “lunatic fringe” without thinking instinctively of the chart-topping rock anthem released by Canadian band Red Rider in the early 1980s.

With that in mind, I’ve linked to this cool Sin City montage featuring the “Lunatic Fringe” song. As an aside: if you’re looking for a DVD to watch over the Labor Day weekend and are a fan of film noir and highly stylized graphic violence, check out Sin City. Not only does the film feature Bruce Willis, Mickey Rourke, Clive Owen and Benicio Del Toro - it also includes some unbelievable eye candy in the form of Jessica Alba, Brittany Murphy, Devon Aoki and Rosario Dawson (as a “machine gun-wielding Dominatrix-Hooker-Godmother”).

Tags: lunatic fringe TI innovation Sin City

[video: Sin City’s “Lunatic Fringe”]

According to ars technica, the German-language version of Wikipedia will get an experimental overhaul over the next few weeks in an effort to cut down on the types of “vandalism, edit wars and misinformation” that plague the Wikipedia site. In the German version of Wikipedia, any user will still be allowed to make edits to any article. However, those edits won’t show up in the live version of the site until a registered user with a certain level of time and experience approves the changes. As Wikipedia founder Jimmy Wales points out, this change is needed to guarantee a certain amount of stability to Wikipedia entries. In fact, Wales even discussed the possibility of a “frozen” form of Wikipedia that would allow users to find older versions of Wikipedia entries. Anyway, the move to cut down on vandalism is a way to improve the integrity of the popular site:

“It’s a simple change, but one that could prevent the most juvenile forms of vandalism from ever appearing on the main site, which should do much to remove the appeal of vandalizing articles. The feature probably won’t deter more committed defacers and political operatives, but it should bring a stability to the site that Wikipedia currently lacks. If the pilot program is successful, the idea could eventually be incorporated into other Wikipedia sites.”

Tags: Wikipedia innovation

[image: How Popular is Wikipedia?]