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Nicholas Donofrio, IBM executive vice president for innovation and technology, was interviewed by Diane Morello on 12 September 2007, in Armonk, NY.
Gartner: Many CEOs and CIOs have innovation at the top of the strategic business objectives, yet many are not sure how to drive innovation through their enterprises. What's the secret? Donofrio: That's a terrific place to start. You have to, though, start with what do you mean by innovation. And it's quite different in our minds than what it meant perhaps in the 20th century. It's quite striking, to be honest with you, especially in the information technology industry. The invention, the creation or the discovery in the 20th century was probably good enough in many ways to be called innovation. It could drive value. It could literally unlock new hidden value at some strange intersection that hadn't been driven through before. That's not the way it is, as I see it, here in the 21st century. This is much more about literally understanding the problem better – understanding the political issue, the societal issue, the business issue, the academic issue – so that you can then take your technical knowledge and apply it in new and uniquely different ways. Sometimes that's not an invention, a creation or a discovery. Sometimes it's just seeing things that other people missed. It's looking at these deep intersections or interstices and seeing something that nobody else saw before, and that becomes the innovation. There's no doubt that what it is is business value. It's the ability to generate new economic wealth where it couldn't have been generated before. Gartner: What role does culture play here, and specifically, how did the issue of culture affect or enhance IBM's pursuit of innovation? Donofrio: Using our 21st century definition of innovation, we set about trying to find a way to convert our culture, because this is a cultural thing. That's probably what most people struggle with, the fact that it's a cultural thing. Here we are in IBM – we're a lot of things to a lot of people – and I think most people would agree we're pretty technologically rich. You know, we are kind of "bathed in that light," of that energy, of invention, creation and discovery. And now you say to people: "Well, you have to keep doing that, but that, by itself, is just not enough to get the job done. We've got to look differently, we've got to act differently, we've got to behave differently in order to create the new value." Gartner: So what were the ingredients for an innovation culture at IBM? Donofrio: We know it needs to be a collaborative, open, multidiscipline global thought process. We know it has a lot to do with talent. We know it has a lot to do with enablement. But we also know it has a lot to do with yourself as a business – a lot to do with your own ability, your own capacity for change and your own willingness to remember that value migrates. Your job is to find out where the value has migrated to. And just because you're doing it and actually doing it well, doesn't mean that anybody wants it. It doesn't mean that anybody needs it. That's what people have the greatest difficulty with, I think, when they think about innovation in the 21st century. This whole idea of being willing to let go of something, stop doing something, in order to put your energy and capacity and focus and capability on to the right thing. It's a very hard thing for people to do. Gartner: So, how do people contribute to innovation at IBM? Donofrio: We believe that everybody can be an innovator, even if everybody can't be an inventor or a creator or a discoverer. For IBM, innovation is in the large, not in the small. So yes, it's product and services, but it's also processes, it's also management systems, it's also business models. Of course, it's societal as well, because, if society isn't innovating at the same time you're innovating, many of the things that you're counting on aren't going to work: Society will either take you in a different direction, or they're not going to be ready for it in a more positive sense. Like Gartner, we've done surveys to try to understand what's on our clients' minds – what are leaders of the organization, in a global sense, looking for? I'd say the vast majority of time, innovation leads the list. And they, the leaders, clearly have to participate, so they do get it – that it's a cultural thing. Although culture does change from the bottom up, those are usually revolutions, and that's not what most people are looking for. They're looking for evolutions. They're looking for the ability to kind of move to the future without huge dislocations or discontinuities. So culture usually changes from the top down. It's all about enablement. It's literally about helping your people believe that you mean what you say, and then having them start to perform that way every day. Then, before you know it, the tide starts to turn, and people start to think of you in a different way. I'd like to believe that people are starting to think of IBM as more than just a technology-based company, more than just a hardware company, they're thinking of us more as an innovative company. We want to be the company that helps other companies be innovative – the innovator's innovator, so to speak. Gartner: In February, I was in the U.K. talking to some IBM software engineers, and I heard them speak about IBM's internal innovation and collaboration networks. People are clearly open for collaboration, information sharing, idea sharing. Can you tell me a bit about how innovation bubbles up – say, through IBM's InnovationJam – to support this innovation culture? Donofrio: It all supports the sense that the real innovation is usually at the bottom of the organization or out in the marketplace. It's with your employees, it's with your partners, it's with your clients. So, you have to be willing to look down and out to find it. If all you do is look up or out, you're not likely to find it. And if you're looking just at places where you normally would – that is, research, marketing – those places are not necessarily where people generate innovation. You have to build this extended network. You have to enable people to get connected. We have a couple of ways we've done that, to be candid with you. What InnovationJam does is literally get people connected at the moment. So, it's a finite period of time, 72 hours. It's well-structured – as much as 72 hours of online discussion can be – and it's structured by subject matter experts. So, we're not talking about everything in the world, we're talking about these four topics in the world. Fit yourself into one of them, fit yourself into the environment and climate, fit yourself into healthcare, fit yourself into financial services. We structured those forums. That's what you have to start with. You put a lot of energy into it up front. And then you're prepared, your people are prepared, you've given people notice, you've given them opportunity to read materials before the innovation jam begins. Then once it begins, the dialogue is never-ending – 72 hours of constant interaction, back and forth. Everybody can read it, everybody can rate it, everybody can score it. A popular idea all of a sudden builds momentum, and before you know it, it's a different idea. It started out on the left and it ended up on the right, because the community kind of took it and moved it. In those 72 hours we got over 40,000 ideas. A hundred and almost fifty thousand people were online with us at some point in those 72 hours. We only have 350,000 IBMers, so it's not a bad participation rate. People were incredibly energized. We also allowed families to be registered, as well as clients. The whole experience was pretty powerful, and just the fact that there was so much participation was just huge. Gartner: And then the hard work began – sifting through 40,000 ideas. Donofrio: We had to take those 40,000 ideas, and we had to reduce them, because I couldn't fund 40,000 ideas. They weren't all unique, so we had to go through a bit of a digital and analog refinement process for the next couple of months. Then we took the top 36. Gartner: So, you reviewed 40,000 ideas and reduced them to 36. Donofrio: And then we put those 36 ideas back online for another 72 hours, and we let people have at them to refine them, to nurture them, to massage them, to move them in a direction where they really stood out – or didn't stand out. We then picked 10 from the 36, to be candid with you. We did that in 2006, about a year ago, and I've been funding them throughout the year to figure out what's real, what's not real and where the good ideas are. It's not always obvious that these things are going to stick in the marketplace. Some need even more incubation, they need more nurturing because they're great ideas, but they're so far out – like never in a million years would the world be ready for it right here and now. Gartner: Would you do InnovationJam again? How? Donofrio: Probably not annually, but there's nothing to say that I'm the only one who can do InnovationJam. I mean, other people can do what I did – countries could do it, industries could do it, professions could do it, parts of the software group could do it, parts of the systems' group could do it. And by the way, clients are asking for that, so we're building that as an offering – literally to let clients do that. Maybe it's a hosted service, maybe it's a service that we could simply train them to do if they have the supporting infrastructure. We have to be there with the processes and the systems that allow them to do this. Gartner: So, what else does IBM use to energize innovation? Donofrio: The other way to get people connected is a more sustainable approach. We call it ThinkPlace. That's a portal with a very interesting process behind it: Any IBM employee can get to it, anywhere in the world. You can put your idea up, and the minute your idea goes up, the clock starts. Somebody has to pick up your idea, somebody has to comment on it, somebody has to give you some feedback. Gartner: Who is that somebody? Donofrio: We call them catalysts. They're named by subject matter on a global basis. No standing army here – totally voluntary – and what happens is, the idea gets evaluated, it gets nurtured, it gets merged with other ideas, it gets referenced to other people. Other people can read it too, by the way. This is done in a collaborative environment. Other people can be commenting on your idea, they can be rating it, or they can be saying, "What a wonderful idea. We ought to adopt it tomorrow." Those things that do get adopted, we pay money – five, ten thousand bucks, depending upon the value that the business can derive from it. ThinkPlace is a more everyday notion of "this is where you should put your ideas." The kind of ideas we tend to get, of course, are not inventions because we have several processes for inventions. They tend to be market-facing ideas. They tend to be a client, this problem, this issue, I think we should go this way, what do you think? All of a sudden you get the heavy lifters starting to say if that's really the problem, then why aren't we looking at it this way, or why aren't we thinking about this, and why doesn't this work? Gartner: So, we've been exploring a hypothesis in Gartner around change – that is, as the array of high-impact external forces widens and accelerates, roughly 60% to 70% of traditional tactics associated with solving business or technology issues will potentially be irrelevant, maybe obsolete. Just as product strategists might say that 50% of their new revenue will come from products introduced in the past five years, will the same thing go on inside organizations around innovation? Donofrio: My answer goes back to things my father used to say when I was a kid, and it all has to do with your capacity for change. He used to say, "If nothing changes, nothing changes." It's really that simple. Your success is limited not by opportunity, but by your willingness to accept change. I say to people all the time, the biggest issue in your career is you, not is there opportunity for to grow, is there opportunity for me to be excited? It's like the notion of value migrating. The question is, where is the notion of value going, and are you willing to move to it? Think about the information technology business. I started out 43 years ago at IBM armed with a vacuum tube and circuit design skills. You know how long I actually used that in IBM? Zip. I get here and they say, "Hey look, we got all this semiconductor stuff, can you help us figure out what the ground rules need to be?" I worked on the very first FET memory chip we ever built (i.e., FET for field effect transmitter) – 512 bits of information, not 512,000, not 512 million, just a lousy 512, the first actual semiconductor memory chip we ever built. I wasn't prepared for that, I had to acquire those skills while I worked here. I think IBM has a capacity to change, and therefore, we have a capacity to innovate. So, the systems we put in place, the processes we put in place, the availability of collaboration tools, they're all meant to enable people to be more innovative. And I tell you, the smart people don't have any trouble with this. We're blessed with over 200,000 engineers, scientists, mathematicians and technologists, and nobody thinks this is a stupid idea. Everybody is energized, very focused. And like I said, the more we talk about this, the more it becomes obvious to them that we're dead serious, the culture is changing. I've got to change right along with it and watch this issue of value. As value migrates, you've got to move with it. I mean, we almost lost our company because we didn't pay attention to the migration of value. We paid more attention to the invention, the creation and the discovery than we did to the innovation, and that's why this means so much to me personally. I think that's why it means so much to IBM. Gartner: With the Global Innovation Outlook program, IBM has taken its traditional forecasting process and turned it inside out. IBM now shares its forecasting and trend analysis with other businesses, government institutions and academic institutions. How does the conversation grow? Donofrio: So, I told you earlier that we did innovation work here in the United States. It took three years from starting the National Innovation Initiative to the time the America Competes Act was enacted into legislation – three years, from whole cloth to something finished. We didn't do it alone, we had partners, but I really am very proud of our team. We did similar innovation work for the president of India, which we did in conjunction with the Indian government and with the Indian industry association. And we're doing something similar for the prime minister of Vietnam. Governments around the world are receptive to innovation. They say, "We want to get ahead. We don't want to be behind. We want the work that everybody else wants, not the work that nobody else wants." In the final analysis, everybody becomes a partner. This Global Innovation Outlook process has allowed that. We're in our third year, and we have partnered with hundreds of people. You can't do these things by yourself. You're not the knowledge source. You're the enabler, you can put the topic up, but then they have to bring subject matter expertise. On the topic of Africa alone, just that one topic, we've seen two, three, four hundred people come to sessions to talk to us and give us their ideas about what is going to happen with Africa as it develops into an economic giant later in the 21st century. Gartner: What's happening in the rest of the world? Where is the innovation? We hear so much about China, we hear about Southeast Asia, your comments about Vietnam. Donofrio: Nature will continue to make a globally integrated economy. There's just no doubt about it. That's the way the momentum builds up. Work has been moving around forever. It's moved from cities to the urban area, from the urban area back to the cities, it's moved from north to south, east to west. I mean, it just goes where it's more logically done. So, if that's what's really going on, what do you need to worry about? What do you need to think about? What you need to think about is not the thing that you have or had, you need to think about the thing that you really need to have or that you want. If you remember, you have to learn what not to do as well as what to do. You have to learn when to stop doing something as well as when to continue to do something. We've learned that lesson bitterly in IBM. We had to stop a lot of things that we created that were part of our DNA, part of our bone structure, but it was just time for us to not do that anymore. Countries have to think that way. The world has to start thinking that way. Not everybody can do the same thing. Not everybody can be the same. So if that's true and nature's going to force that to happen on its own, what's the differentiator? What do you do? What do you aspire to do? Gartner: We experience deep concern inside the United States and in other Western economies about whether the knowledge, skills and qualifications that will drive innovation are here. What kind of commitment and investment will we need to make? Donofrio: You always have to aspire to a better education system. You have to worry constantly about whether you have the right environment to educate your young in the right fashion to have the high-value jobs and the standards of living that continue to rise. It's no more complicated than that. In the United States, we should have concern about whether or not we are getting enough of our population into the STEM disciplines [science, technology, engineering and mathematics] and whether the STEM disciplines are actually being taught correctly for the 21st century. Are schools doing to our kids today what they did to me in the 20th century? Because if that's what they do, just educating the new the way they educated the old, then all you're going to get is what you got out of me. So, this is back to my father's comments – if nothing changes, nothing changes. The equations will give you exactly the same answer over and over and over again. Seventy percent of our kids in the fourth and fifth grades in the United States are taught math and science by teachers who never went to school to learn math and science. They didn't graduate with a math or science degree, or they were never certified in math and science. So, we have teachers in there, through no fault of their own, teaching things that they know very little about. Gartner: How do you think curriculum must change? Donofrio: Here in the United States, we need to change the curriculum. We want to help people become – you'll easily get this in imagery – T-shaped, not just I-shaped. And that's very important. T has a very long stem to it, and it says you're capable of seeing what's going on all around you and can actually change your base. If you saw enough change, you would adapt to a new base and become deep in a different way. [Note: Gartner has adopted a similar concept in its concept of the versatilist.] Even today, in the role that I play, I have to constantly acquire new knowledge. I have to constantly change what's important to me – understand services, understand where markets are going, understand why they're going there. I have to understand those things because I'm expected to help make decisions about what we shouldn't be doing, as well as what we should be doing. We have to be constantly mindful that we don't control value, the market controls value. So I need electrical engineers, semiconductor people and software people to generate value in new ways. The T-shaped people, this emerging curriculum about SSME [service science, management and engineering] that we're trying to build – they're all part of the answer to the question of what's next? Where do I go? Some of the curriculum is business training, some is business knowledge, some is just a better understanding and appreciation for this whole issue. It's marketing, it's value, it's the migration of value, it's the ability to integrate and put together a solution. Gartner: The developed countries have a base of skilled and professional baby boomers who are about to embark on their next career stage – perhaps pursuing a path of meaning, a path of making a difference. How can innovation make a contribution here? Donofrio: It's a really interesting question. The answer is, I believe that IT people need to understand the business. So that if you just have IT people who just write code and they don't understand the business, then they're never going to be as valuable or as good as they need to be, because they have to understand the business to be able to anticipate what the business really is.What do people do when they want to have a second career? Where do they go? What value can they add? It's all about being prepared. IBM has one initiative that is especially innovative – the Transition to Teaching Initiative. On our nickel, we'll train you to become a math or a science teacher when you tell us, "I'm ready to retire, but I still have something to contribute, and I have some qualifications." We've got almost a hundred soon-to-retire IBMers who are ready to graduate from the Transition to Teaching program and go to work as teachers [in the STEM disciplines]. Our thinking was, if we could start this, maybe we could export this to other companies. Before you know it, it's not just IBM putting a hundred math and science teachers into school systems, it's ten other companies – Exxon Mobil has started a similar program – so, now we've got a thousand teachers. Then it's another ten companies and so on. Before you know it, we've got ten thousand new teachers trained in science and math. We also have a program that allows employees to make a difference by, in effect, being lent to meaningful nongovernment organizations and not-for-profits. Maybe they'll come back to IBM, maybe not. But they will be our ambassadors. To complement all of this, we created a program for IBMers to put money into a special re-education account, allowing them to use that money to re-educate themselves whenever, whatever they want to be. And we'll match it. If you put enough money in this account for long enough, it could help you make a major shift and a major change. We put these innovative thoughts together and kind of weave them into a holistic thought that gives employees the capability to transition themselves when they thought it was right. You don't say, woe is me. You let go of that, and you move. This is an enablement program that allows people to do that. It allows people to go somewhere else, to move in those directions. That's innovation in a different way – an example of how everything can be innovative. I meant it when I said everybody can be an innovator. To just say, "Well, I didn't go to school to learn that." Nobody went to school to be an innovator. That's not what they taught you in school. Maybe we'll do a better job in the future, and that's why there's always hope that there's something up here, and that's what we should be moving to. Gartner: As we wrap up, are there any final thoughts? Donofrio: I'll never forget when I first met the prime minister of Vietnam. He said to me, "What can you do to help me? My people work incredibly hard. We're incredibly capable of doing a number of things. We're 80% literate. Eighty-four million people, 80% literate. The only thing that's wrong is my people work for too little money. The only work we have is the work no one else wants. Can you help me get the work that everybody else wants?" It's the thing we should all worry about, because as we mature, the lower our capacity for change becomes. The more we have to lose, the more we want to protect, the more we don't want to change, the more we want to hold on to things, the more we don't want to let go of things. Do you become too complacent? Do you become too comfortable? We have to find ways to motivate people. This whole idea of innovation – enabling people to innovate, encouraging them, fostering collaboration – it's the best approach. Each of us must grind away at where value is. Why are we doing this? What's the value? Does the market care? Answering those questions will feed success.  |
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