There should be no limits as to where innovation comes from, whether inside a business or from competitors or, for that matter, what is happening in the broader market as a whole.
Businesses need to have the ability to pick up on ideas and trends and turn them into something that has potential commercial value.
It can be a very long and risky process that requires not only an idea but investors, suppliers, customers and end users.
So what does it take to be innovative?
For a start, most successful businesses need a roadmap and a strategy that lays out where and how innovation is going to help them get to where they need to be.
Critically, businesses also need to create an atmosphere in which creativity is possible, encouraged and welcomed. That requires making people feel comfortable in developing and sharing ideas. Collaboration is critical in that networking with people inside and outside of the organisation helps to create, what many refer to as an environment of ‘Open Innovation’.
Innovation is often associated with start-ups and small businesses, there are plenty of incubators and business accelerators available to help, but what does a larger company have to do to be considered innovative? Too often big organisations play it safe, so their focus tends to be on doing what they do, but only better, and product or service innovation becomes more incremental as the organisation tries to manage risk and maintain stability.
The list of big companies considered to be innovative contains the likes of Apple and Samsung, but also banks and supermarkets that are using technology to improve their performance and to deliver enhanced products and services to their customers. Many have set up their own accelerators or incubators to drive innovation.
In order to succeed, large companies have to look beyond the safe and secure and embark on long shots that could bring them much greater advantages. There needs to be a balance between taking risks and playing safe and that’s a tough balancing act.
How do businesses go about managing innovation? What processes do they have in place and how supportive are they when it comes to turning ideas into successful innovations that create value?
Analog Devices (ADI) has nurtured a culture of innovation and risk-taking that has enabled it to sustain leadership over many years in its core signal conditioning and conversion markets.
It has a history of developing ideas and moving into new areas from digital signal processing to developing the first commercial MEMS accelerometers.
The company’s Chief Technology Officer, Daniel Leibholz has been appointed to develop and lead the company’s long-term technology strategy for applications across its end markets. It involves working closely with ADI’s business units and manufacturing operations and he is responsible for identifying, sourcing, and cultivating new business, technology and research opportunities, as well as developing foundational technology capabilities in support of the future needs of the company’s markets and customers.
“ADI has invented and improved manufacturing technologies and has often pushed into unexplored directions,” he says, “and it continues to be on the lookout for new ideas whether that’s from inside or outside the company.
“Innovation is about taking a creative idea or concept and turning it into a product or service that supports an identified need, providing a commercial or societal impact in a measurable way.
“For a company like ADI that type of innovation will be reflected in its revenues and margins and for our customers it will be about solving a specific problem and creating value.”
According to Liebholz the heart of innovation is to, “understand the problem you are trying to address and whether your technology will have a measurable impact.”
Currently we are in a period of great technological innovation and there’s been an explosion in advanced cloud and analytic capabilities, for example, all of which depend on data derived from the analogue world.
“This growth means that innovators need a place where they can develop ideas and disruptive technologies. ADI has established the Analog Garage, a corporate incubator program, that provides entrepreneurs with a path to develop, explore and scale new technologies and new business models,” Liebholz explains.
The Garage looks to recognise new technologies such as sensors and connected devices, machine learning and AI, engaging with start-ups, universities, and company employees. Any employee can apply for a grant and use staff scientists in the Garage to validate their ideas – much like how a venture capitalist works.
“The Garage is intended to provide the support needed to solve tough problems, collaborating in a ‘learn fast, roll-up your sleeves and experiment environment’.”
Over 350 pitches have been received over the past five years, since the Garage was established, with around 10 percent being successful.
According to Liebholz, ADI is looking for ideas that will have a real impact and which are not simply incremental.
“You have to understand the problems you are trying to address. At the heart of innovation are problems and the technology you develop will need to have a measureable impact. For ADI , for example, that could mean providing improved levels of signal identification, measurement, or power efficiency. It is about our customer’s systems benefitting materially so we are looking for innovations that will have a real impact.”
According to Liebholz, the most impactful form of innovation comes when there is an overlap between ADI and its customers.
Daniel Liebholz: "ADI has created the Garage incubator programme to provide entrepreneurs with a path to develop and scale new technologies and new business models
“Understanding the systems challenges of our customers while they have, at the same time, an appreciation of the technology we can provide is critical. Often both are seen in a static way with improvements tending to be limited or at the margin.
“It is when we are dealing with something more abstract that we can rethink a problem. It is then possible to supply technology that will help the customer radically rethink their systems and architectures.
“Conversely, an abstract enough problem means that we can rethink how we go about solving it at a technical level. When you are innovating at the chip and system level that, from my experience, is when you are truly able to deliver innovative systems.”
Continued engagement with customers is also critical.
“You need a good antenna to pick up on trends,” suggests Liebholz, “and we try to hold regular meetings with our larger customers to discuss their future plans. Their purpose is to better understand the technology we can provide them with and help us better understand the challenges they face. For example, how are they applying the latest technologies, such as machine learning?”
According to Liebholz these technology scouting meetings enable ADI to make connections to new teams and designers within their customers and to then link them up with other parts of ADI that, perhaps, they may not have engaged with.
“It’s a long journey but made easier where roadmaps exist. The cross linkages that we form are essential to creating and driving innovation. It’s about better understanding and exchanging ideas as well as questioning each other in an open and frank way, so we can look to solve problems.”
Collaboration is crucial
Located in Silicon Valley, PARC (Palo Alto Research Center) is a scientific research and Open Innovation company that’s been at the heart of some important recent technological developments.
“Collaboration is crucial and we bring leading scientists, engineers and designers together to form teams across a series of Focus Areas that we believe are the future of technology, science and innovation,” explains Markus Larsson, the VP of global business development at PARC.
PARC is a Xerox company and provides custom R&D, technology, expertise, best practices and intellectual property to companies, start-ups and government agencies.
“Our Open Innovation approach means that we are able to combine scientific creativity, interdisciplinary collaboration and business drive,” says Larsson.
PARC works across a number of different industries focussing on Artificial Intelligence and Human-Machine Collaboration, Internet of Things and Machine Intelligence, Digital Design and Manufacturing, Microsystems and Smart Devices.
“Creativity and science are at the heart of our mission to reduce the time and risk associated with innovation that is looking to solve complex problems.”
PARC looks to form a custom, multi-disciplinary team for every project or partnership it gets involved with.“Continuous evolution keeps us at the cutting edge of innovation and it enables us to rapidly build and combine the right capabilities,” explains Larsson.
“Our work is guided by the ambitions of our clients and the stage of innovation they’re at will define how they work with PARC. We have a well-defined engagement process to ensure that they get what’s needed from any partnership – whether that’s early stage concept exploration and validation, proof of concept and prototype development, or commercialisation of existing PARC technologies.”
Launched last year, PARC unveiled a shared cleanroom-as-a-service centre that was designed to enable partners to develop and test new thin-film electronics and optoelectronic devices.
Equipped with a wide range of tools, it allows for unique processes such as deposition, wafer bonding and sputtering. In addition, clients can draw on PARC’s expertise in working with semiconductor thin-film materials including amorphous silicon, metal oxides, low-temperature polysilicon and microelectromechanical systems (MEMS).
“Many large technology manufacturers have advanced cleanrooms in place, but very few facilities are readily available to those who need small and medium-sized research and development capabilities to develop next-generation electronic devices,” Larsson suggests.
“ADI has a diverse portfolio of customers, two hundred are strategic, with whom we have a close working relationship and our engineers engage with them on a number of high profile designs,” explains Liebholz.
“But when we talk about innovation we also have to pay a lot of attention to smaller companies and the role of the Garage, mentioned earlier, is critical here in helping companies develop the capabilities they need to reach a point when their ideas become viable.”
Innovation often looks to address current customer needs.
“Businesses tend to focus on roadmaps that are one year out from generating revenues and we need to look five to ten years out at developing new technologies and products. But that takes time. It’s about de-risking that process and ensuring any offerings are viable,” Liebholz explains.
“Within ADI company engineers meet at events around the globe where tracks, demos and papers are presented and discussed. We bring our engineers together to both learn but also to celebrate.”
ADI also has a technology advisory council that takes ideas from within the company’s various technology groups, assesses them and then looks to support them going forward.
Critically, the key measure of success when it comes to innovation is the level of adoption and the financial return.
“Business margins and return on investment are critical factors and for industrial or communication products we can tell pretty quickly if it has been embraced. ADI is constantly looking at financial metrics to see if we are capturing value. Discipline and rigour are crucial when looking at and considering innovation and new technology.”
The measure of success will be determined by the company’s overall revenues, which reflect the vintage of a company’s innovation, according to Liebholz.
“At the moment technology companies are being massively creative; a huge amount of work is taking place, but we also need to be aware of how companies support new products, how they go about getting them designed in and what support is required.
"For larger companies that can be a trap, as if product support needs to grow that can lead to engineering time and resources being misdirected from innovation.”
ADI is certainly a standout example of how bigger companies are looking to innovate, but too many large companies are failing – they are too risk averse or simply struggling with time constraints.
In order to benefit from innovation more companies need to put in place processes that tap into new ideas and creative thinking, from wherever it comes.