Sunday, April 29, 2007

Open Innovation at HP

Hewlett-Packard Company (not to be confused with Hewlett-Packard Development Company, L.P.) is one of the foundations of the modern Silicon Valley. Even if you accept the argument of Tim Sturgeon (who I finally met last week) that Silicon Valley began in 1909 with Federal Telegraph, no firm has had a more sustained impact on Silicon Valley than has HP.

[1970s logo]Thus, it’s been kinda depressing to watch the company mostly flounder since Bill & Dave left. Once the valley’s exemplar of an empowering corporate culture and engineering-driven innovation, it has been fighting a three front war against irrelevance: the risk that a culture of empowerment becomes one of entitlement, the bureaucratic stultification of any Fortune 100 company, and the disease of management-by-spreadsheets (particularly during the tumultuous reign of Queen Carly I).

How do you shake things up and turn things around? Do you hire from within, which brought us Dick Hackborn (who nurtured the printing cash cow responsibility for the vast majority of HP’s profits over the past 15 years) but also two undistinguished CEOs, John Young and Lew Platt. Hiring from outside brought both Carly Fiorina (a disaster) and Mark Hurd (for whom the jury remains out).

Today the Merc (dead tree edition) ran a story (registration required) on Phillip McKinney, a blogger and VP and CTO of HP’s personal systems group. For most, his claim to fame would be convincing Hurd to spend a few hundred million buying Voodoo PC.

But the most interesting thing about McKinney is his effort to incubate new ideas through a formal process of open innovation, by creating the Innovation Program Office. McKinney seems to have a highly original take on internal incubation, one that just might make a difference in restoring the company’s once-great record of innovation.

From the Q&A (not yet online):

We actually ask that every initial idea has to be able to answer five questions. …
  1. “Will this idea fundamentally change the customer’s expectation?” …
  2. “Does this idea fundamentally change the competitive landscape?” …
  3. “Does this idea fundamentally change the economics of the industry?” …
  4. “Does HP have a contribution to make?” …
  5. “Will this idea generate enough margin?”
While these are good questions, they have been studied before. I don’t know if McKinney has read Radical Innovation, the multi-year study out of RPI that focused on these questions. If not, he should.

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