Technically Speaking with John C. Dvorak - PBS Radio
Technically Speaking is hosted by technology industry pundit, John C. Dvorak, and is made available to over 100 public radio stations nationwide. It also airs twice a week in the San Francisco Bay Area on 910AM CNET Radio.
Dvorak is a veteran high-tech journalist, author, columnist, and also host of TechTV's daily show, Silicon Spin. In addition, he writes more than a dozen unique columns a month for PC Magazine, Forbes, Smart Business, BoardWatch, Computer Shopper, and various newspapers around the world.
John interviewed Imaginatik's CEO, Mark Turrell in July 2001 to find out more about the emerging area of enterprise idea management. The following is a transcript from the interview.
DVORAK: So what does a company do that has to somehow manage ideas in the real world or in their company? A lot ofcompanies have a lot of people with smart ideas but they don't really have any way of collecting these ideas from people and in fact, a lot of companies don't want to hear the corporate ideas from the employees. Well, that may change with a company called Imaginatik. We've got Mark Turrell, CEO and Co-Founder here to talk about it. Mark welcome to Technically Speaking.
TURRELL: Thanks a lot.
DVORAK: Imaginatik?
TURRELL: That's right.
DVORAK: You're out of San Francisco. Imaginatik is an idea management company. How do you manage ideas?
[Editor's Note: In the Summer of 2001 we were finalizing our location in the US and the choices were San Francisco and Boston. We chose Boston. Sorry San Francisco!]
TURRELL: If you don't actually have with a process - with difficulty. What we do is we actually look after innovation management. How big companies get cost savings from employee ideas, how they generate new products…
DVORAK: This is different than one of those little boxes on the wall that says suggestions. You write a little thing, drop it in. You get maybe a thousand dollars if you win that month.
TURRELL: It's pretty much an advance on that. I mean, the first suggestion box existed in 1891 in a Scottish shipyard. The very first suggestion system was the British navy back in the 1770s.
DVORAK: Really? So you guys tracked the history of this?
TURRELL: We have tracked the history of this. It has been around for a while but the sad thing is that most of the suggestion boxes don't work very well. I'm fairly sure that in the Scottish shipyard there is an idea sitting at the bottom which was never looked at that says, 'Maybe it would be better to build boats out of iron instead of wood. They don't burn down.'
DVORAK: So, I understand a lot of companies do use a suggestion box, wisely though. Is there any evidence of that? It sounds to me that you have an elaborate system.
TURRELL: The U.S. Department of Commerce has been fairly obsessive about tracking innovation, how well companies have been doing with ideas, pretty much since the Japanese came in and almost decimated the auto industry. For example, the U.S. Department of Commerce tracked that the average cost saving in the U.S. per implemented idea is about 5,500 dollars. So there are large cost savings and yet, the participation rate for U.S. employees is only 10% whereas in Japan, it's well over 70%.
DVORAK: Seventy percent of the Japanese employees actually make…
TURRELL: Actually contribute.
DVORAK: Aren't there other negative aspects of the Japanese system - when they contribute then everyone has to agree on it or something? There is a lot of consensus management.
TURRELL: There's a lot of consensus. There is also a different style of ideas. In Japan there is a lot of very, very small incremental ideas whereas, in the U.S. it's much bigger ideas. Whether it's big cost saving, big product improvement, and the average cost saving is a lot bigger in the U.S. than it is in Japan. In Japan it's more like a couple hundred dollars. And that also feeds into the reward process. U.S. employees are rewarded much higher for their idea on average than in Japan where it might be two dollars, whereas, in the U.S., the average is about 450 dollars reward.
DVORAK: Two dollars is all those guys are getting? Maybe that's why they are going for the bulk.
TURRELL: I think it's for volume, yeah.
DVORAK: So anyway, what does this process that you have… what does it do, how does it work?
TURRELL: So what we do is we've developed a way of actually capturing ideas from employees. We also have systems that capture ideas from supply chains, from customers, often the general public and taking those ideas into the corporation in the most appropriate format. And also dealing with some of the legal issues which can be pretty big. Then having a formal review process inside of an organization so you can have quality reviewers do objective evaluations of ideas, giving feedback to people, which is extremely important, and then passing those ideas off into actual implementation. An ideas management system is interesting but what you want to do is turn these ideas into cost savings or actual revenue increases.
DVORAK: Is this a software package that runs on the desktop. What are the details?
TURRELL: It's run on a corporate intranet or extranet.
DVORAK: Let's say I'm an employee at company XYZ and I've got a good idea. This system is running on my machine. What's the process?
TURRELL: So what you do is you may have a portal or you might have, on your intranet, that you're in R&D for smart materials and there is a button that says, 'Got an idea'. So you would click on that. That opens up an idea form, you type in your idea, you describe it in an appropriate way. In a drugs company you might have a form that pretty much maps what the FDA requires. If you're just in a normal firm it might be like, here's my idea and here's an attachment, maybe a drawing that I'd done, and you click submit and then that creates that workflow process to kick off the reviews.
DVORAK: O.k., let's say I'm in this company, I'm the CEO of this company, you send me an idea, the idea goes through the system, and I immediately fire you. And I let everyone know that here's this idea that was really stupid and that's why he's out. What would happen there? Do you think that would destroy the whole process?
TURRELL: We prefer not to deal with customers like that. It's a delicate flower, we like to call it. It's real easy to make suggestion systems fail. We've been working with a company who is a metals company up in England and they were giving 5% of the net cost savings to employees. Well the first employee that had a good idea was going to get $50,000 worth of reward. They decided that was too much for a guy that was pretty much paid $35,000 a year and so they decided to cap his reward at $10,000 and then inform everybody in the corporation that there was this cap that existed. The system died pretty much the same afternoon.
DVORAK: And do you go in there or come in with a series of lectures, or anything, that would help people manage this system better and keep something like that from happening? How does that work?
TURRELL: Pretty much. If you look at the research, like PricewaterhouseCoopers did a study last year and they found that for the very best companies, the most innovative companies, who make four times the profit of non-innovative companies, there are three things that are important. One is leadership. So, does the executive support innovation? The next is climate and culture. Are people rewarded for having ideas? Are they rewarded for being creative? And the third thing is the ideas management process. How do you actually manage innovation across the corporation. If you screw up any one of those things, you will fail. So what we've found, being a technology company, is that you cannot just offer software, you have to actually pay very close attention to the leadership issues and the culture issues as well.
DVORAK: Now, curiously I just got back from IBM's Almaden Research Center, and IBM brags that it may be the best at moving from research and ideas into products, of all companies. Have you studied any of the companies that are successful at doing this and tried to implement some of the strategies that they use?
TURRELL: Very definitely. In fact, one of the IBM subsidiaries is a client of ours, Lotus Development.
DVORAK: Has there been a new idea from them since they were bought by IBM?
TURRELL: The culture of the organization is somewhat special, shall we say.
DVORAK: In other words, the answer is no.
TURRELL: But they have done pretty well. One of the first suggestions that we had in one of our clients made $300,000 dollars worth of cost saving and it was a secretary. Like normally, if you have innovation, I've been in telcos where maybe twenty people, the top executives, are allowed to have ideas. And yet, very often, secretaries can have ideas, marketing managers can have ideas that are good or…
DVORAK: Yeah, when I was in college, I used work on assembly lines during the summer because it was the best paying job you could get at the time. And there were always these guys on the line that had these great ideas but there was really no methodology for their ideas to get put into play.
TURRELL: Exactly. And what we want to do is we want to scale it up to the enterprise because everybody has ideas.
DVORAK: Then how do you deal with… to the other extreme you have a large company with 100,000 employees let's say and every clerk in the place thinks that they can do things better and they flood the system with crappy ideas.
TURRELL: Well with crappy ideas, you can tweak the system so the crappy ideas very quickly get highlighted as that. You don't want crappy ideas so you can tweak…
DVORAK: You mean blackball somebody for submitting too many crummy ideas?
TURRELL: You could do that but it is very dangerous to do that. Very often, to have one really, really good idea, you want staff to have a hundred ideas of which one is good. I mean there is a law of averages in there. I mean Einstein never had one idea, he had loads and loads and loads and it turned out that when they shook the tree, some of them worked, some of them didn't.
For our system, we try and make it very people-centric. For example, when you put in an idea, you can actually start off with your idea being anonymous so that the idea is then treated objectively on the merits of the idea itself. So they don't say, 'Well, hi it's Mark and Mark always has crappy ideas.' Instead, they have to treat the idea properly but then if the idea is good, the reviewers can then request the identity to find out more information about the idea. Or, if the idea is the best idea ever, give him a holiday to Hawaii or a Porsche Boxster. Whatever the reward system is.
DVORAK: How long has this system of yours been in place? How long have you been studying this process?
TURRELL: We've been studying the process and also knowledge management for about seven years. We started doing ideas management software about two years ago so our software is now at version two.
DVORAK: Have you noticed any trends in idea creation insofar as where it shows up in the scheme of things? In other words, is it vice presidents or is it secretaries, like you said earlier, or is it across the board? Is there any one specific group that seems to be more idea-oriented than any others in a corporate culture.
TURRELL: I think it really depends on the organization and it kind of depends on the project. One of the things that we found looking at ideas management is that whatever you try and do, if you implement an ideas management project, the system will die. People get very excited at the beginning and then it all dies off. So when we do our Idea Central, which is the name of our software, we implement it on an event basis so that you'd have a four week event to solve a particular project. So it could be a R&D project around smart materials, it could be a cost saving project. One of our clients is in France and they just implemented the 35 hour working week, if you can believe it. And they are looking for time saving ideas.
DVORAK: I think the French are going for 30 hours if they can get it.
TURRELL: And I would quite agree with it. And eight weeks holiday as well would be nice.
DVORAK: Yeah, well it would be nice here too. Now do you have a consulting aspect to Imaginatik? In other words, where you can bring in a team to get people to think more creatively. Because that seems to me… there are these systems that people use, I have mixed feelings about their value, but you come in with a trainer and you get people to think more creatively within the organization.
TURRELL: We use partners for that. One of the things about trying to scale something up to the enterprise… if you're trying to train 10,000 people, it's cost prohibitive. What we would do is we're building out the platform, and ideas management is the first of a range of products around innovation to actually then allow everybody across the company to be innovative. But then in certain cases, you're better off using our breakthrough innovation technique to solve a major corporate problem and then we have partners who come in to do those creativity, breakthrough brainstorming workshops.
DVORAK: What is this going to cost some company?
TURRELL: It depends on the size of the company. We have a one-off license fee and then there is software maintenance.
DVORAK: Give me an idea.
TURRELL: If you're about 2,000 people inside of your company, it's between $75,000 and $100,000 dollars.
DVORAK: So not cheap but one idea would pay for it, I suppose.
TURRELL: Exactly.
DVORAK: We're talking to Mark Turrell who is the Chairman and Co-founder of Imaginatik out of San Francisco. Mark, if somebody wants to get a hold of the company, what's the process?
TURRELL: The best way is to go to our web site to find more information. We have white papers, product demos. And the web address is www.Imaginatik.com. And from there you can also contact one of us well.
DVORAK: O.k. thanks. Thanks for being with us Mark.
TURRELL: Thanks a lot.
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