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Corporate innovation guru Richard Platt, formerly of Intel, has a lot of strong opinions about innovation. In two previous podcasts, he has described how Sun Tzu's Art of War applies to the corporate environment and why innovation is important for businesses to stay competitive.

But realizing the need to be innovative is only the first step. The second and most important is actually taking that step.

Challenges Companies Face in Acting on Innovation

The corporate structure itself tends to be a barrier to innovation at times, given that middle management is often expected to sort the good ideas from the bad before
ideas reach upper level management.

"Decisions made by mid-level management can be rather difficult and tenuous, because you get into political aspects and if, to any degree at all, a company is siloed, then you don’t get good sharing," Richard explains. "For the individual or the group that sort of comes up with a really neat idea and they’re starting off at the bottom of this pyramid of the corporate structure and sort of walking it through, I mean, you’ve got to be wearing track shoes for the bloody thing and from a corporate standpoint, his isn’t really a system or a pipeline for innovation."

Overcoming Innovation Barriers

So how can companies overcome these challenges? You have to put in place a process, Richard suggests, but the answer to that question lies in the definition of industrial or commercial innovation itself. Formulas and functions exist so that you can evaluate functions and costs with very specific formulas.

Industrial Innovators and What They Are Accomplishing

In researching innovation, Richard says that he spent a lot of time investigating who was actually using these strategies. One source of innovative companies is Business Week's list of the 25 most innovative companies. Numerous big-name companies like H P, Nokia, Siemens, and Samsung use innovation methods.

The vice president of Sigma Breakthrough Technologies developed a presentation evaluating development techniques across 233 manufacturing firms and looked at nine specific approaches. The data verified that when you listen to the customers and end users, companies are more speedy and profitable, and that having specific methods in place to accelerate time to market tended to pay off. A lack of a structure for innovation tends to mean reduced profitability.

"That’s what the data tells usm" Richard says. "It’s been very interesting to see data like this confirm what I had sort of worked out through my research and work in other areas that validates the very direction that Boyd is getting at is in the O-O-D-A Cycle of things: compress time and you’ll gain benefits."

Executive Summary by Krissi Danielsson

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Bennett points toward the automotive industry to illustrate the point. Although the auto industry has its Big Three or Big Four just like the software infrastructure industry, individual automotive vendors target specific spaces, like the high-end or the low-end of the market. Some vendors try to cover every segment of the market and others target specific niches.

In the software industry, you see much of the same. Just like a vendor like BMW might specialize in creating a car to perform and handle better than other cars on the market rather than trying to create an option for every type of consumer, an integration technology vendor might focus in on a core business problem for a specific target audience and customize an offering to fit that market need, such as collaborative business problems like supply chain management, supply chain finance, or SOA compliance.

Specialization tends to evolve as companies trying to maintain a market share look for a way to sustain themselves in the face of competition. As companies look for a way to adapt in order to meet new business pressures, they need systems that can adapt to regulatory changes and new business models and changes in existing business models.

Axway's Approach to BPM and Business Agility

A lot of people pay attention to orchestration of BPM, said Bennett, but not everyone pays much attention to choreography. Axway's approach attempts to carve out a niche in the BPM field by being specialized to deal with both choreography and orchestration.

The solution attempts to help customers with business agility and enhanced collaboration as well. Axway aims to help its customers deal with SOAs and regulatory compliance in order to solve competitive challenges in the current market and allow companies to be more dynamic in response to market events, such as regulatory or sensor-related events.

"Having great domain in solving some of these SOA problems or collaborative business problems is key," said Bennett. "And knowing it from a contextual level, from a vertical perspective, understanding a healthcare/life science problem vs. a financial services problem."

Do Companies Need to Consolidate Their Strengths?

But with the trend toward specialization, is the market getting too fragmented? Are companies being forced to focus on their core strengths at the expense of innovation? 

Bennett doesn't think so. The need for agility and the need to compete will still drive companies to look for ways to distinguish themselves, but focus isn't necessarily a bad thing.

"I think you have to be focused. If you try to cover every market, you're going to fail. In fact, even the big guys, they have challenges covering every market," he said.

Case Studies

Bennett points out that Axway now has more than 8,200 customers, including most of the Fortune 500 companies. He cites DHL as one example, where DHL has developed a quick-shift product where about 20,000 trading partners and customers have automated key processes to create a collaborative backbone in order to extend new services to customers on demand.

McKesson is another example, said Bennett, of a customer that has built an e-commerce infrastructure on Axway's platform in search of agility. McKesson provides its customers with a way to distribute goods, as well as advanced services around ePedigree and controlled substance ordering systems. These services are provided over a backbone, taking the infrastructure and leveraging pre-built solutions in order to offer more benefits and values to customers.

The core technologies of ePedigree are an interesting example, according to Bennett, because the next step is track and trace which can work down to an RFID level or a sensor-based level in industries like automotive, aerospace, or supply chain event-oriented environments.

"As the next generation of supply chain moves towards supply chain finance, where you're tying together these sensor events with financial events, you're going to see new types of solutions for visibility, track and trace and supply chain finance that will drive revenue up for a lot of these companies and improve their bottom line," he said.

Finding a Win-Win Proposition

A lot of companies today in the infrastructure space focus on enterprises, but Bennett thinks a good strategy is to focus on collaborative business problems, because if you need agility in any area, that would be the one.

"If you have these collaborative business solutions in place and the right infrastructure in place, you're absolutely going to need agility," he said. "If you break anyone of those things, you break a lot. You can lose a lot of money quickly."

To find out much more about the topics summarized above, listen to the entire 15:07 podcast.

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