3. From Research to Industry
Innovation
Open Innovation
(Intuit, USA)
Industrial
Engineering Process
(Intuit, USA) development
Head of research lab Industrial
(Nokia, Finland) research
Professor of software
engineering Academia
(+ consulting)
(RuG, Netherlands)
(BIT, Sweden)
Intuit Proprietary & Confidential
4. Intuit at a Glance
A Leading Provider of Business and
Financial Management Solutions
• Founded in 1983
• FY 2009 revenue of $3.1 billion
• Traded on the Nasdaq: INTU
• Employs more than 7,800 people
• Offices across the U.S., Canada, India and U.K.
• Nearly 50 million people use our QuickBooks, Payroll,
Payments, TurboTax, financial institution solutions
and Quicken products and services
Intuit Proprietary & Confidential
6. Our Ecosystem: Millions of Customers
and Developers
19 million 7 million 1,600
TurboTax Small Business Financial Institutions
Users Users serving
9 million
End Customers
12 million 250,000 75,000
Consumer Accountants Developers
Quicken Users
Intuit Proprietary & Confidential
7. Markets and Opportunities
Small Business:
QuickBooks Tax
Health
Care
Global
Plus Payroll &
Payments
Financial Institutions
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8. Fortune Top 100 Places to Work
Intuit Proprietary & Confidential
9. Most Admired: Software Industry
7 Years in a row
2004 2005 2006 2007 2008 2009 2010
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10. Game Plan to Win: Connected Services
Intuit’s focus is…
By creating and acquiring…
And capitalizing on three significant market trends…
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13. Internal Innovation
New organic … are driven by 3 … which are outputs from
revenues… factors… how we innovate
Quantity of
ideas Ideas
(at bats)
Priorities
New organic Quality
source revenue of ideas 1
ƒ ƒ
(runs scored) (right pitch)
People
Execution
against ideas
Approach
(mechanics)
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16. Unstructured Time
10% time
• Block and protect 10% of employees time
– Recognize in project schedules
– Aggregate into bigger blocks
– Establish a “no meeting day”
• Innovation events every 4-6 months
– Focused time and competition drive energy & results
– VP (and up) engagement…and customers are there, too
– Tracks for ‘prior work,’ ‘same day sprint,’ and ‘business challenges’
• Recognition, rewards and celebration of UT successes
– For teams (best award = more time)
– And for managers who enable teams
– Start with organizations with passion and drive…create & celebrate success
• Fun tools and clear, lightweight processes
– Idea visibility…enabling collaboration to improve ideas (Brainstorm)
– Matchmaking to get x-functional teams to critical mass (Brainstorm)
– Clear the obstacles to getting working code out fast (IntuitLabs.com)
– Review groups and mentors in each business
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17. • 35% engagement across Intuit; 50% at some customers
• 6x new releases with 60% reduction in TTM
– Viewmypaycheck: idea to in-market release in 3 months, it now
has 90,000 active users and a 4.5 rating
• Fits naturally into existing workflows, e.g. email, and helps
connect people with relevant skills and interests
• Recommended as the platform of choice by Bain & Co, etc.
– Innovation tournament at a 45,000 employee services company
and saw a 5x increase in participation from the previous year
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21. Intuit’s Engagement with the Outside
• What Intuit has to offer
– Brand
– Customer base
– Products capable of acting as platforms for innovation
– Developer ecosystem
– Technology and market due diligence
– Marketing and distribution channels
– Infrastructure
– Equity
• What Intuit may receive
– The usual – M&A opportunities
– Access to complimentary technologies, products, services, business models
and channels
– resources to support Intuit-funded development
– new applications and increased demand for Intuit products & services
– favorable terms on future development and commercialization agreements
– options to increase ownership in future
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22. Phase 1: Establish Current State
Open innovation
A huge opportunity that we are exploiting to less than
30% of its potential; successes exist, though
Structure of study
28 innovation leaders across the company interviewed
More than 100 years of Intuit experience
Several key inhibitors need to be addressed
• Mindset and Culture: Not Invented Here syndrome
• Organizational: Lack of executive attention; Intuit is insulated
and inward focused
• Skills: Traditional open innovation core competencies eroding
Proposed key initiatives
• Awareness: Open Innovation event
• Desire: quantitative Open Innovation objectives for BUs
• Capability: focus OI efforts on academia, VCs/startups,
suppliers and crowdsourcing
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23. For Each “Dimension” – Self Assessment*
70%
Several interviewees included CDI in their
assessment of Open Innovation with the
60% customer. The author respectfully disagrees with
that assessment
50%
40%
30%
20%
10%
0%
*Average of self assessment by innovation leaders on how effective their BU is in exploiting each “dimension” of
Open Innovation on scale from 1-5 (5 being best), converted to percentage points.
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24. Proposed Key Initiatives
Build Awareness
• Organize Open Innovation event (external and internal successes)
Create Desire
• Quantitative (metrics-based) Open Innovation objectives for BUs
• Long term BU scenario planning workshops with external partners
Develop Knowledge and Capability
• Focus Open Innovation efforts on:
• Academic partners – to break myopia
• VCs & startups – for non-M&A partnerships
• Suppliers – to drive growth by reducing Intuit investment in
context
• Adopt crowdsourcing
• For ideas and challenges: external Brainstorm
Institutionalize Open Innovation
• Attention in Operating reviews
• Celebrate successes
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25. Phase 2: Undirected Open Innovation
• Academic partnerships: MIT Media Lab (Center for Future
Banking)
– Future of Payments workshop
– Future of Personal Financial Management workshop
– Broad attendance of sponsor weeks
– Individual meetings between innovation leaders and research
groups
– Graduate students as summer interns at Intuit
Results:
Great at ideation – Intuit staff came away feeling energized and full
of new ideas
Technology transfer from Media Lab to Intuit
Summer intern initiated 3 valuable innovations at BU
Stanford Technology Venture Partners - Global Innovation Tournament
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26. Entrepreneur Day #2
What:
• Half day session with selected entrepreneurs and startup companies
to explore partnerships
Why:
• Find new business opportunities
• Source leading edge technologies
How
• Broad call for proposals to several communities
• Involve BUs to select ~60 companies to attend
• Give each company speed dates and demo opportunity
• Provide feedback within 48 hours
Results
• Business partnerships in place, several trials ongoing now
• Entrepreneur day #1: 10% success rate; #2: > 25%
• Very positive feedback from participating companies
• Great exposure in (social) media
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28. Strategic Supplier Innovation Contest
What:
• Contest for strategic suppliers to submit innovative proposals for
collaborative growth efforts
Why:
• Drive growth with already established partners
• Offer venue for strategic suppliers to differentiate and engage
beyond current relationship
How
• Announced at Strategic Supplier Summit
• Involve BUs to evaluate 60+ proposals from 30 suppliers (alliances)
• Selected a winner, two runner-ups and 38 ideas were followed up on
Results
• Around 5 of the ideas taken forward by the BUs with strategic
suppliers
• Very positive feedback from participating companies
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29. Phase 3: Directed Open Innovation
Transition to:
• Asking for technologies and solutions that we want to source
from the outside
• Continuous interaction with communities and partners around
innovation (instead of periodic events)
• Specifically: Crowdsourcing
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33. Four Use Cases …
Share your best idea with us
Send us your best collaboration proposal
Look at our technology needs and solve them
Participate in a challenge and win!
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34. Phase 4: Integrating Open Innovation
• Up to now Open Innovation is still viewed as separate of
“business as usual”
• Final stage is to embed open innovation as an integral part of
innovation and development processes
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35. Lessons Learned
• Even in a very innovative organization, opening up the
innovation process to the outside is difficult
• In order to get early wins, focus initially on the late stages of
the innovation process – revenue (even a little) is a great
motivator
• InnoCentive/Hypios/NineSigma-style challenge formulation
not successful internally (yet) – not sure if it fits Intuit or
software companies in general
• Even if a topic is a strategic priority, a specific opportunity
may still fail if it’s not on the internal top-3 or top-5 list
• Transition to undirected to directed open innovation (getting a
shopping list) proved to be difficult
• Implementation at Intuit had to be adopted to our specific
needs and particularities
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36. Conclusion
YOU already know the answer, but the
Phase 1: Build awareness organization does not
Events build awareness and create the first
Phase 2: Undirected OI early successes
Limited effort required from organization
Getting a CDI driven company to express
what it needs before it needs it
Phase 3: Directed OI Software companies are different …
Open innovation is an integral part of the
Phase 4: Integrate OI innovation and R&D processes
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