My former employer, Intuit, has always been considered a thought leader in the area of product innovation. Even with this reputation, however, the company realized in 2006 that it needed to become more nimble and innovative to compete. To accomplish this, Intuit had a number of key hires including Per Kris Halvorsen, Chief Innovation Officer at Intuit, who held senior research positions at the Sloan Center for Cognitive Science, HP, Symantec, and Xerox.
I recently reached out to Kris because I witnessed first hand at Intuit his ability to influence change and successfully motivate employees to think about innovation in new ways. There was another reason too: Norwegians like Kris have always had a big influence on me. I was raised by a Norwegian up until I was four years old.
At Xerox, Kris worked with some real thought leaders such as Brewster Kahle, who created Alexa, and John Seely Brown, who currently heads up Deloitte Center for the Edge. Kris brought to Intuit the thought process that in order to make digital technologies successful, you need first to address cultural issues. I asked Kris about what was in fact the secret sauce? He provided some very specific insights into how organizations can become more innovative.
Moving from the desktop to the cloud
This change was a big challenge for Intuit. Historically, Intuit had been successful in the desktop space, mastering such tasks as making it easy for small business owners to master tax filings, bookkeeping, etc. As Kris explained, “It became like fine art – entering data using a keyboard and mouse.” However, then people started to leverage other devices, such as smart phones and other technologies such as voice interaction. So, the company identified five key areas of focus: User contribution systems (see Scott Cook’s Harvard Business Review article on this), Data analytics, Voice interaction, Touch interaction, and Image processing.
We are really about democratizing innovation!
Intuit believed that mastering these five areas would lead to a better customer experience, which is something they are fanatical about. The challenge, however, was also to build a simple framework to explain their approach and disseminate this information throughout the company. Kris believes, “You need to make innovation everyone’s business. It is not something that is reserved for a small team of researchers in the laboratory.” His team’s job was to create the right environment for this democratic laboratory. Intuit leveraged three main levers to accomplish this: Internal mechanisms (processes), culture, and technology.
1. New and existing internal mechanisms (or processes): To start with, Kris leveraged the companies existing leadership model. He decided to get in front of senior management at the company’s bi-yearly leadership conference where directors and above share updates on their business with their company , so that they could cascade his recommendations to their teams.
This also enabled Kris to address, up-front, any potential resistance from middle management. After all, Intuit already had a successful formula that catapulted it to market leaders in several categories. Certain leaders in the company knew it didn’t want to be caught off guard like Netscape was in the browser war with Microsoft. It was also to reduce internal obstacles so that people can get to market faster. Kris recommends, “You will be more effective if you can make innovation happen faster, iterate faster, get feedback, and make progress without waiting for that one brilliant insight.” My experience is that many product managers want a game changing insight to happen before taking action and changing their product.
Intuit also implemented the Design for Delight (D4D) approach, or as it is referred to in other companies, Design Thinking. D4D consists of giving some basic tools for brainstorming, making sure that you don’t lockdown on a single solution before you’ve considered a number of them. Kris stated, “One of its key principles is helping people develop customer empathy and deep customer insights and then rapidly iterating on the hypothesis and experiments that they had and doing that with customers. It’s important to give all employees the freedom to develop new and innovative solutions.” Kris explained, “We turned then our intent to be an innovative growth company into simple steps and initiatives, concrete ones, along these three different dimensions.”
2. Culture: To implement D4D, it’s imperative that there’s a company wide understanding that the path to business success is to solve customer problems well. Product managers are trained to go beyond quantitative findings and focus on the true pain points or jobs (task) a small business owner wants to achieve. To help change how the company thought about innovation, it created Innovation Catalysts to shepherd the process along. These coaches focused on whether the software solved the user’s problem in a delightful way by talking to users and solving problems with colleagues rather than depending solely on their own genius.
For Intuit, a strong customer focus does not mean just listening to customer, but rather observing them by developing empathy and insight. Kris points out that someone at one point said, maybe somewhat flippantly, that some companies hire anthropologists for this purpose, and Intuit has 8,000 of those amateur anthropologist.”
A key cultural aspect was giving employees 20% free time to innovate. With the rise of Google, no single tactic comes up more in innovation circles than their concept of 20% time. Even though this amount of time is not tracked, I would venture to bet that a small percentage of employees actually take advantage of it. 3M actually developed a 15% time rule in the 1950s with the same exact intentions and basic philosophy. (For more about this read Wired’s article: The 15 Percent Solution.) Kris emphasized, “If you plan everybody’s time 100% and then ask them to be innovative and experimental, you’re really not setting yourself or them up for success, but you’re setting the whole organization up for frustrations.”
Intuit’s matrix organization has always emphasized teamwork, so it leveraged again the “learn-teach-learn” approach and encouraged employees to share their learnings with others. One way to accomplish this is to bring people together from different groups, so they can learn from each other and then bring their learnings back to their respective groups.
Finally, the company held three types of Jam Sessions. First, it started with “painstorms” in which employees detect customer pain points or problems that should be address and alleviated. After identifying the relevant “outages,” customer issues, a “sol-jam” session is held where the company challenges the employees to identify solutions that address consumer pain points. Once the solutions are discussed and narrowed down to a relevant few, the company then embarks on the third step in the process called “code-jam,” which consists of quickly developing and sharing a simple product or service with a customer and measuring whether or not it has successfully addressed their pain
Kris also stressed his own journey in working more with smaller teams and organizations that are more manageable. “It’s easier to understand them and you can wrap your arms around it in a way that allows you to just play out your program more effectively and maybe be a more effective contributor to the organization’s success.” Intuit has adopted this approach and focuses on smaller teams to develop products. Scott Cook summed up this approach in a Harvard Business Review article entitled The Contribution Revolution: Letting Volunteers Build Your Business.
The lesson is big organizations get committed to the way things were. The power is in small entrepreneurial teams. It’s the small team led by an entrepreneur that can invent the way things will be. So, a team of initially two and then three people did SnapTax. Similarly, our online-payroll service was done by a small team as well. Each one solves a problem that nobody else has solved and that’s what keeps the company on the cutting edge of change, whether it’s on mobile phones or web services.
3. Technology This is the third pillar in Intuit’s Innovation model. Like most companies, Intuit recognized the rapid emerging popularity of mobile. Kris states, “It’s important to say, hiring some experts that were not just good, but also inclined to share their knowledge with others, building libraries, setting up shared services, SMS messaging buses, and aggregations that people could get their notifications out in both the time to pay and arm and a leg for it. So, you have to build the capabilities internally to use the technology.”
Kris believes that if companies truly understand the Process, Culture and Technology levers, they can accomplish great things. “If you can’t get your hands on those levers, you’re not going to have any positive effect and you just end up being frustrated. So, spending time figuring out what levers you have to move by studying people who are successful at it in particular is very worthwhile.”
People and Companies mentioned during discussion
PARC (Palo Alto Research Center Incorporated), formerly Xerox PARC, is a research and development company in Palo Alto, California, with a distinguished reputation for its contributions to information technology and hardware systems.
Ronald M. Kaplan is a Senior Director and Distinguished Scientist at Nuance Communications. Prior to that he served as Chief Scientist and a Principal Researcher at the Powerset division of Microsoft Bing. He is also a Consulting Professor in the Linguistics Department at Stanford University and a Principal of Stanford’s Center for the Study of Language and Information (CSLI). He was previously a Research Fellow at the Palo Alto Research Center (formerly the Xerox Palo Alto Research Center), where he was the manager of research in Natural Language Theory and Technology.
John Seely Brown is John Seely Brown is a researcher who specializes in organizational studies with a particular bent towards the organizational implications of computer-supported activities.
Steven Berlin Johnson is the best-selling author of six books on the intersection of science, technology and personal experience.
Recorded on the phone on June 20, 2012. Written up the week of July 18th in Cape Cod, Massachusetts.
Thank you Nation!