Future of Work – Transcript of Interview with Kris Halvorsen, CIO, Intuit, Inc

Future of Work

June 20, 2012

Host:                     Welcome to the Future of Work series, an ongoing series of conversations with global thought leaders that focuses on lessons learned in the digital trenches and information to help you transform your organization to gain competitive advantage in the 21st century.  This show is proudly produced and sponsored by Human 1.0.

Scott K. Wilder:    Hi there, this is Scott Wilder, and today we have another episode of the Future of Work, practical information for tomorrow’s practitioners.  Today I’m talking to Kris Halvorsen, Chief Innovation Officer at Intuit.  Kris is responsible for building the company’s innovation capability and translating emerging technologies into products and services.  He has worked at HP, Semantec, Xerox PARC where I think he spent 17 years, and he originally comes from Norway, which was of special interest to me because from – for some bizarre reason I was actually raised the first four or five years of my life by a Norwegian, who is also from Oslo.  So, Kris, thank you for joining me today.

Kris Halvorsen:     My pleasure.

Scott K. Wilder:    So Kris, the way we usually start these things, start these conversations, is it would be great to have you share a little bit about your career journey and how you got to where you are today and kind of the key milestones or key areas, similar to kind of the Lifeline exercise that Intuit does, you know, the highpoints and the challenging points.

Kris Halvorsen:     Yes, so, I’ve been lucky in that I’ve always been able to follow my passion as I embarked on my educational and professional career.  I got interested at an early age in high school in linguistics.  And that doesn’t mean that I am a polyglot.  I was more interested in the structure of languages, how you describe it, how you turn it into a system that eventually you can compute on, how you can use to understand language interpreted, and eventually get some sensible response out of a computer.  You know, today we have these systems like Siri that exhibit a behavior.  But when I got started on this back in, you know, 1968, ’70, it was a far more uncertain gamble, but one that I was – that was very, very interested in.

So I left Norway early on.  When I was about 23, I went to the University of Texas where I studied linguistics, particularly interested in the meaning side of language.  And the University of Texas is an unlikely place you might say for anything having to do with other than Texan as a language.  Actually it was a center for the study of the meaning of language in the context of formal grammar.

And after that, I was lucky enough to find a research fellowship that brought me to MIT, which was a real hotbed for research and innovation in artificial intelligence, as well as really a center for the formal study of language.  I met a number of interesting people at MIT, and one of them, Ronald Kapland, brought the research team that I was on to the west coast back in the mid, early ’80s.  And the team kind of spread out over Stanford and the Xerox PARC research center where I spent 17 years as initially a researcher in the natural language team there.

And I started a research lab later on in the ’90s that was the first one to actually put all the web content on a box; we called it “Web in a box.”  And we did an interesting amount of work on now understanding language using more statistical techniques than the grammatical techniques that we had originally started with.  We also were the center for user interface research at PARC; and, as you probably know, that has a long and proud history.

Scott K. Wilder:    Yes, PARC was the center of the interface universe. What year was that, the Internet in a box or content in a box?

Kris Halvorsen:     Yes, I think the “Web in a box” – and we bought hardware for that, I think, around 1995, ’96.  And, of course, you know, Brewster Kahle with Internet Archive, you know, he came along I think more – maybe as early as that, but we were more or less contemporaries in that effort.  Of course, Brewster has carried that on and made it a resource that can be shared by the whole world and that has far surpassed in terms of content what we were able to gather in those early years.  And that – but it was interesting nevertheless.

Scott K. Wilder:    Is that Brewster from WAIS?

Kris Halvorsen:     Yes, that’s right!

Scott K. Wilder:    Yes, I worked at AOL…

Kris Halvorsen:     Yes.

Scott K. Wilder:    …when AOL acquired his technology and then he…went off.  And he brought together some really fabulous engineers.  I never interacted with him, but he had really amazing engineers.

Kris Halvorsen:     Yes.

Scott K. Wilder:    So then after PARC, what happened?

Kris Halvorsen:     Well, yes, and that’s an interesting question.  It was kind of after PARC because the Palo Alto Research Center had been a really fascinating place to work with a group of talented – and not just engineers, talented scientists, anthropologists and, I wouldn’t say eclectic, but very varied set of experts that were able to go after really, really hard problems for a long period of time to understand at the deep level what was the impact of digital technology.  And in particular, you know, we looked at – so what happens when books go digital?  And we see the benefits of that type of inquiry now where you have books that are electronic and at the same time have some of the affordances of the original paper artifact.

But still, you know, there is a lot of stuff that’s missing.  You can’t really move to a web page very well, you can’t necessarily share them as easily as you could the physical artifact, but in order for these new digital equivalents of the central cultural elements that we have around us that developed over millennia, you know, if we are to hope that they’re going to be in all respects as good as the original, you’re going to have to understand them at the really, really deep level—how they’re used, how they age, what their value is also, you know, culturally.  And one of the benefits of PARC was that with the diverse talent and perspectives, you could actually get closer to an understanding of that.

So, but towards the end of the ’90s – and Xerox faced a lot of challenges, and PARC I think was objectively in decline, and when a really effective leader for PARC, John Seely Brown, who many of you probably know for his own study of work, he retired at that point, and I left and joined HP as – at HP Labs.  And that was a really different, very different, environment, much more dominated by engineering ethic, engineering skills, and engineers than PARC was.  And I think I learned more about the practical side of the computer industry from that experience.

Scott K. Wilder:    That’s interesting because there’s always the challenge of kind integrated technologies in a corporation then you – when you went to HP, you found it – I’m just guessing, kind of here is like the practical day-to-day, how engineers are going to work, and here is how they think about innovation.  Is that…

Kris Halvorsen:     Yes. For me it’s been an interesting trajectory from how do you participate in the conception of the really original idea, — the things that never had been created before, which I think, you know, PARC excelled at through HP – to where the emphasis was much more on reduction to practice.  But still, you know, in a very, very large organization—I think at the time HP had 80,000 employees—and it’s hard to kind of get your arms around an organization like that and make the kind of impact that you think maybe you can make.  So I’ve been in – moving towards smaller organizations that are more – manageable is not the only term, but is more kind of – 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 a contributor to the organization’s success.

Scott K. Wilder:    I think that’s really key. In all these discussions, that’s one of the things I’m trying to get towards is:  How can individuals contribute to a company’s success?  And that’s in terms of whether it’s getting the product out of the door, generating revenue, or saving costs.

Kris Halvorsen:     Right.

Kris Halvorsen:     And so it’s worthwhile spending time figuring out how does that organization that you’re part of, how do they really work?

Scott K. Wilder:    Yes

Kris Halvorsen:     What are the levers? And if you can get your hands on those levers, you can accomplish great things.  If you can’t get your hands on those levers, you know, you and the team or you and the team that you’re part of, 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.

Scott K. Wilder:    Can you maybe give an example of either a group or company that you’ve studied and actually seen – like some examples of what the levers have been, and how you’ve leveraged those?

Kris Halvorsen:     Well, Intuit is a good example of that, I think, where – when I came to Intuit in 2006, the challenge for us was to refresh our technology.  Intuit had been very successful and was still in producing desktop software that solved truly hard problems for people.  And certain things that – like, you know, your tax filings, your bookkeeping, your personal finance challenges.  And it had developed – it had certain aspects of what it did into fine art, like entering data, using keyboard and mouse, you could do it more quickly in an Intuit product probably than any other with auto completion and bells and whistles for how to adjust the dates with pluses and minuses, etcetera, etcetera.  But at that time, people were also starting to use other things than keyboard and mouse to get work done.  There weren’t – you could – so an emergence of voice interaction with mobile devices, people were starting to see camera phones, scanners were ubiquitous and so why couldn’t you enter data by just putting things through a scanner?  Well, you know, these were – these weren’t technologies that the company was (sounds like: fassled) with yet.

And so we identified five areas where we thought if we could get really expert at using those technologies – we didn’t have to invent them, they were already out there, things like mobile technology, the use of contribution systems, data analytics, or new forms of interaction in using voice, using touch, using image processing.  If we could get expert of that, we thought we could really make the user experience radically better and transform our customers’ lives.  But we started to realize that having identified these areas as pivotal, it wasn’t going to do us much good if we didn’t have a way of sharing it with the company at large.

Scott K. Wilder:    Yes

Kris Halvorsen:     And what we realized, with the help of Steve Bennett, who was the CEO at the time, was that the company has a mechanism for spreading messages once it decides it wants to spread it.  And at Intuit, it takes the shape of a leadership conference and the number of kind of events that bring people together and allow you to share insights and messaging.  And so for us it was critical to get this technology innovation agenda onto the company’s change agenda and then just kind of roll with it.  And if we hadn’t been able to connect our wagon, so to speak, to that train of change, then I think the effect of – the insights we might have had that – in terms of what was it important for this company to do now in terms of changing its user-facing technologies, those insights would have been for not.

Scott K. Wilder:    Interesting.  It – yes, mobilizing an organization is…

Kris Halvorsen:     Yes.

Scott K. Wilder:    …always a challenge.  Are there any other kind of learnings in the process in terms of trying to mobilize the group, company, or maybe you can talk a little bit about kind of Intuit’s journey to innovation.  Because certainly in the last few years, part of it has been, you know, grassroots…

Kris Halvorsen:     Yes.

Scott K. Wilder:    …part of it’s been top down, part of it has been through acquisition.

Kris Halvorsen:     Yes, and so I think the – you have to have an approach that you stick to.  And I’d say even though you’re right, there are kind of different passes to it at Intuit, that Intuit, you know, is a company of about, what, 8,000 people.  And you feel you can speak to them all in one way or another, and you may know most of them after having worked here for awhile.  So it comes natural that you make innovation everybody’s business.  We really are about democratizing innovation.  It is not something that is reserved for a small team of researchers in the laboratory.  In fact, we don’t have a laboratory.  What we are doing in my team is we are creating the conditions for the rest of the company to be effective and successful in its innovation efforts.  And it’s – I think this is really very important to recognize that you only have a few levers that you can operate.  You know, culture is one of those levers that if you have an – a culture that’s open to and expects innovation, you have a leg up on coming up with bright, new, impactful initiatives.

The other thing you can move off is technology.  You have the right technologies, you have a much better chance of solving the deep customer problems well and in a way that will delight people and surprise them.

And the third thing is, you know, internal mechanisms that make it easier for people to both get to market fast with these solutions using new technologies and, you know, respond to that challenge that the culture is putting on you and asking you to be innovative.  If you have all of these three working together, then you can indeed turn the innovation crank faster, iterate, get feedback, and make progress, without depending on the brilliant insight of a single person or a small number of people.

So this approach for us translates in terms of concrete initiatives to things like unstructured time.  We – one of the things that influences the culture here and makes it open to innovation is that not only do we want people to go after new solutions to new problems and, you know, better solutions to old ones, and be innovative in that sense, we also give people time to do that.  If you plan everybody’s time 100% and then ask them to, you know, be innovative and experimental, you know, you’re really not setting yourself or them up for success, but you’re setting the whole organization up for frustrations.

Scott K. Wilder:    Nice

Kris Halvorsen:     If you – and similarly when it comes to the second lever I mentioned, technology, we saw that mobile devices was – they were very likely to be the most frequent and popular way in which, you know, our customers, which are millions of either small business people or normal Americans trying to get a handle on their financial lives or, you know, file their taxes in a hurry.  Using mobile devices is going to be a preferred method.

And then – 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 that’s – you have to build the capabilities internally to use the technology.

And then the mechanisms for us, we realize that, you know, you can be expert at trying to generate new concepts, so you can be a neophyte.  And we settled on an approach to, you know, what people typically called design thinking to give people some basic tools for brainstorming, making sure that you don’t lockdown on a single solution before you’ve considered a number of them.

We had another principle of 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.  We call these three principles Design for Delight principles.  And we teach and train people and give them the practice that allows you to just be better and more familiar with the basics of how to come up with new solutions, how to innovate.  So, you know, we turned then our intent to be an innovative growth company into simple steps and initiatives, concrete ones, along these three different dimensions.

Scott K. Wilder:    Fascinating.  That’s a great framework to look at it.  Just want to – a few questions come up based on this.  So culture, you talked about the, you know, leadership culture.  Are there other aspects of Intuit that you’ve seen that have either – you got there, you know, many years ago and it just was different compared to other companies, or – I’m kind of trying to get at how you change culture.

Kris Halvorsen:     So Intuit has distinguished by its focus on the customer and that kind of becomes – maybe it sounds trite because, of course, everybody would say that a business better be focused on its customers.  But in – but what it means here—and this I think has been something that has been with the company from the very beginning when it was founded by Scott Cook and his co-founders—where customer focus meant really not just listening to customers, but observing them, and through that developing both empathy for them and insight.  And it was said at one point, maybe somewhat flippantly, that some companies hire anthropologists for this purpose, and Intuit have 8,000 of those amateur anthropologist.  And I think being a great observer and learning from observation of practice is something that really takes less skills, you know, none of us are probably quite as good at that as a trained anthropologist might be, but it is an imperative and a desire that people have to learn from observation.

And then there is also a clear understanding in the company that the path to business success is to solve customer problems well.  So this is not kind of a technology-driven innovation.  A company where there’s feeds and speeds) and you know that your next ride with a product is going to be express and faster, regardless of whether anybody’s asking for that.  Intuit is really about solving problems that – and eliminating pains that people really have.  And so that kind of color how – it makes for a company that in a certain sense is humanized in a way that technology companies often are not.

Scott K. Wilder:    After consulting with another number of companies, I interact with the more I appreciate the Intuit approach.

Kris Halvorsen:     Yes.

Scott K. Wilder:    Two big trends that people talk about, one is globalization and one is kind of a disbursed work force.  I’m just curious based on, you know, based on your opinion, how those two trends impact all this, right, because you’re trying to build a culture and so does it translate well to different parts of the world?  You know, Intuit obviously is making a big push internationally.  And then, of course – and just to give it some context, I’ve had some interesting discussions about Agile and how Agile requires, you know, people face to face in some ways.  But that kind of contradicts what the disbursed workforce trend that’s happening.

Kris Halvorsen:     Yes, that’s an interesting question, you know.  On globalization, I was very lucky when I was at HP to start up the HP Labs in India.  And that was really the first IT industry research operation that was focused on creating solutions for the market that was, in this case, for India.  Initially we started out with a broader BRIC—Brazil, Russia, India and China—focus and realized, no, no, no – and this kind of speaks to your thing about being face to face, you really – you want to be close, much closer to the people in the markets that you’re solving for than you could be if you had the lab in India and you’re solving for oil-emerging economies.  They have some things in common, but you’re not going to hit the sweet spot in Brazil by having a research team in India.

So on the one hand, I’d say the – both of these things that are happening are important.  You want to try to operate on a global scale, but you want to maintain the benefits of local connections and insights.  Many things, however, can be compensated for by networks and the telecommunications, but I don’t think that the fundamental processes of understanding your environment and then building an effective, agile team that does things are close to being left unaffected by distance.

Scott K. Wilder:    True

Kris Halvorsen:     However, these things kind of self-assemble, though.  So if you have pods that work well together locally and depend on really rapid interaction, iteration, and face to face, you can assemble bigger teams where the communication latency between these pods may not be an issue.  So you can compose bigger teams that have, you know, cells in them that benefit from being close together, iterating rapidly, and in real time and in reality in vivo.

Scott K. Wilder:    Are there other trends that are top of mind for you that are impacting how the company innovates or, you know, in terms of impacting your job whether it’s short-term or long-term?

Kris Halvorsen:     Yes, I’d say it’s all about networks.

Scott K. Wilder:    Yes

Kris Halvorsen:     For the longest time, computers were tools to make you as an individual more effective at what you as an individual were doing.  You know, so whether that’s word processing or calculations and whether it’s, you know, creating your presentation.  And some support, of course, for communication through email, but it wasn’t a radical change.  That kind of network was outside of your primary existence.  It just happened to be more efficient than the U.S. Mail is to send it, the email.  But then in the last ten years, not only are computers networked, but you realize that if you – the most fascinating things can happen if you make the interactions between people richer or more effective.

So you go from making the individual to making the group either hang together or communicate better, grow.  And that’s a big paradigm shift when it comes to thinking about what kind of solutions can and should you create for people.

So we are very interested in not just making people more effective as they deal with their money tasks, whether they’re small businesses or they are individuals, but trying to also find ways in which would make the commercial interactions between business and their suppliers and their customers or the customer’s interaction with those favored businesses that they frequent, approaching it as a network of activity.  And I think that’s a fascinating shift.

Scott K. Wilder:    Can you give an example of how Intuit might do this, or another company?

Kris Halvorsen:     Yes, so an example of that is in payments.  We have interesting, I think, very innovative offering that we call the Intuit Payment Network, which is not – you know, traditionally Intuit would make it easy for you to keep track of what work you’ve done for somebody and then send them an invoice for it.  So now we’re saying, ‘Well, not only can I do that, but I can also as a side effect will make that invoice be something that the person who receives it can also pay easily online.’  And now we turn our systems into – they’re not a financial system like QuickBooks that just supports the individual small business owner, but also makes him or her able to connect with their customers and get the payment side of things – happen easily and over the internet, regardless of whether that other person is a user of one of our systems or just somebody with access to the internet.

And when you see – you know, it’s fascinating to see the viral growth that can emerge for something like that because when you send out an invoice, it’s also an invitation for people to join in your network and make your life easier and more predictable, I think, when it comes to, you know, taking care of the payments that you don’t have to go outside, write a check, send it in the mail, or go through some other mechanism to take care of it.

Scott K. Wilder:    What a great feature.  I love it.  Very, very nice.  Just a few more quick questions.  So how is your group or innovation scored or evaluated in the company?  How does the company determine it’s successful, which – you know, whether it’s from an ROI perspective or…

Kris Halvorsen:     Right.

Scott K. Wilder:    …the number of products out the door?

Kris Halvorsen:     Right, I think that is a – that’s a recurring challenge for, you know, organizations that either don’t themselves create the product but – or, you know, distribute or sell it, but somehow enable things to happen.  How do you account for that effectively?  And I think this is a place where I really feel we’ve had a breakthrough at Intuit.  Not that we saw how to do this initially and so readily, but now we are really aligned with the transformational change initiatives of the company.

And I mentioned earlier that, you know, we came up with these technology and innovation priorities like mobile use of contribution, collaboration, you know, data analytics and new interaction technologies.  And we had a breakthrough when we realized that we could piggyback on – or actually we had to kind of move through the change processes of the company in order to make this take hold and scale.

Well, the – you know, these things happen more than once.  They happen on a regular basis as the company takes on new challenges.  It has to change as they develop new skills and capabilities.  And these skills and capabilities, you have to have them take hold broadly and, therefore, you need a concerted effort.  And, you know, that’s what we talk about as transformational change.  You can’t deal with that – too much of that.  You only have one or two of these initiatives maybe every year or every other year.  But the way we have impact is by creating, you know, options for the company to choose between in terms of transformational change initiatives that it would embark on.  And then, you know, when one is selected that we are well-qualified to help amplify, we help design the whole process and we help implement it.

So we are good to the extent that these change initiatives are effective and you can measure change in terms of, you know, what are people now able to do, what’s the change in the product portfolio that the company is able to turn out and with what speed.  And, you know, that’s our measure of effectiveness, how we facilitate and accelerate change.  And not random change, but change that has been carefully selected and initiated and on a scale.

Scott K. Wilder:    Interesting, interesting.  So, you know, I always like to ask folks what they read, who they’re influenced by, you know, what websites they follow.  Maybe you can share a little bit with us in terms of how you gather information and learn about what people are talking about.

Kris Halvorsen:     Well, you know, a most effective way for me is conversation, being around, you know, people inside and outside that on their own initiative are creators of ideas, people who absorb ideas, and people who’ve expanded on ideas.  So I think that interaction and conversation is critical.  And, of course, you know I – you get a good portion of this from reading as well.  The – when it comes to kind of lightweight news and what’s kind of happening in the industry, I’m an avid podcast listener.  So, you know, podcasts like this one and then kind of more organized networks of them like This Week in Technology I really like.  Even though it is very lightweight, it’s a good way to figure out what’s happened in the last week.

I am interested in a certain number of thinkers when it comes to innovation as well, so like Steve Johnson’s, you know, Where Great Ideas Come From, is one example of that.  But I think probably practice is better than reading.

Scott K. Wilder:    Learing by doing, right?

Kris Halvorsen:     Yes, but then talking to people about what you are doing and what they’re doing, yes.

Scott K. Wilder:    Intuit’s Learn Teach Learn approach. I definitely agree with that. Is there anything that I didn’t bring up that kind of came to mind while you were speaking about where companies are going in terms of innovation, things that are changing, whether it’s the organization, whether it’s impact on companies’ products and technology?

Kris Halvorsen:     I think that we covered the things that I feel most passionately about being important.  I think this notion of making – when it comes to innovation, making it everybody’s business, is a real critical enabler in realizing that it’s not enough to say it’s your business.  You have to create the conditions for success, and that may be a more effective way for an innovation organization to contribute than for it to insist that it has to create all the breakthroughs themselves.

Scott K. Wilder:    Yes, no, I definitely agree with that.  We actually had a company we worked with where they created the innovation group.  And supposedly they were supposed – and it was kind of mid-level on the company.  And what happened was employees are not shy anymore, so they spoke up and said, “Wait, innovation happens everywhere.”

{Laughter}

Kris Halvorsen:     Right, exactly, yes.  “And so do help us with that.”

Scott K. Wilder:    Say that again?

Kris Halvorsen:     So – and they say it happens everywhere and they ask for help.

Scott K. Wilder:    Exactly.

Kris Halvorsen:     For them to be more effective – and, you know, people are inquisitive, talented, and interested in learning, though.  If you can improve 1,000 or 8,000 or 100,000 peoples’ ability to think creatively and iterate rapidly so they can get the right feedback that they need in order to come with an improved solution that will succeed, you’re much more likely to have impact than if you depend on you and your small team to do the same, enable millions rather than depending on a few – there’s probably a golden rule there.

Scott K. Wilder:    No, exactly, and you guys have done an incredible job in doing that.  Kris, I really want to thank you for your time today.  This has been really, really insightful.

Kris Halvorsen:     My pleasure.

Scott K. Wilder:    This is Scott Wilder.  I’ve been talking to Kris Halvorsen, Chief Innovation Officer at Intuit.  Kris, again, thank you for your time, and I will follow-up with you.

Kris Halvorsen:     Great, my pleasure.

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