The Best New Ideas show "Evidence of Tinkering"

A conversation with Guido Jouret, CTO of Emerging Markets Technology Group (EMTG), Cisco Systems, Inc.
By Jo Grogan
Guido Jouret believes that innovative ideas with the greatest chance of success show "evidence of tinkering," that is, "people are trying to use whatever means they have at hand, barbed wire, bubble gum, sticky tape," to make the idea work.

Those are the ideas that are worth the investment of time and money necessary to bring it to market, and those are the ideas that get his attention.

As CTO of the Emerging Markets Technology Group at Cisco, Jouret is always seeking the next big thing, and uses a variety of methods for finding it. He is actively working towards new technology development, and Cisco is investing in its company's future today in order to stay ahead of the game. I recently caught up with Jouret to discuss innovation.

Jo Grogan (JG): In light of today’s global economic climate, are you seeing any changes in innovation and the way companies innovate? What role do you believe innovation plays or should play in this climate? How is this role reflected at Cisco?

Guido Jouret, CiscoGuido Jouret: Enduring differentiation depends on a company's ability innovate. The only way to stay ahead is to keep running. At Cisco, especially, during the tech meltdown in 2001, in the consumer markets, it took courage to continue investing. It paid off for us. Think of it this way – If a recession lasts twelve to eighteen months, the best way through the recession is investing in new products and services. It takes a while to bring new ideas to market. You have to be there when the demand kicks up again. Cisco has a $27 billion cash pile, and today, cash is king.

JG: What is the most difficult problem you/your team have solved? Were there any surprises along the way? If so, what were they and what was the result?

Guido Jouret: The most interesting problem has been in how you make innovation a process. We have been pretty successful here in making innovation measurable and profitable. Most people think you get lucky. Look at IBM and GE. They nurtured innovation and overcame a series of handicaps along the way. At Cisco, our goal is to have innovation at the heart of what we do, and it is. Our corporate culture supports it – it is what we do.

JG: What is the most exciting innovation you or your teams were involved in developing? What factors made or make it so exciting?

Guido Jouret: The most visible is in our telepresence. You've seen our ads on TV with children across the globe communicating with others across time and distance. It's not quite the holodex from Star Trek, but it's close.

We have at least four other revolutionary emerging technologies that will be coming to market this coming summer. That's exciting.

JG: How and where do you find your new innovative ideas? Do you use any ideation/thinking/problem solving/creativity tools/innovation software?

Guido Jouret: If you do the math, Venture Capitalists only invest in two percent of ideas they come across, so you have to have an incredible funnel for new ideas and research and development. The best ideas come from your customers and partners – from the edge where you interact.

We have something called the "I-Zone" where all 65,000 employees can participate in fleshing out new ideas. My team and I provide feedback on the ideas, as do other executives and teams throughout the company.

We also have an "I-Prize." The I-Prize is where American Idol meets The Apprentice, with a Crowdsourcing twist. It is a contest where for two months; people around the world post their ideas. We are cautious in investing in something too early or too late in the process, we want to hit it just right. We look for "evidence of tinkering." The question is: are people trying to use whatever means they have at hand, whether it is barbed wire, bubble gum, sticky tape, whatever. In the military, soldiers are very innovative and are taping things in place on Humvees, jury rigging them as an intermediate step. These are the types of things we look for – where the users are trying to solve a problem, and we look at it and say, we can make their lives better and easier.

When we evaluate ideas, we have three basic questions that have to be satisfied:
  1. Is there enough of a market for the idea?

  2. Do we have disruption to break in and reshuffle the economic deck and redistribute the value chain to our benefit?

  3. What is the sustainable differentiation? Enduring differentiation is the key.There are a number of ways we have historically built our intellectual property for developing good hardware and software – we want to tap into the key strengths of our company and maintain our brand integrity.

    (author's note – for a good description of the I-Prize, the process, the contest, and this year's winners, see Bill Ives' article at the FastForward Blog.)

    JG: What innovation methodologies, theories, and training do you use at Cisco (e.g. Six Sigma, Edward DeBono)?

    Guido Jouret: We engineer for operational excellence, and of course Six Sigma figures in, along with Web 2.0 as a collaborative method. You need creative ambiguity – it is absolutely necessary to the ideation process.

    We also have an Executive Training Program. It is differentiated in that it has grown from the old Harvard Business Review and discussion model and idle speculation to a hands-on team approach from idea to project. Each team starts with an embryonic business plan. They have two months to develop the idea, at the end of which they have 90 minutes to pitch it – how to improve and change the business plan, how we enter the market, what it will cost, what we can gain. The teams are diverse, in terms of expertise, background, geography, and company function. The business plans they are working from are those in which we have an interest. We get three things from this program:
    1. We have a different set of eyes looking at opportunities.

    2. We have an educated project team within the company, along with energized Senior Vice Presidents and funding.

    3. We get a great pool of highly motivated people to be part of a team to bring a product to market.

    These live-fire exercises lead to concrete outcomes.

    JG: How is social networking contributing to innovation at Cisco?

    Guido Jouret: We believe in the collaborative workspace. We bought WebEx last year, we use instant messaging, facebook, and facebook-like areas. We are coming up with new ideas every day through these methods.

    JG: What books, articles, blogs, or other media on the topic of innovation have you read? Are there any that you recommend to employees of Cisco?

    Guido Jouret: I keep up with Harvard Business Review case studies, Geoffrey Moore's "Crossing the Chasm," Tom Friedman's "The World is Flat," Clayton Christenson's work on commoditization and the struggle to innovate. I try to keep it broad.

    What I've learned is that organizations can become self-optimizing and tend to squash what doesn't fit the core business, attacking it as if it were a foreign agent. It is difficult to incubate on the side. The best and brightest are not attracted to skunkworks – their focus and attention is on new markets. You need a dedicated team focused on innovation, like we have here at Cisco, Incubation is our core – it's the only thing we do. We help overcome obstacles. We have a term – "The Hunt for Bad News." One of the key elements of innovation here is answer a few questions. Is it customer-led or customer-driven? Is it incremental innovation or is it disruptive?

    To be fully successful, it needs to be disruptive. Be customer-focused, but don't expect the customer to come up with the answer. There's a famous quote from Henry Ford, regarding the first car he built. "If I'd asked my customers what they wanted, they would have said a faster horse." So when we're looking for something new, we ask our customer the question "what's your pain, where is your pain." It's then up to us to try to think of a way to get rid of the pain.

    JG: Are you familiar with virtual collaborative innovation communities such as IdeaConnection, and other networks that bring together experts, facilitators, and product developers for confidential collaborative creation? What has been your experience with this type of collaboration? What are the barriers to using such services? How might they be overcome?

    Guido Jouret: Yes. We have our I-Zone, as I mentioned earlier, which is internal for the use of our employees, and the I-Prize, which is external. We also try to get information from venture capitalists and academics as a part of our information gathering.

    Collaborative design here is more contextualized. For example, the way Fraunhofer Institute's MP3 audio codec was done – contextualized outsourcing. We tend to leverage something that exists.

    In principle, we are open to confidential collaborative creation, but in practice, we send our own entrepreneurs out. For example, for two months we sent a team out to interviewed 50 major corporations. They spent many hours gaining excellent feedback from our customers and potential customers. We are very hands-on and customer oriented. We want our engineers and developers close to the user, so the solutions are real to all of them.

    At the moment there is not a lot to gain for us to use such services as the confidential collaborative workspace. We want our engineers to hear our customer's pain and develop our solutions internally without an intermediary.

    JG: Do you have any other thoughts you would like to share about innovation?

    Guido Jouret: Yes. Internally, we combine Web 2.0, social networking, and open innovation models. I believe we need the wisdom of crowds and Wikinomics, but you can't assume spontaneous order out of chaos.

    Crowdsourcing works well in some instances, and there are some success stories out there – Innocentive and Netflix come to mind.

    The best exercises are when an operation is externalized, but self-contained, with a well-defined and testable set of criteria.

    Control doesn't necessarily yield clear priorities. Crowdsourcing models are great for assigning value, but in a prediction market, it can fail. There is a cautionary note here. Crowdsourcing can fall prey to people gaming the system – it's one reason the Caucus model in politics yields more polarized opinions than the whole. When developing products, we are looking for what the majority wants, not necessarily the more vocal minorities who self-select.

    When you have a list of ideas that are wide and diverse, voting on new business without questioning the basis for judgment can be disastrous, especially when there are no consequences to those who are judging. With the I-Prize, we ask open-ended questions such as, "what type of new business should we be in?"

    When you're considering a new idea, ask the originator "how much of your 401K are you willing to bet on being right?" You'll get a more high quality result when you ask these open-ended questions and when there is something at stake for all the parties.

    Based in San Jose, California, Guido Jouret is the Chief Technology Officer (CTO) of Cisco’s Emerging Markets Technology Group (EMTG), which is responsible for incubating Cisco’s future billion-dollar businesses. In this role, he evaluates new product and market opportunities, ensures architectural tie-in between the emerging technologies and Cisco’s core products, and is responsible for developing and communicating Cisco’s thought leadership on new technologies.

    Guido has a B.Sc. degree in Electrical Engineering from Worcester Polytechnic Institute (MA, USA) and a DIC and PhD in Computing from Imperial College (UK).

    Feedback Welcome: If you would like to comment on the above article, please feel free to contact Jo Grogan. If you would like to suggest other innovation decision makers for me to interview, please just let me know.

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