Story:
Is managed innovation an oxymoron?

By Kumar Sachidanandam - Senior Director - Innovation Group at Cognizant Technology Solutions Limited

Co-Authored By Sukumar Rajagopal, Bhaskar V, Ramaseshan Ramachandran, G, Kumudha, N.ELILANBAN

January 7, 2013 at 4:24am

Summary

Background:

Why is innovation elusive and hard? Organizations invest big money chasing ‘Breakthrough Innovations.’ According to 2012 Global Innovation Study by Booz & Co., global 1000 enterprises have spent a whopping $0.60 trillion in the pursuit of innovation just in 2011. It is a popular belief that innovation is about finding the next big thing and it is the privilege of an elite few. With less than 5% of any large organization getting approvals and funding to pursue breakthrough innovations while the remaining 95% focus on ‘Business As Usual’, innovation efforts may become a dartboard game of ‘Hit-or-Miss’.

However, at Cognizant (NADAQ: CTSH), our problem was slightly different. Entrepreneurship was always ingrained into our DNA since its inception as a technology unit of Dun & Bradstreet in 1994. The testimony of our innovative spirit can be seen in the way Cognizant has successfully navigated the major industry transitions - from Y2K to e-business enabler, from e-business to full spectrum IT/ITeS consulting and Business Process Service provider. Recently, our early leadership in the currently emerging SMAC arena shows that our Innovation DNA is intact.

Innovation Vision

Six years ago when we started the Cognizant Innovation Group, the challenge was channeling and preserving this DNA as our employee count swelled rapidly year over year due to the industry leading growth.

Could Innovation be managed differently to enable this type of channeling while growing fast? How do we make sure everyone in the organization innovates when so many people are new to the Cognizant way of working? Is there a structured way to energize and enable everyone to innovate? Could employees innovate inside-the-box? Could that lead to the next big thing? Could the outcome of such Innovations be big enough? Would innovations from the ground-up make a difference? Even if the value of innovation impact is small, could the cumulative rewards be big? Could the concept of “Long Tail” be applied in Innovation too?

This is an attempt at chronicling a journey that demonstrates the passion and perseverance of our associates over 6 long years and still going strong - the journey of Managed Innovation at Cognizant.

Summary:

“Managed Innovation” is a framework for sustainable cultural change, a set of processes, a collection of easy to apply innovation tools, a holistic measurement mechanism and an integrated innovation management infrastructure to enable every employee in the organization to participate in the innovation journey and harness the innovative spirit of employees. Managed Innovation is integrated into the service delivery model applicable for a large IT services organization like Cognizant.

The premise is that such a framework would produce several measurable and small innovations and the cumulative impact would be bigger than its parts as in “long tail”. In the long run, a sustained Managed Innovation program will also improve the “creative confidence” of the organization.

With over 6000 trained idea champions / innovation champions driving the innovation process across the organization, Cognizant’s Managed Innovation framework has evolved over the past six years, helping our customers and Cognizant to reap the benefits of a structured approach to innovation. In these years, Cognizant Innovation Group has gained valuable lessons and insights on the art and science of Managing Innovation at scale.

In FY12 alone, Cognizant’s Managed Innovation framework has empowered 55,383 out of 150,000 employees to generate 134,242 ideas, implement 19,172 innovations for nearly 400 clients, amounting to a total value of about $548 million including both tangible and intangible savings based on our estimates.

Context

In 2007, Cognizant’s Board of Directors, after reading the future economic instabilities accurately, felt that the best way to help our customers and to retain the entrepreneurial DNA over a long period would be to invest in channeling the creative energy towards innovation efforts.

A small team of leaders from diverse backgrounds across the company was assembled. This core team christened as the “Cognizant Innovation Group” was charged with articulating a right innovation model to help Cognizant sustain its entrepreneurship DNA and help its customers grow using innovation as a lever.

Seeking and Searching:

Entrepreneurship was always ingrained into our DNA and Cognizant had designated teams for focused innovation. There were multiple “Centers of Excellence” and “Solution Groups” embedded within every business unit. We started engaging with these internal innovation hubs and other such specialized groups whose mandate was to innovate. However much we tried, we struggled to come up with a systematic method.

In parallel, we also closely engaged with over 30 client-based projects. Given our service-centric business model and customer centric approach, our leaders and employees were dedicated to building deep, sustainable and long-term client relationships based on collaboration, customization and quality of delivery. They always met and often exceeded customer’s expectations and the clients were very happy with the efficiency and the value of the delivery.

As we interacted more with the business unit leaders, project directors and managers, another insight emerged. Every one of them was supportive of innovation and they wanted to help their teams innovate. But they had other burning issues such as client interactions, maintaining SLAs, project pressures and other things like revenue and profitability to focus on.

With reference to our customers, every client executive was aware of Cognizant’s industry-leading growth and our superior domain capabilities. They were appreciative of Cognizant’s capabilities to exceed their expectations. Clients had the complete knowledge of what was being delivered to them through the defined SLAs and extensive dashboards.

In summary, we had customer centricity as a core value, we were meeting and beating SLAs and leaders were supportive of innovation. It looked as though everything was fine.

At the same time, something else resonated consistently in some client CxO visits and in their conversations. This was very palpable with the clients who have had long term engagements with Cognizant. Few of the clients’ CxOs felt something was missing and some of them even hinted out the missing piece. It was also observed that certain accounts were not affected by these and we felt that those accounts must have been doing something different.

Triggers

The insights:

It didn’t take a long time for the innovation group to realize some of the best run accounts figured out that the best way to deliver innovation in a service based business model was to enable employees innovate from the insights they gained. The needed attribute was not only the ability to execute what was told within the defined SLAs, but also to ask questions, challenge the assumptions and the ability to propose new ideas based on the insights gained from working on clients’ systems and processes. All these had to be done without taking the eye off current priorities and SLAs.

The need was to put in place a transparent mechanism to enable, monitor, measure and report anything beyond SLAs. This mechanism had to be institutionalized across all the accounts.

Big Questions:

Back in 2008, with 100s of clients and over 60000 employees and with ambitious growth, the leadership team was struggling to arrive at a suitable approach. There were more questions than answers lingering in the minds of the Cognizant Innovation Group leadership team, which had little experience in managing innovation of this scale.

Where to begin? - Start the innovation drive from the Top-Down or encourage, excite Bottom-Up force to innovate
Where to innovate? - Outside-the-Box or Inside-the-Box
How to spread the message of innovation? – Blast impersonal messages to everyone in the organization or create a multi-level network and spread the message with a personal touch;
How to energize a growing organization with 1000s of employees to continue innovate? – Mandate everyone to Innovate (push model) or encourage people to realize their potential (pull model);
How to measure the innovation impact? – Go after the big impact innovations or take into account even the small innovations with tiny impact;
What to measure and how to communicate the progress? – Send flashy mails to everyone in the organization or use the power of informal networks;
What kind of rewards and recognitions to provide? - Worship a few heroes or reward behavioral changes;
What kind of people, systems, process and structures required to support this effort? – Build a large centralized innovation organization or go for distributed innovation teams using a leveraged model;
What might be the cost to the organization? – Ask for big budgets given that everyone is spending big dollars or experiment using a small team with a small budget?

Big Qustions

The rest of the story discusses and elaborates how the Cognizant Innovation Group addressed these questions, challenges faced, results captured, insights gained and the lessons learnt from our journey.

Key Innovations & Timeline

Circa 2008:

Not having managed innovation efforts of this scale was a blessing in disguise for the innovation team. It allowed us to look at every challenge with lively curiously and an open mind. It made us receptive to new ideas and to try them without any fear.

One of the very first artifacts that we referred to was NASSCOM-BCG Innovation Report 2007 "Unleashing the Innovative Power of Indian IT-ITES Industry", which outlined the importance of innovation, need for innovation, state of innovation, gaps and recommendations.

Given the client-centric culture of Cognizant, we closely engaged with client accounts on innovation. We believed that engaging with client directors, delivery directors and delivery managers of top 30 accounts would help us in identifying the needs and more insights on innovation.

We felt employees need a common vocabulary on innovation. We described the term innovation as "people creating value by implementing new ideas” and added the concepts of ideators, connectors and executors. We went about explaining the meaning of innovation, the need for innovation, innovation process and innovation funnel, etc., through multiple one-on-one meetings and roadshows across locations.

OurFirstDefinition

However, this further complicated the situation as everyone started questioning the very definition of innovation we had come up with. We kept refining and redefining the definition. It took some time for us to realize that everyone had their own definition of innovation depending on their role, the level and the exposure they had on innovation. Please read the lessons learnt section “Power of Perspectives” and “Power of Hierarchies” for more insights on how we addressed this.

In the meantime, we also started a few experiments such as engaging customer accounts on innovation, training innovation champions on innovation tools and techniques, deploying an “Always On” idea management system, setting up the “Concept Lab”, a sandbox and fail-safe environment for rapid experimentation, researching on innovation tools and techniques, managing and on democratizing innovation.

We engaged many industry experts on innovation, discussed various innovation models and participated in external innovation forums to gain more perspectives. The team attended many training sessions conducted by external innovation experts. We also organized innovation workshops for our internal innovation champions. Those external experts were really good and every example they took or taught was from product based innovations and business model innovations.

In the meantime, we evaluated many Idea Management Systems (IMS) and finalized a specific IMS product that could be hosted in-house in our data center. We made few customizations and our own “Idea Management System” was ready.

The Concept Lab, a “sandbox environment” for experimentation was also getting ready. Their motto was “Don’t reinvent the wheel, but pick few interesting concepts and build on them to make potential impact for our customers’ business.” To reduce the risk of failure and to mitigate mental blocks that might arise from ‘experienced hands’, they engaged student interns right out of colleges. They were building capabilities and concepts around Text Mining, Faceted Browsing and Robotics, to name a few.

Circa 2008: The global economy was undergoing a huge turmoil. Amidst the worldwide financial collapse, some of our biggest customers in the Banking and Financial Services domain were the hardest hit. The fallout was felt everywhere; the entire business ecosystem and its supply chain were having difficulty in sustaining their core. Ordinary consumers were tightening their purse strings leading to butterfly effects in the automobile, retail, healthcare and insurance industries. Some clients were downsizing their commitments and some called for contract / price re-negotiations.

Funding was hard to come by and we were exploring optimal way of creating a sustainable innovation culture and a thriving innovation ecosystem. We were realizing the importance of taking a contrarian approach to firing up the creativity in each and every one of the individuals and use the power of informal networks. That is when we came across two interesting HBR articles that set our spirits high and put us on the right path.

One was “Teaming Up to Crack Innovation and Enterprise Integration” which, recommended setting up a “Distributed Innovation Group” which seemed to unravel the mystery we were seeking. The other was the story of “Paul Revere” from HBR Article on “How to build your Network?” and decided to create a network of connected people as information brokers around innovation for the cause of “Making everyone believe that they are creative and innovative”.

As we began to focus on spreading innovation message and creating awareness amongst employees, our headcount swelled to 60,000. This brought more challenges than before. How will spread the innovation message o 60,000 employees across the globe? How many trainers will be needed? How many training classes will be required?

We created a simple script for evangelizing innovation under “Innovation Igniters”. The core message was “Everyone is creative in their own way and every one of us is a potential innovator”.

We embedded messages such as don't assume, ask questions, think different, look for better ways, recognize opportunities, take risks, and Collaborate. We also had few games and activities to illustrate why people normally don’t innovate and what stops us from innovating. The program always ended with a famous quote of Tom Peters’ - “Impossibilities often aren't hard; Test fast, fail fast, adjust fast.”

The team followed the Train-The-Trainer model to create Innovation Igniters and make them ignite the spirit of innovation across the organization. It was like a stand-up comedy; there were no PowerPoint presentations; no projectors; no classrooms and no expertise on innovation required. Anyone could become an innovation Igniter. All they had to do was to walk into a work area, draw people’s attention and enact the script.

Igniter Session

The outcomes were very encouraging and by the end of 2009, the Innovation Group had seeded over 2500 Innovation Igniters across all of Cognizant’s India locations and each one of these igniters was spreading the message of innovation. Together, we reached out to thousands of employees through these floor-talks and generated insightful information on the enablers and blockers of innovation.

Today, this is an ongoing program and each year the Innovation Igniter script is improved with more information and different activities. In the year 2012 alone, a total of 379 igniter sessions were conducted across the organization covering over 10,000 associates. One inspired Innovation Igniter from our BFS practice had single handedly conducted over 100 such sessions covering over 3500 individuals.

Reports were collected on a periodic basis and experiences were shared using internal blogs. We started seeing patterns and valuable insights emerged. These insights helped us to tweak our innovation approach and define rewards and recognition programs.

BarriersToInnovation

These igniter sessions inspired everyone. It was a 60-90 minute fun-filled, informative and inspiring session for the audience. The next challenge was how might we inspire everyone to do something about innovation?

Inspired by stories and examples from industry leaders like Toyota, 3M and Intuit, we were certain that the key to building creative confidence of our associates had to be through Kaizen or Continuous Improvement. We wanted to encourage them to “Minnovate” rather than going after risky and hard-to-get breakthrough innovations.

The missing piece was “innovating in a services-based business model”, where everything revolves around meeting and beating well defined SLAs and delighting customers by exceeding their demands. The BIG vision of enabling everyone to innovate in an IT services- based project delivery model was still a distant dream.

We decided to try a different approach by equipping employees with the right set of tools suited for our services business instead of complex, hard to grasp innovation frameworks. This led to the development of the Innovation Capability Building Program - ICBP. These capability programs were designed as 2-day intensive, activity-based workshops covering various aspects of the Managed Innovation process.

ICBPAgenda

Those who attended these sessions were called as “Idea Champions / Innovation Champions” and they were provided with continuous mentoring by the Innovation Group and peer-coaching by other champions. Along with their primary role, they also had additional responsibility to be innovators, facilitators of innovation, evangelize innovation, identify problems, facilitate ideation sessions, enable others to innovate and manage innovation within their accounts.

Soon another challenge arose. Given the lack of any industry standard training, certification and any defined career path for Managing Innovation, how can we make sure these trained innovation / idea champions are continuously engaged?

The innovation Group devised a certification program to recognize these champions who have been fostering the culture of innovation and successfully managing innovation within their customer accounts as Cognizant Certified Idea Champions and Cognizant Certified Innovation Champions. A set of simple guidelines, transparent metrics, nomination from their respective managers and a final review by the innovation group were the qualifying criteria to get certified.

We have been certifying qualified individuals for the past five years. Over the years, we have also instituted awards and rewards like “Best Idea Champion of the Year” and “Best Innovation Champion of the Year” and they have become coveted awards within the innovation community and the organization.

Over the past five years we have trained over 6000 idea champions. Of these trained idea champions, over 1500 champions were conferred as Certified Idea Champions and about 400 as certified innovation champions.

Certification

We had regular calls and meetings with these innovation / idea champions to gain further insights. One such meeting threw light on a very interesting concept that became the best innovation management tool we ever adopted.

The innovation champion handling one of our large consumer goods customers shared his story on how he had instituted a bottom-up innovation culture in his project long before the innovation group was formed and how he used a simple dashboard to keep track of all the innovation work done within all the projects at the Consumer Goods practice level.

Inspired by this concept and Global Innovation Index, we researched on measurement for innovation and developed Cognizant Innovation Index. This index is essentially a balanced scorecard to keep track of all the elements of Managed Innovation within every group in the organization.

For example, aggregation of all Project Innovation Indices becomes the Account Innovation Index and further aggregation of them makes it the BU Innovation Index and further aggregation leads to the Cognizant Innovation Index. Each month, the index is computed and circulated to the innovation community across the organization.

InnovationIndex

In the year 2008, the Innovation Index was mostly piloted within Consumer Goods practice accounts. In the year 2009 it was broad-based and increased to 50 accounts in the Retail, Hospitality, Manufacturing and Logistics and Consumer Goods business units and 25 accounts spread across few other BUs. Starting 2010, it was measured across all business units including Cognizant’s corporate functions and the results were encouraging.

The next challenge was how to use the Innovation Index as a lever to produce behavioral change and improve our innovativeness?

Innovation is not just one-off activity but a continuous behavioral change that needs constant triggers. Every year, based on the insights, index parameters and the percentage weightage are also tweaked to achieve the desired behavior. The Innovation Index is also reset to Zero, at the beginning of each year, forcing every team to rethink about their innovation strategy from the ground-up.

For example, in 2008 and 2009, the focus was on idea generation, idea proposal and idea execution. The very first version of index in 2009 had 25 different parameters to measure. But, the current index in 2012 has just 10 parameters. From year 2010 onwards, $ impact was added as one of the key measures. From the year 2010, weightage for innovation outcome in $ terms was considerably increased.

Circa 2010: As our idea champions and innovations champions were out in the field, they were generating interesting and useful insights. One of them is around Innovation Contexts.

Cognizant had one of the best integrated Delivery Management and Collaboration Systems called as Cognizant 2.0. It enabled us to globalize and virtualize delivery to ensure timely and high-quality services are delivered consistently to our customers. Most of the client specific tasks, delivery process, and knowledge management including SLA tracking were already part of it.

Our innovation process begins with a problem or an innovation challenge. These challenges are launched as innovation campaigns in the idea management system and employees are encouraged to contribute ideas. Most of the innovation challenges have come from client related contexts.

InnovationProcess

At the same time, clients have started to demand innovation as a part of service delivery. The issue was that delivery management and innovation management systems were two separate, disconnected entities. The Innovation Group had heavily invested into a third-party standalone idea management system that was not integrated into our delivery excellence platform.

The next challenge was how to enable delivering innovation as part of our delivery excellence commitments?

After a lot of internal deliberations, it was decided that innovation management system would be integrated into the delivery management platform Cognizant 2.0 building on its core abilities and especially leveraging the enterprise collaboration and social media capabilities. It would support the end-to-end innovation process from innovation campaigns, idea generation, idea rating, ranking, idea selection, idea proposal and all the way up to idea implementation and impact tracking. Today, integrated innovation management system is a core part of delivery system.

Here is a representation of how this platform helped a project team to innovate for their healthcare client. They took a problem, generated 63 ideas, picked 4 best ideas, merged them into a proposal, got it approved, built a proof of concept, implemented and evangelized.

InnovationCaseStudy

The story below is an example of how once we created a thriving innovation ecosystem we didn’t have to worry for new ideas even for complex management topic as “Innovating Innovation”.

What is in it for me? - WIIFM is a powerful acronym that everyone in the change management business should know to tackle. This insight came from a set of idea champions during the Cognizant Innovation Summit 2010. They mooted an idea of Innovation Bank or iBank.

iBank is focused on encouraging employees to get credit for their individual contribution towards implemented innovations. The value of the innovations in dollars could be deposited as virtual money into the innovator’s virtual bank account. iBank provided the capability for any innovator to track the innovation impact created by him or her. It also builds peer pressure amongst employees creating a positive change management towards innovation and encourages reporting of innovations however small they might be. We also created annual awards for the top 3 employees with highest iBank credit.

Innovations Galore: As we engaged the wider organization on the subject of innovation, we saw that passionate people were already innovating even without an organization mandate or structure or rewards or recognitions. These were mostly need-based such as outcomes of daily frustrations, unreasonable client demands and market dynamics such as competitive pressures.

The challenge we faced was how can we unearth these innovations from across the organization and spotlight them?

The National Association of Software and Services Companies (NASSCOM) the premier organization which sets the tone for public policy for Indian software industry conducts annual event to identify top innovations.

Starting 2009, we took this as an opportunity to execute a companywide innovation awards competition as a precursor to NASSCOM innovation awards. A structured process was instituted for collecting nominations from across the company under three categories — Business, Process and Technology. These nominations are then put through multiple rounds of internal reviews and the top five in each category are chosen.. These Top-5 candidates have to present their innovations in front of a grand jury comprising of executives at the Senior Vice President level and eminent external judges drawn from the academia.

This process paved way for Cognizant Innovation Awards, a set of prestigious organization level awards. What started as an Innovation Awards in 2009 with over 250 nominations has grown to encompasses many more categories and certifications with close to 2000 nominations and cash awards totaling to more than USD 25000 in 2012.

InnovationAwards

The next challenge was how can we evangelize best innovations for adoption in a globalized organization?

While it is a great feeling to go through tough competition and win awards, the innovators get real recognition for their hard work only when their innovations are adopted and the benefits are reaped. In addition, adoption enables a vicious feedback cycle that triggers the next wave of incremental or breakthrough ideas.

This lead to another initiative called Cognizant Innovation Journal. In the year 2008, we published innovations from the Concept Lab. From 2009 onwards, we started publishing top innovations from various business units. Every year, this journal goes through metamorphosis with the changing times. What started as a research publication as a hard bound volume in 2008, turned into a compendium of innovation stories in a story telling format published in the Apple iBook format in 2012. Today, our Innovation Journal is more about best innovation stories from Cognizant and how we innovate and made available to everyone in the organization and our customers.

InnovationJournal

The next challenge was, given the distributed, multi-locational, global nature of the organization, how can we excite, engage, educate and enable networking of people to trigger innovative ideas?

Innovations happen at information crossroads. They happen when people, thoughts, ideas and solutions collide and converge. This is possible only when people get a chance to connect with others to share their ideas, their innovations, pains and frustrations faced by customers and learn from each other.

What started as an experiment at our Retail business unit in November 2008 is today an annual affair across all locations across the globe. Retail practice held the first innovation fair for five consecutive days showcasing 23 innovations touching close to 2000 employees within the practice. We christened it as Innovation Fairs - a platform for crosspollination.

As in any traditional fairs, there is something for everybody. Innovation Fairs aim to highlight the importance of innovation, make the employees experience various traits, mindsets, tools and techniques of Innovation and enable people to practice innovation by way of participation in multitude of creative activities. These fairs are owned and executed by the local Innovation Community with the support of executive leaders in each of our company’s locations across the globe.

Circa January 2010: This was a defining year. Many of our initiatives started yielding results.

The first and the most important was the Concept Lab. Concept Lab was setup with the mantra of “Leverage mature research concepts to innovatively solve business problems”. To identify business problems, we employ several methods which include viewing the pains of the business from various frames of references, ethnographical studies, outside-in, inside-out, to name a few.

They undertook repeated rounds of discussions with users, developers, leaders and seek customers’ views on the problems. Once the problem was clearly defined and understood, they employed student interns, who are required to acquire industrial experience during their studies, to search for suitable research concepts. These students became integral part of identifying and testing the fitment of research concepts and our innovation journey. While students acquired their expertise in niche research areas and understood the concept of problem solving in the business context, the repertoire of tested and validated concepts grew for Concept Lab.

This unique approach of keeping the business problem at the center of the equation rather than technology or research, gave enough freedom to analyze problems from various frames of references – customers, Cognizant, users and developers; to co-create with academia and leverage their vast experience in R&D in various areas rather than duplicating them internally at a huge cost; to develop a sandbox environment for rapid prototype creation and foray into various disciplines of research which includes text mining, robotics, semantic web, financial information processing, big data and text analytics, autonomous computing, augmented reality, and hardware design.

Many of the innovations from this lab have gone live for internal and customer usage. For example, a recent innovative solution arrested several thousand pounds of revenue leakage for a manufacturing customer during its first three months of operation alone and it continues to save more for the customer.

The second was the strategy to include Cognizant’s own internal corporate functions into the managed innovation ambit. With the innovation initiatives delivering impact to clients, and Cognizant growing fast, it was just a matter of time to apply managed innovation methodologies to support scaling Cognizant’s corporate functions to attain organization’s long term ambitions. All of Cognizant’s corporate functions became part of this and Managed Innovation has delivered tremendous impact for Cognizant. By end of year 2012, these functions together have generated over 15000 ideas, implemented close to 1000 innovations resulting in $ 150 million innovation impact.

The third was even more interesting. Any reward or recognition is not special if given in private. Awards become special neither by the size of the cash award nor by the physical size of the memento. What makes the award special is the forum in which it is given, the person bestowing the award and the audience at the award ceremony. This insight came from the very first innovation awards in December 2009. Cognizant organizes the Senior Managers’ Meet periodically. In these business meetings, Cognizant’s CxO level leaders give business updates and interact with the managers in the true Cognizant spirit of openness and transparency.

When we chose to give the first innovation awards during this meeting, the awards were given as part of other recognitions and the award recipients expressed a need for an exclusive platform that would make the innovation awards even more special. This mooted the idea of organizing an annual innovators’ meet which eventually became Cognizant Innovation Summit.

Cognizant Innovation Summit is an annual forum for innovators from across Cognizant to congregate, learn from each other, share ideas, insights and trends, and network with fellow innovators. Innovation Summits are one of Cognziant’s largest internal events by importance, the executive patronage, audience participation and by the sheer size. Each year, the Innovation Summit is organized around a theme.

InnovationSummit1 Innovation Summit is a by-invite only program for the innovation community hosted by Cognizant Innovation Group. The attendees are Innovators who have innovated, created solutions and won awards, Innovation Igniters who ignited everyone’s mind on creativity and innovation, Idea Champions who facilitated idea generation, measured impact etc., Innovation Champions who manage the innovation process, Innovation leaders who demand and fund innovation. It is also a platform for recognizing and rewarding our best innovations, innovators and catalysts for their work on innovation across the company.

InnovationSummit2

Circa June 2012: Next New Challenges for Managed Innovation: The innovation journey is a continuum and it never stops. With the progress made over the years, today, every BU leader is proud of their team’s achievements; especially the volume and the impact of bottom-up innovations. Leaders are seeing the creative confidence of the teams improve manifold. Now, business leaders are challenging the innovation community to come up with bigger innovations.

As we plan for the next phase of innovation journey, the question that is lingering in our mind is how we can find a way to identify ‘Seemingly Impossible Problems’ and how we can help execute “high risk / highly uncertain innovation projects” in a large scale across the organization.

Challenges & Solutions

The journey wasn’t an easy one. It was fraught with challenges. Here are some of the challenges faced by us.

Management Challenge 1: Power of Perspectives:

In our experience, there are multiple perspectives to innovation outcomes, each coming from the priorities of executive stakeholders who run the business. For example, in an organization, CEO, COO and CFO could have their own perspectives and innovation efforts have to heed to these needs.

We see such perspectives with leaders across our organization. Many BU leaders and profit-center heads sometimes wear all the above three hats at the same time. For example, in our IT services business, innovation priorities of different stakeholders.

The big management challenge was, how can we create innovation programs that meet each of these stakeholder perspectives and needs?

Our Tactic: At a fundamental level, Managed Innovation is focused on improving the “creative confidence” of target group in stages over a period of time in a structured way. We have also seen the cumulative impact of such innovations. The best way to handle such situations is to take the BU in question and plot their innovation portfolio. Based on the gaps, we provide remedial recommendations.

InnovationMaturity

Management Challenge 2: Power of Hierarchies:

As an organization scales to an enterprise, hierarchies are built to provide management direction for seamless execution and to reduce risks with each layer having certain skills and priorities. However, this introduces a challenge for managing innovation as each layer in the hierarchy is designed to focus on tactical, operational and strategic aspects of running a business.

The specific management challenge was how can we create innovation programs that meet needs of these hierarchies?

Our Tactic: While innovation does not follow hierarchies and anyone could come up with ideas, managing innovation certainly needs different skills at different levels. We have designed our Managed Innovation program to address these needs at different levels. We also came up with specific titles and specific responsibilities for each of these layers and instituted organization level training, measurements, rewards and recognition. Power of Hierarchies

Management Challenge 3: Power of Progression:

The common belief is that creativity can never be demanded and innovation can never be measured. However, large enterprises are very good at it, setting benchmarks and taking directions based on such measurements. Measurements play a vital role in an enterprise, starting from client SLAs, revenue targets and all the way up to performance appraisals. If there is no progress and the value is not demonstrated, programs are shelved. Innovation programs are no exception to these management practices.

The management challenge was how can we design Innovation Programs that demonstrate a sense of progress and deliver tangible impact to sustain in the long run?

Our Tactic: We would like to explain this through a well-researched article Global IT Culture Survey - Forrester Research, August 2008 which plotted various activities in changing the culture in effectiveness against effort plot. Armed with the insights from the above, we implemented five specific tactics.

Statement of Leaders: This was the easiest. Every one of our leaders always supported innovation. They shared their views and stories on innovation.
Encouraging Behaviors: This was achieved by defining carefully designed Rewards and Recognition programs. We had rewards and recognitions for best rated ideas, best approved ideas, best implemented ideas, ideas appreciated by clients, highest innovation progress based on innovation index and value of innovation impact. Innovation Awards at individual and BU levels were also given.
Demonstrating Benefits: This was hard. The first barrier was to change the mindset towards what was innovation and what was not. Employees thought that everything they did was part of their job and they weren’t innovating. The second barrier was arriving at an impact. Every innovation is unique and there is no simple, right way to calculate the impact. Some innovations provided tangible and many innovations delivered intangible benefits. We came up with a simple method to calculate the innovation impact. When people started seeing the benefits of their innovations, they were convinced.
Actions of Peers: The Cognizant Innovation Index was the biggest enabler of this behavior. Enterprises thrive in right amount of pressure and competition. Once the innovation index was published to the innovation community, everyone started comparing theirs with others. They started taking note of what others are doing differently and set a stage for healthy competition.
Actions of Leaders: With an ingrained entrepreneurial culture at Cognizant, this was an easy one. Leaders spoke about innovation in town halls, participated and spoke in innovation fairs and summits, gave away innovation awards, allocated funds for innovation execution and allocated certain resources as Innovation Champions and Idea Champions to measure and monitor the progress of innovation efforts.

Management Challenge 4: Power of Balancing

There are many perennial challenges in managing innovation in an enterprise. Here are some of them

Where and how do we focus - “Tomorrow's feast Vs Today's bread”?
Where and how do we balance between - “Breakthrough Vs Sustaining Vs Optimizing innovations?”
Should we focus on common problems that everyone sees or uncommon problems that very few see?
Should we implement on common ideas that agreeable to everyone or uncommon ideas that are whacky and new?
Finally, being part of the Innovation Group, how do we justify and provide a career path for an innovation catalyst role that does not innovate, but creates and nurtures an innovation culture?

These are interesting challenges and we don’t have direct and concrete answers. These are very context-specific to a company, its leadership, its culture, its business model, its products, its services, its customers, the geography in which they operate and the situation on hand. Finally, the most important aspect is where in the “S-Curve” the organization is positioned at the time of taking decisions.

Benefits & Metrics

Innovation is an intuitively simple process, yet surprisingly elusive. Our business is made up of heterogeneous customers from various domains demanding solutions using different technologies. Customer specific ideas and innovations have to come from the insights working on client’s processes and systems. Hence, it is simple to say distributed innovation is the way to go. However, when you have 150,000 employees spread across 100s of client projects distributed in many delivery centers and client locations across the globe, enabling and empowering them makes “innovating innovation” even more complex and hard.

Metrics

Here is a set of metrics that show the progress and accomplishments over the last 5 years timeline.

*Metric*	*FY08*	*FY09*	*FY10*	*FY11*	*FY12*
*Number of Employees in the organization*	~ 60,000	~ 75000	~ 105,000	~ 135,000	~ 150,000
*Number of Trained Idea Champions*	56	240	1462	2008	2451
*Number of employees per trained idea champion*	1071	312	71	67	61
*Number of Certified Idea Champions*	5	19	174	677	660
*Number of Certified Innovation Champions*	1	5	59	156	176
*Number of Ideas Generated*	327	5551	20848	78,354	134242
*Number of associates contributing ideas*	1166	2062	9110	28,894	55383
*Number of Innovations implemented*	NA	NA	2935	10289	19172
*Total Value of Innovations*	$ Impact was not the focus	$ Impact was not the focus	79.1 Million USD	261 Million USD	548 Million USD
*Number of Innovation Fairs*	1 in India	4 in India	4 in India 11 in Rest of World	4 in India 1 in Rest of World	7 in India 28 in Rest of World
*Innovation Journal published*	No	Yes	Yes	Yes	Yes
*Innovation Summit*	No	No	Yes	Yes	Yes

Lessons

As described in the beginning of the story, we had many questions. Throughout the past 5 years, we have had multiple challenges, tried multiple experiments and learnt valuable lessons. Managed Innovation has not only delivered impact but also created a large innovation community within Cognizant. If creating such a huge community is hard and metrics are a leading indicator, then keeping this community alive is even harder.

We are proud of our achievements and this article is our way of contributing to a broader innovation community by sharing our experiences. While the lessons and insights are already part of the story, we would like to share few important lessons for those wanting to learn from our journey.

Do not discount the small and tiny: In the history of innovations, many of the innovations and breakthrough opportunities started as small innovations. Some were successful at the first attempt, and some did not succeed and many came back after a period of hiatus to become breakthrough. If you are in the services business, there is no specific time allocated for innovation. Innovations in a services business have to happen on-the-job and they have to come from the insights gained from doing the job. Finally, as we have seen, there is merit in the ‘Long Tail’; innovations however small, when aggregated, create a big impact. In the year 2012 alone over 19000 innovations have created an overall impact of 548 million dollars while the average impact of an idea is just $ 2800.
An example from one of our accounts in the Life Sciences business unit is shown in the plot below. They have implemented 100s of ideas and many ideas in this list are tiny and small. Only few were in the breakthrough area. However, the cumulative impact of those tiny innovations was $ 1.3 million out of total $ 1.8 million.

Power of Minnovations

Ideas are problematic and problems are ideal: When we ask people, “Give me all your best ideas”, we were inundated with thousands of ideas like “Cafeteria food should be like this” or “Give all of us tablets”. These ideas don’t go anywhere because they don’t address problems of the stakeholders and sponsors. And when nobody supports such ideas, the idea owners get frustrated. Hence it is better to launch idea campaigns with sponsored challenges. This may lead context specific ideas which may have a better chance of acceptance and implementation. If the ideas come from employees’ current area of work and if they have good insights about the problems and customer pains, then those ideas may have a better chance of approval. These are excellent candidates where the employees can experiment without asking for anybody’s permission. Perhaps one can fail and still continue without worry of any punishment. This doesn’t mean that one can’t go after big ideas. But, if you want people take your big idea seriously, you need credibility. How do you build that credibility? One way to do it is by implementing small ideas first. If you say that over the last year I have implemented 7 ideas, chances are high people might take your potentially big idea seriously. (Reference: Sukumar Rajagopal’s talk at IIM Bangalore as captured by Vinay Dabholkar - http://cataligninnovation.blogspot.in/2011/12/building-creative-confidence-insights.html)
It’s about signal and not noise: Innovation is not about always creating something new all the time. It’s about creating impact. In our observation, everyone has ideas and there are plenty of ideas out there. It is very easy to come up with a brilliant idea. It is difficult to come up with a working prototype. It is hard to get funding for implementation. It is even harder to make your customers adopt innovations. While running organization wide innovation programs, it is important to measure the impact using appropriate parameters and use those measurements as a base to tweak the program.
Managing innovation is a long haul: Machines don’t produce ideas; it is the employees with the right insights that ideate. Every breakthrough innovation in the world came from the frustration innovators had and in most of the cases they were experts in their field. Investing in an employee-centric innovation culture and empowering everyone takes time. Lessons cannot be learnt in a single day and every single tweak takes time to rollout. With the millennial workforce, mandates don’t work. It has to be voluntary. Innovations don’t happen in isolation, but in collaboration. Be prepared —sustaining continuous innovation is hard and needs management support for a long time. Finally, a parental attitude towards managing innovation is required. At the end of the day, it will be the innovators who would be in the limelight; not the people who created the innovation culture. You need a mature team that understands this fine point. In our case, our management funded and BU leaders supported the managed innovation efforts and the core team of innovation group persevered together for six years.

In Concluding:

Long before, it was considered that Management is an art and leaders are born. Today, we have management schools teaching the science of managing and producing future leaders. Long before, it was believed success is an outcome of sheer luck. But Malcolm Gladwell in his book Outliers argues success in any field can be achieved by practicing the skill repeatedly for at least 10000 hours. Based on our experience managing innovation in large organizations like Cognizant, we believe everyone is creative, creativity can be taught, Innovation can be practiced, Innovation can be managed and Managed innovation is NOT an oxymoron.

Credits

Executing an organization-level innovation program of this scale and sustaining it for the past six years needs a lot of perseverance and patience with scaffolding from many people at different levels within and outside the organization. Many leaders and individuals played a key role in shaping the Managed Innovation Program over this period. While we thank everyone, here are a few who played pivotal role in defining Cognizant’s Managed Innovation.

Internal Credits

Innovation is the journey towards the future which is unpredictable and unknown. Without management support, innovation programs cannot sustain for a long period. The first set of credits are dedicated to our CxOs Francisco D'souza, CEO of Cognizant for his executive sponsorship, Gordon Coburn, President who was then CFO for his meticulous reviews and budget approvals, Chandra Sekaran, Group Chief Executive for his continuous mentoring.
Whether there is a structure for innovation or innovation is demanded, there would be someone making a difference somewhere. All we need is to seek and find them. Vishal Anand, Client Partner, then the delivery manager and innovation champion for the Consumer Goods practice deserves a mention for pioneering the first bottom-up Innovation at Cognizant.
There are leaders who take the lead and travel to extreme ends even before others can think. Credit to the Consumer Goods Practice and Prakash Hemdev, VP for conceiving the first innovation dashboard and including innovation in the management scorecard.
Scaling anything requires tremendous belief in something and an equal amount of willpower to see it through. Mahesh Venkateswaran, SVP, for piloting the Cognizant Innovation Index across 50 accounts within the RHMLCG business unit deserves a very special mention.
There are leaders who think beyond the horizons. Debashis Chatterjee, SVP, needs a special mention for his vision in setting up the first Innovation Group within a large business unit.
Measuring the most important aspect is the key to driving behavior. Credits to Nagaraja Srivatsan, SVP – Emerging Business Accelerator and Sairamkumar Jayaraman, VP - Life Sciences BU and their team for figuring out a way to calculate $ value for every innovation and influencing the introduction of the $ impact in the Cognizant Innovation Index.
Thanks to Vinayambika Kidiyur, SVP – Healthcare Business Unit and Ravikkumar Nalliyappa, Biz. Account Manager for pioneering partnership with clients on Managed Innovation leading to transforming client relationship.
Innovation must never be the forte of few. It should be as distributed as possible. Credit goes to Sumithra Gomatam, SVP - Testing BU and her team and A. Prem, Senior Architect - CRM practice and his team and for developing their practice specific Idea Management Systems.
For an organization with 150,000 employees spread across the world, scaling managed innovation model integrated into the delivery excellence platform requires a solid infrastructure. Credit to Rajashree Natarajan, Vice President, Process and Tools Group and her team at the Process and Tools Group and for developing the integrated Innovation Management System.
Hackathons are great platforms for enabling employees to solve pertinent problems with a right solution at the shortest time with the lowest investment. Special credit to Cognizant Application Services, the internal IT team for creating Hackathon as a culture, Muthu Kumaran, VP - Insurance Practice for hosting the first BU level hackathon and the Manufacturing and Logistics BU for hosting the first client-facing Hackathon.
Innovation is not about finding something new. It’s about applying something that works well somewhere within one’s context. Credits to industry leaders like Toyota, 3M and Intuit for helping us understand the innovation culture aspects that forms the foundation for Managed Innovation.
There’s got to be someone who would experiment with ideas, apply, test them and come back with valuable insights. Credit to Vijay Rajagopalan, Director at Technology BU and Tamvada Veenadhari, Senior Manager at Manlog BU for their tireless efforts in trying out every aspect of Managed Innovation and providing valuable inputs for the past five years.
All these efforts make a difference only if they lead the organization to move into a different maturity model recognized by the industry. Thanks to Hariharan Mathrubutham, VP of Delivery Assurance Group and his team for their constant guidance and making Managed Innovation as part of SEI CMM Level-5 certification criteria.
Credits to all the Igniters, Idea Champions, Innovation Champions and Innovation Leaders from across all the practices who have been part of managed innovation journey.
Finally, a capable team with diverse skills that leverages each other’s strength and open to new ideas is a must to spearhead innovation efforts of this scale. Credit to each and every member of Innovation Group led by its leaders Sukumar Rajagopal, CIO and Head of Innovation, Ramaseshan Ramachandran, Senior Director, Kumar Sachidanandam, Senior Director, Bhaskar Venkatasubramanian, Director Neehivanan Elilananban, Director and Kumudha G, Assoc. Director for being together over the past six years for this cause of “Managed Innovation”.

External Credits

Thanks to NASSCOM and the Boston Consulting Group for their report NASSCOM-BCG Report "Unleashing the Innovative Power of Indian IT-ITES Industry" released in 2007. This report laid foundation to our understanding of managing innovation at a macro level. This report also introduced few important tools like the nine-cell innovation matrix for mapping innovation profile, elucidated the pathways to innovation using the concepts of motivation and discipline and the three simple-step process to optimal innovation journey.
Special thanks to Prof. Thomas H. Davenport, a visiting professor at Harvard Business School and a senior adviser to Deloitte Analytics. He is the author of several books on management. In his most recent book “Judgment Calls: Twelve Stories of Big Decisions and the Teams That Got Them Right” we are honored to have Managed Innovation mentioned under the chapter “Harnessing the Power of Organizational Wisdom on a Global Scale”. (Ref http://www.cognizant.com/approach/SiteDocuments/cognizant-harnessing-the-power-of-organizational-wisdom-on-global-scale-and-decision-making.pdf)
Thanks to Prof. Rishikesha T Krishnan, Professor, Chairperson, Corporate Strategy and Policy Area at Indian Institute of Management for his constant encouragement, insights and participation in innovation-related activities at Cognizant. We are honored to have Managed Innovation being highlighted in his book and articles. (Ref Outlook Business December 2012 Article – “Maintaining the momentum - While it's easy to kick off innovation initiatives, sustaining them isn't”)
Thanks to Fredrik Härén, (http://www.theideabook.org/fredrik_01.html) Creativity and innovation expert, inspirational speaker and author of “The Idea Book”, an international bestselling management book on business creativity for inspiring 600 idea champions by his workshop on innovation and teaching the concept of “ideamation”, which is one of the best tools we have ever learnt in our innovation journey.
Thanks to Vinnie Mirchandani, founder of Deal Architect(http://www.dealarchitect.typepad.com) , a former technology industry analyst (with Gartner), outsourcing executive (with PwC, now part of IBM) and author of two wonderful books “The Technology Elite” and “The New Polymath” for his constant support by being part of our innovation journey and inspiring our North America innovation community.
Thanks to Jatin Desai, CEO, Co-Founder of “The DeSai Group” for his constant support in enlightening the Innovation Group members on the tools and frameworks for innovation in addition to being a well-wisher of our Managed Innovation efforts.
Thanks to Parvathi Menon and Devika Devaiah from Erehwon Consulting (www.erehwonconsulting.com) for their innovation workshops and coaching our innovation champions during the early stages of our Managed Innovation journey.