PDMA 2006 - OCI Awards (part 1 – Bank of America)

The Outstanding Corporate Innovator award is presented each year, to date 33 awards.

Criteria:

1. Significant commitment to innovation
2. Have proven themselves capable of delivering innovation sustainably
3. Their process and culture provide a good learning experience for the rest of us

Bank of America
Xerox Corporation

Each one of these companies have made a strong commitment to innovation as a strong driver of growth. They make strong use of Voice-of-the-Customer (VoC) to determine what they need to do. They both have excelled at creating a highly innovative culture. We’re going to learn from them through their best-practices presentations.

Bank of America – Ray Chin
Innovation story / capability at BofA have three characteristics

1. It’s been a journey, it didn’t start over night
2. Innovation is a part of our DNA
3. Integration is our competitive advantage (although it’s not easy)

We were one of the first non-manufacturing companies to apply Six Sigma. We used it to develop the process itself

Gen 1: Build the process (2002 – 2003)
Gen 2: Execute and triage the process (2003 – 2005)
Gen 3: Integrate and refine (2004 – 2006)

At every step we improved the process (that’s the Six Sigma aspect).

The process in more detail…

They’ve integrated the strategic planning with NPD process itself.

1. Vertical & Horizontal Strategic planning
2. Idea Generation (including triage)
3. Stage-Gate with these phases: DMAIC
4. Product Lifecycle Management
5. Back to Vertical & Horizontal Strategic planning

DMAIC – Define, Measure, Analyze, Improve, Control

Vertical & Horizontal Strategic planning consists of a cascading Hoshin Plan. Hoshin Plan definition: “The basic premise behind the hoshin plan is that the best way to obtain the desired result is to ensure that all employees in the organization understand the long-range direction and that they are working according to a linked plan to make the vision a reality. The second aspect of the plan is that there are fundamental process measures which must be monitored to assure the continuous improvement of the organization's key business processes. In essence, all are heading in the same direction with a sense of control.” (source)

Example: Keep the Change program

• Strategic plan – Boomer women with kids had unmet needs and they seemed to have growth potential for BofA.
  
  
• Idea Generation – They conducted VoC with the target
  
  
• Define – Stated it simply
  
  
• Measure – Evaluate and validate
  
  
• Analyze – The final design
  
  
• Improve – Build and prepare for the launch (coding, training, marketing)
  
  
• Control – Launch and monitor

VoC helps drive the innovation process:

• Concept Screening (ethnography, mind mapping, brainstorming, etc.)
  
• Concept Optimization (qual. and quant.)
  
• Business Case & Build - Concept Testing
  
• Launch - Market Test (VoC, BoC (Behavior of Customers))
  
• Monitor & Improve

They use Accolade to manage the process.

Their ethnography indicated that Boomer women would ‘trick’ themselves into saving money, so Keep the Change would allow them to round-up their purchases and the change would go into a savings account. BofA would match the amount.

Key Performance Metrics

Units
1. Number of ideas generated
2. WIP, Yield, Kill Rate
3. Strategic Mix (incremental, strategic, breakthrough)

Time
1. Average Completion Time
2. Average time to launch
3. Average aging

Quality
1. Tollgate achievement rate
2. Rolled Throughput Yield (RTY)

Benefits
1. % of total rev. from new produscs
2. % of benefits achieved
3. number of patents

In recent years they’ve focused on improving their Kill Rate.

They’ve driving double digit growth from their new products. BofA is the fifth most profitable company in the world.

Here’s their framework on sustaining innovation.

1. Leadership commitment and growth aspirations
2. Idea generation and management
3. Content development and prototyping
4. Portfolio management and measurement
5. Talent management
6. Governance
7. Funding
8. Innovation culture

“Flawless execution” is the mantra of their management team. That would seem to fly in the face of creativity. They’re expected to take risks, calculated risks. Each stage of the process is meant to reduce the risk. It’s the discipline of their process that enables them to achieve close to flawless execution while also being creative.

Strategically driven innovation
VOC throughout the process
Integraiton (of the products, the stakeholders, etc.) made the difference

In its first year, over 3.2 million accounts were created. Customers have saved of ver $230 million in their accounts (not including the amount BofA will match on their anniversary).