Tuesday, October 24, 2006

PDMA 2006 - OCI Awards (part 2 – Xerox Corporation)

Innovators at Xerox produce about 2 patents per day on average.

One early key innovation was with their business model. Rather than selling the customer a copier, they leased them the copier and they were charged per copy. Xerox would handle the maintenance.

In 2000, Xerox had a “Perfect Storm” including decreasing revs, new competitors, delayed product, stock price drop of 15%, debt rating fell. So they focused on stopping the bleeding. But “I have to survive the present, but I must invest for the future or else I’ll fail” is what the CEO declared.

Today’s story is about that time period.

Here’s how they created a culture of innovation:
  1. Intense customer focus
  2. Create and leverage the world’s best new technologies
  3. Use a disciplined process
  4. Embrace and manage risk
Everyone knows about VoC, conjoint, and the rest of the tools of customer-focused marketing. However, they also have the Gil Hatch Center for Customer Innovation and Ethnographic Research.

The Gil Hatch center invites customers (sometimes alone, sometimes together) to interact and work with Xerox’s engineers and scientists. Customers receive access to Xerox’s technology. They work together to develop concepts.

Ethnographic research flips it around and Xerox goes out and visits the customers in their native environment.

These tools augment VoC and actually make customers a part of the innovation process.

Create and Leverage the world’s best new technologies.
  1. Global presence
  2. Crown Jewel Process – “Partner or perish”
  3. Managing the innovation web

We don’t think in terms of “make or buy” but instead “how can what’s available out there complement what I’m doing”.

Using a disciplined process...

  1. Rigorous (data driven, metric based) (Lean Six Sigma, Design for Lean Six Sigma)
  2. Make it easy to use
  3. Leverage Information Technology

Originally their process was documented across 11 binders. That was too cumbersome, so they simplified it enabled people. They also employed information technology to make it easier.

Design for Lean Six Sigma (DLSS) is about never letting waste into the original design. At first they had to grapple with how to combine Phase Gate and DLSS, but they ultimately determined it was:

Phase Gate – “the what”
DLSS – a set of tools for developers to use to keep it simple

Failure is defined as letting a project go on too long w/o doing the due-diligence to test assumptions. Failure is also defined as missing an opportunity. It’s not failure if an idea falls out of the rigorous process, that’s success.

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