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BUILDING AN INNOVATION COMMUNITY
           Pitney Bowes’s employee innovation community demonstrates the types of results
            managers can expect from a thoughtfully designed and implemented innovation
                 community and illustrates design principles and key success factors.

                                      Allison Dahl, Jill Lawrence, and Jeff Pierce

OVERVIEW: Companies are increasingly using social                    well as providing intangible benefits such as employee
media and other technologies to broaden the approach to              engagement, improved internal processes, and increased
idea generation and innovation both within and outside               customer satisfaction. The outcomes illustrate the
the walls of the organization. However, managers can                 types of results managers can expect from a thought-
tend to focus on installing the technology, rather than on           fully designed and implemented innovation community,
designing a socio-technical system that can meet the orga-           and the design principles and key success factors pro-
nization’s goals and foster authentic participation. In 2008,        vide guidance to managers looking to initiate a similar
Pitney Bowes, a $5.4 billion provider of technology and              approach.
services for mail and digital communications, initiated
an effort to build an employee innovation community aimed            KEY CONCEPTS: Innovation, Participatory design, User
at driving organic growth and fostering a culture of in-             research, Action research, Social media
novation among its 30,000 employees around the globe.
The Pitney Bowes Employee Innovation Program team                    Companies are increasingly using social media to open
took a human-centered approach and used primary re-                  participation in innovation to nontraditional actors, both
search and co-creation with individuals across all levels            inside and outside the organization. Recently, as the
of the organizational hierarchy to design a program that             flattening of organizations and rapidly changing com-
both met company objectives and satisfied a value propo-              petitive environments increase the need for companies
sition for managers and employees. The resulting pro-                to innovate at an accelerated pace, many companies
gram delivered measurable value inside of two years, as              have begun exploring the use of online communities to


Allison Dahl was the community and communications                    employees and drive collaboration across business units.
manager for IdeaNet and the Employee Innovation Pro-                 She started her career as a workplace anthropologist
gram at Pitney Bowes. In that role, she worked with teams            and has 10 years of experience working with multidisci-
across the company to track, measure, and promote in-                plinary teams in design and innovation. She studied an-
novation results and leveraged her design background to              thropology at New York University and Smith College,
create an engaging and sustainable employee experience.              where she received her BA. Jill.Lawrence@gmail.com
Allison also executed large-scale events such as Innova-
                                                                     Jeff Pierce is the IdeaNet challenge architect for Pitney
tion Idol to showcase employee ideas and build momentum
                                                                     Bowes’s Employee Innovation Program. Jeff’s role is to
around innovation. Allison has a BFA in Communication
                                                                     guide senior leaders in engaging and collaborating with
Design from Syracuse University and is pursuing an
                                                                     employees, applying the “wisdom of the crowds” to meet
MBA at Boston College. Allison.Dahl@mac.com
                                                                     critical business objectives. Jeff has diverse experience
Jill Lawrence is principal of J Lawrence & Associates, a             in marketing, strategy, service design, and software devel-
consulting practice with the mission to help companies               opment. His customer-centered research includes the
use participation to spark innovation (from employees,               marketing needs of small businesses and an ethnographic
customers, and suppliers) and to accelerate decisions                study of some of the world’s largest law firms. His system
and results. Previously, Jill was the director of acceler-           and software experience ranges from development of a
ated innovation at Pitney Bowes, where she led a CEO-                highly secure Internet application to an interactive mul-
sponsored global innovation program to source ideas from             timedia exhibit in the Smithsonian. He has a BS in Infor-
                                                                     mation Systems from Marymount-Fordham University
DOI: 10.5437/08956308X5405006                                        and holds over 20 U.S. patents. Jeff.Pierce@pb.com

  September—October 2011                                        19
0895-6308/11/$5.00 © 2011 Pitney Bowes, Inc.
tap the intellectual capital of their employees. These             The community is called IdeaNet, and activity is struc-
changes have prompted organizations to try different               tured around online brainstorms, or “idea challenges,”
technologies for collaboration, including blogs and                which take place over a 3–4 week period and engage
microblogging tools, wikis, virtual project rooms, and             anywhere from 600 to 30,000 employees. Challenge topics
idea management systems. Sometimes these technologies              are framed around real business issues and sponsored by
survive and add value. Frequently, they fall into disuse.          the business leader accountable for developing and im-
                                                                   plementing the solution. While challenges often target spe-
Whether a technology persists or not depends on how                cific employee groups, a fundamental principle of the
well it supports the work to be done and fits the corporate         community is its emphasis on openness; therefore, most
culture. All too often, work is designed around technol-           challenges are accessible to and visible by all employees
ogy rather than the other way around. To build sustain-            who visit the site. The expectation is that contributions will
able communities, managers need to view technology as              come from all employees, from frontline workers to middle
an enabler and focus the effort on taking a participatory          managers to senior leadership, including the CEO. This
and iterative approach to build a system that reflects the          participation model creates situations where a manager
needs and values of stakeholders at all levels in the orga-        may act in the community as an idea contributor one day,
nization. The key to success is a human-centered ap-               and as a challenge sponsor on another day.
proach. Methods from anthropology, design, and action
research can help managers to design systems that take             In its first two years post-pilot, IdeaNet received close to
into account the way people actually work.                         3,000 ideas posted to 52 idea challenges and generated a
                                                                   portfolio of 874 ideas adopted by the business units, rang-
The Pitney Bowes Employee Innovation Community                     ing from quick-win process improvements to concepts now
represents an example of how managers can take advan-              in longer-term development (Figure 1). While participa-
tage of these new forms of collaboration and implement             tion remained steady across both years, the second year
technology in a way that sticks. To create community               saw fewer ideas adopted by project teams, a healthy result
at Pitney Bowes, the program team took deliberate steps to         of a more refined focus in selecting ideas and a more
engage the participation of stakeholder groups across the          realistic evaluation of the resources available to implement
organizational hierarchy. This involvement meant that              ideas. As of December 2010, approximately 35 percent
the resulting community not only reflected the perspec-             of those employees with daily access to the intranet had
tives of these very diverse groups, but also had shared            participated in IdeaNet idea challenges, about 6,500 in-
ownership. These factors enhanced the results and sustain-         dividuals. In 2011, the community’s third year, 10 chal-
ability of the program.                                            lenges have been launched as of June; with just over 600
The Employee Innovation Program                                    ideas posted in response to these challenges, 2011 is ex-
                                                                   pected to match last year’s activity.
Like many companies, Pitney Bowes realizes the best
thinking can come from anywhere in the organization,               Designing an Innovation Community
and in 2008 the CEO set out a vision to engage employees
in innovation, specifically using an innovation community.          From the start, the program team charged with the design
The idea surfaced in response to an internal audit of inno-        and execution of the innovation community took a socio-
vation and product-management practices that revealed              technical systems perspective (Bansler 1989). This per-
barriers to innovation across the enterprise. The mission          spective acknowledges that technical systems do not stand
of the new Employee Innovation Program was to engage               apart from human systems and that technology should
all employees in innovation, to facilitate organic growth          support work rather than work accommodating the tech-
and process improvements, and to foster a culture of in-           nology. Applied to the creation of the innovation com-
novation through changes in behavior.                              munity, this stance meant that technology would make




                   Figure 1.—Participation and idea uptake for IdeaNet idea challenges, 2009 and 2010

                                                              20                        Research • Technology Management
up an important enabler of the community (via the web
platform), but that the most fundamental driver for sus-
tainability was a design that combined an understanding
                                                                      The team aimed for a
of the organizational culture with the dynamics of the
human work system. In other words, the team aimed for
a design driven by the organization’s needs and not the
                                                                         design driven by
technology’s features or functions. In addition, the ap-
proach was underpinned by the belief that workers are                   the organization’s
experts in what they do and should therefore be involved
in the design of their work. The team viewed worker
participation as key to employee engagement because
                                                                        needs and not the
participation enables people to find and create meaning
in their work (Weisbord 2004).                                             technology’s
To get broad participation in the design process, the
team used methods from the practice of participatory de-
sign (PD). This approach elevates the importance of user
                                                                            features or
participation in the design process, positioning the de-
signer as a facilitator of a user-centered design process,
rather than as a master architect of the solution. Tradi-
                                                                             functions.
tionally, PD is concerned with the politics of design and
with the distribution of power in the workplace; PD
approaches to worker participation have been able to
both improve systems design (by accounting for the re-             First, 25 interviews were conducted with managers and
alities of work) and address issues of managerial control          directors across the company, all the way up to the se-
and workplace democracy (Kensing and Blomberg                      nior team. The purpose of this “innovation audit” was to
1998). As the innovation community launched, Pitney                explore interviewees’ experiences with starting and build-
Bowes was in a time of transition. Having made a num-              ing new products and services within the company, in
ber of business acquisitions in the recent past, the               order to identify both impediments to innovation and
company had a dynamic mix of corporate cultures. Fur-              opportunities to improve the approach to innovation
thermore, the CEO’s intention to reshape the company’s             companywide. The data was analyzed using a frame-
culture of innovation helped to get broad participation in         work (Hansen and Birkinshaw 2007) that broke down
the design process.                                                the innovation process from idea to implementation. The
                                                                   interviews revealed major organizational barriers to in-
The methods used in the program design process—                    novation; for example, authority for taking an idea to
collaborative workshops, ethnographic interviews, and              implementation was fragmented across individuals and
interactive activities—are drawn from multiple disci-              functions, and the sharing of ideas and customer knowl-
plines, particularly anthropology and design (Brown 2009).         edge was limited by organizational silos. The audit also
The iterative nature of the design approach was inspired           highlighted mechanisms that could better support inno-
by PD as well as by the action research paradigm, in               vation efforts within the company. The resulting conclu-
which the researcher makes real-world interventions,               sions underscored the urgency of the CEO’s mission to
evaluates the results, and then repeats the process, taking        engage employees and planted the seed for the innova-
into account the information from previous iterations              tion community.
(O’Brien 1998). To achieve employee and management
commitment along with program sustainability, the re-              In the wake of the interviews, the program team ran a
search and design processes solicited participation from           co-creation workshop with the company’s CEO Council
three levels in the organization: senior management, em-           (top 40 executives) to identify and address discontinui-
ployees, and middle management.                                    ties in vision and tactics for building an innovation com-
                                                                   munity. CEO Council members completed a survey prior
Involving Senior Management                                        to the workshop, providing their views on the basic ele-
                                                                   ments of the proposed community. This feedback was
The management perspective had the potential to inform             incorporated into a mock-up description of the future
the design in two important ways: (1) senior managers              program. At their annual meeting, the members spent the
had a point of view about what would succeed within the            afternoon in groups and worked through the mock-up in
organization and what barriers would need to be over-              90-minute breakout sessions, followed by a plenary dis-
come, and (2) the commitment (or lack thereof) of se-              cussion. The intent was not to reach consensus, but in-
nior managers could make or break the community, so it             stead to surface key assumptions and potential pitfalls
was critical to understand their priorities.                       and to provide a forum for these leaders to contribute to

 September—October 2011                                       21
the design. With all units and functions represented, the          A unique approach to oversight, prioritization of quick
session yielded important insight on what was needed to            wins, and sponsorship of idea challenges all helped se-
make innovation successful in the company.                         nior managers build a sense of ownership in the program.
                                                                   Senior managers actively shared in the process of de-
The co-creation with managers surfaced a paradox: the              signing a human system that would work with technol-
management discipline traditionally emphasizes control,            ogy to create the community.
while open innovation requires managers to relinquish
some level of control. As part of their design recommen-           Engaging Employees
dations, the CEO Council established the Enabling In-
novation Group (EIG) as a unique oversight group to                With the goal of incorporating into the community de-
resolve this tension. This executive working team                  sign the motivations and needs of employees, we con-
provided oversight but also served to champion the pro-            ducted nearly 50 interactive interviews with individuals
gram and encourage open participation from managers                representing over 20 job functions and multiple business
throughout the community. The work with managers re-               units. Interviewees were asked about how innovation
vealed a paradox: the management discipline tradition-             occurs in their organizations. These ethnographic in-
ally emphasizes control, while open innovation requires            terviews also included a participatory activity in which
managers to relinquish some level of control. As part of           employees used small cards on a board to design a ficti-
their design recommendations, the CEO Council estab-               tious community website. This tangible activity pro-
lished the Enabling Innovation Group (EIG) as a unique             vided employees with the ability to envision possible
oversight group to resolve this tension. This executive            futures and provided the researchers with a richer data
working team provided oversight but also served to                 set than interviews alone would have.
champion the program and encourage open participation
                                                                   Insight from the employee research was codified in an
from managers throughout the community. More than 30
                                                                   “employee value proposition” that described the benefits
individuals were nominated for membership in the EIG;
                                                                   that would motivate and sustain employee participation.
10 directors and vice presidents were selected based on
                                                                   Employees were looking for a community that would
specific qualities, including their skills as coaches, influ-
                                                                   allow them to
encers, and leaders who could create energy around in-
novation. This visible and desirable assignment helped to          • Connect with individuals across the organization, to
combat the perception of the community as another “pro-              find employees with specific expertise and to build
gram du jour,” and the personal capital of these individu-           groups around shared topics of interest;
als lent the program credibility from the start. This team
contributed to the program design, helped navigate inter-          • Learn about innovative projects across the company;
nal systems, and acted as spokespersons to leadership              • Have a voice, be part of change, and exercise an abil-
teams across the organization during the first year. By               ity to influence things; and
year two, IdeaNet saw widespread adoption; this allowed
the EIG’s oversight role to be phased out and the group            • Gain personal recognition for their contributions.
to be replaced by Innovation Champions who worked to
                                                                   Using the employee value proposition as a guide, the
embed the community in the organizational culture.
                                                                   IdeaNet platform made accessible a wide variety of tools
Another critical learning from the workshop was the im-            to enhance access to information and provide opportuni-
portance of demonstrating quick wins. Idea challenges              ties to contribute. This included such social networking
were designed with this criteria in mind. In late 2008, a          tools as profiles and the capability for users to collabo-
three-month pilot with 2,000 employees quickly demon-              rate on ideas through commenting. The IdeaNet home page
strated that idea challenges can serve as a call to action,        established a sense of community by including space for
sparking participation. Results of idea challenges func-           such content as success stories, innovation event announce-
tion as a fast and visible way to demonstrate quick wins.          ments, challenge results, and recently posted ideas. This
                                                                   allowed employees to consume and contribute content
Idea challenges also serve as a way to foster senior lead-         in brief, productive interactions. A daily digest e-mail to
ership engagement by giving managers ownership of                  interested subscribers compiled the previous day’s idea
the challenges. The CEO required each one of his direct            submissions to make activity on IdeaNet visible and ac-
reports to sponsor at least one idea challenge during the          tionable even outside of the site, so that participants did
year, making participation by senior leaders mandatory.            not have to navigate to the site to follow recent changes.
Importantly, this charge established a metric that mea-
sured behavior—idea challenges required leaders to be              Further interviews after the three-month pilot revealed
transparent about their business challenges and to open            that while employees are invested in their own ideas,
discussion of possible solutions to a broader group of             they cared less about getting personal feedback than they
potential contributors. These leadership behaviors are a           did about knowing the overall challenge results. Partici-
critical piece to help foster a culture of innovation.             pants expected to see that the challenge had created

                                                              22                       Research • Technology Management
value for the unit. This learning led the program team to
establish a challenge closing process to ensure that a deci-
sion was made on every idea and communicated to the
                                                                            Participants
original submitter. For ideas adopted by the sponsoring
unit, a time frame, owner, and next steps were summa-
rized in a multipage “Results Memo,” which was pub-
                                                                        expected to see that
lished on IdeaNet and via the corporate intranet.

Post-pilot interviews also revealed that the majority of
                                                                         the challenge had
employees did not feel connected to the activity of in-
novation, because they viewed innovation as a creative                   created value for
moment of identifying a large, disruptive idea. To build
participation in the community, it was vital to broaden
the definition of innovation and to enable each employee
                                                                              the unit.
to see him or herself as a potential contributor. Site con-
tent was added to describe the roles employees could play
in innovation—as submitters, commenters, or connectors—
and additional communication reinforced this message.               also initiated challenges or advocated to senior manage-
Emphasis was placed on the broad scope of ideas that                ment for the launch of a particular challenge. During the
are valuable to the company, including everything from              early idea challenges, the program team worked along-
basic process improvements to new growth areas.                     side middle managers to actively guide business-unit chal-
                                                                    lenge teams in running effective challenges. Working
Once the community was active, the program team con-                with these middle managers also provided a front-row
tinued to use participatory approaches with employees to            seat to the realities of running the process and allowed the
guide activities to fulfill the community’s mission. For             program team to adjust the design based on work realities.
example, midway through the first year the team hosted               This flexibility proved hugely effective in ensuring a
a day-long “Open Space” meeting focused on direction                quality process that produced the kind of outcomes man-
for the program’s second year. Open Space is an approach            agers were driving for. It also enabled the program team
to conducting large meetings in which participants de-              to make quick interventions if anything went off track.
sign their own agenda by nominating and leading topics of           To accomplish this ongoing collaboration, a role was es-
their choice, within a predetermined overarching theme              tablished for a “challenge architect” to work with spon-
for the meeting (Bunker and Alban 1997). Over 50 of                 sors to translate their objectives into idea challenges and
IdeaNet’s stakeholders and most-active users attended,              shepherd challenge teams to get the most out of em-
representing every business unit. The day included 23               ployee participants. This role is central to the iterative
participant-led discussions under the theme of “How can             learning effort, as it serves as program eyes and ears on
we continue to enable employees to innovate at Pitney               the business-unit challenge teams and supports their
Bowes?” Each discussion produced clear recommenda-                  adoption of innovation practices. It also serves to main-
tions for program improvements. In some cases the pro-              tain process controls that have proven critical for elevat-
gram team had to weigh employee preferences for new                 ing the probability of success for this new initiative.
technical features against the ability of IdeaNet to sus-
tain participation.                                                 In the first year, work with middle managers resulted in
                                                                    significant modifications to the program. The most im-
Ensuring that the program was in tune with employee
                                                                    portant was building and refining the practice of framing
motivations and making employees co-creators were im-
                                                                    idea challenges around current business issues (VanGundy
portant factors in sustaining engagement in the community
                                                                    2005). At the outset of IdeaNet, sponsors tended to ask
and differentiating IdeaNet from other top-down initia-
                                                                    lightweight questions and to treat IdeaNet as an activity
tives. This involvement, like that of senior management,
                                                                    separate from work they were doing to address their
demonstrates that while the technology enabled parts of
                                                                    strategic objectives. Working closely with middle man-
the design—such as publishing the results memos—the
                                                                    agers made it possible to move from this compartmen-
importance of the technology was far second to the par-
                                                                    talized approach and position idea challenges as a tool
ticipatory design of the human system surrounding it.
                                                                    that could be used to address current business challenges
                                                                    and explore key strategic questions. The result of this
Including Middle Management                                         shift was an evolution in the type of challenges that were
                                                                    issued. In the first year, the program team experimented
Middle managers played a unique role in the community,              to improve challenge outcomes and employee engage-
since in addition to being participants, they reviewed,             ment; year two saw fewer challenges, but these were
prioritized, and implemented ideas. In some cases they              more closely linked with the business and more focused

 September—October 2011                                        23
on growth—reflecting the increasing comfort with using              The make-up of the business-unit challenge teams has
challenges as a modality for approaching strategic innova-         also evolved with experience. The process of running an
tion questions (Figure 2).                                         effective challenge includes a team of four to five people
                                                                   from the sponsoring organization who post comments
One excellent example of how challenges have come to               on the site during the challenge and make decisions
support innovation work is their use by one business               about the ideas once the challenge closes. Early on, these
unit’s R&D organization. This team actively experi-                teams were made up of stakeholders who represented the
mented with IdeaNet challenges and evolved them to                 perspectives of business functions relevant to the chal-
function as the front end of their innovation pipeline.            lenge. Over time, however, it became clear that these
Each challenge issued by the group addresses a strategic           challenge teams also needed to include the individuals
area of opportunity, and all employees across the unit are         who would have responsibility for acting on the ideas.
invited to participate. Top ideas from these challenges are        Frequently, employees post ideas that are not completely
reviewed by an executive committee within the unit,                actionable; the ideas are not fully formed, may identify
which makes decisions about further development. High              only part of a solution, or are not well articulated. The
involvement—over 75 percent of all employees in the                inclusion on the challenge team of individuals charged with
unit participate—has contributed to the identification of           implementing ideas gives these individuals the opportu-
additional business opportunities for development. In ad-          nity to comment on ideas, ask questions, or build out
dition, the active engagement from this unit has informed          ideas in collaboration with submitters.
many of the companywide best practices for the program.
                                                                   In the third year, the challenge architect role itself has
                                                                   shifted, from working alongside individual middle man-
                                                                   agers to establishing a network of practitioners across
                                                                   the organization who shepherd challenge teams. The EIG,
                                                                   which provided strategic oversight and advocacy in year
                                                                   one, has now been replaced by these challenge practitio-
                                                                   ners, called “Innovation Champions,” who work to embed
                                                                   this innovation practice within the business units. Innova-
                                                                   tion champions have oversight of IdeaNet as a unit-level
                                                                   business tool; they facilitate challenges, track and report
                                                                   results, and build innovation practices within their units.

                                                                   Results
                                                                   The Pitney Bowes Employee Innovation Community
                                                                   was initiated to support organic growth and employee
                                                                   engagement as part of a renewed focus on the company’s
                                                                   culture of innovation. The program has demonstrated re-
                                                                   markable results on both fronts. The outcomes of idea
                                                                   challenges have increased the bottom line, contributed
                                                                   to strategy, impacted employee engagement, and created
                                                                   other intangible benefits.
                                                                   From an engagement perspective, employee participation
                                                                   has steadily increased over time, with particular success
                                                                   with customer-facing employees such as call center staff,
                                                                   service personnel, and salespeople. The annual employee
                                                                   engagement survey includes six questions on innovation
                                                                   and empowerment; scores on five of these questions in-
                                                                   creased 3–5 percent in the program’s first year, a statisti-
                                                                   cally significant movement. Employee engagement
                                                                   resulting from idea challenges is evidenced in very tangi-
                                                                   ble ways. For example, IdeaNet provided an opportunity
                                                                   for R&D personnel and technical fellows to engage in
                                                                   conversations across the organization and make connec-
                                                                   tions outside their own work groups. One idea posted by a
                                                                   developer in India related to an active project in the corpo-
 Figure 2.—Number and type of challenges, 2009 and 2010            rate R&D group. The R&D team was able to include this

                                                              24                       Research • Technology Management
developer in project discussions and move quickly to pilot         opportunities is projected at two or more years in the
the idea by working with his network in India.                     future (Figure 3). Of the 38 value-producing challenges,
                                                                   thus far, near-term actions emerging from 7 constitute
From the perspective of building a culture of innovation,          the majority of the $10 million in revenue and $320,000
behavior change has also been visible, most notably                in cost savings realized to date. Yet to be measured are
among middle managers. For middle management, sup-                 results from six other challenges, which include new
port for innovation and the innovation community took              products in development, as well as process or service
shape as leaders stepping forward to use idea challenges           improvements still in progress. The remaining 25 chal-
as a business tool. Their willingness to demonstrate a de-         lenges have produced a variety of intangible values, includ-
sire for open collaboration—to make their business chal-           ing increased customer satisfaction, increased employee
lenges public and consider varying solutions—was a                 engagement, greater efficiency, and new training and
significant new behavior. Another important cultural im-            recognition programs. Ideas from some challenges were
pact was an increase in cross-organizational collaboration,        also incorporated into product roadmaps and other long-
evidenced by cosponsored challenges in which business              term strategic initiatives and business strategy.
units shared responsibility for implementing ideas.
                                                                   Challenges produced value in diverse ways. For exam-
Of the 52 challenges launched in 2009 and 2010, 38 pro-            ple, a sales challenge resulted in three major actions that
duced value, either tangible (in the form of bottom-line           contributed to a 23 percent year-over-year increase in
impact as cost savings or revenue gains) or intangible (in         revenue. As the result of another challenge, a simple new
the form, for instance, of strategic value). Some value was        protocol was instituted for call center agents that in-
realized within the first two years; the time horizon for           creased customer satisfaction scores by 10 percent and
realizing the value of longer-term or more complex                 was still maintained at this level a year later. In another




                                   Figure 3.—Value of IdeaNet challenges, 2009–2010

 September—October 2011                                       25
instance, two challenges sponsored by international orga-
nizations that were active at the same time enabled a ser-
endipitous connection that yielded new service contracts.
                                                                           One lesson was
Not all challenges produce value, in particular because
challenges require a balance between asking questions
                                                                                central:
with enough uncertainty to warrant a challenge and
framing narrowly enough to produce actionable ideas. A
significant number of the early challenges served to im-
                                                                             implementing
prove innovation practices, like that of framing the chal-
lenge question. The overall percentage of challenges                        technology for
with limited results was 27 percent (14 challenges), al-
though the percentage decreased from 38 percent in
2009 to just 10 percent in 2010. Even these apparent
                                                                             collaborative
failures, however, must be seen as learning opportuni-
ties. “Failed” challenges offer a window for sponsors
and senior management to reflect on what can be
                                                                             innovation is
learned—either about the business space or the deci-
sions to be made, even if there are no specific actions                     principally about
resulting from the challenge itself.
These outcomes illustrate the complexity of measur-
ing results from innovation and represent the diversity
                                                                            designing for a
of results managers can expect. At Pitney Bowes, a
significant driver of the effort was the CEO’s inten-
                                                                            human system;
tion to focus equally on growth and fostering a culture
of innovation culture change. The actual return on
investment of IdeaNet includes both tangible and in-
                                                                             technology is
tangible value generated across a time horizon ex-
tending years out. Many actions, like those that
increase customer satisfaction, are of significant im-
                                                                              secondary.
port to the company but are difficult to assign a dollar
value to. In addition, current actions underway repre-            1. Start from your context. Best practices are helpful,
sent a portfolio of ideas with estimated future value                but it is critical to consider the context of the organi-
that has yet to be calculated. Finally, the community                zational culture. Another organization’s practice or
itself is now an important component of the compa-                   technology platform can’t be forced to fit your par-
ny’s innovation architecture, achieving the CEO’s ob-                ticular culture. The key to sustainability is the upfront
jective of engaging employees and fostering a culture                work to understand the needs and barriers that are
of innovation.                                                       unique to the organization.
Lessons Learned                                                   2. Design first, consider technology second. Estab-
                                                                     lishing an innovation community is not about procur-
A number of factors contributed to the success of the                ing a technology platform, but about designing a
Pitney Bowes Employee Innovation Program (see “Key                   socio-technical system that takes into account real
Success Factors,” p. 27.). However, one lesson was cen-              organizational dynamics.
tral: implementing technology for collaborative inno-
vation is principally about designing for a human                 3. Plan for change. Build in the practice to monitor,
system; technology is secondary. In the case of the                  learn, and modify as the community evolves, ideally
Pitney Bowes Employee Innovation Program, the pro-                   in collaboration with stakeholder groups.
gram team used participation from stakeholders at all
                                                                  4. Recognize and accept failures as learning oppor-
levels of the organization to build a community that ac-
                                                                     tunities. Even with the best design practices and par-
complished the CEO’s intention for engagement and
                                                                     ticipation, failure must be accepted as a natural part
growth, while also serving the unique needs of each
                                                                     of an evolutionary human system. Set aside time to
constituent group. Based on this example, managers
                                                                     reflect on what has been learned—but don’t over-
can draw on a few key design principles when creating
                                                                     think it. Keep experimenting.
an innovation community—or any system that requires
the commitment of groups across organizational silos              This effort was well served by good planning; how-
or management hierarchy.                                          ever, the planning, like the program itself, was dynamic

                                                             26                       Research • Technology Management
Key Success Factors for an Enterprise Innovation Community
   Stakeholder involvement at all levels
   Participation should include senior managers as sponsors, mid-level managers as project leads and idea implementers, and
   all employees as contributors. The program should have a senior executive as sponsor.
   Pilot program before enterprise launch
   A pilot program provides the opportunity to test the approach by starting small and scaling. A good pilot program can help
   identify ways to overcome existing barriers to innovation and evolve the design prior to a formal launch.
   Value proposition for community members
   Understanding what will motivate participation in a specific organization is critical. Typical benefits include personal rec-
   ognition, networking across the organization, and contributing ideas that positively impact the company.
   Network of support
   To ensure long-term sustainability, the program should be owned by the entire organization (not a single unit) and include
   a network of champions to embed innovation practices in each unit of the organization.
   Transparency of results
   The practice of sharing results should mirror the open nature of the community and should include both quick wins and
   long-term work in development. Participants don’t expect that every idea will be implemented, but they do want to see the
   outcomes.
   Foundation in current business objectives
   Challenges should be focused on current business objectives, enabling them to become part of existing work supported by
   a ready-made team to execute ideas.




and based on reflection-in-action (Schön 1983). The                   evolution. Also thanks to the engaged employees of
imperative for quick wins cannot supersede good plan-                Pitney Bowes for continued participation and support of
ning. In this case, the program team used visible action             innovation.
to meet the need for quick wins at the same time that
those actions created the space needed for deliberate                References
planning.                                                            Bansler, J. 1989. Systems development research in Scandinavia:
                                                                        Three theoretical schools. Scandinavian Journal of Information
Conclusion                                                              Systems 1:3–20.
                                                                     Brown, T. 2009. Change by Design: How Design Thinking
                                                                        Transforms Organizations and Inspires Innovation. New York:
Innovation is inherently uncertain, and human systems are               HarperCollins.
dynamic. Building a sustainable innovation community                 Bunker, B. B., and Alban, B. T. 1997. Large Group Interventions:
required the program team to gain authentic participation               Engaging the Whole System for Rapid Change. San Francisco:
                                                                        Jossey-Bass.
from stakeholders and be open to evolving the program                Hansen, M., and Birkinshaw, J. 2007. The innovation value chain.
design to meet the unique needs of all groups. The team                 Harvard Business Review 85(6):121–130.
did not approach the project as master architects, but               Kensing, F., and Blomberg, J. 1998. Participatory design: Issues
                                                                        and concerns. Computer Supported Cooperative Work 7:167–
rather followed the spirit of the participatory design notion           168.
of the “designer-as-facilitator.” The result is a design that        O’Brien, R. 1998. Um exame da abordagem metodológica da pesquisa ação
uses technology as an enabler and is bounded but not con-               [An Overview of the Methodological Approach of Action Research]. In
                                                                        Teoria e Prática da Pesquisa Ação [Theory and Practice of Action
trolled. Striking this balance is not without its challenges,           Research], ed. Roberto Richardson. João Pessoa, Brazil: Universidade
and the program team regularly considered where and                     Federal da Paraíba. (English version). http://www.web.ca/∼robrien/
how to intervene. The resulting community meets different               papers/arfinal.html (accessed June 21, 2011).
                                                                     Schön, D. 1983. The Reflective Practitioner: How Professionals
needs at each level in the organization, but collectively it            Think in Action. New York: Basic Books.
clearly serves the interests of Pitney Bowes to drive                VanGundy, A. B. 2005. The care and framing of strategic innovation
growth and support a culture of innovation.                             challenges. The Wonderful World of Jeffrey Baumgartner, Innovation,
                                                                        September 29. http://www.jpb.com/creative/VanGundyFrameInnov.pdf
The authors would like to thank the teams, individuals and              (accessed June 21, 2011).
                                                                     Weisbord, M. R. 2004. Productive Workplaces Revisited: Dignity,
managers who supported the early research and contrib-                  Meaning, and Community in the 21st Century. San Franciso:
uted to the program throughout pilot, launch, and ongoing               Jossey-Bass.


 September—October 2011                                         27
In today’s business landscape, we consistently see
         that the best performing companies are the ones
         with a set of innovation capabilities. A key factor
         explaining why these organisations outperform
         their rivals is that they also ensure their innovation
         efforts are tightly aligned with their overall
         corporate strategy.
         INSEAD’s Strategic R&D Management programme
         will help you to view R&D from a strategic
         perspective and to build the tools to translate
         corporate strategy into innovation initiatives.
         07 – 11 November 2011 in Fontainebleau, France
         Contact us:
         Tel: +33 (0)1 6072 9350
         Email: srdm@insead.edu
         www.insead.edu/srdm


         Executive Education




Is your R&D
aligned with your
corporate strategy?

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Building an Innovation Community

  • 1. BUILDING AN INNOVATION COMMUNITY Pitney Bowes’s employee innovation community demonstrates the types of results managers can expect from a thoughtfully designed and implemented innovation community and illustrates design principles and key success factors. Allison Dahl, Jill Lawrence, and Jeff Pierce OVERVIEW: Companies are increasingly using social well as providing intangible benefits such as employee media and other technologies to broaden the approach to engagement, improved internal processes, and increased idea generation and innovation both within and outside customer satisfaction. The outcomes illustrate the the walls of the organization. However, managers can types of results managers can expect from a thought- tend to focus on installing the technology, rather than on fully designed and implemented innovation community, designing a socio-technical system that can meet the orga- and the design principles and key success factors pro- nization’s goals and foster authentic participation. In 2008, vide guidance to managers looking to initiate a similar Pitney Bowes, a $5.4 billion provider of technology and approach. services for mail and digital communications, initiated an effort to build an employee innovation community aimed KEY CONCEPTS: Innovation, Participatory design, User at driving organic growth and fostering a culture of in- research, Action research, Social media novation among its 30,000 employees around the globe. The Pitney Bowes Employee Innovation Program team Companies are increasingly using social media to open took a human-centered approach and used primary re- participation in innovation to nontraditional actors, both search and co-creation with individuals across all levels inside and outside the organization. Recently, as the of the organizational hierarchy to design a program that flattening of organizations and rapidly changing com- both met company objectives and satisfied a value propo- petitive environments increase the need for companies sition for managers and employees. The resulting pro- to innovate at an accelerated pace, many companies gram delivered measurable value inside of two years, as have begun exploring the use of online communities to Allison Dahl was the community and communications employees and drive collaboration across business units. manager for IdeaNet and the Employee Innovation Pro- She started her career as a workplace anthropologist gram at Pitney Bowes. In that role, she worked with teams and has 10 years of experience working with multidisci- across the company to track, measure, and promote in- plinary teams in design and innovation. She studied an- novation results and leveraged her design background to thropology at New York University and Smith College, create an engaging and sustainable employee experience. where she received her BA. Jill.Lawrence@gmail.com Allison also executed large-scale events such as Innova- Jeff Pierce is the IdeaNet challenge architect for Pitney tion Idol to showcase employee ideas and build momentum Bowes’s Employee Innovation Program. Jeff’s role is to around innovation. Allison has a BFA in Communication guide senior leaders in engaging and collaborating with Design from Syracuse University and is pursuing an employees, applying the “wisdom of the crowds” to meet MBA at Boston College. Allison.Dahl@mac.com critical business objectives. Jeff has diverse experience Jill Lawrence is principal of J Lawrence & Associates, a in marketing, strategy, service design, and software devel- consulting practice with the mission to help companies opment. His customer-centered research includes the use participation to spark innovation (from employees, marketing needs of small businesses and an ethnographic customers, and suppliers) and to accelerate decisions study of some of the world’s largest law firms. His system and results. Previously, Jill was the director of acceler- and software experience ranges from development of a ated innovation at Pitney Bowes, where she led a CEO- highly secure Internet application to an interactive mul- sponsored global innovation program to source ideas from timedia exhibit in the Smithsonian. He has a BS in Infor- mation Systems from Marymount-Fordham University DOI: 10.5437/08956308X5405006 and holds over 20 U.S. patents. Jeff.Pierce@pb.com September—October 2011 19 0895-6308/11/$5.00 © 2011 Pitney Bowes, Inc.
  • 2. tap the intellectual capital of their employees. These The community is called IdeaNet, and activity is struc- changes have prompted organizations to try different tured around online brainstorms, or “idea challenges,” technologies for collaboration, including blogs and which take place over a 3–4 week period and engage microblogging tools, wikis, virtual project rooms, and anywhere from 600 to 30,000 employees. Challenge topics idea management systems. Sometimes these technologies are framed around real business issues and sponsored by survive and add value. Frequently, they fall into disuse. the business leader accountable for developing and im- plementing the solution. While challenges often target spe- Whether a technology persists or not depends on how cific employee groups, a fundamental principle of the well it supports the work to be done and fits the corporate community is its emphasis on openness; therefore, most culture. All too often, work is designed around technol- challenges are accessible to and visible by all employees ogy rather than the other way around. To build sustain- who visit the site. The expectation is that contributions will able communities, managers need to view technology as come from all employees, from frontline workers to middle an enabler and focus the effort on taking a participatory managers to senior leadership, including the CEO. This and iterative approach to build a system that reflects the participation model creates situations where a manager needs and values of stakeholders at all levels in the orga- may act in the community as an idea contributor one day, nization. The key to success is a human-centered ap- and as a challenge sponsor on another day. proach. Methods from anthropology, design, and action research can help managers to design systems that take In its first two years post-pilot, IdeaNet received close to into account the way people actually work. 3,000 ideas posted to 52 idea challenges and generated a portfolio of 874 ideas adopted by the business units, rang- The Pitney Bowes Employee Innovation Community ing from quick-win process improvements to concepts now represents an example of how managers can take advan- in longer-term development (Figure 1). While participa- tage of these new forms of collaboration and implement tion remained steady across both years, the second year technology in a way that sticks. To create community saw fewer ideas adopted by project teams, a healthy result at Pitney Bowes, the program team took deliberate steps to of a more refined focus in selecting ideas and a more engage the participation of stakeholder groups across the realistic evaluation of the resources available to implement organizational hierarchy. This involvement meant that ideas. As of December 2010, approximately 35 percent the resulting community not only reflected the perspec- of those employees with daily access to the intranet had tives of these very diverse groups, but also had shared participated in IdeaNet idea challenges, about 6,500 in- ownership. These factors enhanced the results and sustain- dividuals. In 2011, the community’s third year, 10 chal- ability of the program. lenges have been launched as of June; with just over 600 The Employee Innovation Program ideas posted in response to these challenges, 2011 is ex- pected to match last year’s activity. Like many companies, Pitney Bowes realizes the best thinking can come from anywhere in the organization, Designing an Innovation Community and in 2008 the CEO set out a vision to engage employees in innovation, specifically using an innovation community. From the start, the program team charged with the design The idea surfaced in response to an internal audit of inno- and execution of the innovation community took a socio- vation and product-management practices that revealed technical systems perspective (Bansler 1989). This per- barriers to innovation across the enterprise. The mission spective acknowledges that technical systems do not stand of the new Employee Innovation Program was to engage apart from human systems and that technology should all employees in innovation, to facilitate organic growth support work rather than work accommodating the tech- and process improvements, and to foster a culture of in- nology. Applied to the creation of the innovation com- novation through changes in behavior. munity, this stance meant that technology would make Figure 1.—Participation and idea uptake for IdeaNet idea challenges, 2009 and 2010 20 Research • Technology Management
  • 3. up an important enabler of the community (via the web platform), but that the most fundamental driver for sus- tainability was a design that combined an understanding The team aimed for a of the organizational culture with the dynamics of the human work system. In other words, the team aimed for a design driven by the organization’s needs and not the design driven by technology’s features or functions. In addition, the ap- proach was underpinned by the belief that workers are the organization’s experts in what they do and should therefore be involved in the design of their work. The team viewed worker participation as key to employee engagement because needs and not the participation enables people to find and create meaning in their work (Weisbord 2004). technology’s To get broad participation in the design process, the team used methods from the practice of participatory de- sign (PD). This approach elevates the importance of user features or participation in the design process, positioning the de- signer as a facilitator of a user-centered design process, rather than as a master architect of the solution. Tradi- functions. tionally, PD is concerned with the politics of design and with the distribution of power in the workplace; PD approaches to worker participation have been able to both improve systems design (by accounting for the re- First, 25 interviews were conducted with managers and alities of work) and address issues of managerial control directors across the company, all the way up to the se- and workplace democracy (Kensing and Blomberg nior team. The purpose of this “innovation audit” was to 1998). As the innovation community launched, Pitney explore interviewees’ experiences with starting and build- Bowes was in a time of transition. Having made a num- ing new products and services within the company, in ber of business acquisitions in the recent past, the order to identify both impediments to innovation and company had a dynamic mix of corporate cultures. Fur- opportunities to improve the approach to innovation thermore, the CEO’s intention to reshape the company’s companywide. The data was analyzed using a frame- culture of innovation helped to get broad participation in work (Hansen and Birkinshaw 2007) that broke down the design process. the innovation process from idea to implementation. The interviews revealed major organizational barriers to in- The methods used in the program design process— novation; for example, authority for taking an idea to collaborative workshops, ethnographic interviews, and implementation was fragmented across individuals and interactive activities—are drawn from multiple disci- functions, and the sharing of ideas and customer knowl- plines, particularly anthropology and design (Brown 2009). edge was limited by organizational silos. The audit also The iterative nature of the design approach was inspired highlighted mechanisms that could better support inno- by PD as well as by the action research paradigm, in vation efforts within the company. The resulting conclu- which the researcher makes real-world interventions, sions underscored the urgency of the CEO’s mission to evaluates the results, and then repeats the process, taking engage employees and planted the seed for the innova- into account the information from previous iterations tion community. (O’Brien 1998). To achieve employee and management commitment along with program sustainability, the re- In the wake of the interviews, the program team ran a search and design processes solicited participation from co-creation workshop with the company’s CEO Council three levels in the organization: senior management, em- (top 40 executives) to identify and address discontinui- ployees, and middle management. ties in vision and tactics for building an innovation com- munity. CEO Council members completed a survey prior Involving Senior Management to the workshop, providing their views on the basic ele- ments of the proposed community. This feedback was The management perspective had the potential to inform incorporated into a mock-up description of the future the design in two important ways: (1) senior managers program. At their annual meeting, the members spent the had a point of view about what would succeed within the afternoon in groups and worked through the mock-up in organization and what barriers would need to be over- 90-minute breakout sessions, followed by a plenary dis- come, and (2) the commitment (or lack thereof) of se- cussion. The intent was not to reach consensus, but in- nior managers could make or break the community, so it stead to surface key assumptions and potential pitfalls was critical to understand their priorities. and to provide a forum for these leaders to contribute to September—October 2011 21
  • 4. the design. With all units and functions represented, the A unique approach to oversight, prioritization of quick session yielded important insight on what was needed to wins, and sponsorship of idea challenges all helped se- make innovation successful in the company. nior managers build a sense of ownership in the program. Senior managers actively shared in the process of de- The co-creation with managers surfaced a paradox: the signing a human system that would work with technol- management discipline traditionally emphasizes control, ogy to create the community. while open innovation requires managers to relinquish some level of control. As part of their design recommen- Engaging Employees dations, the CEO Council established the Enabling In- novation Group (EIG) as a unique oversight group to With the goal of incorporating into the community de- resolve this tension. This executive working team sign the motivations and needs of employees, we con- provided oversight but also served to champion the pro- ducted nearly 50 interactive interviews with individuals gram and encourage open participation from managers representing over 20 job functions and multiple business throughout the community. The work with managers re- units. Interviewees were asked about how innovation vealed a paradox: the management discipline tradition- occurs in their organizations. These ethnographic in- ally emphasizes control, while open innovation requires terviews also included a participatory activity in which managers to relinquish some level of control. As part of employees used small cards on a board to design a ficti- their design recommendations, the CEO Council estab- tious community website. This tangible activity pro- lished the Enabling Innovation Group (EIG) as a unique vided employees with the ability to envision possible oversight group to resolve this tension. This executive futures and provided the researchers with a richer data working team provided oversight but also served to set than interviews alone would have. champion the program and encourage open participation Insight from the employee research was codified in an from managers throughout the community. More than 30 “employee value proposition” that described the benefits individuals were nominated for membership in the EIG; that would motivate and sustain employee participation. 10 directors and vice presidents were selected based on Employees were looking for a community that would specific qualities, including their skills as coaches, influ- allow them to encers, and leaders who could create energy around in- novation. This visible and desirable assignment helped to • Connect with individuals across the organization, to combat the perception of the community as another “pro- find employees with specific expertise and to build gram du jour,” and the personal capital of these individu- groups around shared topics of interest; als lent the program credibility from the start. This team contributed to the program design, helped navigate inter- • Learn about innovative projects across the company; nal systems, and acted as spokespersons to leadership • Have a voice, be part of change, and exercise an abil- teams across the organization during the first year. By ity to influence things; and year two, IdeaNet saw widespread adoption; this allowed the EIG’s oversight role to be phased out and the group • Gain personal recognition for their contributions. to be replaced by Innovation Champions who worked to Using the employee value proposition as a guide, the embed the community in the organizational culture. IdeaNet platform made accessible a wide variety of tools Another critical learning from the workshop was the im- to enhance access to information and provide opportuni- portance of demonstrating quick wins. Idea challenges ties to contribute. This included such social networking were designed with this criteria in mind. In late 2008, a tools as profiles and the capability for users to collabo- three-month pilot with 2,000 employees quickly demon- rate on ideas through commenting. The IdeaNet home page strated that idea challenges can serve as a call to action, established a sense of community by including space for sparking participation. Results of idea challenges func- such content as success stories, innovation event announce- tion as a fast and visible way to demonstrate quick wins. ments, challenge results, and recently posted ideas. This allowed employees to consume and contribute content Idea challenges also serve as a way to foster senior lead- in brief, productive interactions. A daily digest e-mail to ership engagement by giving managers ownership of interested subscribers compiled the previous day’s idea the challenges. The CEO required each one of his direct submissions to make activity on IdeaNet visible and ac- reports to sponsor at least one idea challenge during the tionable even outside of the site, so that participants did year, making participation by senior leaders mandatory. not have to navigate to the site to follow recent changes. Importantly, this charge established a metric that mea- sured behavior—idea challenges required leaders to be Further interviews after the three-month pilot revealed transparent about their business challenges and to open that while employees are invested in their own ideas, discussion of possible solutions to a broader group of they cared less about getting personal feedback than they potential contributors. These leadership behaviors are a did about knowing the overall challenge results. Partici- critical piece to help foster a culture of innovation. pants expected to see that the challenge had created 22 Research • Technology Management
  • 5. value for the unit. This learning led the program team to establish a challenge closing process to ensure that a deci- sion was made on every idea and communicated to the Participants original submitter. For ideas adopted by the sponsoring unit, a time frame, owner, and next steps were summa- rized in a multipage “Results Memo,” which was pub- expected to see that lished on IdeaNet and via the corporate intranet. Post-pilot interviews also revealed that the majority of the challenge had employees did not feel connected to the activity of in- novation, because they viewed innovation as a creative created value for moment of identifying a large, disruptive idea. To build participation in the community, it was vital to broaden the definition of innovation and to enable each employee the unit. to see him or herself as a potential contributor. Site con- tent was added to describe the roles employees could play in innovation—as submitters, commenters, or connectors— and additional communication reinforced this message. also initiated challenges or advocated to senior manage- Emphasis was placed on the broad scope of ideas that ment for the launch of a particular challenge. During the are valuable to the company, including everything from early idea challenges, the program team worked along- basic process improvements to new growth areas. side middle managers to actively guide business-unit chal- lenge teams in running effective challenges. Working Once the community was active, the program team con- with these middle managers also provided a front-row tinued to use participatory approaches with employees to seat to the realities of running the process and allowed the guide activities to fulfill the community’s mission. For program team to adjust the design based on work realities. example, midway through the first year the team hosted This flexibility proved hugely effective in ensuring a a day-long “Open Space” meeting focused on direction quality process that produced the kind of outcomes man- for the program’s second year. Open Space is an approach agers were driving for. It also enabled the program team to conducting large meetings in which participants de- to make quick interventions if anything went off track. sign their own agenda by nominating and leading topics of To accomplish this ongoing collaboration, a role was es- their choice, within a predetermined overarching theme tablished for a “challenge architect” to work with spon- for the meeting (Bunker and Alban 1997). Over 50 of sors to translate their objectives into idea challenges and IdeaNet’s stakeholders and most-active users attended, shepherd challenge teams to get the most out of em- representing every business unit. The day included 23 ployee participants. This role is central to the iterative participant-led discussions under the theme of “How can learning effort, as it serves as program eyes and ears on we continue to enable employees to innovate at Pitney the business-unit challenge teams and supports their Bowes?” Each discussion produced clear recommenda- adoption of innovation practices. It also serves to main- tions for program improvements. In some cases the pro- tain process controls that have proven critical for elevat- gram team had to weigh employee preferences for new ing the probability of success for this new initiative. technical features against the ability of IdeaNet to sus- tain participation. In the first year, work with middle managers resulted in significant modifications to the program. The most im- Ensuring that the program was in tune with employee portant was building and refining the practice of framing motivations and making employees co-creators were im- idea challenges around current business issues (VanGundy portant factors in sustaining engagement in the community 2005). At the outset of IdeaNet, sponsors tended to ask and differentiating IdeaNet from other top-down initia- lightweight questions and to treat IdeaNet as an activity tives. This involvement, like that of senior management, separate from work they were doing to address their demonstrates that while the technology enabled parts of strategic objectives. Working closely with middle man- the design—such as publishing the results memos—the agers made it possible to move from this compartmen- importance of the technology was far second to the par- talized approach and position idea challenges as a tool ticipatory design of the human system surrounding it. that could be used to address current business challenges and explore key strategic questions. The result of this Including Middle Management shift was an evolution in the type of challenges that were issued. In the first year, the program team experimented Middle managers played a unique role in the community, to improve challenge outcomes and employee engage- since in addition to being participants, they reviewed, ment; year two saw fewer challenges, but these were prioritized, and implemented ideas. In some cases they more closely linked with the business and more focused September—October 2011 23
  • 6. on growth—reflecting the increasing comfort with using The make-up of the business-unit challenge teams has challenges as a modality for approaching strategic innova- also evolved with experience. The process of running an tion questions (Figure 2). effective challenge includes a team of four to five people from the sponsoring organization who post comments One excellent example of how challenges have come to on the site during the challenge and make decisions support innovation work is their use by one business about the ideas once the challenge closes. Early on, these unit’s R&D organization. This team actively experi- teams were made up of stakeholders who represented the mented with IdeaNet challenges and evolved them to perspectives of business functions relevant to the chal- function as the front end of their innovation pipeline. lenge. Over time, however, it became clear that these Each challenge issued by the group addresses a strategic challenge teams also needed to include the individuals area of opportunity, and all employees across the unit are who would have responsibility for acting on the ideas. invited to participate. Top ideas from these challenges are Frequently, employees post ideas that are not completely reviewed by an executive committee within the unit, actionable; the ideas are not fully formed, may identify which makes decisions about further development. High only part of a solution, or are not well articulated. The involvement—over 75 percent of all employees in the inclusion on the challenge team of individuals charged with unit participate—has contributed to the identification of implementing ideas gives these individuals the opportu- additional business opportunities for development. In ad- nity to comment on ideas, ask questions, or build out dition, the active engagement from this unit has informed ideas in collaboration with submitters. many of the companywide best practices for the program. In the third year, the challenge architect role itself has shifted, from working alongside individual middle man- agers to establishing a network of practitioners across the organization who shepherd challenge teams. The EIG, which provided strategic oversight and advocacy in year one, has now been replaced by these challenge practitio- ners, called “Innovation Champions,” who work to embed this innovation practice within the business units. Innova- tion champions have oversight of IdeaNet as a unit-level business tool; they facilitate challenges, track and report results, and build innovation practices within their units. Results The Pitney Bowes Employee Innovation Community was initiated to support organic growth and employee engagement as part of a renewed focus on the company’s culture of innovation. The program has demonstrated re- markable results on both fronts. The outcomes of idea challenges have increased the bottom line, contributed to strategy, impacted employee engagement, and created other intangible benefits. From an engagement perspective, employee participation has steadily increased over time, with particular success with customer-facing employees such as call center staff, service personnel, and salespeople. The annual employee engagement survey includes six questions on innovation and empowerment; scores on five of these questions in- creased 3–5 percent in the program’s first year, a statisti- cally significant movement. Employee engagement resulting from idea challenges is evidenced in very tangi- ble ways. For example, IdeaNet provided an opportunity for R&D personnel and technical fellows to engage in conversations across the organization and make connec- tions outside their own work groups. One idea posted by a developer in India related to an active project in the corpo- Figure 2.—Number and type of challenges, 2009 and 2010 rate R&D group. The R&D team was able to include this 24 Research • Technology Management
  • 7. developer in project discussions and move quickly to pilot opportunities is projected at two or more years in the the idea by working with his network in India. future (Figure 3). Of the 38 value-producing challenges, thus far, near-term actions emerging from 7 constitute From the perspective of building a culture of innovation, the majority of the $10 million in revenue and $320,000 behavior change has also been visible, most notably in cost savings realized to date. Yet to be measured are among middle managers. For middle management, sup- results from six other challenges, which include new port for innovation and the innovation community took products in development, as well as process or service shape as leaders stepping forward to use idea challenges improvements still in progress. The remaining 25 chal- as a business tool. Their willingness to demonstrate a de- lenges have produced a variety of intangible values, includ- sire for open collaboration—to make their business chal- ing increased customer satisfaction, increased employee lenges public and consider varying solutions—was a engagement, greater efficiency, and new training and significant new behavior. Another important cultural im- recognition programs. Ideas from some challenges were pact was an increase in cross-organizational collaboration, also incorporated into product roadmaps and other long- evidenced by cosponsored challenges in which business term strategic initiatives and business strategy. units shared responsibility for implementing ideas. Challenges produced value in diverse ways. For exam- Of the 52 challenges launched in 2009 and 2010, 38 pro- ple, a sales challenge resulted in three major actions that duced value, either tangible (in the form of bottom-line contributed to a 23 percent year-over-year increase in impact as cost savings or revenue gains) or intangible (in revenue. As the result of another challenge, a simple new the form, for instance, of strategic value). Some value was protocol was instituted for call center agents that in- realized within the first two years; the time horizon for creased customer satisfaction scores by 10 percent and realizing the value of longer-term or more complex was still maintained at this level a year later. In another Figure 3.—Value of IdeaNet challenges, 2009–2010 September—October 2011 25
  • 8. instance, two challenges sponsored by international orga- nizations that were active at the same time enabled a ser- endipitous connection that yielded new service contracts. One lesson was Not all challenges produce value, in particular because challenges require a balance between asking questions central: with enough uncertainty to warrant a challenge and framing narrowly enough to produce actionable ideas. A significant number of the early challenges served to im- implementing prove innovation practices, like that of framing the chal- lenge question. The overall percentage of challenges technology for with limited results was 27 percent (14 challenges), al- though the percentage decreased from 38 percent in 2009 to just 10 percent in 2010. Even these apparent collaborative failures, however, must be seen as learning opportuni- ties. “Failed” challenges offer a window for sponsors and senior management to reflect on what can be innovation is learned—either about the business space or the deci- sions to be made, even if there are no specific actions principally about resulting from the challenge itself. These outcomes illustrate the complexity of measur- ing results from innovation and represent the diversity designing for a of results managers can expect. At Pitney Bowes, a significant driver of the effort was the CEO’s inten- human system; tion to focus equally on growth and fostering a culture of innovation culture change. The actual return on investment of IdeaNet includes both tangible and in- technology is tangible value generated across a time horizon ex- tending years out. Many actions, like those that increase customer satisfaction, are of significant im- secondary. port to the company but are difficult to assign a dollar value to. In addition, current actions underway repre- 1. Start from your context. Best practices are helpful, sent a portfolio of ideas with estimated future value but it is critical to consider the context of the organi- that has yet to be calculated. Finally, the community zational culture. Another organization’s practice or itself is now an important component of the compa- technology platform can’t be forced to fit your par- ny’s innovation architecture, achieving the CEO’s ob- ticular culture. The key to sustainability is the upfront jective of engaging employees and fostering a culture work to understand the needs and barriers that are of innovation. unique to the organization. Lessons Learned 2. Design first, consider technology second. Estab- lishing an innovation community is not about procur- A number of factors contributed to the success of the ing a technology platform, but about designing a Pitney Bowes Employee Innovation Program (see “Key socio-technical system that takes into account real Success Factors,” p. 27.). However, one lesson was cen- organizational dynamics. tral: implementing technology for collaborative inno- vation is principally about designing for a human 3. Plan for change. Build in the practice to monitor, system; technology is secondary. In the case of the learn, and modify as the community evolves, ideally Pitney Bowes Employee Innovation Program, the pro- in collaboration with stakeholder groups. gram team used participation from stakeholders at all 4. Recognize and accept failures as learning oppor- levels of the organization to build a community that ac- tunities. Even with the best design practices and par- complished the CEO’s intention for engagement and ticipation, failure must be accepted as a natural part growth, while also serving the unique needs of each of an evolutionary human system. Set aside time to constituent group. Based on this example, managers reflect on what has been learned—but don’t over- can draw on a few key design principles when creating think it. Keep experimenting. an innovation community—or any system that requires the commitment of groups across organizational silos This effort was well served by good planning; how- or management hierarchy. ever, the planning, like the program itself, was dynamic 26 Research • Technology Management
  • 9. Key Success Factors for an Enterprise Innovation Community Stakeholder involvement at all levels Participation should include senior managers as sponsors, mid-level managers as project leads and idea implementers, and all employees as contributors. The program should have a senior executive as sponsor. Pilot program before enterprise launch A pilot program provides the opportunity to test the approach by starting small and scaling. A good pilot program can help identify ways to overcome existing barriers to innovation and evolve the design prior to a formal launch. Value proposition for community members Understanding what will motivate participation in a specific organization is critical. Typical benefits include personal rec- ognition, networking across the organization, and contributing ideas that positively impact the company. Network of support To ensure long-term sustainability, the program should be owned by the entire organization (not a single unit) and include a network of champions to embed innovation practices in each unit of the organization. Transparency of results The practice of sharing results should mirror the open nature of the community and should include both quick wins and long-term work in development. Participants don’t expect that every idea will be implemented, but they do want to see the outcomes. Foundation in current business objectives Challenges should be focused on current business objectives, enabling them to become part of existing work supported by a ready-made team to execute ideas. and based on reflection-in-action (Schön 1983). The evolution. Also thanks to the engaged employees of imperative for quick wins cannot supersede good plan- Pitney Bowes for continued participation and support of ning. In this case, the program team used visible action innovation. to meet the need for quick wins at the same time that those actions created the space needed for deliberate References planning. Bansler, J. 1989. Systems development research in Scandinavia: Three theoretical schools. Scandinavian Journal of Information Conclusion Systems 1:3–20. Brown, T. 2009. Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation. New York: Innovation is inherently uncertain, and human systems are HarperCollins. dynamic. Building a sustainable innovation community Bunker, B. B., and Alban, B. T. 1997. Large Group Interventions: required the program team to gain authentic participation Engaging the Whole System for Rapid Change. San Francisco: Jossey-Bass. from stakeholders and be open to evolving the program Hansen, M., and Birkinshaw, J. 2007. The innovation value chain. design to meet the unique needs of all groups. The team Harvard Business Review 85(6):121–130. did not approach the project as master architects, but Kensing, F., and Blomberg, J. 1998. Participatory design: Issues and concerns. Computer Supported Cooperative Work 7:167– rather followed the spirit of the participatory design notion 168. of the “designer-as-facilitator.” The result is a design that O’Brien, R. 1998. Um exame da abordagem metodológica da pesquisa ação uses technology as an enabler and is bounded but not con- [An Overview of the Methodological Approach of Action Research]. In Teoria e Prática da Pesquisa Ação [Theory and Practice of Action trolled. Striking this balance is not without its challenges, Research], ed. Roberto Richardson. João Pessoa, Brazil: Universidade and the program team regularly considered where and Federal da Paraíba. (English version). http://www.web.ca/∼robrien/ how to intervene. The resulting community meets different papers/arfinal.html (accessed June 21, 2011). Schön, D. 1983. The Reflective Practitioner: How Professionals needs at each level in the organization, but collectively it Think in Action. New York: Basic Books. clearly serves the interests of Pitney Bowes to drive VanGundy, A. B. 2005. The care and framing of strategic innovation growth and support a culture of innovation. challenges. The Wonderful World of Jeffrey Baumgartner, Innovation, September 29. http://www.jpb.com/creative/VanGundyFrameInnov.pdf The authors would like to thank the teams, individuals and (accessed June 21, 2011). Weisbord, M. R. 2004. Productive Workplaces Revisited: Dignity, managers who supported the early research and contrib- Meaning, and Community in the 21st Century. San Franciso: uted to the program throughout pilot, launch, and ongoing Jossey-Bass. September—October 2011 27
  • 10. In today’s business landscape, we consistently see that the best performing companies are the ones with a set of innovation capabilities. A key factor explaining why these organisations outperform their rivals is that they also ensure their innovation efforts are tightly aligned with their overall corporate strategy. INSEAD’s Strategic R&D Management programme will help you to view R&D from a strategic perspective and to build the tools to translate corporate strategy into innovation initiatives. 07 – 11 November 2011 in Fontainebleau, France Contact us: Tel: +33 (0)1 6072 9350 Email: srdm@insead.edu www.insead.edu/srdm Executive Education Is your R&D aligned with your corporate strategy?