Why don't we start off by you giving us a quick overview?
What is IOP, the Innovation Outreach Program at Microsoft?
How did it come to be?
What are you guys up to?
Yeah, so back in 2009, I was at bank of America.
I spent my whole career there, almost 30 years.
The last seven years, I led innovation for the enterprise.
When you're in that kind of role, you have a constant appetite for stimulation from other
places.
Stimulation on new tech, the ways innovation is run, how to break through innovation leadership
challenges, and it's a lonely kind of job.
When Microsoft pitched this idea, five companies came together: 3M, BMW, Bank of America, and
... I missed one.
Anyway.
Came together, yeah.
Initially, the approach was going to be how could we take Microsoft technology and do
something really big with it across multiple industries?
These companies said, "No, we're really not interested in doing that for you, Microsoft,
but we really are interested in creating a cohesive network of peers because we're all
misfits in our own company, in own companies, and we need ... the stimulation of like-minded
peers; but we're also really interested in exploring breakthrough tech together."
We came up with this statement that you see above, is how we talk about the IOP to third
parties.
It's a way to energize and create across the normal boundaries of your own enterprise.
Now, I also heard an origin story that started out slightly differently.
I think there were some folks at Microsoft originally thinking about the mission for
this program in a slightly different way.
Do you want to share that?
It was originally pitched as the next billion dollar business for Microsoft, and that was
how they initially got their funding.
As I say, that was the premise at this kick-off meeting to which all the other four companies
said, "Ah, not really interested in that.
But we are interested," as I say, "In creating a new sort of social net amongst these very
unique roles that each of played at our individual companies."
We advanced the notion, and changed up and created this criteria.
We became an exclusive network in the sense that we try and narrow it only to enterprise
leaders who are at that ten billion revenue mark and higher, and global in operation.
Without that constraint, we initially had some larger and smaller players together.
While there are similarities in the leadership challenge at those different levels, it's
difficult for, if you're at Shell, for instance, and running a 500 billion dollar a year company
portfolio of innovations, it's difficult to talk to somebody from a two billion dollar
company who's just sort of breaking into what it means to run at large scale.
That scaling ... function has been really important for us to create a cohesive group,
and keep it [inaudible].
I think that part of these restrictions that we put in place, when you and I were talking
in prep for this, the restrictions we put in place actually have contributed to the
health of the network [00:03:00] and prevented some of that ... natural chaos from getting
too far away from us.
Can you tell us who's part of the network?
Yeah, sure.
That's the next slide.
A lot of people like this slide because it shows the breadth.
We cut across, whether it's entertainment, automotive, engineering, materials.
Most of these brands, you probably know.
There's a few you may not.
What it lets us do is develop ... Well, I'll speak from my own perspective.
When I was a delegate to the program, this was secret sauce for me.
I could go to an IOP meeting and talk with 20 or 30 innovation leaders from other sectors
I otherwise would never touch, and then bring that knowledge home.
For a while, I kept that very guarded.
That was my secret sauce.
I didn't share it much with other people at Bank of America.
I learned over time that I actually was more powerful when I would bring those folks in
and share this network with them.
It would become ... It would triple and quadruple the impact back home.
Could you give us a bit more of a sense, like the profile of the delegates?
Who are they?
Sure.
Are they going to be part of this forever and ever?
How does that all work?
Yeah, that's interesting.
Longevity is an important point I wanted to come back to.
The profile, these are generally the futurist for their company; maybe one of a couple of
futurists.
I'm actually leaving this event to go to Ford, and at Ford, we have one of three Henry Ford
fellows is our ... He leads all electronic systems for all vehicles manufactured by Ford,
and is leading their autonomous vehicle program.
You have people at the pinnacle of their career in that regard.
We also have R&D people.
We have sometimes they're ... product division leaders, who also have an innovation function
there.
It really generally two to three clicks down from the CEO is where we like to function.
People who can actually make things happen at their company.
If, at an IOP meeting, we find a collaboration that works between two companies or three
companies, they have the power to then go act upon it and change ... steer strategy
in their firms.
That's why we're also a little bit ... We push to a more senior person so that they
can have that effect with the program.
Let's get into the meat.
What are you guys doing to foster idea exchange, to really bring that network to life?
Yeah.
We run a couple of events per year.
I appreciate coming to your event, because I get to steal ideas.
You saw me taking pictures around.
I always steal ideas from other people's events.
We run these events with an intentional 40/30/30 ratio of planned content from experts, 30%
structured networking, and 30% unstructured networking.
We run, as you see, a [00:05:30] couple of other techniques; but really what it's all
about is trying to drive this sort of interaction.
In this network graph that we've put together, it's an attempt to show these multiple orbits
that our members run in.
What you see is that it varies.
It varies both by company.
It varies by time.
We talk to our membership that we're all on innovation journey, and everybody's at a different
point.
You can always find someone who's ahead of you in some aspects, and is behind of you
in other aspects.
When we draw this map, obviously Microsoft's at the center.
We act as sort of the super member of this group.
We don't own it.
The group is run by an advisory board of seven members.
We have a permanent seat.
The other six seats rotate.
We have this ... I like the gardener term earlier.
We're definitely gardeners of this network, ... and work to, as you said, energize it,
to make more and more of these collaborations happen.
When we talk to you and other folks in your team, one of the things that stood out to
me was this notion that when there's a new delegate member coming into the club, there's
typically a set of behaviors that could be quite different from the more senior veteran
IOP delegate.
Can you talk a little bit about what is going on?
What is that journey?
Yeah, sure.
We have what we call the 'delegate's pledge.'
Each member company names two delegates, and each of these delegates takes the following
pledge.
Raise your right hand.
'I will return any text, call, or email within 48 hours from any other delegate with one
of three answers: Yes, I want to play in that space.
No, I'm sorry, that's really not our space.
Interesting, but I can't drive anything at my company.
Or, what usually happens, number three, I can't help you, but you should meet my friend
Harald, because he's working on a project that sounds a lot like what you're doing,
and maybe we can get you together.
Very quickly, we work to establish what I call extreme trust.
Members and delegates trusting each other more quickly than they should in a natural
way.
We do that with a couple of activities.
This pledge is very important.
Then, we also demonstrate it.
We'll talk in a minute about a couple of the rituals.
I'm a big believer in modeling, that if I can stand somebody up, a seasoned member,
and have them model for you the way that an IOP member behaves, what's the ... Tell me
a story about a collaboration that happened because two delegates connected.
That's what we expect of all of our members.
In fact, we now have started doing a health review each year.
We look quite closely at these analytics and I've got another slide.
We look very closely at our analytics within the network to understand who are the net
givers, who are the net takers, and who has a balanced approach.
On the left, ... and we call this a tornado chart, ... kind of gives you an illustration,
member by member.
Are they making more matches to others, or are they taking in more inquiries?
I'll pick on Ford for a minute, so two and 11.
Two is where Ford has reached out to others, 11 is in that period of time ... 11 other
members came to them to make a match.
They're a real giver in the network.
Now, they also get their extractions in other ways; but this is a really important health
factor for us.
When we find a member who is harvesting too much, we'll talk to them about it.
As well, this data's imperfect.
This data is the perceived matches that are happening.
Whenever we hear about it, we log it.
But we also know that there's some secret stuff going on.
When we've gone to a member and said, "oh, well, it looks to us like you're harvesting
a little too much.
We think you should be giving more."
They're like, "Well, what about this, and this, and this?"
Well, we didn't know about those activities."
Can you share some of the secret stuff?
On the small scale, one that came out at the last meeting that was just spontaneous.
Ford was working on a new.
Starbucks was working on a new Alexis Gill.
The delegates knew each other, and they connected and said, "Oh, huh.
Wouldn't that be cool?"
Now on a 2018 Ford, you can order your favorite Starbucks drink and the order will go in,
and then your GPS will bring it up.
You've got this seamless end to end.
That's sort of a small- Thank you, IOP for making this happen.
This is awesome.
More caffeine, yeah.
In drivers, that's what we need.
On a more serious note, we have a case of a joint venture called that launched last
year.
It's a joint venture between Merck and Lockheed Martin.
Lockheed Martin is constantly looking for ways to commercialize their military solutions,
because they only have one customer, essentially.
They're always looking for ways to reuse that technology.
Merck is fighting the good fight in healthcare, but also saw this change happen where insurance
reimbursements to hospitals were based more now on outcomes than on treatments.
They're focused on prevent ... In-hospital infections are a big problem.
These days, hospitals pay for it.
If you come in for a knee operation, and you contact a infection, it's on the hospital.
They combined strengths and took technology that was used in the military for targeting
and detection purposes, and put it into hospitals to spot outbreaks of sepsis four hours faster
than normal systems.
Four hours doesn't seem like much, until you learn that your ... Once you go septic, your
life expectancy drops 50% per hour.
Four hours is a real life and death kind of solution.
This is a beautiful swords into plow shares kind of story.
It never would have happened ... Merck and Lockheed Martin aren't having coffee on a
normal basis.
We felt it was a great example of bring that together.
That's a great story.
Now, Matt, I know it's not all success, and roses, and sunshine.
When you have 60, 70 executives from 35 companies, there's a lot of different agendas.
There's a lot of different cultures.
Can you maybe talk a little bit about one example that illustrates some of those challenges?
You were kind of in the thick of things.
I'm thinking about the ... Lee and I had a chance to actually observe some member interactions.
Yeah.
There was a group that works on comfort as it relates to VR and AR.
Yeah.
You want to talk a little bit about that?
Sure.
Each year, we go out and talk to each member in a one-on-one kind of ... way.
I started hearing echos of the same problem across.
Hey, we all want to work in virtual reality, whether it's entertainment or engineering,
or medicine.
We all have a interest in VR, but you know what?
People get sick.
Cyber sickness is a real thing.
We'd like to work on this as a group.
We organized this VR comfort work group, but quickly, as you said, found out a lot of different
agendas in the room.
There really wasn't a space to collaborate.
What was needed was more knowledge.
We ended up creating collective research collaborative where three or four companies in different
combinations chose to co-fund a senior researcher, a global ... sort of the expert in the world
on this topic, to go into the next level.
While we had higher expectations of what was going to come from, we were able to salvage
some collaboration.
Of course, this lays a platform in the track for the future of where this research might
take them.
What I recall, some of the dynamics I thought were fascinating; where basically, you were
saying, "I don't want to be the guy leading this group."
Yeah, yeah.
"I don't want to be the leader of this working group.
I want this to emerge organically from the working group."
Yup.
That was not easy.
No, it was not.
It was not.
The one sort of rival I had, who was saying, "Well, I should run this."
"Fine.
Here's the stage, go ahead and take it."
"Well, da-da-da-da," ... Suddenly he had the stage and didn't have a whole lot to say.
Yeah, it's tricky leading innovation teams.
As you say, particularly when ... These are all people who are biased to action and want
to get things done.
The ratcheting of ... or the coalescing of vision is a tricky one.
We have time for one more area.
I know you have a slide on this.
Yeah.
I have had a chance to follow what the IOP team is doing over the last seven years.
I went to some of your events six years ago, I think with Anton, to Amsterdam.
There's some very remarkable little tricks that you have.
Yeah.
Do you want to talk a little bit about the rituals?
Sure, and it was fun, too.
These three rituals, three of probably six or seven that we have in total.
Conveniently form along this classic divergence and convergence sort of innovation graph.
We have beg, brag or what if, which is a ... I call it a quaker style meeting.
Every member can stand up and deliver a beg, a brag, or a what if.
A beg is, "Hey, I'm doing this research into network activity.
I could really use ... Anybody have any insights?
Have you read some good research?
Do you know somebody?"
That's a beg, an invitation.
A brag is, "Let me tell you about this deployment I just did."
Or, "Let me tell you about so-and-so."
It's a more of a sharing.
A what if is a postulation, "What if X, Y, Z?"
All of these are invitations to conversation.
Most importantly, the beg is an exposure of vulnerability.
We teach very quickly new entrants to this network that we want you to share your vulnerabilities,
because innovation is about problems.
Without good problems, there can be no good innovations.
We drive that to expand.
I'll go to the end.
We have a 'vote with your feet' ... These are my favorite part.
Vote with your feet is the function at the end where each speaker hosts a table, and
you vote with your feet.
You go and sit, [00:14:30] and have a more in-depth conversation with a speaker, or perhaps
someone who's done a beg.
Anyone can host a table.
It's brings closure.
The most interesting part happens in the middle of IOP, late night.
Every night, from nine until midnight, it's an open bar.
We invite everybody to come down and join, and have conversation.
What we discover, the bubbles were going to be ideas.
They're kind of champagne bubbles, too.
The free flowing conversation that happens during that divergence, and having no fear.
Driving the fear out and saying, "Hey, we're just having a beer.
It's not like I'm asking you to commit a million dollars.
Let's just have a beer and talk about it."
That's so important because then it can drive towards a real conclusion at the end, and
serves as a filtering function for what's the real and what's the not-so-real.
Fantastic.
I think this is all the time we have.
I really want to thank you, Matt, for making this trip out.
Absolutely.
I know you have to hustle to get to LAX to fly to Detroit.
It was fantastic.
Thank you for sharing your- Thank you, Harald.
You bet.
Thank you all.
[inaudible]