In the new digital economy, where data is currency and everyone and everything are increasingly connected, many would have expected corporates to embrace open innovation and knowledge sharing within the industry.
But for large organizations, shifting to an outward-looking growth and innovation strategy isn't easy. While most are taking some steps forward by adjusting to and adopting a faster ecosystem approach, they still have to deal with legacy technology and a corporate immune system primed to view any changes to business-as-usual as a threat.
Daphne Gottschalk is Head of Innovation at Amdocs, a leading software and services provider to the world's most successful communications and media companies. Through the company's innovation program, she and her team partner with a large ecosystem of start-ups and academic institutions to find new ways to offer business value - both to its customers and within the company itself. While in their home-town Tel Aviv, we had a chat with her about Amdocs' innovation strategy.
How do you approach innovation at Amdocs?
We have two main goals. The first is to create a culture of innovation. We want every employee and unit to have the opportunity to innovate and drive innovation internally. The second is around open innovation. As a large B2B organization, we look for ways to co-innovate with the external ecosystem - whether it's customers, partners, institutes, academia, VCs, incubators or users.
How are you making open innovation a business practice at Amdocs?
Our customers are among some of the largest telecommunication companies in the world, with many placing high strategic importance on our collaboration with them. For example, we've established joint innovation centers with AT&T in the US, Airtel in India and Kyivstar in Ukraine to solve and address their business challenges.
In addition, leveraging our wide ecosystem of partners and leading academic institutions, we introduce our customers to specialist, niche technologies. We also recently established a research center at Israel's Ben-Gurion University, where joint teams will be working on addressing challenges using applied research around artificial intelligence and cyber security, with the aim of delivering results within several months.
Are there other ways that your employees can get involved?
While there's no silver bullet to get employees on board, if we can leverage their talent with that of our community of academia and vast ecosystem of partners, we can create conditions that are ripe for innovation - and come up with brilliant solutions.
One example is an executive challenge we conducted with British Telecom to address the way millennials want to use corporate applications. It was basically a form of crowdsourcing, where we turned to our employees and partners to submit their own ideas. This was followed by an evaluation process, which led to a selection of the best ideas to be taken to the customer.
Despite the myth that large organizations struggle to innovate, Amdocs has proved otherwise. Is there an underlying methodology that you see as your "bible"?
The attitude of companies who think they "know it all" is one of the toughest barriers to innovation.
Essentially, what's required is a culture shift. It begins by asking how to get the organization and staff - from the leaders downwards - to be curious about what's happening outside the organization.
There's no single method that's guaranteed to work, but I'll mention two that have worked for us:
Over the past two years, we've embraced the concept of "design thinking", which encourages people to look at things from the end-user's perspective. For a B2B organization, this notion of identifying, empathizing and connecting with the end user is powerful in its ability to force us to look outside organizational structures. By definition, you have to venture outside and see how your end-users interact with your product and solutions.
We also run a quarterly program that we call Launchpad, a forum where people can learn about new technology trends, and then innovate and experiment in collaboration with the ecosystem. To date, we've held several - around Blockchain, AR/VR, and the next one will be on AI. The program begins with a series of lectures by experts from startups, partners and academia. Working teams are then formed from the diverse pool of experts and session participants, including Amdocs employees. As part of the process, the teams devise ideas of how we can "apply" the trend within our domain, and then we start experimenting. The end result is a number of low-to-medium fidelity prototypes of use cases, solutions and ideas.
It's a great way of empowering the organization to learn. It's very different to the traditional classroom: it's an appealing environment and very dynamic.
Personally, I've seen how people thrive in these sessions and it brings out the best in them. Then, once the program ends, the participants, with our ongoing support, go back to become innovation ambassadors within their teams and units.
Rather than forcing employees to go through innovation training, your focus is on enablement. Is that a conscious choice?
There are 26,000 employees in our organization and I see each one as an innovation ambassador.
It's my team's role to wake up every morning and come up with new ways to enable innovation more effectively, on a larger scale, and with better results.
It's also our responsibility to identify and use the best methods out there. We believe that although innovation requires a lot of intuition, there are clear best practices and methods we must learn, adapt and build in order to innovate more effectively.
So how do you measure success?
We measure the entire "innovation funnel" where each year, we aim to improve on the previous year's results. We have formulas for both internal innovation and open innovation. We think about the entire journey - so for example, we measure how many people we engaged in innovation, the ideas that were generated and subsequently converted into concepts - and ultimately, business. We also perform an annual survey and use additional means to measure cultural aspects.
So essentially, it's a numbers game. We've found that the biggest gap large organizations face lies in the ability to convert ideas into commercialized products or services. Our biggest focus for this year is to figure out how we can convert at higher rates.
Finally, why is it so important for B2B companies like Amdocs to embrace open innovation?
It doesn't matter which industry you're from - whether it's agriculture, automotive or communications and media - everyone is undergoing some form of digital transformation. For us, the concept of open innovation has never been more relevant to our business. The notion of co-innovating and co-developing is something that we see happening more and more across the market, and as an organization who is a market leader in this space, it's a direction we are actively embracing.
It's also important to remember that the transition is a journey. To succeed, large corporations must take steps to become familiar with and adapt to the new models. Such change needs to occur at all levels, including organizational, technological and business leadership.
I believe that organizations who master this transition will ultimately become the top performers within their industry - attracting more and more players in their ecosystem and enjoying new paths to growth.
