Seizing Digital Opportunities

 

In an increasingly digital environment even large companies have identified opportunities they cannot seize alone and sometimes even their industry needs external assistance in delivering the solution

 

Can successful solutions in other sectors work in the hospitality arena? In an increasingly digital and connected environment is a possible solution to use partnerships for shared problems?

A partnership process which helps build innovation capabilities for the digital age which can work across the sector. 

 

The Cisco Project

Cisco, the California networking and technology company, created a possible answer to the challenge of finding new ways to grow profits. They brought together innovation experts and large company senior executives in a model designed to address opportunities where the goal is to work together to overcome an issue.

Instead of relying on start-ups to create the innovation or buying them, companies can take part in an ‘ecosystem innovation’ to collaborate to develop and then commercialise new concepts. Cisco have created a four phase approach for their projects: 

1. Identify the ‘focus zones’ and innovation partners

These are the areas of opportunity. The group knows they need to draw on each other’s capabilities to create ecosystem-level solutions so they evaluate the best way to apply the methodology. 

2. Find and define the problem

A robust problem discovery and definition phase is finalised after months of asking and understanding the problems customers face.

 3. Convene the participants to prototype solutions

Teams build a simple prototype, use it to test their ‘leap of faith’ assumption with customers, and then apply the learning to restart the build-test-learn loop.

 4. Achieve commitment and follow-up

The teams prepare presentations for experts and investors – for Cisco this was their senior executives and executives from the participating organisations. Anyone ‘judging’ the event and wanting to invest must commit on the spot.

 According to participants the value of the process goes far beyond additional revenue and creates value through launching the project, through adding strategic value via these collaborative alliances and, finally, enhancing long term value on any exit.

“We believe that no one company can deliver the full breadth of technology solutions that customers need at the pace the market requires,” says Chuck Robbins, Cisco’s CEO. “This process brings our teams together with partners, customers and companies working to find new opportunities. Through analysis and collaboration, these lab sessions result in breakthrough ideas that can be implemented or invested in by those that participate, including Cisco.”

In the example, one team focussed on the issue of effective data-sharing, and Cisco partnered with four universities to create a cross-industry open-data platform to encourage application development by other start-ups. Another team sought to update the ‘pen and paper’ tools used by warehouse workers – its solution was to introduce augmented-reality wearables and to design a pilot that launched in a warehouse 60 days later.

Early project results include an Airbus-DHL-Caterpillar lab which produced a project that digitalised supply chains, factories and warehouses. It will generate $6 billion in new revenue and save $3.4 billion in costs over the next ten years. Not all projects survive to fruition, but most involved in the process believe that one of the most important factors is that participants are developing new innovation capabilities at the ecosystem level.

 Can this be applied in the hospitality sector?

The partnership process helps build innovation capabilities for the digital age which can work across the hospitality sector.

Collaborating skills to capture the valuable opportunities of products and companies can effectively solve many problems we face. Due to each business having a distinct culture and objectives it is important to have one partner as the lead project manager. Partners do not need to be in the same industry but they should have a connection that is relevant to the ecosystem innovation effort. Although they may not have worked together in the past, the hope is that they are all eager to gain new knowledge and bring their respective insights and resources to the table. Cisco stress that a senior executive with an innovation role is best to lead the project because larger organisations can often be bureaucratic, destroying the momentum of innovation. Start-up speed often requires individual participant’s passion and clout.

Teams build a simple prototype, use it to test their ‘leap of faith’ assumption with customers, and then apply the learning to restart the build-test-learn loop. It involves repeated cycles of hypothesis, development, prototyping and testing with customers. David Ward, Cisco’s CTO of engineering and chief architect, calls this approach “speed innovating” and says, “This is the polar opposite of R&D. It’s built around what people don’t know, rather than the common factors we do know.”

In the final stages, all the content, customer feedback and insights are compressed into a business model and a plan of action for the next six months. Ecosystem innovation is one answer to the challenge of finding new ways to grow profits. Not every project succeeds – some are too ambitious or not ambitious enough, some run up against cultural blockages and some simply fail. However, the process allows companies to bring diverse ideas, skills and resources together to solve problems at lightning speed.