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Bend It Like a Start-Up

Ge Look Ahead
September 26, 2014
When Regina Dugan, former director of DARPA, took to the stage at the 2013 All Things Digital conference in California, it was to explain how she planned to bring fresh thinking to Google-owned Motorola Mobility. She then revealed a temporary tattoo embedded with thin, stretchable electronics on her forearm.

The tiny device, she said, would soon replace passwords for logging on to mobiles. Although she explained that the tattoo was the work of a start-up (MC10 Inc.), what she left unsaid was that companies like Motorola can learn a lot from start-ups in the design of user interfaces.

Big companies tend to have infrastructure and processes built around established ways of conceptualising innovation and design — especially those that have brought them success over time. While this can give older companies an advantage over start-ups, which almost always have limited capital and infrastructure, it can also cause them to miss opportunities that start-ups may see more readily. An innovation such as bringing user interface design elements normally reserved for keyless automobile entry to mobile phones is just the kind of leap that is often more likely to come from a start-up like MC10 than from an established company like Motorola.

No wonder, then, that Dugan turned to a start-up for new ideas for Motorola. Many large, established companies have begun setting up and investing in start-ups through internal incubators and venture capital divisions as a way to capture that start-up mojo. Citibank, for example, has its own venture capital arm, Citi Ventures, for investing in start-ups that could eventually serve the larger organisation. To date, the division has invested in some 18 start-up companies, including mobile payment solution provider Square — in which it invested $200 million.

Crowd-sourcing the design of new products is another proven way for big companies to foster potentially valuable start-up-style thinking. GE is among the large companies soliciting design ideas from smaller companies and outside innovators. This year, the industrial giant entered into a joint venture, FirstBuild, with the much smaller crowd-sourced design and manufacturing firm Local Motors. FirstBuild acts as a technology incubator for GE, seeking ideas and designs from the crowd for next-generation home appliances that it can produce and market in small quantities. FirstBuild offers modest amounts to spark ideas from the crowd (up to $2,500 for an indoor grill design, for example), but the real prize is the potential for a product to take off in the marketplace and for GE to then produce it in large quantities with minimal risk.

Large companies are also turning to outside entities not just for new ideas, but for soup-to-nuts design, manufacturing and marketing strategies. New York City-based consultancy Fahrenheit 212 guides clients like Samsung, Coca-Cola and GE through the process of creating and bringing new products to market. Mark Payne, Fahrenheit 212 co-founder and head of idea development, explains in his forthcoming book, “How to Kill aUnicorn: How the World’s Hottest Innovation Factory Builds Bold Ideas that Make It to Market “(Crown Business, October 2014), that his company employs a two-pronged “money & magic” approach to innovation. “Money & Magic,” writes Payne, bring about “the collision of two power sources that have traditionally been kept apart—user-centered creativity and outcome-riven commercial grunt.”

For his big company clients, Payne further tells GE Look ahead, the magic of creating successful new products “starts by thinking more like a start-up.” Since start-ups tend to look at challenges and solutions differently from large organizations, says Payne, much of his and his colleagues’ work is geared towards helping their big clients see the world through different lenses.

Besides innovating at an ever-increasing pace to keep up with shortening product cycles, large, established companies have the additional challenge of managing mature businesses even as they foster the development of new ones. This requires them to adopt a three-horizon leadership style, according to Paul Nunes, the global managing director of the Accenture Institute for High Performance and co-author of “Big Bang Disruption:Strategy in the Age of Devastating Innovation” (Portfolio/Penguin, 2014). Leaders of large corporations today, he explains to GE Look ahead, “have to simultaneously manage a dying business, a stable business and an emerging business”.

One example is Kollmorgen, the 70-year-old, $500m-a-year division of Danaher Corporation that makes motors and actuators for food packaging and other industrial applications. The company continues to manufacture the motors and control systems that are the foundation of its success, but it is also rolling out innovative components designed for total immersion in cleaning agents in anticipation of more stringent hygiene practices. Meanwhile it continues to develop advanced technologies—such as the motors in Abiomed’s entirely self-contained artificial heart—that could eventually benefit its main product lines by helping them develop motors that are more reliable, require less maintenance and can operate in wet environments..

As for the electronic tattoos that Dugan showed off last year, they are now available from Silicon Valley start-up VivaLnk, which created them in partnership with Dugan’s team at Google. (The team remained with Google after Google sold Motorola to Lenovo in January 2014.) “We’d like to expand this to other devices and future versions of Android,” a Google spokesperson tells GE Look ahead, “but we don’t have anything to announce right now.”

Top Gif: Video courtesy of VivaLnk.

This piece first appeared in GE Look ahead.