Over the last century, the cross-pollination of ideas has produced unexpected, life changing inventions. IBM used technology from military computers and networks in the 1950s to help create the groundbreaking computerized Sabre airline reservation system that went live in 1964. The global positioning system (GPS) designed for military intelligence operations at the height of the Cold War in the 60s has evolved into a satellite network underpinning dozens of civilian applications in map-making, climate studies, outdoor recreation, and more.
Today’s management experts refer to this interchange, where one thing evolves to support another purpose in a different market, as adjacent innovation. While a related concept, transformative innovation, creates entirely new products, services, or markets, adjacent innovation leverages an existing product or service to capitalize on a new market space. Digital transformation is giving adjacent innovation a boost, morphing technology to solve new problems. One of the most widely known modern examples is Uber, which combined geo-location, data analytics, and digital payments to create a new service that reinvented an entire industry.
About six years ago, my company, Infor, which creates industry-specific business software, was embarking on the next phase of our evolution. With more than 15,000 employees in 100 countries working on a wide range of software solutions across dozens of industries, we needed to find a way to bring our company together. We saw an opportunity to use adjacent innovation as our rallying cry and put it at the center of our transformation that was aimed at creating a more modern set of business software for specific industries based on cloud technology.
Our experience at Infor has shown that adjacent innovation emerges along an operational continuum. On one end, there are proactive, explicit initiatives where we define a big problem and solve it programmatically with a curated team. On the other end of the spectrum, adjacent innovation happens serendipitously. The important point is that we didn’t just get lucky. Much of the success came down to building a new culture and method of working that powered the outcome. We changed our business processes, the way we communicate, and how we measured ourselves.
With our more deliberate approach, cross-functional leaders convene proactively to brainstorm how to solve a particular problem, capitalizing on the power of interdisciplinary thinking. At Infor, our teams include domain experts from the particular area being addressed (e.g., retail, healthcare) and technical experts from relevant areas (e.g. big data). Together, these teams are able to act on each opportunity in different but complementary ways.
A key tactic we’ve implemented in recent years to spur adjacent innovation is a company-wide show and tell where our product teams demonstrate their solutions to a variety of internal audiences. Assembling hundreds or even thousands of employees in some cases, these events provide employees working on a range of initiatives a unified, comprehensive view of what’s happening outside their areas of expertise. This approach enables distinct teams to share ideas and see connections that otherwise wouldn’t be uncovered.
In just one example, our teams saw an opportunity to apply our retail solutions and customer experience platform across multiple industries, including healthcare. Patients are effectively consumers of goods and services from healthcare providers, even though they don’t consider themselves as customers in the traditional sense. Realizing these connections, we turned our CRM platform, which helps retailers manage and analyze interactions at every customer touch point, into a platform for providers to manage patient interactions. We also embedded data science from our retail systems to help healthcare providers better inventory (medical supplies) with patient needs. This technology is now being used to help hospitals ensure their floors are stocked with medicines, bandages, and other mission critical supplies that patients need, at the right place and the right time. Through these initiatives, our goal was to help the healthcare industry more effectively navigate complex challenges, such as regulatory pressure and the impact of the Affordable Care Act, by becoming more business focused to drive financial performance while keeping quality of care high.
Following this same model, we have now constructed six additional vertical solutions on the same underlying platform that handle the unique needs of automotive, financial services, distribution, public sector, hospitality, and fashion. What’s amazing is that while all solutions share the same core engine, you would never know by looking at them. Each speaks its own industry specific language, targets key roles in those verticals, and powers business processes that are uniquely theirs.
Of the many things we’ve learned from our adjacent innovation initiatives, the importance of building a culture that fosters cross-industry thinking stands out. In my experience, achieving this objective comes down to three key factors: people, process, and products or the “3 Ps”.
With the first “P” — people — you have to think carefully about how you’ll achieve the optimal mix of skills and expertise on a team. When reviewing individual candidates, we look for three major attributes: industry, product, or business area expertise; expertise in a role; and what I call the “athlete” factor: Is he or she a smart, scrappy, and talented person who’s able to adapt quickly, learn new things, and embrace a challenge?
Rarely, if ever, does one person possess all three of these capabilities, so it’s important to determine the point of the triangle you’re least willing to sacrifice. My experience suggests that holding fast on the third leg — that intangible or athlete factor — is most important. Even if a candidate lacks one of the other two skills, an entrepreneurial person will overcome the gap, learning what they don’t know and proactively figuring out what needs to be done.
With the second “P” — process — it’s critical to create respect and accountability between individuals and across organizations that aren’t always aligned and whose perspectives might even be at odds with each other. Successful cross-functional teams are typically characterized by cultures of influence vs. explicit power, where individuals have to earn credibility with the rest of the team to avoid compromising group productivity.
The third key ingredient — products — means having clear, tangible goals. Whether it’s an actual product, a presentation, a demonstration, or an event, the “product” is a point-in-time culmination of everyone connecting to deliver something great.
Through our initiatives, we’ve also found that physical proximity is not a prerequisite for realizing adjacent innovation. Technology allows us to transcend space and time, making it possible for teams of twenty people from fifteen different countries to build relationships and achieve great things. I’ve witnessed a high level of discourse and complex problem solving in our global teams that is nothing short of astounding. Best of all is that remote chemistry can be genuine. Achieving intimacy and trust while working amid geographic and cultural distances is probably the most powerful dynamic in achieving adjacent innovation. When that kind of magic happens, global companies are able to more effectively compete in a world that requires big change at an unprecedented pace.
Christina Van Houten is Senior Vice President of Strategy & Product Management at Infor
