In today’s economy, the difference between surviving and thriving is innovation—creating new business models, developing new solutions, and designing new products and services. For many businesses, however, innovation is easier said than done.
To that point, nearly three-quarters of businesses admit that they’re not out-innovating their competitors, according to a PwC report. But those that consider themselves leaders in innovation are expecting considerable growth—15% over the next five years.
How are industry leaders approaching innovation in their organizations? Cisco, Delta Air Lines, Philips, Cornerstone OnDemand, and Neiman Marcus have all baked it into their company ethos—whether it’s through a funded innovation center, an annual hackathon, or by allocating time and money to testing new ideas.
Here’s a closer look at how these companies are prioritizing innovation.
Three years ago, Cisco noticed that many of its customers were struggling with the same industry issues but were stuck in corporate processes that resulted in slow, siloed innovation. Its solution: the Cisco Hyperinnovation Living Labs (CHILL).
CHILL brings together between four and six customers at a time to innovate alongside each other around a particular topic, said Kate O’Keeffe, CHILL’s senior director. For two days they immerse themselves in repeated cycles of ideation, rapid prototyping, and user testing. At the end, they leave with four to six viable prototypes backed by businesses cases, she explained.
Last year, for example, a living lab focused on transforming the patient experience of cancer care developed a mobile app that helps patients and their caregivers organize and mobilize an on-demand social care team to support them throughout the treatment journey, O’Keeffe said.
“One of the guiding principles of CHILL is ‘learn by doing,’ and this is a critical part of creating an innovation culture,” O’Keeffe told CMO.com. “We just make it easier, faster, and cheaper to try out an idea instead of going through the usual corporate paralysis by analysis.”
Requiring all stakeholders—whether they’re executives, subject matter experts, builders, hackers, end users, etc.—to be present speeds the process, she added. The build team executes a quick prototype, end users provide feedback, and the insights team researches the market to look for existing solutions and to evaluate the market potential.
At the end of the two days, they pitch their ideas to executives from their respective companies with the authority to make on-the-spot funding decisions. About 75% of the ideas move on to further development stages, O’Keeffe said.
“On one level, CHILL’s goal is to generate ideas that can come to fruition in one of these ways, creating value for the participants as a joint initiative or even a startup,” she said. “But on a deeper level, our goal is to spark innovation that transforms industries.”
Delta Air Lines
Meal bots, voice assistants, and mobile apps for gate agents are just three products that were conceptualized, tested, and launched out of The Hangar, Delta’s 2-year-old global innovation center.
Staffed with a team of 20 and supported by a $2 million grant from Delta Air Lines, The Hangar was created to develop innovations that improve the customer and employee experience, said Nicole Jones, Delta’s global innovation leader.
“Our philosophy is to think big, start small, and learn fast,” Jones told CMO.com. “We’re taking bigger and bolder moves to challenge some of the traditional thinking in the airline industry and to try new things. Because we’re diverse in skill set and years of experience—and because we have the executive support to take some risks—it allows us the freedom to test ideas."
The Hangar’s team includes part-time and full-time strategists, industrial designers, researchers, engineers, contractors, and partners at startups. The Hanger also works with students from Georgia Tech and Savannah College of Art and Design. Ideas come from all around Delta, usually stemming from pain points and challenges or driven by business opportunities, Jones said.
“Our airport customer service division, for example, might tell us about issues they’re having. We’ll work with them to determine the real problem we’re trying to solve and develop a variety of potential solutions,” she said. “Then we’ll implement that solution on a small level, consider the feedback, and then figure out how to scale.”
One of the innovations The Hangar’s team is most proud of is the mobile gate interface, an application that allows lobby and gate agents to perform a number of flight-associated tasks—such as assigning customers seats and checking their flight status—without having to be tethered to a PC behind the gate counter.
“That’s just one example of how we put the customer at the center of everything we do,” Jones said. “Our job is to help [employees] do their job better and to provide our customers with the best service.”
Cornerstone OnDemand held its first hackathon four years ago—a 24-hour-long event during which 25 teams assembled and worked together to create something new. Since its inaugural run, participation has doubled, becoming one of the company’s highlights every year, said Pratak Savai, Cornerstone’s VP of application development.
“The goal is for everyone to showcase their abilities and inspire everyone else, and to create an environment where you can come up with an idea that maybe won’t show value but shows others your creativity,” he told CMO.com.
The rules are simple: All employees from any department can participate; if you have an idea but not the skill set to execute it, recruit others to round out your team; and don’t work on anything related to your day job.
After the 24-hour work period, teams are invited to present their innovations to a panel of judges comprised of Cornerstone leaders. A few days later, the company awards the top three teams prizes, which have ranged from iPads to drones, Savai said.
A number of ideas and products conceived during the hackathons has been adopted by the company, including an interactive data visualization tool that provides insights into the company’s talent data, Savai said.
“We were hesitant [about hackathons] because the company was used to doing things a certain way—new ideas and change came from the top down,” he said. “But there was also a need for something grassroots that everyone could contribute to. It’s been a great opportunity to see how creative people are and how they think outside the box.”
The future of retail has taken a decidedly digital turn. ILab, Neiman Marcus’ hub for innovation projects, is help the brand “keep up with technology’s relentless pace,” according to Scott Emmons, who heads operations.
“Retailers are having to figure out how tech can integrate into their core values,” he told CMO.com. “Being a leader in innovative tech is a core value today, but it wasn’t when we started five-and-a-half years ago.”
When Emmons was tapped to head the iLab in 2012, he was tasked with defining the types of projects it would take on and what the governance would look like, he said. While IT—the department he reported to—worked to solve business problems, it traditionally wasn’t invited to participate in customer-facing technology. Emmons knew iLab could fill that void.
Today, iLab operates on a small budget and staff—Emmons is the only full-time employee—but he said that’s what has made it successful.
“We bring on resources as needed for projects, whether it’s borrowing people, enlisting consulting help, or getting help from third-party solution providers,” Emmons said.
Emmons is responsible for vetting and developing ideas, which come from a variety of avenues: his business trips, research, trade events, local meetups, and from associates or executives who have seen something they’d like him to dive deeper into.
“It’s the typical funnel process where you start with a big pile of ideas and eliminate based on whether they’re on-brand or practical from a cost perspective,” he said. “If I know an idea is great, I’ll personally shepherd it through. Otherwise, I’ll ask for help from others to decide whether it’s something we want to pursue.”
One of those ideas came from Neiman Marcus’ CEO: The Memory Mirror records the customer in an outfit she has tried on, plays back the video so she can see herself from different angles, then allows her to share the video with friends for opinions, he said. The company recently expanded this idea, pairing it with augmented reality to include virtual try-ons in which customers can test sunglasses and makeup without having to physically put on the products.
“As our world has increasingly become more digital, [iLab has] helped us remain cutting-edge,” he said. “IT now has a seat at the table of the ideation process and is part of the discussions that get tech launched. That means we’re in a position to say yes and deliver what the customer wants more easily.”
The key to enduring for 126 years is to constantly out-innovate yourself, said Blake Cahill, SVP of digital marketing at Philips.
“The fact that innovation is in our brand statement said a lot about our company—it’s in our DNA,” he told CMO.com. “All of our domains and functions live and breathe innovation. If you don’t, one day you’ll wake up and no longer be relevant.”
Philips’ marketing and media domain, for example, builds a small innovation budget into some campaigns it launches, Cahill said. This percentage ranges anywhere from 1% to 10% and is used to try something new, whether it’s an up-and-coming social media platform, new ad unit, or new format. For example, rather than using Instagram and Snapchat to promote products and drive engagement as they traditionally had, Philips tested these apps as ways to sell products and offer exclusive deals, such as on Black Friday.
“The consumer really drives our innovation road map in terms of where their time is being spent and how they want to connect with us, and we use that to determine how much we should test,” he said.
Twice a year the results of those tests are presented at a marketing and media digital summit, which is attended by 500 to 600 of Philips’ global marketing workforce. Outside speakers from other brands and platforms are brought in, which sparks and fuels ideas, creating a “flywheel for innovation,” Cahill said.
“If you’re always doing everything the same way, you don’t know what you’re missing,” he said. “Experimenting can lead to great success, which can be applied the next time at a greater scale. Not everything is successful, but there’s still success in failure—you always learn something along the way.”