Sunday, May 3, 2015

Innovation – the NTT I3 way

In March 2015, Srini Koushik as the President and CEO of the NTT Innovation Institute in Palo Alto visited us in Munich before his keynote presentation for a customer workshop. I took this opportunity to do an interview on his view on innovation & product lifecycle management.

Srini, please introduce yourself to our readers.
I was both a developer of technology and consumer of technology. My background is more in “applied innovation” than core innovation. My focus has always been on how to use technology to improve things in enterprise settings. I started as a developer at IBM research and global services, became an architect and a distinguished engineer and ended up writing a couple of books, e.g. “Patterns for eBusiness” in 2001. Then I went on to be CIO & CTO at Nationwide Insurance for close to 10 years. The whole focus shifted from developing technologies to applying technology in an enterprise setting.
Srini Koushik, President & CEO of NTT Innovation Institute Inc.

So with the combined role of CIO & CTO, you contributed to the core business of the company?
That’s one of the changes that I was pushing for at Nationwide because I think IT in many places tends to be more of a support function and not integrated into the core of the business. I think for today’s digital businesses, IT has to be part of the core business. That’s a change a lot of CIOs are beginning to recognize. For a company to be successful, IT has to move away from being that order-taker / enabler role to someone who is actually involved with and driving the innovation in the business.

Who is driving innovation for digital businesses – IT or the business?
In the best case, it is a collaborative approach. The big shift I see in successful companies is IT moving away from saying “no” most of the time because of cost, standards, security etc. and helping to drive innovation in the business. On the other hand, the business is realizing they cannot be market leaders without technology.

What is the Mission of the NTT Innovation Institute Inc. (NTT i3, pronounced NTT i-cubed)?
We have 2 objectives: the 1st one is to help increase revenue for our operating companies (NTT DATA, NTT Communications, Dimension Data). We do this by the development of platforms for cloud and security and others. We don’t take these platforms to market directly, but through the operating companies.
The 2nd objective is to make sure that NTT Group is viewed as a global innovator. In order to do that, we have to do the R&D and forward looking research that helps position all of us as thought leaders in the market place.

NTT Innovation Institute Inc.

Tell us about the NTT i3 approach on innovation.
Well, we believe in applied R&D – as discussed earlier - and open innovation. Innovation is not something you can do in one single place, you can’t have a center that does innovation for you. By definition, innovation comes from merging of ideas from different places. Sometimes it comes from our employees, sometimes it comes from our customers or competitors. We make sure that we have a completely open view on where we’re going to get the ideas from.

How do you think about intellectual property protection in this open innovation approach?
All of us who have been in corporate settings have been taught to become convergent thinkers: here is a problem – how do I solve it? You define alternatives and narrow them down to a solution. We believe that innovation is a divergent process. Some of the best innovative solutions come from the combination of ideas, e.g. someone from the financial services industry listening to an automotive expert and modifying the concepts just a little bit for his environment. We believe in going out and listening to as many solutions as possible. Instead of narrowing them down to solutions, we try to build upon them.
Only when you get into the implementation of a specific solution, then you want to protect the IP. One of the reasons why Silicon Valley works so well is the spirit of “no patents in the early ideation phase”.

What else is so special about Silicon Valley as an innovation environment?
A key to success is the availability of experts and their willingness to spend time with each other. There are hundreds of people ready to help you. They may be billionaires who started up other companies and competitors, but everyone will take the time to sit down with you and share ideas. But after you get there, it’s a race. Everyone is trying to figure out how to implement that idea. The ability to execute on ideas is key.
A lot of large companies make mistakes when they setup these labs in Silicon Valley and implement the same management model as in their home countries. They bring their company culture into the valley and expect different results. I think it’s important to recognize that when you’re coming into the valley, you have to have a good mix of people and cultures. People from Germany and Japan have a lot of shared culture in terms of engineering discipline and quality, but this can also get into the way of innovation. Because you deliver quality by eliminating variability, but innovation by definition is challenging this process.

What are the focus topics for NTT i3?
We are focused on applied R&D for cloud, security and network function virtualization. We are not very big, so we focus on research in specific emerging areas such as machine learning and Internet of Things. We actually call it a social network of things because we believe that these devices don’t act in isolation, they actually collaborate with one another and they share information, so it is very much like a social network.

How do you organize your team at NTT i3?
If you truly believe in the divergent thinking approach then you have to build a team made up of people from different backgrounds. So I have a lot of really good scientists, they are experts in security, machine learning etc. But I also have 10-12 people on my team with very little technology background. As an example, I just hired a person with three degrees in nano technologies, so that he can sit down with the rest of my team and they can combine ideas.

How do you transfer your results to the operating companies?
We have different maturity across the globe in terms of using our technology. A key to success is speed to market, so we cannot develop our platforms and then spend one year on training. Instead, we are identifying the areas and people with the right skills to bring our technologies to the market. This is definitely work-in-progress and we appreciate any input from our operating companies to improve this process.

What is your view on the relationship between innovation and product development?
Innovation is a divergent process, product development has to be a convergent process because you cannot work on 20 ideas in parallel and deliver results. The one thing I would like to add to this is that continuous innovation has to be integrated into the product development process. Most of our products are software platforms. This field changes so quickly, that we cannot afford 12-18 months product development cycles, so we have to incorporate continuous innovation into the product development. We have this in common with the automotive industry, they also have to make sure that the product stays current in 3-4 year development cycles. In NTT i3, we use a process called “agile product lifecycle management”. It allows us to constantly look at changes in the market and work that into the overall process. The stage 1 is about ideation and proof of concepts. Once that is done, we create the “minimum viable product” and put it in front of our customers to get feedback. We iterate through this stage 2 frequently. After that, we take the product to general availability. These concepts are not only valid for software development, but can be applied to other product development settings.

Thank you very much, Srini. How can we get more information?
Please visit our website on for access to our publications and views on digital business. I’m also available on Twitter as @skoushik.

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