Product Development & Management Association’s 32nd Annual International Conference, September 15-17, 2008, Orlando, FL – www.pdma.org

NPD 2.0The Impact of the Web on Product InnovationPanelists:

Dion Hinchcliffe, Founder & CTO - Hinchcliffe & Company

William Porter, Chief Technology Transfer Officer, TekScout - Vice President – UTEK Corporation

Vida Killian, Manager of IdeaStorm, Global Communities and Conversations Team - Dell Inc.

Kenny VanZant, Chief Product Strategist, SolarWinds

Moderator:

Patrina Mack, Managing Partner – Vision & Execution, Inc.

Patrina MackManaging Partner, Vision & Execution Patrina Mack, Managing Partner of Vision & Execution,

consults with emerging and established companies here and internationally to optimize market acceptance of innovative product solutions across a wide range of industries. In addition she works with established companies who have fallen behind in innovation of new products or services to retool and redesign their product development organizations. She authored the award-winning white paper, "After Internet Time: Five New Realities for Product Development." She is a two-term Chapter President of the Product Development & Management Association, and is an Advisory Board Member to TechCoire and CleanTech Open. Ms. Mack holds a BA from UC Irvine, in Advertising Design. She continues her lifelong pursuit of understanding what drives customer adoption of innovative products.

Dion Hinchcliffe Founder & Chief Technology Officer, Hinchcliffe & Company Dion Hinchcliffe is a well-known business strategist and enterprise architect,

who speaks, writes, and works prolifically hands-on with clients in the Fortune 500, federal government, and Internet startup community. Mr. Hinchcliffe was the first to provide a detailed definition of Product Development 2.0 that was generally accepted in the product development community. He also helps lead the industry by evolving the thinking around Web 2.0 in the enterprise for ZDNet (http://blogs.zdnet.com/Hinchcliffe) as well as other leading industry periodicals and media outlets. He was founding Editor-in-Chief of the respected Web 2.0 Journal and is current Editor-in-Chief of Social Computing Magazine. His thought leading work has been covered in BusinessWeek, CNET News, Wired Magazine, CIO Magazine, and many other well-known periodicals.

In addition to helping companies deliver effective Web 2.0 and Enterprise 2.0 product solutions, Mr. Hinchcliffe is also is a regular keynote speaker on the topics of Web 2.0, SOA, and Enterprise 2.0 and has presented or keynoted at Web 2.0 Expo, CeBIT, Business Integration Forum, Interop, JavaOne, SOA Web Services Edge, Enterprise 2.0 Conference, Office 2.0, and other major business and software conferences. He is also the founder of Web 2.0 University (http://web20university.com) the world's leading education solution around Web 2.0 as well as The Enterprise 2.0 TV Show (http://e2tvshow.com). He can be reached at dion@hinchcliffeandco.com or http://twitter.com/dhinchcliffe.

NPD 2.0 Defined

Comparison of NPD 1.0 to 2.0 

Product Development 1.0 

Product Development 2.0 

Primary Customer Interaction Channel:

Telephone, Mail, Face-to-Face, One Way Media (Print, TV, Radio, etc.), e-mail

World Wide Web, e-mail, IM

Source of Innovation: Organizations Customers

Innovation Cycle: Months, YearsMinutes, Hours, Days, Weeks

Content Creators: Internal Producers  External Producers

Feedback Mechanisms:

Market research, satisfaction surveys, complaints, focus groups

Analytics, online requests, user contributed changes

Comparison of NPD 1.0 to 2.0 

Product Development 1.0 

Product Development 2.0 

Customer Engagement Style:

Controlled, well-defined process

Spontaneous and chaotic

Product Development Process:

Upfront design Less upfront, much more emergent

Product Architecture:

Closed, not designed for easy extension or reuse by others; walled garden

Open, very easy to extend, refine, change and add on to, ecosystem friendly, designed (and legal) for widespread remixing and mashups

Product Development Culture:

Hierarchical, centralized, Not Invented Here, somewhat collaborative, expert-driven

Egalitarian, decentralized, remix instead of reinvent, highly collaborative, Wisdom of Crowds

Comparison of NPD 1.0 to 2.0

 Product

Development 1.0 Product

Development 2.0 

Product Testing:Internal, dedicated test groups, hand-picked select customers

Users as testers

Customer Support: Customer Service User Community

Product Promotion:One-Way Marketing and Advertising

Viral propagation, explicit leveraging of network effects, word of mouth, user generated and other two-way advertising

Business Model:

Product Sales, Customer Service and Support Fees, Service Access Charges, Servicing High Demand Products

Advertising, Subscriptions, Product Sales, Servicing All Product Niches (The Long Tail), Unintended Uses

Comparison of NPD 1.0 to 2.0

 Product

Development 1.0 Product

Development 2.0 

Customer Relationship:

External Buyer (Consumer)

Partner and -- increasingly remunerated -- Supplier (Consumers as Producers )

Product Ownership:Institution, particularly executive management and shareholders

Entire User Community

Partnering Process:Formal, explicit, infrequent, mediated

Ad hoc, thousands of partners online, disintermediated

Product Development and Integration Tools:

Heavyweight, formal, complex, expensive, time-consuming, enterprise-oriented

Lightweight, informal, simple, free, fast, consumer-oriented

Comparison of NPD 1.0 to 2.0

 Product

Development 1.0 Product

Development 2.0 

Competitive Advantage:

Superior products, legal barriers to entry (IP protections), brand name advantage, price, popularity, distribution channel agreements

#1 or #2 market leader, leveraging crowdsourcing effectively, mass customization, control over hard-to-create data, end-user sense of ownership, popularity, cost-effective customer self-service, audience size, best-of-breed architectures of participation

William Porter – TekScout / UTEK Chief Technology Transfer Officer From 1983 to 1998, Mr. Porter was an executive

with AT&T/Lucent where he was general manager and co-founder of the Intelligent Acoustics Systems Group within Bell Laboratories. From 1998 to 2001, Mr. Porter was Director of Business Development for the Digital Television and Entertainment Business Unit of Sarnoff Corporation. Recently, Mr. Porter was a technology business development consultant for NEC Research Institute where he was responsible for developing strategies to facilitate technology transfers for the Institute. Mr. Porter received a B.S. in Physics from Lamar University and a M.S. in Mathematics from Texas Southern University.

Fundamentals of Open Innovation

The most difficult developmental challenges are solved by experts on the fringe or outside a company’s core expertise, who may see the solution as obvious.

IP must be managed as a perishable asset–markets and customers won’t wait.

Not all of the smart people in the world work for you

Why Open Innovation Networks Work Open Innovation networks deliver technical experts

motivated to find and solve challenges They are pre-qualified to move your product quickly

and innovatively from R&D concept to commercialization.

They have expertise from multiple disciplines to ensure the best solution to get your product to market.

Open Innovation leverages professional scientists, engineers and academics Only 40% of the 640,00 U.S. based scientists in the US

are employed in for-profit companies. Open Innovation taps the knowledge of the 60%

working in government and academic labs.

Why Open Innovation Networks Work Open Innovation provides access new perspectives

from the emerging worldwide technical community 37% of the foreign-born scientists who are US

Educated return to their country after graduation. There is tremendous growth in new research being

done in Russia, China, India, and other emerging countries.

Certain countries are ahead of the US in areas such as “green” and sustainable design methodologies.

Companies post challenging development projects online, along with a reward and timeline

TekScout makes the Scientist connection

TekExperts earn rewards by solving posted projects

Products reach the market with more Innovation, faster, and with less expense

How It Works

The Process is simple, the results are brilliant

Make The Challenge Clear: Include a summary that scientists outside of your field can

relate to Give detail as to what might work Don’t waste your and scientists’ time: State up-front any

solution approaches that you are not interested in.

Make it interesting to Scientists, Engineers and Academics The most likely success will come from professionally

affiliated experts, not “the crowd”. Pique their motivation to solve challenges Encourage and be open to expertise from multiple

disciplines to ensure the best solution to get your product to market

Key to Effective Open Innovation

Vida Killian - Dell Inc. Manager, Ideastorm Vida Killian is the manager of IdeaStorm within the

Global Conversations team at Dell Inc. In this role, Vida manages the technology that powers Dell's IdeaStorm and engages teams across Dell that participate on the site, evaluates ideas, and steer business action on innovation. Dell's IdeaStorm has collected more than 670k votes on over 10,000 customer-driven ideas.

Vida has been with Dell for over nine years including roles in Manufacturing, Supply Chain, Services and Community.Vida holds a Chemical Engineering degree from Texas A&M University as well as an MBA and Masters in Supply Chain from MIT.

Why IdeaStorm? Engage in relevant conversations with our customers online 24/7,

worldwide in all major languages.

OBJECTIVE:

Encourage ideas,feedback, inputand dialogue

RESULTS:

IDEASTORMLaunched Feb. 2007

DELL CONFIDENTIAL

Approx. 10,000 ideas generated by the community 200 Ideas Implemented by Dell to date Over 1 million unique users More than 670,000 positive votes Approx. 4,000 comments per month

www.ideastorm.com

DELL CONFIDENTIAL

• Executive review at the highest level

• Screening ideas for validity

• Engaging experts to weigh in

• Critical to have strong process and idea management

• Listening Culture

• Lightning rods to focus discussion

• Allows users to deliver bad news (rate ideas low)

• Clarify ideas and brainstorm

• First place Dell engages

• Moderation to encourage ideas not chatter

• Closed loop feedback model

• Transparency

• Recognition

• Engagement and interaction with top users to include them in the management of the site

How it works…

Approximate Breakdown of IdeaStorm

DELL CONFIDENTIAL

4% InnovationNew Brainstorming

Process.

80% ImprovementsIncludes both incremental ideas for next generation products as well as improvements to existing products and services.

Use existing Ideas Management process.

12% UnusableNo action needed.

Next Steps – IdeaStorm 2.0 Continuous improvement in Idea Management

Improve back end process flow to manage inputEnsure the right people throughout the company

are engaged and active in the community Build on truly Innovative ideas (~4%)

Create a virtual team room for collaboration Create other applicable Storms

Internal: Product Group Innovation, Place for Account Executives to provide input

External: PremierStorm, Non-English Languages, Others TBD

DELL CONFIDENTIAL

Kenny Van Zant - SolarWinds Chief Product Strategist Kenny Van Zant serves as chief product strategist

and is responsible for overall product strategy and strategic partnership activities. Prior to SolarWinds, Kenny served as head of Strategy and Corporate Development at Motive, Inc., a leading provider of broadband management software. Kenny joined Motive following its merger with BroadJump in 2003. Prior to Motive, Kenny co-founded BroadJump in 1998, and served as its COO. Previously, Van Zant was responsible for the technical direction and strategy for Broadband sales in the United States for Cisco Systems.

SolarWinds was founded on the idea of products designed BY network engineers, FOR network engineers

Thwack, our community site, is more than 17,000 members strong

600 new registrations per month, 2000+ posts per month Offers solutions problem-solving, technology-sharing, peer

interaction, and product development input. Community engagement is part of employee quarterly goal

setting To date, 20% implementation rate (up to 33% for some

products)

Lessons Learned

1. Strike a Balance

HYBRID of 1.0 and 2.0 approaches

Engage both the vocal minority and the not so vocal majority

2.0 delivers more incremental than transformative

2.0 offers great testing ground

2. End the telephone game

“Old Way”

Lessons Learned

3. Overcome your fears

Be ready for the good AND the bad (they will defend you)

Join the debate! Be human, but don’t take

it personally All levels participate

4. Define WIIFM

Clearly outlinewhat you wantto know, be specific.

Identify the value of participation for the end users

Lessons Learned

5. Beware the False Positives

Know the audience, engage both sides Have a mechanism to clarify & validate ideas Close the loop

Watchers Creators

Discussion & Questions

Download Presentation  http://www.visionandexecution.com/2008PDMA/