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GameChanger: Open Innovation through Angel Investing

Point: Create an internal venture fund to incubate revolutionary ideas.

Story: This week’s Innovation Summit at the Shell Technology Center Houston (STCH) highlighted the need for innovation and collaboration to solve society’s most pressing challenges. As the world’s problems become more complex, the best way to tackle them is with a cross-disciplinary approach.

What are some ways that companies can foster this multidisciplinary collaboration to achieve breakthrough innovation? One way is to create an open mechanism inside the company that solicits promising ideas regardless of where they come from — including outside the company — and offering seed funding that’s outside of the company’s traditional R&D programs to give them time to develop.

GameChanger

Shell is doing this with its GameChanger program, headed by Russ Conser.  GameChanger seeks out and invests in early-stage ideas that could potentially revolutionize the energy industry. GameChanger plays the role of an angel investor; a panel screens ideas and selects ones to fund. Idea submissions can come from any Shell employee as well as from outside the company.

Shell actively solicits ideas from academics and entrepreneurs alike through its web site www.shell.com/GameChanger.  Ideas that pass the initial screen receive seed money — $25,000 to develop a robust proposal and on up to $500,000- $1 million a year to actually test and develop ideas that graduate into projects.

Example

For example, Erik Cornelissen, a research scientist, was in a toy store looking for a gift for his nephews when he saw a science toy that many of us have seen before: a dinosaur that grows in size when placed in water. A nifty, fun gift. But Erik made a connection back to a perplexing problem that had plagued Shell and other oil companies for a long time. Specifically, oil wells contain water, not just oil. Over time, more and more water gets pumped up relative to oil.  Not only does that make the well less productive, but it pumps water that increasingly is becoming a scarce resource itself. The question is, how to detect that water and prevent it from mixing with the oil?

Erik realized that the same principle behind the dinosaur toy — a material that expands upon contact with water — could be applied at the oil well. Erik needed to identify a “swellable elastomer” that would seal off the pipe when water started to mix with the oil flowing through it. The idea was not difficult to articulate or explain, but finding this kind of material proved long and difficult. GameChanger provided Erik with the time and funding he needed to go through hundreds of experiments to find the elastomer that fit the demanding conditions at the oil well site.

Results

About 40% of Shell’s core Exploration & Development R&D portfolio has evolved from ideas submitted to GameChanger, and 70% of the GameChanger portfolio includes collaboration with people outside of Shell.

Since its inception in 1996, GameChanger has funded 3000 ideas, investing $350 million and resulting in 250 commercial projects, said Gerald Schotman, EVP, Innovation, R&D and Chief Technology Officer at Shell.

Action

• Publicize clear and explicit selection criteria, so external submitters know what you want and will fund.  For example, GameChanger uses 3 primary criteria:

  1. Novelty: is the idea truly and fundamentally new and different? (There’s no point in funding ideas that would qualify as traditional R&D projects.)
  2. Value: Could the idea create substantial new value if it works? (Wild ideas are welcome, but ultimately they need to deliver value if they come to fruition.)
  3. Credible Plan: is there a plan to manage risks prudently? (New ideas are risky, but many risks can be identified up front and plans can be put in place to stay ahead of them.)

• Have an end game for how you’ll commercialize an idea that demonstrates feasibility. For example, GameChanger uses 3 commercialization strategies:

  1. Move the idea into the company’s internal R&D portfolio.
  2. License the idea externally.
  3. Spin off a new company to bring the idea to market.

No Comments »Capital, Case study, Entrepreneurs, Growth, How-to, Innovation, New Product Development, open innovation, R&D, Strategy

Improve Productivity through Data Visualization

Point: Presenting data visually reduces the mental resources we expend to understand a concept, thereby improving our productivity.

Story: Humans are naturally visual creatures. “Fundamentally, our visual system is extremely well built for visual analysis,” says Noah Lliinsky, author of Designing Data Visualizations and Beautiful Visualizations. We’re tuned to spot patterns.

Consider the Anscombe Quartet, created by statistician, Francis Anscombe. First, look at the datasets in Figure 1.1.


Figure 1. The x values are the same for the first three datasets.
There seems to be little difference between the datasets. But, when graphed out, we suddenly see differences.


Figure 2. Ascombe’s datasets when graphed.
Not only do humans like images, but we’re more efficient thinkers when we use them.  A study conducted by Mindlab International at The Sussex Innovation Center investigated how office workers manage existing data using traditional software and how efficient that process is. One of the key findings of the research suggests that when carrying out routine, everyday tasks in the office, if the data is displayed more visually, such as through visual maps, individuals are 17% more productive and need to use 20% fewer mental resources. What’s more, teams collaborating on a joint project use 10% fewer mental resources and are 8% more productive when using visualization tools, reports Mindjet’s Nicola Frazer-Reid.

Why is visual information easier to process? Verbal abilities developed much later on the evolutionary scale than visual ones. “We are well-developed in imagery for quick environmental awareness,” writes Steven Kim in The Essence of Creativity.  According to Kim, imagery has two main advantages. First, we can see multiple things in parallel. For example, we can see the body language of four people simultaneously much better than we can track four conversations at a party simultaneously. Second, we can grasp an image’s meaning faster, which accelerates productivity.
Action

  • Use visual dashboards to show the status of projects at a glance, such as red/yellow/green indicators
  • Use bar graphs and pie charts to show relationships. These visual cues help people quickly grasp the meaning behind numbers.
  • Encourage people to sketch out ideas — even very rough drawings help make abstract ideas more tangible and easier for a group to react to and discuss.

Sources:

Source for Fig 1 and 2: http://en.wikipedia.org/wiki/Anscombe’s_quartet#cite_note-Anscombe-1 and Anscombe, F. J. (1973). “Graphs in Statistical Analysis”. American Statistician 27 (1): 17–21. JSTOR 2682899.

http://blog.mindjet.com/2012/05/fact-people-and-teams-work-better-with-visuals-so-what-can-you-do-to-benefit-from-this/

 

1 Comment »How-to, Innovation, Productivity

CVS and Ford: Putting Designers in Customers’ Shoes – literally

Point: To design better for customers, put yourself in their shoes.

Story:  What’s it like to drive a car if you can’t turn you head easily to look over your shoulder? Or to shop, if bending over hurts and the product you want is on the bottom shelf?

That’s what older drivers feel, and every minute in the US, one person turns 66. In seven years, the US will have 55 million people over age 65 — a big market.

To better design for the needs of this market, companies like pharmacy chain CVS are putting themselves in the shoes of aging customers with AGNES. AGNES stands for “Age Gain Now Empathy System.” Developed by the MIT AgeLab, AGNES is a specially-designed jumpsuit that mimics what it feels like to be in your mid-70s. The suit can be be worn by designers, product developers, architects and planners to experience firsthand the physical challenges associated with aging. For example, bungee cords anchored to the helmet and hip restrict movement and rotation of the spine, and elastic bands from hit to wrist reduce shoulder mobility.

CVS will be making store design changes based on learnings from the suit. For example, they’ll be putting carpeting in the stores to reduce slick-floor slipping, and they’ll adjust the height of checkout counters to require less bending and lifting.

Similarly, Ford Motor’s engineers use a similar suit (they call it the “Third Age Suit”) to experience driving with restricted movement and dexterity in hands, knees, neck and even eyesight (goggles simulate cataracts).  Ford also has a bulbous weighted “empathy belt” that simulates the physical effects of pregnancy.  All of these inventions help give designers a better sense of the consumer’s experience of the company’s products and services.

The result: not only will product designers develop better products for the elderly, but their innovations — like Ford’s hands-free automatic parallel-parking system — appeal to consumers of all ages. Simplicity, ease and comfort attract customers of any age.

Action:

  • Create tools or prostheses that simulate the customer’s experience of the product or service
  • Test products and services for ergonomics for a wide range of customers (especially the growing population of those over 65)
  • Look for win-win design solutions that improve usability for everyone.

 

Sources:

MIT AgeLab: AGNES (Age Gain Now Empathy System)http://agelab.mit.edu/agnes-age-gain-now-empathy-system

Future Demographics – The Silver Book: http://www.silverbook.org/browse.php?id=57

Interview with Dr. Joseph Coughlin on AGNES and the AgeLab: http://web.mit.edu/newsoffice/2009/coughlinqaa-0414.html

In An Aging Nation, Making Stores Senior-Friendly
http://www.npr.org/2011/05/10/135773106/in-an-aging-nation-making-stores-senior-friendly

In a Graying Population, Business Opportunity
http://www.nytimes.com/2011/02/06/business/06aging.html?pagewanted=all&_r=0
A Profile of Older Americans: 2011 – Administration on Aginghttp://www.aoa.gov/aoaroot/aging_statistics/Profile/2011/docs/2011profile.pdf

No Comments »Case study, Customers, How-to, Innovation, New Product Development

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