Bill and Dave begin part-time work in the rented garage at Palo Alto, California, 1938. With $538 (U. S. ) in working capital, consisting of cash and a used drill press, they produced Hap’s first product, HP Model AAA, a resistance-capacitance audio oscillator. Table I-I summarize the Journey of HP from time to time. Table I The Journey of HP as a Company asses – asses Bill and Dave formalized their partnership on January 1, 1939. They issued $5 (U. S. ) Christmas bonuses and adopted production bonuses on 1954, laying the foundation for the company’s profit-sharing program.
HP established a pioneering health insurance plan for all employees and has its first owned open floor plan that signed for versatility on 1942. HP held its PIP on November 6, with shares selling for $16 (U. S. ). The PIP issued help with estate planning for its founders and to enable employees to share in the company. HP did their first acquisition on 1958 with F. L. Mosey Company, a producer of high-quality graphic recorders. HP went global on 1959, establishing a marketing organization in Switzerland and a manufacturing plant in Germany.
Number of employees growth from 2 to 1,178; and revenue growth from $5,369 to $28 million. Asses – asses HP listed on the New York Stock Exchange on March 17, 1961. HP introduces its first computer on 1966, the HP AAA. Dave Packard elected as CEO and chairman. Bill Hewlett elected as president. HP instituted flextime first time in the United States, designed to allow employees having more time for family, leisure, or personal business than before. HP had ranked #7 in Fortune’s list of the 100 Best Companies to Work.
HP also made the top 100 in 1993, 1998, 1999, 2000, and 2001. Number of employee increased to 8,700, and revenue increased $9. 8 billion. Asses – asses HP expanded their computer product line, which initially targeted at university, search, and business users, to reach consumers. HP created HP Services on 2001 to provide consulting, outsourcing, support, and solutions deployment. In May 2002, HP officially merged with Compact. Com, Palm Inc, and Archaist. Number of employee increased to 324,600, and revenue increased $126 billion. Sass – present On August 18, 2011, HP announced that it would strategically exit the semaphore and tablet computer business, focusing on higher-margin “strategic priorities of cloud, solutions and software with an emphasis on enterprise, commercial and government markets. On May 23, 2012, HP announced plans to lay if approximately 27,000 employees, after posting a profit decline of 31% in the second quarter of 2012. 1. 2 Case Overview Innovation & consumer focus at HP From the beginning of its Journey, HP has a strong innovation culture.
The office and lab buildings designed for sparking creativity; ideas overrule any rules from the top; and there are continuous strives to develop products that represent true advancement. HP believes that the fundamental basis for success in the operation is in the Job done in satisfying the needs of the customers. They also realize that having a continuous growth is essential to remain competitive. The new challenge In the time frame of this case study, world economic growth was highly affected by rapid growth of China. While US sink deeper into debts, China was undergoing an explosive industrialization.
With this new challenge, HP needs to define how they can get their continuous growth to remain competitive. They successfully set operational efficiency, but that is not sufficient to achieve the scale of profitable growth without bringing true new advancement through innovation. The creativity generated within HP labs with focusing on long-term research and development. With the new halogen, the executives thought it would take nearer-term innovations, to produce financial result that would give HP steady and massive growth.
Based on that thought, one of Hips business groups, Personal System Group (USGS), initiated to pursue the nearer-term of innovations. They created Innovation Program Office (PIP). The case study describes how PIP went through challenges and hurdles along the way from the conception, getting the resources needed, having acceptance in the middle of resistances, managing ideas and opportunities, and processing an idea to be launched in the market. The case study emphasizes the importance of the rule of the champions.
With a strong contribution of champions, by early 2008, PIP got 26 projects underway from 200 qualified ideas/year. They were also starting to have co- funding efforts with other business groups in developing ideas. As the idea of PIP seemed to be catching on, HP top management considered replicating the idea to other business groups in the company as an engine to gain profitable growth. This brings new challenges for them. II. Discussion Questions 11. 1 Question #1 – Discuss the state of innovation at HP before the PIP process s a company.
The existence of innovation thorough HP Journey was remaining with dynamic intensity. The state of innovation at HP before the Innovation Program Office (PIP) introduced at USGS could be analyzed using basic OWE+1 H questions (what, where, who, when, why, how) as describes in Figure II-I . Figure II The State of Innovation at HP before PIP What/Why Innovation has laid strong foundations to HP success, and they want to keep this legacy as the spirit to conduct the business. They even went to a troublesome in the restoration of the nearly collapse garage.
Two recognitions that confirmed innovation purity at HP: Bill Hewlett awarded the National Medal of Science, the nation’s highest scientific honor on 1983. HP Garage named California Historical Landmark 976, Birthplace of Silicon Valley. Where HP has some laboratories for places to research and develop creativity, and allocated budget to run the process. The labs are serving all of the business groups. When HP laboratories are focusing their activity on long-term research and development. Phillip McKinney reported that the development timeline for other HP business groups took a long time and cost halve over an 8-year period.
Who The innovation led by top management and each business groups initiate the idea. The research and development team is further developing those ideas in HP labs. How Innovation recognized in the corporate strategy as mentioned in Hips corporate objective and shared values. Corporate objective: HP aims to lead in the marketplace by developing and delivering useful and innovative products, services, and solutions. Shared value: Meaningful innovation – HP is a technology company that invents the useful and the significant. HP produced new to the world and new to the market products in their early time.
They are constantly having a principal of never pursue me-too products. In funding their innovation process, PEGS has over 95% of their research and development budget spent on Egg’s core products. Less than 5% of the budget directed to develop products or services that were adjacent to the current offering or represented fundamentally new, potential growth engine. Based on the focus of Hips labs and assuming that budget allocation for R&D process was the same at other HP business groups, HP at that time was doing incremental innovations.
HP focused to expand market in the last 3 years,marked by a series of acquisitions and merger. They also put a weightlessness’s observationally efficiency. These activities made several difficult organizational and structural changes. This is probably major impetus of shifting the way of HP doing its innovation, from new to the world and new to the market products to incremental innovations. As explained by Placekicking in his early involvement at USGS, it is hard for large R&D organizations to create disruptive business that could attack the current business.
This shows how corporate immune system has becoming a hassle to its own growth. The concern was, the current process of incremental innovations was not sufficient to cake a continuous profitable growth at HP, especially in facing a new changing landscape. HP has put innovation in their corporate strategy well enough as can be seen in their corporate objectives and shared value, but HP has not used their innovation process strategically. 11. 2 Question #2 – Discuss the importance and role of the champion in the PIP process.
What does the process have to do to achieve a balance in leadership? The Champions in the PIP process There will no entrepreneurial team that could long survive without the services of a sponsor. The importance of having a good sponsor is he/she could make the team ore focus in doing the innovation process, rather than supporting activities such as lobbying and approval that condensed with politics. Align with the above statement; Phillip McKinney believed that a critical element of success for any project undertaken by the PIP was also the champion.
Some of the role of a champion in a project are: Fight corporate inertia Move fast in delivering the project Catalyst to innovation Coaches, protects and marshals resources for the team Provide “air cover” Suggest strategies for winning allies, rather than enemies Provide extended networks Does the internal politics needed for approval One thing that important in champion rollers most of these people Join the group voluntarily; it was more of a calling rather than a Job. They can indulge their passion and dream for building a high-performance products and or services.
Balance in leadership In contrast to the role of the champion, project leader focused on sustaining the development of a project. They are acting as a project manager. A project leader has different skill sets compared with the champions. In PIP process, the project leaders came from the executives of the core business. They know how to plug into the operation side of HP and to work with DMS (Original Device Manufactures), and to linkages to the broader company that help the new group to survive and grow.
The challenge for PIP concerning project leaders was a balance that needs to achieve in introducing established players/leaders into the nascent projects. If they were being introduced too early to project, their strength of knowledge and experiences could kill the idea. They have a strong foundation in core business that could create a tendency to resist a disruptive idea. If they are being brought too late to the team, he PIP process could be less efficient due to duplicate things that already exist.
The perfect time for bringing the leaders into the project probably when the idea has been through initial customer and market validation, and have an informal approval from the management. 11. 3 Question #3 – How do ideas get into the PIP and where do they end up when they are ready for centralization? There are three houses/business groups for an idea to be found, evaluated, developed, and launch for centralization. The process flow that happened in those three houses describes in Figure 11-2.
Figure II Process Flow of Managing Idea in PIP Idea generation, evaluation, and development in PIP group The team receives ideas from employees and people outside the company from HP website (idea central) or via email. The quantity of these ideas reaches 1000 per year, but only 200 qualified ideas will be further considered. The evaluation process consists of a set of 5 questions, and additional effort if necessary to make the idea better. The team would bring experts to work with the person to development of the vision. There are four gates for an idea to enter and move forward through the development in PIP process.
PIP can develop projects up to a certain level. When a project/business able to resist the HP elephant (the aspect of a large company inimical to start-ups) and can plug in to take advantage of the benefit offered by big HP (economic of scale for example), it will go to Emerging Business Unit (EBB). Outgrow the business, in EBB Businesses in the EBB have different sales channels and requirement. When a business starts to earn more than $500 million to $1 billion in annual revenue, they become big enough to develop their own sales channels, and can consider becoming their own Global Business Unit (KGB). 1. Question #4 – Describe in detail how the PIP process works internally and in relation to others at HP. PIP initiated within Personal System Group, one of seven HP business segments that was responsible for commercial and consumer PC’s, workstations, handheld computing devices, digital entertainment systems, calculator and other product and services. There is a mutual relationship between PIP process with others at HP. Figure 11-3 describes this relationship, and the Table 11-3 elaborates emphasizes in human resources. Epiglottis and utilizations resources from within USGS, and outside USGS within HP.
PIP used their deep and unique knowledge ND established informal networks that could help the new group to survive and grow. Figure II How PIP works internally and in relation to others at HP At the beginning, PIP process faced some resistances from the executives that believe that developing core products will bring more value to the company. There was also a tendency from managers in business units that hold their high performers. With the strong sponsor and the spirit of persistence from the champions and the leaders, PIP started to catch on HP.
Indeed HP was introducing PIP to other business units beyond USGS, sharing the same innovation process. Table II How PIP Process Works Internally and in Relation to Others at HP PIP Internally Relation with others at HP Initial set up strategy Research and development’s budget & timeline The budget allocation within USGS changed from 95% for core products, and less than 5% for developing adjacency’s and fundamentally new areas, to 70% for core products, 20% for adjacency’s, and 10% for new growth engines. The development timeline in PIP is about 24 months.
Some executives viewed PIP idea as a distraction and thought that the money could be better used developing more core products. PIP has a fast-paced process compare to other HP business groups that cost halve over an 8-years period. Conception of PIP PIP operated by separately funded organization within USGS. PIP develops programs up until they are ready to scale. Bradley & McKinney created a new business group, the Emerging Business Unit (EBB) PIP process guarantees the process so they able to resist HP elephant and remain outgrow its business within HP.
Human Resources Sponsors Role Todd Bradley as executive vice president of USGS, and Phillip McKinney as vice president and chief technology officer, serving PIP as their main sponsors. Human resources in PIP process consist of employee ranging from within USGS to outside USGS within HP. There is mutual benefit relationship between PIP and its team members. PIP could give a chance to pursue one’s dream, and career growth opportunities. PIP exploits and utilizes their deep and unique knowledge and established informal networks that could help the new group to survive and grow.
These people know how to plug into the operations side of HP, they know how to work with EDM (Original Device Manufactures), and Hips supply chain. The team altogether could give a mean for generating efficient, fast track innovation. Champions& Leaders Role McKinney believed that a critical element of success for any projects undertaken by the PIP was the champions. In PIP, champion does not equal leader. They have different skill sets. Champions act as the catalyst and leaders act as a project manager.
The champions in Blackbird project were: Besides being a project sponsor, Phillip McKinney is also acting as project champion. Tom Zoology as initiator and champion is working as an engineer in USGS. Rural Sod as chief technologist came out from Voodoo, a high-end gaming provider acquired by And the leaders were: Gene Becker as initial R&D leader came out from HP labs. Bill Norm’s, the person who ran operation came out from Peg’s consumer PC business. Mike Perkins as UP and general manager came out from Peg’s consumer PC business.
The PIP team members PIP consists of seven full time executives and a half time resource in some roles. PIP uses two different teams working in tandem: One team tasked with developing and qualifying ideas into PIP. Other team focuses on pushing PIP projects forward. The team consist of three horizontal resources who touched the project based on management role. The last one is Phillip McKinney himself. McKinney placed his trust in seasoned executives that he picked by himself, for example, for the horizontal resources: Christian Epee as operation manager has 19 years experiences in HP.
Steve Balkier as project manager has 19 years experiences at HP. Mice Calking as senior producer for experience design has 21 years experiences in HP. Operational Process Getting into the PIP vision. In getting the idea to innovate, PIP believes that great ideas can come from anyone, and at any time. Therefore, there is no limit to the contribution of ideas. PIP very concerned about the relevancy fan idea to the development of the company’s equines, as well as Hap’s capacity to realize the idea. This appears in the questions used to evaluate the idea.
The involvement of outsiders in the definition of ideas can help the PIP in the next stage, which in the process of acceptance of the idea in HP, it could minimize the effect of the immune system. Getting through the PIP The four gates There are four gates for an idea to enter and move forward through the development in PIP process. Making the mistake faster The team have propensity to kill projects quickly. The process of innovation at PIP often stretched current prevailing standard reoccurred and cultures.
The team will use their networks to help them get what they need. However, they know the boundaries and could be diplomatic to operate within those standard. The celebration of failures The team members are not afraid to kill projects due to failure. PIP has same bonus structure for teams that are successful and those that fail. Works hand in hand with HP labs PIP has 24 months period for its innovation process. If an idea takes longer than that, PIP will work on it. In validating the idea, the team works closely with the targeted customers.
In the example of blackbird project, Mice Calking as senior producer for experience design in PIP, directly communicate intimately with the gamers by phone and by having dinner with them. That effort produces excruciatingly honest feedbacks. The team has applied the concept of making the mistake faster. This is one of the reasons why the innovation at PIP has a shorter period than other business groups. The team knows the concept of the waterline, they would do anything to get the work done, without bring any negligible risk to team, and or to the company. The team creativity and spirit coalmining lit.
They also encouraged to be a risk taker. This factor also has an effect to shorten the innovation process. The cooperation with HP labs could bring mutual benefit. The labs help PIP to have an efficient innovation process, and help to develop something that needed by PIP. PIP also could help the labs to commercialism what they already have. Each other and how are they complementary? The profile of head of PIP and head of USGS can be seen in Table 11-2. Table II Profile of PIP Head and USGS Head Head of PIP Head of USGS Name Phillip McKinney Todd Bradley Title Vice President & Chief Technology Officer of USGS
Executive Vice President of USGS Background Senior Vice President & Founding Chief Information Officer for Diligent Senior Executive for Computer Sciences Corporation Senior roles at GE Capital, Dun & Broadsheet and Fed Chief Executive Officer of Palm Executive Vice President of global operations for Gateway Character Innovation & technology evangelist. Primarily interested in what technology could do to help Hips clients and thus drive more sales. The roles of McKinney as the head of PIP are as a sponsor and a champion to some projects. Particularly on his role as a champion, he also neediest support from a sponsor.
He could get the sponsorship from his boss, Todd Bradley. Figure II The Relationship of The Role of PIP Head and USGS Head Based on their characters are quite different. One person has a focus to technology, and the other has more customer insight. The combination of these two is complimentary to innovate sophisticated product that could be accepted and valued by the customer. Based on their role in PIP and USGS they are also complement to each other. For McKinney, having Bradley as his boss and his sponsor gave him advantages in smoothing the PIP process, such as: In deciding the ideas to be proceed In resources procurement