Building a Business Case for Innovation

Greg Frazier, senior vice president of business development and innovation at Avnet Inc., has been in the supply chain trenches across the Avnet organization since 1977. For the past six years, however, his focus has been on identifying and cultivating opportunities for greater process innovation within Avnet's global business.

Since then, Frazier has made a full-time job of listening carefully to the ideas of the company's more than 15,000 employees, as well as countless customers and partners. A carefully chosen team sifts through that trove of thoughts for the true gems and puts them to work in building a more responsive, efficient, and — yes, it must be said — innovative organization.

Innovation can be a wonderful thing, moving ideas and technologies along to bigger and better things. But innovation can be very costly, and its process is never guaranteed. In making a business case for innovation, what key factors should be considered before making time and resource investments that may or may not pay off?

If you take innovation as a process, the most important thing is being able to mine the ideas of your chosen audience. You have people who are smart in that part of the business or in that part of the world, and they have great insights. Then you have to look at it and to consider all the factors that go along with it. How long will it take? What is the potential for profitability and revenue? It's a long process. You have to line up all of the factors (necessary resources, timeframe, money, needed competencies, existing competencies) and weigh each of them appropriately.

If you get the right folks in the idea vetting process, the possibility of success goes up exponentially. At Avnet, we invited people from all over the organization, including people in the supply chain and in sales. None of these people worked on this full time. We borrowed their time in helping us rationalize the ideas. Everyone I asked did so willingly and said it was a great part of their job. People like being part of new and fun things, so recruiting people into the process is no problem at all.

How does a company create an environment that encourages its employees to contribute new ideas, and how does that company then empower its employees to follow through on those ideas for an innovative outcome while still keeping its eye on cost/ROI?

The first thing that I did was to open an email address inside of Avnet and got a button put on the website that simply said, “Got an innovative idea?” When someone pushed the button, they saw a video with a message from Rick Hamada, our CEO, and me thanking them for being willing to share their idea. I started to get ideas from both inside and outside the company. For innovation to be successful in any company, it can't be something that hangs outside the core. It has to be something that is part of people's jobs. One of the things you have to do is get innovation integrated into your culture. We hear people say, “We want to change our culture,” but we've worked for the last 50 years to establish our culture, and we don't want to change that. Instead, we want to add innovation to that existing culture and get it to be part of everyone who works for the company. That's how you win the war. Keep innovation as continuous improvement. When you hire, check for flexibility and innovation. And you celebrate the success of people who come forward and have ideas that make it through to fruition.

What processes do you recommend to evaluate and act on creative ideas?

I can only speak about how we work it. One of the luxuries we have is that we had someone like me that had 30 years at the company. You need someone to field the ideas. We had a guaranteed response of three days in terms of how quickly we would acknowledge that we had received their ideas.

The number of comments I got back from people who submitted ideas was amazing. The No. 1 comment was “I can't believe you answered me.” That floored me. Why wouldn't you acknowledge their ideas? Often, it was as simple as replying to them with the name of the person who was working with their idea, along with a time frame if at all possible.

We are asking people for their ideas. My goal was that everyone who participated would end up having a higher opinion of Avnet than they did before, whether or not we did anything with their idea. You want to make it a positive experience for them, based on the amount of time you take, and the amount of responsiveness you demonstrate. I didn't want this to be a virtual black hole for anyone. You have to treat people sending ideas with a tremendous amount of respect, since they aren't getting any reward for it. They want to do something good for the company, and I'm giving them a vehicle for doing that.

CIO once stood for chief information officer. More and more, this C-level term refers to chief innovation officer within the electronics space. What's your take on such a position?

I don't think that it is a position that is right for every company. An organization has to have some critical mass or high levels of intellectual property before it makes sense. Avnet does not have a chief innovation officer position, but I sat in a council for chief innovation officers, and some of them are completely integral to their company's success.

It's different for distributors. There's a lot more process innovation in distribution than there is business model innovation. There are a lot more opportunities for developing new products in other companies. There is less to come away with in distribution, because people you hire in distribution are hired to perform a specific task. While everyone is innovative, performing a task doesn't give them great access to the total business and therefore, in many cases, limits ideas about how to move the business forward.

Where do customers and partners fit into the innovation process? How is their inclusion part of making a business case for innovation?

Through this process, we didn't have a lot of inclusion with customers and partners on the front end, unless a customer wrote in and wanted something. However, any innovation effort we pursue always keeps the customer in mind. It stands to reason that you never want to create a business or service without having a customer ready to be a part of it. During the vetting process, once we thought an idea was worth pursuing, we would consult with suppliers and customers to make sure they agreed. We always have to keep in mind that we aren't selling to ourselves. Customers are partners and are integral prior to taking something to market.

Any additional thoughts on innovation?

To me, the key point is that the real long-term success potential of any innovation program is connected with getting it integrated into culture. That takes time and institutional training.

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

This article was originally published in EBN’s Velocity e-magazine .

2 comments on “Building a Business Case for Innovation

  1. ahdand
    April 29, 2014

    @Rich: Itseems that things are happening so fast many are changing paths. Anyway hope everything turns out for the best.  

  2. Taimoor Zubar
    April 30, 2014

    “the key point is that the real long-term success potential of any innovation program is connected with getting it integrated into culture”

    @Hailey: I think that's a very apt statement and a deciding factor about the success of any invention. I say invention and not innovation is because of the fact that for me an invention only becomes innovation once it's of good to people around and make their lives better. Without integrating into the culture, I don't think any invention can really become succesful or be classified as innovation.

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