Adding Value to Customers Through Collaborative Innovation

By: Karin Wall

The role of innovation in industry has changed. What used to be a closed and often secretive exclusive business of the R&D department is now being transformed to an open and collaborative eco system in many companies. InnovationManagement.se spoke to GBS Bindra, Global Innovation Director at Logica about the role of innovation.

Innovation is one of three core values at Logica. The definition of innovation at Logica is: “The successful exploitation of creative ideas, leading to a positive business benefit”.

GBS Bindra is the Global Innovation Director at Logica.

-Innovation is something that is very much an integrated part of Logica and is something that is the business of everybody. I think the time of closed and secretive innovation is past. Progressive companies need to break the myth that it´s only R&D-people that creates innovation.

At Logica, all 40.000 employees are considered to be sources of innovation.

Innovation is something that is very much an integrated part of Logica and is something that is the business of everybody

-Besides our employees, we also believe also our partners and customers are sources of innovation. Our aim is to work together to create more value together and a better world of tomorrow.
This means that Logica focuses equally strong on both internal and external innovation.

-We believe generally that if you can’t innovate for yourself in your own organization – you can’t do it for your customers either. That’s why we focus on both so we can collaborate and work together with our partners and customers to create more value. The first one helps you do the other one, you can´t do the one without the other.

The innovation philosophy at Logica is to always keep the growth of the customer in focus.

-We will always innovate with the customer at the centre and will not do anything that will not add value to the customer directly.

Some companies choose to spend enormous amounts of money on doing academic kind of research in labs.

-But according to our philosophy we feel that kind of research that requires millions of dollars in investments is best done in universities and in government sponsored labs. If you are to get value out of research done in these labs you have to let them work independently in the area they want, to pursue to create breakthroughs that the industry can use.

Logica takes a very pro active role in looking for breakthrough that is happening in technologies that are being created around the world.

-We are always looking for new technologies and work very closely with the possibilities of using that technology and apply it in a creative way. Our focus is adding value to our customer and solving the key challenges they are facing. That is our philosophy around innovation. And I think it is helping us to serve our customers very well.

The new role of innovation management

Innovation management as an explicit area is a relatively new thing. In the last few years the subject of innovation has started to become an organized management structure in large international companies.

– Innovation management as a function has gone through a revolution in the last five years. It is now much more structured; you can now create processes around it, set clear targets around it, measure it. And I would also say that the role of chief innovation officer, or what equals that, is a relatively new position in companies.

Innovation management as a function has gone through a revolution in the last five years

According to GBS Bindra there are differences between the markets of Asia and Europe when it comes to adapt to this.

-I can see differences in maturity of the companies and the style of the companies. When a company is of a very large size, then most of the management structure of a company is made largely to handle production. If you look at how the management structure of companies has looked for centuries; companies started for mass producing because there was factories, the factories needed workers, that required supervisors, that needed managers, and as a manager you needed a business unit manager etc. So the whole management structure is borrowed from how you manage production oriented companies.

In India or China o Malaysia, the Philippines, the whole existence of a company is around innovation

And it seems it hadn’t changed that much. Most companies follow traditional management structures, which are geared towards handling mass production.

-Now in India or China o Malaysia, the Philippines, the whole existence of a company is around innovation. If they don’t innovate, they do not exist. If you don’t do innovation in terms of producing products or services at which point can we make them available, then you don´t exist.

Collaborative innovation

On many occasions, Logica works with clients and partners on a collaborative basis. The idea is to capture ideas and customer/market insights and then evaluate and develop the idea into something – a product, service or process improvement that generates a positive business benefit.

-Our theme is collaborate innovation. What we mean with collaborative innovation is that we work with partners that have complimentary goals. When that´s the case it´s very easy to find innovative projects where everyone wins.

It´s not uncommon for Logica to collaborate with small companies.

-Small companies are often very agile and can do many things and have a speed of operations, but they do not have access to large customers. Because customers normally do not trust startup companies, they do not want to work in long term engagements with startup companies, because their future is always uncertain.

It´s not uncommon for Logica to collaborate with small companies

-An example of this is a small Swedish company that we found in a competition that we run to find great new technologies that are available in the word. Once we found that company we are now proactively going to our customers to say, we work together with this partner and this is how we add value.

What Logica do is to identify how they can apply the new technologies into their service and, in that way add more value to the business of the customers.

-For now we feel that we are happy with our model of collaborative innovation.  Because its working very well for us, there are no disputes, it adds value for every partner in it.

What about other ways of innovation, such as user driven innovation, using lead users, tool kits and communities?

If you never try you won´t know

-We are working with this in a small way. Of course when you have 40.000 employees and all of them are sources of innovation, you will always find people experimenting with those kinds of things. Whether we are doing it on a scale that we have seen a tremendous amount of value yet?  The answer is no. But on a small level people are trying those things and we will not discourage them from trying new things. Because is not our philosophy to discourage people. Who knows what might come out of these things? If you never try you won´t know.  But it´s not something that has been tried at a very structured level, not yet.

SPARK – centers of innovation

We show our customers the possibilities of the future

To be able to show customers’ new possibilities and solutions Logica has set up a number of innovation centers called Spark centers.  Each centre of Innovation focuses on a distinct domain area, for example mobility in India, energy & utilities in Portugal. The aim is to create and promote Logica´s technology, solutions and know-how in key industry sectors.

-We show our customers the possibilities of the future. We feel that we have a very trusting relationship with our customers. And one of the reasons that they trust us is that we promise that we will continue to help them grow in their business in the future– because we seek our growth in their growth. If our customers grow Logica grows automatically.

-And if we want that to happen we have to think pro actively on behalf our customers and show them the possibilities of the future. And then help them embrace the future.

According to GBS Bindra it’s not very often that customers know themselves what is happening worldwide, and what might have huge impacts on their business.

And to remain a market leader you have to embrace new technologies and embrace innovation

– So we do it for them, on their behalf and show to them, demonstrate to them what can be done in terms of new things. Because if they don´t do it, someone else will do it. And to remain a market leader you have to embrace new technologies and embrace innovation and make creative use of the technology in the world. That is adding value to their business.

Co-developing and collaboration are very central parts of innovation at Logica.

-Logica does not take any products that are ready to the consumer. We will facilitate and help our customers create new products and possibilities to take to their customers. So essentially we are a service company showing and providing services to our customers for them to become more successful.

We will create a service concept to our customer and then sell this service concept to him, for him to add values to his business

As an example GBS Bindra explains how they have showcased what a bank of the future could look like.

-We have demonstrated the possible use of new technologies in some of our Sparks centers. And some of our customers are now piloting the future concept in some bank branches to see how customers react to this concept of future. So all of these things are things that we are proactively doing and once customers see value in it they incorporate it as small pilots in preferred areas and they improve it based on the feedback from customers. And at one point of time, the bank will incorporate it into all their branches. We will create a service concept to our customer and then sell this service concept to him, for him to add values to his business.

Different kind of innovations in developing countries

The huge increase in numbers of consumers will have a profound impact on the need for innovation, according to GBS Bindra.

-There are two kinds of innovation happening in this world, which seems to be very distinctively recognized. There is the kind of innovation that is happening in the developing world and that is a very different kind of innovation. And it´s two thirds of the world that are developing, countries. And their needs and aspirations are very different from the people in the developed world.  There is and will be an enormous amount of innovation happening in these markets.

There is and will be an enormous amount of innovation happening in these markets

-I often tell people and  companies and  when I speak to them that the biggest fortunes that can be made in European companies today is through creating products, services and experiences for the developing world. Because In the next decade a billion new consumers will join the market and this has never ever happened before in history.

There is of course also innovation happening in the developed world.

It´s a model that has allowed the US to succeed for such a long time to create value

-One of those areas are the US . And why innovation succeeds there is because their model of universities working closely with venture capitalism. It’s a model that has allowed the US to succeed for such a long time to create value. It is for everyone else in the world, whether it is Asia or Europe to embrace that model.

The US model is no secret and very successful. Yet is has not been fully copied in other parts of the world.

-Despite the fact that this model being very open and everyone knows how it works, we haven´t seen that model being replicated in the same way in Europe or Asia. And until we start doing that replication quickly in Europe and in Asia there will be very little competition to the innovation coming from the United States.

When it comes to making firms more successful with their innovation efforts, who will take the position as leading actor in this? Will it be the big management consultants? Or more specialized innovation consultants? Or maybe IT-consultants like Logica?

-I think the market will give all these companies an opportunity to exist. My position is that if you look at the European industry you will find that about two thirds of the European market is service industry. If you look at it even more carefully – what has been the most significant source of growth in the service industry?

Companies who understand ICT very well will have a great opportunity to influence that growth, and create innovation

-Then you would see that ICT has played the most significant role in making the service industry grow and prosper. And I believe, that’s my personal believe, that the service industry will continue to be heavily reliant on ICT for its growth. And hence companies who understand ICT very well will have a great opportunity to influence that growth, and create innovation to prosper in the service industry of Europe.