In his new book, "Smartsourcing: Driving Innovation and Growth Through Outsourcing," Thomas M. Koulopoulos, CEO and founder of Delphi Group, the technology and management advisory firm of Perot System, believes that companies must shed non-core business activities. This type of outsourcing, smartsourcing, will allow companies to focus on innovation which at the end of the day is what differentiates one company from another.
The following is a discussion based on the principles of his book.
Q: You cite that only 10% of organizations have innovation management programs in place. Can you give an example of a good program and its effect on the company?
A: First off all we have to accept that innovation is a process not an event. All too often we think of innovation as a moment of inspiration followed by an invention; the moment Edison's light bulb came to life. The grandeur of those moments tends to eclipse the 1000 times Edison's light bulbs did nothing.
In my own dealings with large organizations I've seen time and time again that those companies who seem to get it right are those that can make innovation systemic and systematic. In other words it is part of what they do every day not once a decade.
Marketing programs and periodic spurts of growth will capture the limelight and make it look as though these companies suddenly came upon the best thing since indoor plumbing, when in fact they have been innovating behind the scenes for many years.
Even the classic consumer success stories such as the iPod or its old technology predecessor the Walkman fall into this category of products that give the illusion of invention. More to the point, these popular icons of invention are actually second or third movers at best. Apple did not invent MP3s, Sony did not invent the transistor radio, Microsoft did not invent the browser, etc., etc. These players do not lead the field in defining a new market, but when they decide to enter it their persistence reshapes it in their own form.
Q: How is it that GE has outsourced 100,000 jobs yet continues to increase its U.S. employment? Can its ability to innovate explain its employment situation?
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