Mike Rhodin discusses social business innovation

I had an interesting discussion with Mike Rhodin, IBM’s SVP Software Solutions Group, at the recent IBM Connections conference. Instead of focusing on products, we relatively quickly started to discuss social tools like IBM Connections as a medium of business innovation. The talk with Mike started me thinking, leading to a recent post, Balancing risk and social business innovation, and the talk was very pragmatic.

m rhodin

Mike Rhodin 2008 Lotusphere (source: Juris Kaža)

We started by talking about adoption: what is the best starting point for the adoption of social business tools?

Rhodin: What we look for in our clients are populations that are more likely to take a step forward, such as product innovation teams. We work with a number of large companies, traditional, 100+ years old companies. And their management is thinking ‘I need to link together the islands of innovation that exist within my company so I can speed up my overall innovation’. Even in companies and industries like construction. Semex s a poster child of this, where the [Cemex] CEO said, ‘It takes too long for you to get products out: we need to connect up R&D’. Cemex R&D had become fragmented and distributed from acquisitions on a global scale, and they put an IBM Connections platform in place to start linking poeple together. They grew it up from the engineering community and spread it from there, across the company.
Boyd: Interesting how the direct application of social business into companies through the concept of innovation. Cemex has innovation going on in various holding companies, different parts of the business in different parts of the world: tie them together and they are able to do this same sort of innovation in a distributed fashion.
Rhodin: Almost like internal crowd-sourcing.
Boyd: There is a second tier of thinking about innovation regarding social business, where social business offers avenues for ways of innovation in the way your business works, not just tweaking the cement formula. [Which was the point of departure for Balancing risk and social business innovation.]
Rhodin: Business model innovation.
Boyd: Yes, you change your business model so you are shifting the way parts of the company deliver value to their clients, for example. You can change the way people organize themselves at a social level. That’s a secondary or additional kind of innovation offered from social business. Do you know of examples of that going on? Where companies move from old business processes to something new?
Rhodin: Lowes sells three different paint trays: a high end tray, a medium, and low end. The premium wasn’t selling: they were on the verge of discontinuing the SKU and taking it off the shelves. One day, one of the employees was bored,  and one of the characteristics of the paint tray is that it’s high end teflon. They poured paint in it and let it dry, and showed how they could lift the paint out easily. It started selling a lot of high end paint trays. They posted that on their Connections platform, and other Lowes paint people turned this into product demonstrations in other stores, and the high end paint tray took off across the country. It was simply an innovative accident that occurred, along with the fact that they had a social network so they could share it horizontally across all the stores. It didn’t go up management chains, but it was shared and done.
Boyd: It spread virally across the company because there was a medium for it to happen.
Rhodin: A lot of that happens inside IBM. All of our engineering groups are connected together socially, and a lot of ideas come out: how we should change our business, what business we should get into. This came from the ground up  out of the engineering communities first, then spread into the consulting communities, and now our client teams, the ones on the large accounts are can now create client hubs and client communities for everything that goes on. It becomes a central place to find out what IBM is doing with any client. Now it’s to the point when you leave a meeting you might post that I was here today, this is what I learned, this is what we talked about, they client said something which someone may want to follow up on, this goes onto the client hub and everyone is organized around it.
We see these ad hoc processes evolving through the use of this. One of the capabilities we wrote into the platform was something we called ‘Activities’ which is unique: it’s not in any public social network. it allows people to control a project and manage every communications and everything in it. But when you are done, you can say this worked out really well, so you can save an template of an activity,  like a template. And the next time you’re involved in a similar activity you can start from that activity template. And you gradually accumulate a collection of activities that can be shared and used around the companies. And you can start to mine the data with analytics to see what’s going on, too.
Boyd: I think that’s interesting on a couple of levels. One is the notion of finding a generalizable pattern at the end of something, as opposed to trying to do it analytically at the start.
Rhodin: Think of it as experiential learning. To recognize that the activity was good enough that someone else could start from that and save time. It’s not that different from business process management solutions if you start from a template. Take what is applicable and drop the rest out.

I continue to be impressed at IBM’s own experiential learning: the fact that they are a large multinational corporation connected by social tools, and working hard to innovate socially, makes them a fascinating testbed. Yes, it’s true that we will have to expect innovation for small businesses, and the freelancer community, to possibly come from other quarters, but what IBM is developing is a large social experiment, along with the tools they are selling.