If you want to be on the cutting edge of the latest industry trends and insights for your company’s strategic partnerships, here’s a conference you won’t want to miss this year. I’m chairing the 8th Annual MRT/PDMA International Congress on Open Innovation and Co-Development (Also known as CoDev 09!)

This year’s program will be held January 26 - 28, 2009 in Scottsdale, AZ at the Radisson Fort McDowell Resort.

We’re focusing on how to build the core components of a successful open innovation capability, and we’ve already lined up a compelling faculty with open innovation ambassadors from Cadbury, Frito-Lay, HP, Booz & Company, Kraft, P&G, R.J. Reynolds, Colgate, WD-40 and many more.

I’m very excited to kick off the conference with a candid one-to-one interview with Henry Chesbrough, author of Open Innovation and Open Business Models and acclaimed thought leader on Open Innovation – we’ll find out his perspectives on how companies can take their open innovation activities to the next level, how early adopters have excelled and discover the key ingredients of their success!

We’re also building in more time for attendees to connect with conference faculty, top experts and attendees of the event to ensure that you’re able to make networking connections for future discussions and possible partnership opportunities. We’ll even have an open innovation mentoring program to bring you up to speed quickly and ensure that you leave the conference with an action plan for getting started on the right path.

I highly encourage you to join us for what promises to be another exceptional program!

IT outsourcing analysts have made big predictions for 2008 in the IT service market.

Experts expect the Indian rupee to continue its rise, keeping global IT service providers and customers on edge. Industry consolidation will continue. And as I’ve blogged recently, the offshore outsourcing market will continue to develop in India and beyond.
But will IT service providers figure out a way to provide more of the innovation their clients crave? Here are some top IT predictions from CIO magazine. (Click here if you’d like to peruse its pages—it’s a great resource!)

The Dollar

The continued decline of the dollar could be difficult for service providers to absorb. If the currency gap widens next year, expect Indian outsourcing providers to start indexing their prices to local salaries, promoting other offshore locations like China and Latin America, delay hiring of new staff, and building currency hedges into contracts.

Consolidation

The industry’s leading providers will gobble up smaller competitors in 2008. Tier-2 providers like ACS, Perot Systems and others have struggled, and as a result will become acquisition targets for larger providers or private equity firms. U.S.-based providers may be more likely to acquire midsize providers than their offshore brethren. Indian IT service providers, however, will continue to set up local delivery service centers in the U.S., Europe and Latin America. Likewise, American and European service providers will continue expanding their offshore presence to remain price competitive.

Politics

Large companies will most likely avoid announcing substantial agreements or employee reductions during 2008. The result could be a backlog of unsigned agreements pushing into 2009, which could put customers in the driver’s seat during negotiations during this election year.

Looking Beyond India

While India will remain the market leader in offshore IT services, clients are looking outside the subcontinent for alternatives. Thus, 2008 will be the biggest year to date of expansion of IT service delivery capabilities beyond India. As I’ve said before, think Latin America, Central and Eastern Europe, China, and to a lesser degree, the Middle East and Africa.

Flight from the Big Cities

In India and beyond, outsourcing hot spots have become oversaturated, so many providers and customers are looking to set up shop elsewhere. A shortage of talent is emerging in the top cities across India, local universities are no longer providing an adequate number of qualified candidates, and recent tier-1 city grads are increasingly wary of starting at the bottom on the graveyard shift because they’ve got other options. That’s creating movement into smaller, less saturated cities.
The same story is occurring in dozens of outsourcing hot spots around the world.
As a result some IT service providers are jumping to second-tier cities in an attempt to sidestep the rush to set up shop in a major metropolis.

Transformation

Customers want more than cost savings. They want access to great talent, vertical expertise, process maturity, flexibility, the great and powerful “value add.” IT buyers want an outsourcing provider who can actually enhance the client’s revenues and not just their own.
That means IT service buyers can expect to spend more on outsourcing services in 2008 while deciphering which market changes warrant the upcharges and which don’t.

Call Center Culture

Clients are demanding improvement in the call center turnover rate. One industry provider reports that it loses half its staff during the first 100 days of work. Providers are beginning to respond to the sweatshop mentality of call centers, by creating more “client-centric” solutions, such as unique scripts and efforts to connect employees to the client’s corporate culture.

Green IT

The “Green” IT service trend will take root and become measurable and attainable in 2008, as outsourcing providers desire to decrease their carbon footprints by creating greener data centers, investing in environmentally friendlier buildings and campuses, and developing eco-friendly processes and policies.

Outsourcing Buyers Get Smart

In 2008, many outsourcing customers will be entering third and fourth generation outsourcing contracts—either renewing, rebidding or restructuring their deals. Many of those IT organizations are making smarter decisions, negotiating better terms, demanding better business-driven metrics and getting better at outsourcing lifecycle management.

I predict there will be plenty of new entrants to the outsourcing market this year to challenge the veterans and create their own innovative structures.

(Photo courtesy of the Post-Crescent)

2007 has been a great year for new beginnings! We’ve been in business for 12 months now, and I couldn’t be more excited about what we’ve accomplished. As we end our first year in operation, Innovationedge is getting a lot of attention both locally and across the globe. We’re working with more than 30 different clients, both companies and inventors, and a global scope that takes us to Russia, the Middle East and Europe.

I’m proud to end 2007 with headlines like last Sunday’s article in the Post-Crescent, the local newspaper in my neck of the woods. Business reporter Pete Bach and I sat down recently to talk about the meaning of Innovation, and why people often are confused by the terminology that many of us in the innovation space take as a given.

Pete did a fabulous job explaining terms like Open Innovation and Disruptive Innovation. The online version has an audio description of Open Innovation from our interview.

I’m glad he he was able to connect with one of my client companies, WD-40, an innovative company poised to build some very significant changes in its business model. This company is about so much more than spray lubricant for squeaks. If you’re not familiar with its product line, I invite you to check out the many familiar names you probably have in your home — household brands like WD-40 Lubricant, Lava Soap, Carpet Fresh and Spot Shot.  The company is learning ways to structure its analysis and find areas of opportunity.  The value they receive from us is learning how to change their culture, views, analysis methods, etc.

I can’t wait to see how clients like WD-40 and others make these significant leaps toward new innovation opportunities in 2008. This next 12 months will bring new growth for Innovationedge as well, and I’ll be sharing some exciting new projects in the weeks ahead.

On behalf of my entire Innovationedge team, I’d like to wish everyone a Happy New Year!

It’s nice to know that other bloggers are writing about the importance of sharing innovation insights. Chuck Frey over at InnovationTools.com did a nice job capturing the Global Innovation Exchange 2007 event that I keynoted last month. The GIE was a 100 percent virtual event that in itself was a highly innovative online format. We had great participation and I enjoyed the feedback.

Events like GIE highlight the need for companies to focus on enabling open innovation through organizational structures that work. I often counsel clients to organize their companies in such a way to include innovation councils, communities of practice and venture boards.

I championed these measures at Kimberly-Clark, and I’ve seen how these structures work in many other companies. Hewlett-Packard, for instance, leverages communities of practice to share best practices, experiences and processes across business units.

At K-C, we used venture boards to manage the growth portfolio and drive a steady stream of new product and market innovations. The board members—all C-level people—were a combination of internal innovation leaders and external experts, who help the company enter “white space” business opportunities.

Nokia formed a venture group called the Innovent  to identify companies and technologies that could disrupt their business. These disruptors help in developing Nokia’s business plans and go-to-market strategies. By investing in and partnering with them, Nokia is able to prevent itself from being blindsided by the competition.

These organizational structures enable companies to take huge strides in building open innovation models that deliver real growth time and again.

I recently read a new study on innovation in emerging markets, and it confirms what I’ve blogged about in the past: navigating those emerging markets waters is a daunting task for most of us. According to the 2007 annual study on Innovation in Emerging Markets by Deloitte’s Global Manufacturing Group, more than half of the companies surveyed fell short of their revenue or operational goals in emerging markets. The report points to the many unique challenges we’re faced with in the areas of talent management, risk management and operating models.

Our thinking about emerging markets has changed. No longer do manufacturers see operations in China or India as simply a means to lower global operating costs. Now places like Hungary, Viet Nam and others are being added to the list of competitive markets as an avenue to grow the top line. Companies are also able to leverage even more sophisticated capabilities in emerging markets to handle high-value activities. This is quickly changing the global competitive landscape.

I highly recommend following this link to read this report, because it evaluates some of the strategic areas that companies need to address to succeed and realize the enormous market potential of the developing economies in China, India, Southeast Asia, Eastern Europe, and Latin America. It also highlights some of the innovative strategies that successful companies are deploying to win the war for talent, manage risk and structure their operations to achieve their revenue and operating goals in emerging markets.

If you’ve never looked into podcasting before, here’s a chance to treat yourself to a free Harvard Business Online podcast interview on one of my favorite topics: Lean and Green Sustainable Innovation. HBR’s Steve Singer recently interviewed me for his IdeaCast, and it’s a free program.

You often hear experts talk about creating an “Ecosystem of Innovation.” But what is it? I see it as a convergence of clean, green environmentally-friendly practices intertwined throughout your holistic business model. In this podcast I explain how businesses need to start with a clear, articulated strategy, and then enable the right model, talent and people to focus on making that company a good steward of the environment. I give several case studies as examples, and explain why Lean and Green initiatives often require outside partnerships to enhance your model with capabilities you don’t yet have. 

To hear more, click on this link and scroll down to HBR IdeaCast No. 64.

I am in Scottsdale, Arizona today preparing to present at the 13th annual Innovation Immersion conference. The theme this year is the 360 Degree Innovation Experience, and will focus on how companies need to approach innovation in order to grow. If you lead your company’s innovation efforts, I encourage you to click on the above link and make plans to attend next year’s conference.

Why are convergence events like these important? Because Innovation has become a corporate buzzword that is not well understood.  Many companies want to innovate and even say they are innovative, but do not really “walk the talk.” Those who get it are the companies that see innovation as a continuum from incremental to breakthrough innovation and are balancing the needs for today while developing solution opportunities for tomorrow.

This convergence event focuses not only on product and service offerings but also on strategy, culture, people and organizational structure to deliver business value. Only executives who incorporate all of these elements can truly claim to be innovative. and deliver sustainable growth.

  The last time I blogged about Alpha-Moms, I shared my thoughts about how marketers are very wise to embrace these savvy shoppers as true partners in the ideation and development of innovative products. That’s because when Alpha-Mom discovers something worthy of her hard-earned stamp of approval, she spreads the word quickly to her vast network of close friends, online acquaintances and even complete strangers.

Honeywell is doing this by creating packaging systems that attract Alpha-Mom to aisles she might not otherwise visit, to discover that the automotive aftermarket aisle is a good place to find new solutions to meet her needs: car accessories that help her maintain order without draining her money or time.These aren’t her husband’s car care gadgets. For the Alpha-Mom, Blink brand products as well as the packaging are designed in soft colors and gentle curves.

 The recent launch of the Blink line follows 18 months of research and planning.  In the process, Honeywell’s research uncovered an entirely different type of target consumer than it had envisioned: Alpha-Moms—time-pressed moms who want to regain organizational control of their cars. Her world in the car is survival, and she focuses on clutter management and spill cleanup. While men view cars as a true expression of self, busy Alpha-Moms view their vehicles as functional tools. 

No Alpha-Mom has enough time in the day for aggressively cleaning the family car, nor does she have the time or cash to clean it professionally on a weekly basis. So Honeywell tackled the challenge of convenience and organization. Under the “Mom’s Car Solutions” brand mark, the lineup includes Mess Lifters stain remover auto interior wipes, Spill Grabbers superabsorbent wipes, Trash Tossers easy clip drawstring litterbags, Smudge Cleaners fingerprint removers, and Tidy Totes carry bags. Each package fastens onto a door pocket or seat back, can be stored in the glove compartment, center console, or in seat organizers.

 It’s a line of products from a company that truly gets it. And did I mention that these innovations came from both within the company as well as outside their corporate walls? Honeywell worked with a network of open innovation partners to create what it calls a “virtual factory” integrated as a seamless manufacturing operation.

Impressive. This rates my hard-earned stamp of approval.