Overcoming Hurdles against Innovation

Date:   Thursday , October 03, 2013

The 1994 founded Sunnyvale based PLX Technology, Inc. [NASDAQ: PLXT] with a market-cap of $271.17 million has been developing I/O interconnect silicon, complimentary software and provides solution consisting of semiconductor devices, software development kits, hardware design kits and operating system ports.

As a technologist, I have come across many a discussions with industry peers about the challenges of driving new initiatives. It is often frustrating to get business groups to listen and to understand new ideas. While there is no perfect answer or silver bullet, we have had reasonable success in this area. As a small-cap public company entering into the PCI Express space in 2002, the odds were stacked against us. The only way to compete was through relentless innovation.

First, there are big innovations or 'moonshot' programs that can be driven by someone at the CEO level who can pretty much set the direction of the entire organization – for example, a Steve Jobs or a Jeff Bezos– but I am not going to be talking about that type of innovation. Then, there is a category I refer to as 'pragmatic innovations'-- more modest in ambition than the moonshots, but can have a significantly impact on the business. These pragmatic innovations can help you leapfrog your competition, deepen your foothold in the market and even launch into completely new markets. For kindred souls that are pushing pragmatic innovations, I have a few suggestions.

First, Establish a Track Record

Design and build a product, take it to production, and engage your customers. Having a strong record on execution is the key in getting folks to listen to new ideas and give you the benefit of doubt. If you try to push new ideas or concepts with no history in the company, in most cases you will fail. Once you have built credibility, you will be amazed at the support and flexibility that the organization will automatically provide, and you will find silent support across the functional groups. I use the word silent because most people are uncomfortable with risk and are afraid of failure; the pain vs. gain metric is not evident given their context and visibility. Folks will silently help and support but not openly commit.

Get buy-in from the Top

Most of people at the top of the management chain are inherently aware of the importance and need for innovation – and if you have a good idea they will listen. If you have a bad idea, they will not be afraid to be blunt about it. The key is to have a credible plan that will not derail resources and schedules of ongoing projects.

Initiate skunk-works efforts to build working prototypes, as this reduces the perceived risk by making the product real. In general, creating a prototype requires significantly lower overhead than a full production part. The advantage with skunk-works efforts is that there are usually a lesser number of barriers to get moving and start building. It sharpens and validates your ideas and also de-risks execution. A real working product or demo gets a lot of the folks in the organization to 'see and feel' the vision.

Do not get Caught by the Current Top-of-the-Charts Cool Technology

Innovation just for the sake of cool technology is futile; you have to find a clear application. As technologists we are automatically attracted to the latest technologies for the sheer technical challenge and the newness of the approach. Unfortunately, in today's corporate structure, the investment for pure R&D is difficult if not unrealistic, so leave those knowledge queries to your weekends. A more pragmatic approach would be to identify initiatives that strengthen your products, expand your existing market or provide a bridge into adjacent markets. In some cases, enter into new markets while leveraging your core competencies.

Work with your Business Counterparts within your Company

Do not shy away from understanding the business case. By understanding the market dynamics, you can simplify, distill and evangelize your technology application. Just as your business colleagues have gaps in comprehending new technologies, you have blind spots about markets. So, acknowledge your lack of understanding of the market dynamics and the competitive aspects. Use the marketing team’s skepticism and inherent cynicism to further fine-tune and sharpen your ideas. Most business models rely on historical product data and analyst reports. In general, building a business for a new market is fraught with unknowns, and as Warren Buffet once famously said, "Forecasts tells you a great deal about the forecaster, not much about the future." One approach that has worked for us is to embed features without exposing them to our customers, in order to test out the concept. We have to get creative to design the features without burdening the product too much both in cost and schedule.

Celebrate Innovation and Risk Taking

Refine your processes to enable good exchanges of ideas. Creating a culture of innovation is not easy, but in my experience, if you have an environment that celebrates any innovation, however small it may be, it sends a message. There is significant satisfaction in innovating and getting recognized.Share and be generous in distributing credit to the entire team.Great products are often a collection of many ideas.

Play it Safe on Execution

Piling on your risks is not advisable- find the best engineers and eliminate risk as much as possible in the implementation. There is going to be risk, so do not downplay it; acknowledge it, and in the process de-risk the project or program as much as possible. Communicate the upside repeatedly to motivate your teams and keep focused on the key tenets of the innovation. Make sure your organization is in a position to absorb the downside to the risk. In quoting Warren Buffet "Never test the depths of the river with both your feet" would give clear context.

Despite all planning, you will face opposition, political maneuvering, and sometimes even ridicule. Navigate smartly, execute efficiently and maintain your conviction throughout. Finally, just remember this quote from Gandhi, "First they ignore you, then they laugh at you, then they fight you, then you win."