One way to generate innovation is by combining two or more existing products to create a new product. The best example of this approach to innovation is the iPhone, which is essentially a brilliant combination of many existing technologies packaged into a stylish slab of glass, metal and plastic.
Another path to innovation is identifying a capability — something you already do really well — and creating an entirely new product from it.
A great example of that type of innovation is the ADP National Employment Report. Created by ADP in partnership with Macroeconomic Advisers, the report is derived from actual payroll data and measures the change in total nonfarm private employment each month.
Last week, I spoke with Mike Capone, ADP’s Corporate Vice President and Chief Information Officer. Combining a unique blend of client-facing operational experience and strong technical knowledge, Mike guides both product development and information technology for ADP.
He estimates that about 70 percent of his time is spent on innovation, and he’s especially proud of the ADP National Employment Report, which analyzes economic data collected by the company to generate highly usable business intelligence.
“The report contains the kind of information that moves markets,” says Mike. “Unlike government reports, which are often based on surveys and samples, our report is based on actual payroll data. We can look at all of the data and see who’s really hiring. Our reports tend to be very accurate.”
Because of their accuracy, the reports are now considered an indispensable source of crucial business information. That’s an amazing feat for an organization that built its reputation as a data processing company. The success of the new product was partly due to the company’s willingness to think boldly and creatively.
“Anyone can do analytics. We decided to create something truly unique and valuable,” says Mike. “For us, it wasn’t about trying to do something that everyone else was already doing. We looked for something that would be genuinely different.”
I love how Mike and his team at ADP moved quickly beyond the “me too” mindset and instead focused on creating a new product that would differentiate the company from everyone else in the market.
Notice how the goal wasn’t “innovation” in some abstract sense – the goal was a specific product that would help the company. “We’re not interested in generating a bunch of patents just so we can say that we have a bunch of patents,” says Mike
I asked Mike if ADP has a formula or a process for innovating. Here’s what he told me:
“It’s hard to put innovation in a box. We do have ADP labs. They come up with an idea, and then figure out how to productize it within 12-18 months. We also use crowd sourcing within the company, and occasionally we hire third-party consultants. It really depends on the topic. We give our people lots of freedom in terms of how they approach innovation, how they go at it. Fail fast is our primary guideline. Try it out, if it doesn’t work, throw it away. We don’t punish people if their ideas don’t work. When they’re successful, we try to give them some recognition. In the IT world, recognition means a lot.”
There are some wonderful lessons here, and I’m delighted that Mike shared his experiences and insight with us.