bhupinder
Par 100 posts (V.I.P)
Motorola
Goal:
Pursuing internal ideas in search of the next big thing
Technique:
A program that functions like a venture-capital firm inside the company
MotorolaMotorola’s Early Stage Accelerator (ESA) program applies venture-capital methodology to ideas within the company. Started by Jim O’Connor in 2003, the ESA uses portfolio theory to assess in-house proposals, treating them like start-ups. “The core purpose of ESA is to save good ideas from being killed and channel them into products as fast as possible,” O’Connor says.
O’Connor identifies three stages of the program: ideation, where the ESA gathers suggestions from employees, vendors, and customers; commercialization, where promising ideas get funding and testing; and market ready, which prepares the final product for commercial release.
At a tech company like Motorola, ideation is the easy part. “Across a company of 66,000 people, 25,000 of them engineers, there are ideas just all the time,” O’Connor says. “But you can’t spend an inordinate amount of time on thousands of ideas.” The ESA studies close to 100 proposals a year. Roughly 30 of those receive funding, and only 15 of those are eventually released for sale.
O’Connor says many ideas still come from old-fashioned conversation — in meetings with customers, during engineering reviews — but like IBM, Motorola also uses a company intranet to capture new ideas. Promising suggestions are assigned to an ESA team member for evaluation, and those that prove worthy graduate to the commercialization phase, where the ESA dedicates funding, assigns a team of engineers, sets milestones, and monitors progress closely. The program also sets an aggressive timeline: the traditional tech development schedule is three or four years; the ESA averages 18 months.
O’Connor and his team use four criteria to assess each proposal: relevance to Motorola’s long-term strategy and targeted markets; projected financial return; execution risk (projects that are aligned with Motorola’s core business tend to work out better); and the previous success of the team behind it. Within each criterion, the ESA has a set of about 100 questions; senior management evaluates the proposals with a software tool called I-Growth, which generates quantitative analysis.
But qualitative assessment remains important, too. “We ask questions like, ‘What is the relevant problem we’re trying to solve?’” O’Connor says. “Sometimes in tech, the tendency is to get complicated. We could be developing a great technology that no one wants to use.”
Goal:
Pursuing internal ideas in search of the next big thing
Technique:
A program that functions like a venture-capital firm inside the company
MotorolaMotorola’s Early Stage Accelerator (ESA) program applies venture-capital methodology to ideas within the company. Started by Jim O’Connor in 2003, the ESA uses portfolio theory to assess in-house proposals, treating them like start-ups. “The core purpose of ESA is to save good ideas from being killed and channel them into products as fast as possible,” O’Connor says.
O’Connor identifies three stages of the program: ideation, where the ESA gathers suggestions from employees, vendors, and customers; commercialization, where promising ideas get funding and testing; and market ready, which prepares the final product for commercial release.
At a tech company like Motorola, ideation is the easy part. “Across a company of 66,000 people, 25,000 of them engineers, there are ideas just all the time,” O’Connor says. “But you can’t spend an inordinate amount of time on thousands of ideas.” The ESA studies close to 100 proposals a year. Roughly 30 of those receive funding, and only 15 of those are eventually released for sale.
O’Connor says many ideas still come from old-fashioned conversation — in meetings with customers, during engineering reviews — but like IBM, Motorola also uses a company intranet to capture new ideas. Promising suggestions are assigned to an ESA team member for evaluation, and those that prove worthy graduate to the commercialization phase, where the ESA dedicates funding, assigns a team of engineers, sets milestones, and monitors progress closely. The program also sets an aggressive timeline: the traditional tech development schedule is three or four years; the ESA averages 18 months.
O’Connor and his team use four criteria to assess each proposal: relevance to Motorola’s long-term strategy and targeted markets; projected financial return; execution risk (projects that are aligned with Motorola’s core business tend to work out better); and the previous success of the team behind it. Within each criterion, the ESA has a set of about 100 questions; senior management evaluates the proposals with a software tool called I-Growth, which generates quantitative analysis.
But qualitative assessment remains important, too. “We ask questions like, ‘What is the relevant problem we’re trying to solve?’” O’Connor says. “Sometimes in tech, the tendency is to get complicated. We could be developing a great technology that no one wants to use.”