For our August “IL Live” conference call, we spent a half-hour with Sophie Vandebroek, Chief Technology Officer at Xerox and President of the Xerox Innovation Group. Headquartered in Norwalk, Connecticut, Xerox brought in $21.4 billion in revenue for 2013. While it may be best-known for its copiers — the first was introduced in 1959 — Xerox’s business has largely shifted to outsourced business services for customers in government, health care, education, and other businesses.
“How I define innovation: innovation is creating differentiated client value…it comes from understanding the pain points and the dreams” of customers or prospective customers. “We have innovation showrooms [at our research sites]. We bring in clients, and we listen to them about pain points and dreams and where they see their business going. Our researchers will highlight some of our capabilities. Together, the dreaming really starts — could you potentially do this for us, or how about that?” Vandebroek says she likes the Henry Ford quote: “If I had asked my customers what they wanted, they would’ve asked for a faster horse.” To complement the dreaming sessions, Xerox conducts deep ethnographic research. “We go into the field and observe how do people really park [their cars]. How do nurses treat patients? How do teachers teach children? Often, what people say they do and what they really do is very different.”
Our work is “all about solving the right problem, as opposed to solving a problem in a perfect way, which is traditionally what researchers enjoy doing.”
Vandebroek says it’s always a challenge for Xerox to move quickly and with agility, “doing pilots so that we get very quick feedback, solving the right problem, understanding how value is created, and avoiding costly revisions after launch.” It’s also an objective to “work with more startups and open up our innovation ecosystem. It’s something we have done, but that we have to do more of.”
They’re different depending on the stage a project is at. For pure exploratory research at Xerox, when small groups are “pushing the boundaries of the unknown,” the metrics are creation of new intellectual property, publication of papers in journals, and how many ideas make it to the incubation stage. At the incubation stage, projects are funded by the business groups. “There, we start to get business-related metrics.” Later, when a business group opts to commercialize the idea, “we definitely get tracked on revenue and profit that the project creates.” Other metrics: How many dreaming sessions the research sites host, and how many patents get filed.
“Research in one year can not immediately create revenue and profit. But if you do it in an agile way, first-of-a-kind implementations can start generating some revenue [quickly.] But most revenue takes off in two or three years.”
In trying to get minimum viable products out to customers quickly, Vandebroek says it is important to ask people within Xerox about features or capabilities that can be dropped for the sake of speed — what she calls “give-ups.” Of course, “nobody ever wanted to give something up. The marketing person would say that their client needs this or that.” Give-ups are “culturally very hard to do.”
Xerox has begun turning its research labs into what Vandebroek calls “innovation services businesses.” Already at PARC, about half the revenue comes from other non-Xerox clients, like government agencies, other large companies, or startups. The idea, she says, is that “you can keep large, flourishing research centers that are half paid for by other income sources,” instead of having them viewed solely as cost centers.