Rolf Kleiner became the first Chief Innovation Officer at Kelly Services, the temporary staffing giant, on January 1st, 2012.
“I’ve really been doing this for twenty years inside the company,” says Kleiner, who previously had been SVP of the company’s outsourcing and consulting division. “But now I’m sanctioned.” The Chief Innovation Officer role was created by Kelly’s CEO, Carl Camden, to whom Kleiner reports.
We spoke with Kleiner about his three primary mandates; his staff; and a bonus program that will reward employees who submit ideas with up to $10,000. His overall objective is to create meaningful new revenues for the company — not, as he puts it, to be “a think tank with great ideas that never get instituted.” Based in Troy, Michigan, Kelly Services’ 2013 revenues were $5.4 billion.
Three Key Mandates
1. The most time-consuming one is to foster disruptive innovation within the company — something that is precedent-setting or obsoletes something which has come before. It has to have the potential to impact the company’s earnings by at least 10 to 15 percent. So an idea needs to pass that gate to be considered disruptive. Anything that is a continuous improvement effort, or an incremental extension, is still handled within our business units, and run through the standard new product development process.
2. Putting more discipline in how we monetize the innovations we generate as a company. We have a great history of creating innovations, but need to do better at monetizing them.
3. The last is the arduous task of creating a culture of innovation within the company itself. If you’re going to strive to be an innovative organization, it needs to touch all aspects of the business. The organization should be innovative, proactive, and externally-focused.
My First Year
2012 was about learning: what is an office of innovation, how is it supposed to work. We joined the Center for Innovation Management Studies at North Carolina State, which helps us survey how we’re doing. We put a roadshow together and delivered it all around the world to senior managers. The first step was getting them to express all the obstacles to innovation — why they can’t be successful, the challenges they need to overcome. The second part was running them through an “idea jam” exercise to get them proactively engaged in something. We let the participants pick a business challenge they were currently facing as the topic to jam on.
How We Review Ideas
Every idea that comes into the funnel is considered equally. Our objective is to source ideas from any part of the organization, or any supplier, vendor, customer, or partner that wants to engage in the process. The ideas are then vetted for potential disruptiveness, for fit to our strategy, and for our ability to execute. If an idea doesn’t make it, it’s not necessarily thrown away. We put it in a repository. We may come back to it. We don’t kill the idea; it just may not advance.
We offer employees a bonus if their idea is approved. If it goes live in our business, the idea submitter gets one percent of its impact, up to a maximum of $10,000.
How We Pilot
Pilot tests are run by this office, not by the business units. We have a pilot around monetizing parts of our business that are currently considered expense. And I’m funding it, not the business unit. We’re paying for the capacity we’re using from that business unit. As this project is being run, people begin to understand it, and they go from being resistant to becoming advocates. They get to see their future, and to shape it.
We practice open innovation. Every one of my projects involves another company in a collaborative effort to bring something to market.
My Staff & Budget
I have three direct reports, and two contracted full-time people. One direct report is administrative, and one is a blend of project manager and evangelist, with a marketing focus. And the other three are hard-core project managers. One is a 30-year veteran of GM, and another is an 18-year veteran of Kelly who had retired, but came back to run a very specific project. Their salaries constitute an operating budget, but there’s also a project budget — and the budget for pilots comes out of that.
Innovation isn’t a convenience, and it can’t be tied to business cycles or a company’s quarter-by-quarter performance. For us, it’s a hard-budgeted activity. Our project budget is sized every year, based on those projects that are running or in the pipeline.
We believe that the revenues that innovation groups create matter. We have a dashboard for this office, and it measures both how effective we are in generating ideas, how many of those step their way through the stage-gate process and survive, and what is the impact after launch. So we think of that as idea flow, yield, and impact. But we do also consider the impact on our brand, which is a soft measure, and the company culture, too. We’re planning to launch our first idea this year.
The reason you do this is to sustain yourself and grow. It’s not some little exercise you do and hand out baseball caps and have cool events. And in many places, the innovation program is a think tank with great ideas that never get instituted.
Three Domains I’m Working On
1. Leveraging the immense amount of experience we’ve had in processing labor transactions, and optimizing those transactions.
2. Virtualization of the service delivery platform without sacrificing “touch.” By that I mean applying new technology to the way labor services are delivered without sacrificing the two things that create the value in what we do — the touch points between us and the customer, and between us and the candidate. You have to automate, but not eliminate the touch in what is a very human business.
3. Closing the gap between educational reality and working reality. We’re looking at customized skills development in situ — in other words, while the individual is actually employed. Either we will do something, or others will insert themselves in there to meet a need, because there’s a profit opportunity in it.
In the Past…
Staffing work is an extremely localized thing, so innovation in the past has been ad hoc. People will come up with ideas, test them, and launch them in their own markets or regions. They’ll self-fund them. Besides creating a fair amount of challenge for cohesive marketing or sales efforts, it’s also a way of letting your competitors know what kind of idea you have, and sometimes they can accelerate faster into the marketplace.
We want to get people putting some more thought behind their ideas, and mapping it out — doing more than just putting something in a suggestion box. We want to speed up the process of vetting ideas. If I have one concern, it’s just speed. You can never be fast enough.
We’re in Year Three of our program, and some of our ideas are going into active pilots that actually generate revenue. Then we may accelerate two of them into the final phase, where they’ll go into the business units at the end of Year Three. So by Year Five, we should have two years of performance data.