Dell’s Chief Innovation Officer on Innovation Portfolios & Training

By Scott Kirsner |  July 28, 2015

Dell chief innovation officer Jim Stikeleather opened a recent Brightidea “birds of a feather” innovation gathering in Austin with a fantastic talk about the importance of fostering divergent thinking in big organizations — and some of the challenges of making real change happen.

“If you’re going to be a change agent, you have to understand that everyone you’re going to disrupt is going to be against you,” Stikeleather says. “You go into a management review committee, and what are the odds that everyone in there is going to benefit from your idea? It could be the greatest, with potential to make an incredible amount of money — but how will it drive the product line manager’s business?”

We caught up with Stikeleather afterward; below, he talks about his role within Dell’s Services business and shares several slides. Dell went private in 2013 in the largest corporate privatization in history; annual revenues at the computer hardware and services giant are about $57 billion, and Dell has 111,000 employees.

  • “When Dell acquired Perot Systems in 2009, I was CTO of Perot. What we were doing was exploring what the world would want, and what technologies would enable that. Dell came up with the title of Chief Innovation Officer to let us continue doing what we were doing. So I am in the Dell Services organization, and I report to the CTO of Dell Services.”
  • “Our team is small and virtual. But at any given time, I’m running projects that can have up to several thousand people working on them. It’s meant to be a true, dynamic, flat, on-demand type of organization structure.” The group’s mission, Stikeleather says, is to “enable, facilitate, and accelerate” innovation within Dell Services.
  • “If you think about how companies have made their money — other than the initial innovation – like Edison creating the light bulb — almost all companies have made their money by achieving scale, and driving efficiency and productivity. They haven’t really made money by innovating.” 
  • Stikeleather says his team manages a portfolio of projects similar to the way a venture capitalist does. “I’m not responsible to my boss for the success or failure of one thing,” he says. “It’s about the whole portfolio.”
  • “Here’s how you could describe almost everything that goes on in business today: a problem occurs, you sense it, you categorize it, and then you find the best practice for addressing it. People into systems theory would call those simple systems. But you look at the economy today, and it’s a complicated environment. There are lots of unknown unknowns. You don’t know what you don’t know. That’s where divergent thinking comes in. You have to probe, try things, and test. You probe and then you look at the results, and take action based on that.” But most business environments encourage and reward convergent thinking, consensus, and analysis much more than they do divergent thinking.
  • Many companies look at truly innovative ideas and see them as small potatoes — because everything is small at first. “It drives me to distraction. You look at something and say, ‘That’s a million-dollar business.’ But what is it going to be five or ten years from now — and do you want to be playing catch-up?”
  • “Most companies don’t really want innovation. They want continuous improvement in what they’re already doing.” Stikeleather’s slide below shows that that is what they tend to get when they don’t make a conscious effort to design and execute an innovation plan.
  • “Executives get to where they are because they were successful at doing what the company does. But innovation is doing something different. Not only is that a threat to the company’s current business and current margins, but it’s also a threat to the executives and their positions and their power.”
  • “Very few companies are doing organic innovation. They’re spending all their time watching, and then acquiring startup companies, which is in-organic.”
  • “My role at Dell is to be an enabler, a facilitator, an accelerator of innovation. I help other people become innovative. And I do that through training and education and through our foresight work — creating future scenarios and trying to provide divergent thinking.”
  • Dangling incentives for innovative ideas or behaviors doesn’t work — and Stikeleather says that plenty of behavioral research backs that up. What does work? “Get out of people’s way, give them autonomy, give them an opportunity they haven’t done before. That is far better than incentives.”
  • By offering innovation training to sales teams at Dell Services, Stikeleather says he has seen employees who have been through the program “closing more deals at higher margins.” Customers, he says, “don’t want to be sold to anymore. They want to insight, points of view, thought leadership. They want to brainstorm — they don’t want you coming in and saying, ‘I have the solution to your problem.'” The slide below shares the principles of his training program; “Salesmakers” is a Dell term that encompasses account executives, sales engineers, and others involved in the customer selling process.
  • In providing facilitation to teams within Dell Services, “we’re internal consultants. I can go in an be [a team’s] advocate with upper management or with customers. And when we talk about acceleration, I have a certain amount of discretionary funding to get things going.”
  • Stikeleather talks about a “three-way pincer process” to get executives bought in to challenging new ideas or disruptive business models. “They need to hear it from their teams, the customers, and reading about it in the press,” he says. Eventually, “it’s their idea because they’re hearing about it from their teams, customers, and the press.”
  • Stikeleather agrees with Clay Christensen that various ratios used as measures — like Internal Rate of Return and Return on Net Assets — can undermine a company’s innovation engine.

Below, Stikeleather shares a few of the trends and scenarios his group is monitoring and exploring.Here’s video from Stikeleather’s presentation at Brightidea’s “Birds of a Feather” gathering in June: