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A three-page excerpt from our 16-page Best Practice Guidebook:

Collaborative Innovation Process

®

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 growth team m e m b e r s h i p™
1
Best Practice Guidebook

Collaborative Innovation Process

guidebook summary
Firm: IBM
Industry: Information Technology: Computer Products and Services
Headquarters: Armonk, New York, USA
Geographic Footprint: Global
Ownership: Public ®
Revenue (2012): $104.50 billion USD

Problem: Resources Required:

IBM must accelerate the delivery of promising innovations from the • FOAK is funded 50/50 by Sales and R&D
research lab to the marketplace. • FOAK funds 20–25 projects annually; each staffed with an average of
4–5 IBM researchers for one year
Solution:
• Program Management Team—Three part-time staff: two from Sales
Sales and R&D* create the First-of-a-Kind (FOAK) program to test
and one from R&D
early-stage innovations by “incubating” them with other companies. This
• Volunteer FOAK Board—11 Members
evaluation period generates market-tested prototypes that IBM can
commercialize more quickly. Applicability of Best Practice to Executive Functions:
Business Results: Function Applicability
• 70% of completed FOAK Projects transfer to an IBM Business Unit Research & Development
for commercialization
Sales Management
• 2002–07 FOAK Revenue:
-- Direct Revenue $440M + (Direct follow-on sales related to reuse of
FOAK assets)
-- Indirect Revenue ~$4.2B (Revenue generated by the adaptation of
FOAK concepts resulting in new business)

* Within IBM, Research and Development are two separate functions. The FOAK program
focuses on IBM Research—the 3,000 + people working in research labs that cultivate
The contents of these pages are copyright © Frost & Sullivan. All rights reserved. innovation ideas for Development to adapt into products and services.
 growth team m e m b e r s h i p™
key takeaway: IBM’s First-of-a-Kind (FOAK) program accelerates the transition from
prototype to product by funding the testing of early-stage technologies in outside companies
Ideation and
Proposal Creation
PHASE 1
• Sales and R&D identify
potential innovation ideas
and refine them with IBM
industry leaders
• The Proposal Team defines
the idea, determines its
pathway to the market, and
develops a structured FOAK
proposal
Key Players
• Proposal Team—comprises
Sales and Service leaders,
the Industry Research
Relationship Manager
(RRM), lead researcher,
and a representative
from the IBM Business
Units that agree to
commercialize the idea if
the project is successful
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Overview of IBM’s First-of-a-Kind (FOAK) Program
Proposal Presentation
and Approval
• The Proposal Team presents
a project proposal to the
FOAK Board for evaluation
• The FOAK Board prioritizes
and funds 20–25 innovation
proposals annually, using
companywide perspectives
and selection criteria
Key Players
• Proposal Team
• FOAK Board—is a cross-
company 11-member
volunteer executive board
chaired by Sales, which
oversees the FOAK
program
Incubator
Selection
PHASE 2
• The IBM Project Team
identifies potential FOAK
Incubators using five central
approaches
• The IBM Project Team
selects Incubators via the
key attributes of previously
successful incubations and
negotiates a contract that
governs the partnership
Key Players
• IBM Project Team—is made
up of the IBM sales rep for
that company, researchers,
service leaders, and a
representative from the
IBM Business Units that
will commercialize the
project’s asset
best practice guidebook
Project Implementation
and Monitoring
• The Joint Project Team
develops a plan for executing
the incubation project
• The FOAK Program
Management Team (FOAK
PMT) holds quarterly
meetings with the IBM
Project Team to monitor the
FOAK project’s progress
Key Players
• Joint Project Team—
combines the IBM Project
Team and the Incubator’s
Project Team
• FOAK PMT—comprises
a small team from Sales
and R&D that manages
operational aspects of the
FOAK program
Source: IBM; Growth Team Membership™ research.
2
Asset Transfer and
Commercialization
PHASE 3
• The IBM Project Team works
with the owning IBM Business
Unit to determine the new
asset’s path to market
• All teams collaborate on
transferring the completed
FOAK asset to the IBM
Business Unit that will
commercialize it.
Key Players
• Proposal Team
• IBM Project Team
• Representatives from the
owning IBM Business Units
• FOAK PMT
 growth team m e m b e r s h i p™
PHASE 1
key takeaway: Identify and select viable innovation ideas based on industry fit and market readiness
IBM utilizes a multi-stage process to identify and refine innovation ideas into project proposals for FOAK
Idea Submission
• IBM solicits needs and innovation ideas
from internal and external clients, then
matches and adapts assets in response
• Most ideas come from Sales and R&D,
but they also come from Product
Developers, Industry marketing teams,
IBM executives, and clients
The Industry Research Relationship
Managers (RRMs) serve dual roles:
first, they are researchers with intimate
knowledge of their industry who inject
research thinking into market strategy.
Second, they bring the industry
perspective into the research labs,
enabling researchers to transform
ideas into solutions with business
applicability.
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Ideation and Proposal Creation Process
Project Designation
and Market Classification
• Idea generators solicit the Industry
Research Relationship Managers, who
sift ideas based on innovation and
business relevance
• Match ideas with the appropriate
research contacts who will create the
project
• Develop a value proposition that
shows the project’s expected benefits
for a client’s business
This Stage Filters Out:
• Research that is too immature:
cannot be completed in the one-
year time frame required for FOAK
projects
• Ideas that overlap with current
offerings
Key Players
Industry Research Relationship Manager
(RRM)—the RRM is an intersection
between research and the market and
serves as the first-line filter for ideas.
Potential FOAK ideas must have an RRM’s
approval to move forward.
IBM Proposal Team—the Proposal
Team comprises the idea owner and
its supporters from Sales and R&D. It
develops the idea into a proposal that can
be presented to the FOAK Board.
best practice guidebook
Project Revision, Validation,
and Proposal Creation
• Test, refine, and filter project ideas
with Industry Solutions Boards and
external industry experts
• Find an IBM Business Unit to agree to
ownership of the potential asset
• Use standardized templates to present
the project idea to the FOAK Board
This Stage Filters Out:
• Projects that lack IBM Business Unit
support
• Projects without industry or market
potential
Key Players
IBM Proposal Team
Industry Solutions Board (ISB)—ISBs manage
each industry’s portfolio of solutions.
The ISB’s assess FOAK ideas in respect
to industry and portfolio need and fit.
ISB’s serve as the second-line filter for
project ideas. The ISB offers revisions and
suggests who within IBM should own the
finished asset.
Source: IBM; Growth Team Membership™ research.
3
Project
Proposal Evaluation
• Submit FOAK Proposal to the FOAK
Program Management Team (FOAK
PMT) for review
• Filter FOAK Project proposals based
on submission criteria laid out in the
proposal template
• Designate the proposals to be sent
to the FOAK Board for funding
consideration
This Stage Filters Out:
• Projects that are too narrow or too
broad in scope
• Projects that are not aligned with a
market segment or solution area
• Projects with weak
commercialization plans
Key Players
FOAK Program Management Team (FOAK
PMT)—the PMT is a team from Sales and
R&D that manages the operational aspects
of FOAK. PMT serves as the third-line
filter before a project idea is presented to
the FOAK Board.
 growth team m e m b e r s h i p™

View GTM’s webinar with Mary Jo Frederich (IBM)

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Collaborative Innovation Process Email us GTMresearch@frost.com

GTM and Mary Jo Frederich, Director, Industry Solutions Labs (ISL) and
First-of-a-Kind (FOAK) program, and Alexis Bantel, Program Manager,
FOAK, present this best practice where they shared their key lessons
learned and participated in a Q&A.

The contents of these pages are copyright © Frost & Sullivan. All rights reserved.