At Employee Fair, EMC Calls for Innovation from the Bottom Up

10/27/08Follow @wroush

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Centers of Excellence, along with small research groups in China and at the Bedford, MA-based RSA division.

Nor is EMC likely to build such an organization. “Companies like IBM have thousand-person research towers on each coast,” Nick (who himself joined EMC from Big Blue) observed during his hour-long presentation at the innovation conference. “We feel like there is a more disruptive way to tackle this, using the collective power of the community as our innovation arms and legs.”

Employees need to think of innovation as part of their day jobs, not as something separate, Nick told me. And as the company continues an effort to disperse more everyday business functions to the Centers of Excellence, he says, the atmosphere for innovation is improving.

“My fundamental premise is that we have an opportunity here at EMC that is unique for us, at where we are in our evolution,” Nick says. “We started out creating these Centers of Excellence in order to get a local presence and tap the talent pools in each region. What’s interesting is that they are becoming melting pots. People from disparate product groups are sitting one desk down from each other. They talk, and all of a sudden the boundaries between storage and content management and security and resource management are no longer geographically and organizationally constrained. It turns into a wonderful place to tap into for cross-cutting solutions.”

In fact, out of the 984 teams competing to enter this year’s innovation showcase, 414 were from the Center of Excellence in Bangalore, India, and 169 were from Cork, Ireland.

As far as I could tell, the first-, second-, and third-place winners in the showcase were all from EMC’s U.S. offices. But even the ideas that didn’t win prizes “are still being propagated and cultivated inside the organizations that brought them forward,” Nick says. “All we can tell at this point in the story is what has risen to the very top, but everybody is enriched for having participated.”

The next step for the top proposals in the showcase, Nick says, will be for his office or Centers of Excellence to pry loose some funding to allow their creators to demonstrate how the ideas save money, improve processes, or benefit customers. The best projects will end up paying for themselves as they grow, he says. “I don’t believe in the big bang theory of innovation,” Nick says. “You can’t just have a vision of where you want to be. You have to build a staircase, and if you do that right, the increments can be monetizable; the first step can fund the second.”

So, will any of this change the overall balance at EMC between growth-through-acquisition and growth-through-innovation? Harry You, executive vice president and head of corporate strategy, gave an inconclusive answer to that question in front of the innovation conference audience last Tuesday. He said the list of companies EMC might want to acquire is getting shorter, but he also said that Tucci hired him last year in part “to help him work on the next big deal”—a large acquisition that, if I understood him correctly, is still in the works and still very hush-hush.

You said EMC “needs to be bigger” to have bargaining power with its large customers, some of whom are also growing—just look at the newly merged Bank of America and Merrill Lynch, which together forked over $180 million to EMC last year. “If there is an opportunity in the next few quarters…we might pick up scale or assets or reach in our channels, but we’ll only do it if it makes sense,” You said.

But amidst all that M&A activity, You added, “innovation dollars have to be constant if not growing. If we don’t give you the resources you need, we are strangling off the future at EMC.” Which must have felt like a bit of water for Jeff Nick’s grassroots.

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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