Intuit Goes All Out to Solve the Innovator’s Dilemma. Is It Working?

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quick-and-dirty customer surveys and experiments. (If those sound like pages from the “lean startup” philosophy being advanced by author Eric Ries around the same time, it’s no coincidence—Cook had noticed Ries and invited him to speak at Intuit in 2008.)

As the Innovation Catalysts went back to their groups and modeled the design-for-delight ideas for their colleagues, Cook and Hanson began to notice more ideas bubbling up through the ranks. The next year, they trained 30 more catalysts. True to the company’s bias against the solitary visionary, they tried to find team-builders and weed out the prima donnas. “There are people who want to be known for being good at designing for delight, as opposed to being known for being good at getting others to do it,” Hanson says. “Over the years we realized that the Innovation Catalysts who had a posse, who had buddies, were much more willing to take risks than those who were on their own.”

Painstorms and Brainstorm

Today there are 200 trained catalysts across Intuit. In June I sat in on a class where instructors were showing the latest group how to lead “painstorm” sessions focused on identifying customers’ most urgent needs. “The Innovation Catalyst training is not something that some crazy aberrant is running with, but rather something that is part of our theory on broad-based innovation,” Stansbury told me afterward. “There might be some people who are more prolific than others, but there is always going to be some guy off in the corner who might come up with a doozie of an idea once in a decade. If you don’t have a mechanism to capture that, you are losing a lot of the potential that the company might have.”

The Innovation Catalyst program was only the first of these mechanisms to be rolled out. Another was unstructured time, Intuit’s version of the fabled “20 percent time” program at Google. Intuit employees don’t get quite as much time to noodle as their Google peers—it’s pegged at 10 percent, averaged over the course of a year—but the idea is the same. “That’s time you spend on some project where your manager doesn’t get to tell you what to do,” says Stansbury. “The projects may or may not be aligned with our present business. Typically they are, but sometimes they’re just off in left field.”

Employees are encouraged to pool their unstructured time to pursue bigger projects. But when that happens, there’s at least a little structure: teams are pressured to adhere to lean-startup methodology. “One of the things that teams can do when they are running off with unstructured time is pursue an idea out of passion when it turns out not to have a lot of grounding in what customers want,” Stansbury says. “You want to be able to distill the ideas down to their essence and figure out what is the cheapest experiment you can do to validate or invalidate that essence.”

Tayloe Stansbury, CTO of Intuit

Tayloe Stansbury, CTO of Intuit since 2009.

Yet another company-wide mechanism for capturing innovation is a private online clearinghouse for ideas, called Brainstorm. Tad Milbourn, a senior product manager at Intuit, co-created the tool shortly after his arrival in 2007. He told me the initial goal had simply been to create better ways for new employees like himself to get plugged into the organization. “Folks who are new to the company don’t have a network of connections and therefore can’t get anything to happen,” he says. “So solving for the innovators was the first unique aspect of it.”

But Milbourn was also reacting to the company’s previous idea-tracking system, which he says actually discouraged innovation. “It was pretty onerous. It had 30 questions you had to answer for every idea, like ‘What kind of revenue is it going to generate three years out?’ Things you can’t possibly know when you’re just starting out.” Brainstorm asked innovators for less information, but still enough to give executives a view into ideas popping up across the company.

Within the first year after Brainstorm’s release, the number of employees contributing ideas to the system quintupled, Milbourn says, and more than 300 ideas that began as Brainstorm posts have now evolved into Intuit products or features in products. Two examples: ViewMyPaycheck, a feature of Intuit’s payroll system that lets small-business employees view their pay stubs online before paper copies arrive in the mail, and the Intuit Payment Network, which allows small businesses to pay vendors, or get paid by customers, through ACH (automated clearing house) technology.

Big products like the payments network can’t happen through unstructured time alone, so there’s yet another program at Intuit to make sure that the most deserving ideas don’t die from lack of resources. “The best way to get more money is to say, ‘Here are the six experiments we’ve run that get at the crux of the idea, and they are all positive,’” says Stansbury. “If we think we want to sink a bunch more money into this, we have a CEO Fund of many millions of dollars set aside at the beginning of each year for things that pop up. So you can get something off the ground without having to wait for the next year’s planning cycle.” (Intuit’s overall R&D budget for fiscal 2012 was $669 million, or a respectable 16 percent of net revenue.)

Catalyzing innovation through training; providing unstructured time; having mechanisms to capture, test, and temper ideas; providing off-cycle funding to the best ones: “All of that fits together into a system that supports broad-based innovation,” says Stansbury. The results are visible each year at Intuit’s Innovation Gallery Walk, an event where … Next Page »

Wade Roush is a contributing editor at Xconomy. Follow @wroush

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