REDWOOD CITY, Calif. -- Cutting through the misinformation surrounding the word "innovation" is the first thing the Vodafone Customer Innovation Group does when it brings customers in to its Enterprise Studio.
"It's one of the most overused terms in industry today," says Shannon Lucas, director of innovation at Vodafone Group plc (NYSE: VOD). "If you have 20 different people in the room, you get 20 different definitions."
Vodafone's definition can be summed up in two words: "Business transformation," says Lucas. "We want to illustrate we're not talking about technology innovation first, even though we're a technology company." Vodafone's customers know the carrier can help with technology -- Vodafone wants to demonstrate it can also be a partner in innovation.
Vodafone focuses on understanding the needs of customers, and using mobility -- the heart of Vodafone's business -- to satisfy those needs, Lucas says.
The innovation program is about four years old, created in response to recognition that the customer should be at the heart of technology development conversations. "Putting the needs of the customer at the beginning makes sure the things we're developing are relevant to their needs," she says.
Vodafone runs 100 innovation centers globally, where the comms provider brings representatives of enterprise customers in to brainstorm new ideas, Lucas says. The conversations don't always result in Vodafone having to stretch its innovation muscles; roughly 90% of the discussions result in Vodafone serving the customer with existing products and services.
"The last 10% of ideas fall into a different kind of bucket that we don't have technology to respond to today," Lucas says.
That's where things get interesting.
In a few of the last 10% of cases, Vodafone spots emerging technology that it needs to embrace.
And in some cases, Vodafone changes the business relationship entirely -- from telco/customer to co-inventors partnering to bring products and services to market together, Lucas says.
For example, Vodafone worked with Lufthansa on a wireless in-flight entertainment and information system, which reduced fuel costs and replaced bulky, heavy flight crew manuals with wireless connectivity for the airline.
The Lufthansa example demonstrates the importance of working with people in all parts of a customer company, and at all levels of the organization, Lucas says. The CIO is concerned with streamlining IT operations, the CFO with cutting costs, and the head of flight attendants is concerned with streamlining in-flight operations. By bringing all those parties to the innovation center, the airline and Vodafone were able to come up with a solution that satisfied all those needs.
In another example, Vodafone worked with Thomson Reuters , consumer goods companies and smallholder farmers in Sub-Saharan Africa on a mobile banking program. The program goes beyond finance, to provide information to farmers on best practices and producing highest yield more efficiently, while producing crops that the consumer goods companies would provide a market for, Lucas says.
Vodafone's innovation program embodies the principles of New IP in key ways: It puts business innovation ahead of technology, partnering with enterprise customers to leverage network resources to transform business.
The program provides business value to Vodafone by making a tangible difference to customers, cementing loyalty, Lucas says. And it also provides that most important business value of all -- revenue. Lucas declines to provide specifics, but says, "I can tell you we're significantly contributing to the pipeline in multi-millions of dollars."
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