Hello INNOVATEwest Community,
Building an innovation muscle from North America to support Fujitsu’s global portfolio is no small feat, but that is what Nicholas Lee and Fujitsu is doing from Canada. Speaking with INNOVATEwest, Nicholas shared a peek behind the curtain at how the company’s Vancouver-based innovation team structures its operations.
Key takeaways:
- Innovation is a relatively new way to describe the human imperative to improve our lives.
- The key to corporate innovation is asking first if a new solution is technically feasible, but then asking whether customers would truly care if you built that solution.
- Investing in an innovation team requires the right structure, a years-long mindset, and stage-relevant KPIs to measure progress.
Dave Tyldesley
Co-Founder/Producer SAAS NORTH & INNOVATEwest
Editor INNOVATEwest PULSE
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Nicholas Lee, the VP, Innovation Consulting & Solutions at Fujitsu, describes the Vancouver hub as the “SWAT team” for innovation. With 30 members, the group comprises industry experts and PhDs operating as a single entity to help Fujitsu and its clients innovate.
More to the point: the team’s work spans nine distinct portfolio areas inside of Fujitsu, such as innovating with Industrial Metaverse and Generative AI in manufacturing to solving complex scheduling challenges across hospitals.
Speaking with INNOVATEwest, Nicholas shared more about how Fujitsu structured its innovation architecture.
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Understand both sides of the innovation coin
Innovation at Fujitsu is matrixed. Not only does Nicholas’ team support different business and industry verticals (for instance, Sustainable Manufacturing or Healthy Living), but it also works within Fujitsu’s broader R&D efforts and horizontally across different technology evolutions like digital transformation projects.
Guiding this matrix is the “Fujitsu Way,” which encapsulates the company’s core principles such as customer-centricity, innovation, and a commitment to societal well-being.
“We always act as one Fujitsu and the Fujitsu Way,” said Nicholas. “That’s a guiding principle that every subsidiary and company works in, so that we can work together for the greater purpose of our customers and their journey to differentiate through innovation.”
But innovating within a complex, evolving customer environment is inherently challenging—global operations, adapting to change, resource limitations, and technology cmplexity can easily create distractions. To break through the noise, Nicholas helps guide customers through repeatable processes; however, he distills his work into two key vectors.
- The first question is about technological feasibility: “Can we solve this problem with technology?”
- The second question is about business feasibility: “If we solve this problem, is there meaningful business impact and who will truly care?
Both questions are essential to corporate innovation, said Nicholas.
“Many times, I engage customers that are very much focused just on technology innovation,” said Nicholas. “Whereas one of the things that we try to do differently is really put business at the forefront, because that’s where a lot of the transformation is happening in companies today—on the business side, less on the IT side more recently.”
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The spark for global innovation
If you have a solution you can build and that people will care about, the next step is building the innovation spark necessary to validate, ideate, develop, and take that solution to market.
In large enterprises, Nicholas said innovation infrastructure setup requires three distinct steps.
1. Decide on structure
In Nicholas’ work across many Fortune 500 companies, he’s seen three patterns emerge: The first is to embed innovation within R&D so it’s all under one roof of new product development. If this model works for your organization, Nicholas said to ensure the innovation arm is customer facing, even if the traditional R&D remains in the background or more research-focused.
The second pattern is a centralized innovation function that works with multiple business units. This approach can be beneficial for skill density on the innovation team, but Nicholas cautioned leaders to ensure the team is always coordinating with other business units so it doesn’t end up in a silo.
Third is a pattern where the innovation team members focus on specific industry verticals and functional skill sets embedded within a business unit (for instance: process optimization in manufacturing). While your innovation team may sit together as one, each individual has their own purview.
“[A good innovation team structure] helps really ensure that the innovation is driven by a deep understanding of the customer needs and preferences,” said Nicholas.
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2. Change from quarters to years
Regardless of the approach you pick, an issue Nicholas has seen outside of Fujitsu and with companies he works with around the globe, are leaders giving up on innovation teams prematurely.
For example, he once worked with a global customer that invested in a full innovation structure, which after only a few months was shuttered; those executives set it up expecting immediate revenue gains and were upset when that didn’t happen.
“It’s a very difficult environment,” said Nicholas. “And you have to manage those expectations upwards and outwards.”
The key to a successful innovation investment, said Nicholas, is transforming timeline perspectives. Large global firms, particularly publicly listed companies, often think solely in quarters. But for innovation to work, you have to think in years.
“It can’t be a quarter-by-quarter kind of investment strategy,” said Nicholas. “It needs to be a long term investment strategy… you need the wherewithal to see it through and have the patience for innovation to succeed. You can’t constantly restructure or you lose your critical mass and focus.”
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3. Measure progress with stage-relevant KPIs
While patience is critical, executives are justified in wanting to know if the innovation team is making any progress. Even if they are willing to be patient, they deserve to know what’s going on, said Nicholas.
This is where stage-relevant KPIs come into play. Here are a few Nicholas recommends:
- At the very beginning: # of conversations with customers and # of times your hypothesis was validated by real customer problems.
- During MVP product development: Leads interested in a specific feature and speed of feature development.
- During full go-to-market: Pipeline management and revenue.
A lot of innovation teams will spend the bulk of their time in the earliest stages—after all, that’s where you identify the true, deeper issues your customers are facing. And the good news is this can happen in multiple ways: traditional interviews, social listening, or having informal conversations at events and conferences.
“It’s an art to try and manage that,” said Nicholas. “But you have to have some level of KPIs because you’re going to get executives saying, ‘Look, we’re investing several million dollars into this innovation business. How do we know that’s good?’”
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Humanity already knows how to innovate
Nicholas said it’s easy to understand why people might be “obsessed” with innovation today, but it’s important to remember the concept of creating a better way to do things is not new at all. From Fujitsu’s perspective, it’s also about staying competitive in a growing global market—and every investment in one good idea can easily trigger 100 more when you talk to customers.
“Without innovation, we’d still be living in caves and struggling to survive,” said Nicholas. “Instead, we have smartphones, electric cars, and vaccines that can protect us from deadly disease. Innovation is the lifeblood of our existence. And so that’s why I think innovation is a place where people really enjoy making a career.”
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