Right from the time the company was founded, BT had a rich history of innovation. Its total patents around the world were nearly 7700 with 141 of them being filed in the year 2006 alone. However, most of the innovations that were made in BT were not commercially oriented. Understanding the need, Bross has emphasized the need to come out with innovations that were more commercially oriented. He constituted a new Research Investment Board governance body that vetted each of the innovation proposals that were going to be pursued by the company. The constitution of the Research Investment Board was a major change in the organizational structure of BT. Rather than having a single research department which did not have any contacts with the other departments of the organization, Bross has ensured that the newly formed board is well connected with all the major operational departments in the company. Having good contacts with other departments could make it possible to get the views of people from multiple departments regarding any proposed innovation project. The Research Investment Board has representations from all the operational divisions The main objective of the reforms undertaken by Bross was to realign the innovation process at BT with its core business model and commercial priorities.
Given the problems that the company was facing with the new competition in the market, BT choose to go for radical innovation. While incremental innovation utilizes existing technology to come out with new products/services, radical innovation banks upon new technologies. The amount risk that will be taken by organizations that are pursuing radical innovation is also significantly higher than that of companies that go for incremental innovation. Radical innovation is useful for improving the competitiveness of the company in the existing markets where it has its operations. On the other, radical innovation transforms the existing markets and industries where it has operations and tries to create new ones (Innovation tool box n.d.). Past studies have proven that radical innovation can be a very important success driver of the company’s growth, wealth, and success (Tellis et al. 2009). Among the factors that have the potentiality to drive the radical innovation in the organization, the most important factor that was the corporate culture (Tellis et al. 2009). Keeping this in mind, the management of BT has come up with the idea of radically transforming the culture of the organization. Traditionally BT neglected the actual needs of the customers while coming out with new innovations. BT and many other telecom companies rewarded their employees for coming out with research papers that were published in the research journals and for participating in the international research conferences. This approach was similar to the ones followed by universities where the professors were encouraged to do basic research irrespective of the commercial viability of the research project.
Given the problems that the company was facing in the market, BT decided to come out with a radical new approach towards innovation. Rather than focusing on the nature of research done by the researchers, BT started to focus on the commercial viability of each and every new research project undertaken in the company. In order to get approved by the research board, any new research project initiated in the company should fulfil at least one of the three core objectives, viz. improving the personal lifestyle of BT’s customers, improving the professional lifestyle of BT’s consumers, and improving the future sales of the company. Under the leadership of Bross, the research approach at BT was also changed from theoretical to experimental. All the research findings that were made at the company needed to have experimental findings to be accepted. Given the new players that were entering the market, BT’s management was also convinced that coming with some minor innovations was no longer sufficient to stay competitive in the marketplace. Rather, it had to introduce new services that could effectively offset the decline in its revenues from its conventional businesses. With these objectives in mind, BT has come out with some radical innovations like ‘Fusion’, the world’s first fully converged fixed mobile service and BT Communicator, a new service that allowed its customers to communicate with each other through Yahoo’s network. Another key strategy that was followed to bring radical innovation into the organization was to look for external innovation models.
Looking for new innovations within the company has many limitations in view of the high gestation periods for many of the internal research projects. Instead, the company initiated a new program called scouting with the objective of identifying new innovations from outside the organization. Special scouting teams formed by the organization looked out for new innovation models outside the organization in places like silicon valley and other leading technological companies in countries like USA and Israel. Entering into partnerships with these companies or forming joint ventures helped the company to get to get workable ideas into the organization soon. For the purpose of scouting innovation from outside the organization a new and innovative organizational structure was constituted with three separate teams working towards the objective. The innovation scouting team looked for new and innovative ideas from outside the organization through the identification of innovation from external sources and aiding any high calibre research external to the organization through funding. The other two teams involved in scouting for innovation, viz. innovation central and applied technology centre were focused on looking out for the commercial viability of the newly scouted ideas and with other issues like performing demonstrations and creating prototypes. The external innovation scouting were divided across the different geographical areas where they were assigned and worked under BT’s chief technology officer, Matt Bross.
Scouting of new technologies in the different geographical areas was done under the respective regional vice presidents. With a major number of teams allotted to the California’s Silicon Valley, having a vice president responsible for scouting for new innovations had a dramatic positive impact on the quality of new technologies that were identified outside the organization. The technologies that were scouted for the organization from outside can be grouped into six different categories, viz. broadband, mobility, information technology, NG customer experience, process innovation, and network technologies. Innovations that were scouted from outside the organization related to broadband and mobility enabled the company to introduce a number of innovative services that helped in increasing the satisfaction and service quality levels offered to the consuerms like home monitoring, global IP interconnect, in-car mobility services, converged messaging, and consumers VOIP. While the innovations that were related to broadband, mobility, and information technology that were scouted from outside the organization helped in improving the range and quality of services that were offered to its customers, the other three kinds of innovations that were scouted helped in improving the organization processes in the organization. All these radical innovations that were brought about by the company and the changes that were to the organization’s structure helped in improving the long term performance of the organization. To conclude, it can be said that the management of BT was quite successful in bringing external technologies to the organization and turning around the fortunes of the organization by effectively tackling the competition and introducing new services to its customers.