HP Turbo-Charges New Business Creation (Case Study)

Overview

HP is a world leader in innovation. The success of their merger with Compaq created an opportunity to develop entirely new areas of the business. Executives recognized that this would require exploring radically new ideas and managing the tremendous uncertainty surrounding moving into new businesses.

Challenges

The head of the imaging and printing division, one of HP’s most successful businesses, stepped up to the challenge by establishing a New Business Creation (NBC) process to focus on building a portfolio approach to new growth. The phased process graduated from new business concepts, to seed funding, to starting a new venture.

Departing from a traditional project management approach, HP decided to rapidly explore a large number of projects to identify potentially high-return projects, all the while knowing there was a high degree of risk and uncertainty. The Division President identified several target markets as diverse as life sciences and home entertainment, and unleashed high-powered teams to develop proposals to address them. His teams quickly came up with a pipeline of interesting, high-potential product proposals.

Said the business process owner, “Our big challenge was to get teams to see the upside potential in a constructive way so they could focus their efforts on a big win, rather than on easy-to-meet incremental goals.”

Solution

HP selected SmartOrg to introduce and implement project evaluation processes and software to help them deal with this challenge.
Starting with a series of Project Evaluation Workshops, SmartOrg led project teams through a structured evaluation of several key projects.

“The team wanted to explore possibilities as quickly as possible. They created a flotilla of plans, each based on different solutions. Using SmartOrg’s portfolio approach, they rapidly winnowed this set down. Within six months HP had cancelled all but one opportunity, while using the lessons learned to create several more. We’ve never been able to make so much progress so quickly; our throughput is up over 100%. Best of all, we’ve just signed a deal with a major partner to market the first product out of this process and it’s headed for success,” said the Business Process Owner.

The results were dramatic. For the first time—in a simple and practical way—project teams and their managers experienced the impact of risk and uncertainty on their projects. They gained a new perspective on where to apply their efforts to create the highest business value.

Over the course of one year, SmartOrg systems helped HP dramatically reduce waste and enable teams to “hit home runs with their projects. They used SmartOrg systems to evaluate a very difficult project. The results directed their attention to work on the most uncertain issues first. The project failed early. But, because the team clearly understood the uncertainties, they were able to quickly recraft their plan. They got a second chance at bat at a very attractive opportunity.