Courtesy of  Cisco's Alex Goryachev, below is a transcript of his speaking session on 'Driving Cultural and Strategic Transformation with Disruptive Co-Innovation' to Build a Thriving Enterprise that took place at Business Transformation & Operational Excellence Summit & Industry Awards.

Session Information:

Driving Cultural and Strategic Transformation with Disruptive Co-Innovation

Companies of all sizes must reinvent themselves, their strategies, and their innovation practices to keep pace in the digital age. This requires nothing short of a highly disruptive and disciplined program across the entire organization, turning all employees in every function into startup-like entrepreneurs. In this session, you will learn a successful cross-departmental approach that:

• Instills entrepreneurial mindsets, attitudes, and values into all employees worldwide, encouraging them to form their own cross-functional venture teams, and co-develop their most passionate ideas.
• Breaks down departmental siloes around co-innovation, improving employee engagement, team-based diversity, inclusion and collaboration.
• Rallies together the C-Suite, especially chiefs of Strategy, HR and Operations, and worldwide talent around companywide co-innovation that produces both incremental and game-changing solutions for the company, customers, and partners.

Session Transcript:

Time for us to get started so we have a couple of speakers today I'm gonna kick this off I'm from a company called Cisco that a CIS CEO we are a computer networking company I'm joined here by flora hi flora flora runs our my innovation program we just got a gold award last night so congratulations floor and the relations are any good.

What I really wanted to do is talk about kind of how do we drive cultural change in a big company if that's at all possible right on how do we approach this at Cisco and what are the some challenges that we see ahead of us and with our customers and what are the some of the best practices to to go and overcome those difficulties and when I look at flora talk to flora because she's facing though you know she's dealing with cross functionally across the company with practically every single function to drive.

Innovation right and in a big company that really means a lot so just to set the stage this is a slide that I kind of use I've been using I want to say I've been using it for for the last 10 years but this slide is very much accurate when we look at the mortality rate of large companies right all the suddenly got out of business right so if we think about the there's a proven market trend which is big companies go out of business suddenly because of their failure to innovate right and it almost happens overnight and it's not necessarily that startups are taking their place right.\

It's really about that the startups are as mortal as as big companies if not more it's just the fact that the big companies are acting slowly and are not necessarily embracing the change right because we're so focused on our success and on our mission and when we become big and when we become older just people right we stopped listening because we know everything right and that's and that's actually what's happening with a lot of companies.

I mean when I look at the anteroom for example that was probably too innovative when it comes to tax accounting and document keeping right but at the same time I know a lot of said about the blockbuster but at the same time that's the company that just never believed that something will go digital right and I remember my personal story many many years ago I was working for a company called Napster.

We truly believe that we're going to change the world we did we never survived as a company and I was and a recruiter called me they said you know Alex I understand you work for a Napster but there's this little small company in Palo Alto and they need somebody to pull some operations together and I said what's the company and they said Facebook and then I remember I was so arrogant because I littered the like recruiter In educated him that myspace already exists right and like who needs Facebook if there's MySpace right.

So it's interesting how all of us we just do not accept certain realities right because we have thus tunnel vision the same thing like public public utilities never thought that they would be disrupted not by regulators but by solar but their revenues are actually going down I mean they're their revenue model let me put it this way as impacted because there's solar power and I remember I was talking to another public utility and they have an Innovation Lab.

I said why do you have an Innovation Lab and they're like well who knows maybe there might be other ways of putting us out of business right so it's important that that we think about that because when we look at the SA P and just look at the big company list there are new companies there and with more and more IPOs there will be more players and that's getting very competitive it's getting overheated and it's getting very confusing for a traditional players that are not necessarily glamorous or players that feel that they work in the highly regulated industry like health care or life sciences and yet they can be disrupted.

So if I think about all of this kind of stagnation of big companies I think all of us we really know why big companies go out of business I mean there are many reasons but at the end of the day this is the primary reason right and when I say big company by the way I mean like why countries become less competitive why cities do not attract trade right at the end of the day it's we get into something and we're very comfortable and then something moves and the gist and that's a bit and it's a bit too late right and when you when I think about this manager view grow of ideas right this is where innovation comes actually innovation.

This is everywhere right but it's really about how do you keep looking into tomorrow why will you focus on today and it's very uncomfortable right because there's a lot of anxiety from unknown why focus on that if there's if things are working well so some of the observation how we can change that because it's our job to do that right this green box is a couple of things one is I think it's essential to communicate urgency.

I think from like if you look at companies I think middle managers are the best who understand that there that something needs to change because they said between the leadership that sets big agendas and kind of vision statements right and and then you have employees right and and you're in between of that and you need to go and communicate the urgent case for innovation so we're in networking business if I think about our business case and enabling our customers everything is connected right there's actually I was just reading.

I was just reading up an article yesterday but there's basically there are more connected devices than humans on the planet which is very interesting because half of the world is not connected to the Internet right I mean there's a tremendous opportunity ahead of us if we think about the kind of what drives the market and again it goes back to democratizing innovation in fact that everybody can go in and displace a big player it's these the mobile apps when we think about iPhone it's a wonderful invention.

That we don't even know what the consequences of that are yet to our society and you know changes everything from dating to shopping right and the way our children learn but the biggest thing is the App Store right it created a virtual marketplace where everyone can pretty much publish an app and I know at certain point many people here thought about like what is the app that I can create and and you know and make millions like other people do but it's it's a reality and in that app can take companies out of business it doesn't cost a lot of money to go in business.

So there's a lower barrier to entry in any field you don't have to have space you can work out if we work you don't have to have any equipment you procure Amazon Cloud Services say right if you want to hire somebody you can hire people in lower cost market you can deploy products overnight right so it costs practically nothing and then there's plenty of capital right there's a lot of funny money and you know in Silicon Valley.

Right so when you think about and there's more money than ideas so if you think about it that's a prime these are prime conditions for disruptions right there's plenty of opportunities to experiment and there are a lot of people that are don't want to go in traditional roles in it work for a large company right and it's really funny because in the past large company meant stability right now it's like large company is instability.

We don't really know necessarily know what's going on and what's the direction so I think it's important to do realize and accept that I think the second one is about innovating right a lot of people talk about cultural transformation or innovating I think it's essential that we understand why and we have a very clear business case and we'll talk more about that but unless you're on the R&D team or you you're serial inventor.

If you're running a business innovating for the sake of innovating it may not necessarily be a good idea right because at the end of the day innovation is a is something that impacts your company goals it's important to tie what your business case why do this right why have this cultural transformation so when we think about kind of the big statements right why innovate at the end of the day big companies innovate these are all very good statements right.

It's customers golf competition talent work conditions right but at the end of the day when we think about companies company is a business right so at the end of the day the value the company innovates to provide value to shareholders and if we provide value to shareholders none we're in business and we can do all those things so you basically companies innovate because of at the end of this but growth or cost avoidance.

What I really want to point out that innovation is as essential to new products as it is for process so I want Flora runs the innovate everywhere program at Cisco what we discover a lot of our employees they don't tell us we need to build a new router right they talk to us hey we actually have the silly process I think it costs us a lot of money and probably we shouldn't be doing it right and that's a lot of opportunity for innovation.

There right and obviously when we think about again being in a being at a networking business when you think about that half of the world does not connect and you have everything from security to privacy to connected wait skills there are a lot of opportunities for innovation and I think generally we as a society right now at the point where we we really want to take a better care of our planet and again I'm going to mention the floor because we were talking about this last night it's really it's how do we use technology for good so that's a great purpose to innovate.

So understanding what the innovation is about and why is essential the other thing a lot of companies are innovating already and some of it is fake innovation and I think it's important that we understand again there is nothing wrong with innovation celebration right it's a very good team-building exercise but I think it's very important that we realize where our money is going in terms of innovation activities and what outcomes do we get from it right so if you're in a typical corporate environment there's a manager that says be innovative.

I mean what does this really mean right what are the practical things that you want your team to do what are the outcomes how it moves the metric and when you think I think a good test for fake innovation as it doesn't really it's innovation for the sake of innovation that doesn't move any corporate metrics right so for example at Cisco before we launched this program of kind of doing cross-functional innovation.

I'll talk about or actually not doing cross-functional innovation but enabling innovators cross-functionally we really talk to our employees about what what innovation is for them and what we've learned is in the company of 74,000 people we have two classes innovators and not innovators and innovators are the people that work in engineering but because they create products that sell of course they're in the theaters right we create best products in the world when it comes to networking connectivity.

So many great things but what about 50 thousand other people right because they work in marketing and sales and logistics and procurement human resources they need their innovators too and it's essential that and what we've heard from them it's like if I if I'm not an engineering and I have an idea I don't have any any vehicles to go and take it to the market and then really if I have an idea which is outside of my team's function I have nobody really cares right so we do a lot of innovation celebration but at the end of the day we don't follow through.

I think again going back to the going back to the test there is a lot of ideas celebration ideas are good as these are great probably all of the ideas are are known right in the world when you go to a venture capital firm and you say hey I have an idea they say wonderful who is on your team right and who is on your team essential because to them it's all about the execution.

So following through on employee ideas is actually a good differentiator from is that really a fake innovation or is this more of a you know continuous process improvement the other one is about the ecosystem so when we think about generally when we think about innovation innovation does not happen in the four walls of anything right in order to invention might right.

So there is a lonely inventories if absolutely you sit under the apple tree and then the Apple hits your head and you come up with an idea and the world has changed true but when it comes to innovation that really requires requires the ecosystem so if I think about generally Cisco's philosophy and this drives and this drives a lot of the internal culture change is how we work with others so we have this premise that no single company can do this along.

What this really means is we build stuff right so we have a large engineering organization as I said 24,000 people we spent significant amount of on an RZ and this is where we work on the products of today and tomorrow great then we acquire companies and this is 201 this is a bit old slide I'm sure it's 211 now or something like that we we do a lot of acquisitions and then we bring that knowledge into Cisco.

Our goal is to is to retain that that talent right and and retain that knowledge we partner with a lot of companies when they say partner it's not only about you know channel a it's not about it's not about distribution right or sales it's about Co innovation as well for example we're in discussions with some of our large partners about how we're going to coin with them so that we create solutions for the market.

When you have local partners that really allows us to to come up with ideas and in scale we invest Cisco is a very large investor we've lately we've been investing in in accelerators which really allows us to go and work with startups and then the last one is we could develop at the innovation centers and what we try to do is get our employees engaged across all of these activities right because when you think about the large company.

There are two great things about large are there are many great things about large companies but I think two are essential it's the knowledge base of all employees if they're connected right because together we know so many great things right and then the second one is when we execute as one function as one big company right as one entity we can achieve amazing things.

So we understand that we can achieve amazing things when we work with others the reason we really like this methodology is not only we're focused on today right but we actually are able to go and scan the marketplace the second one is if we have a good idea we can test it out on the market quickly and then at the end of the day because we engage the partner ecosystem we work we can create end-to-end solutions and take something to market in many countries right.

We're able to capture local innovation and scale it globally next advice that we've learned right is is the ditch company politics and bring everyone together so I was actually thinking about that a lot and before Cisco I worked for a start-up and now I feel that I'm lucky to work in the team of Cisco which is like a start-up.

So what is like a start-up right at the end of the day when you think about startup it's a startup is a team sport is a team sport everybody is on the same team and everyone is playing together when you look at any large organization.

That's a political process very generally it's an attribute it's just a political process so it's very interesting that I think for a lot of innovation team or teams that enable others it's essential that we bring everyone together so I have this thing on top there which is facilitate and be invisible so I see a lot of politics in the innovation.

World were you know innovation team step up and they always say we are the innovators and then there's a third class of innovators right right then like now there is an innovation team and all the other team so what are the other teams doing right they're not innovators right so I think it's essential that that the innovation teams they actually enable and physicians team right operations team are about enabling other people's success so when I think about innovation it's all about how we help others and how we enable them so it's cisco we've built a variety of programs and when I say built we've actually kind of pulled them all together from the place where everybody could go to the hub a place where everybody can learn what's going on when it comes to both topic of animation in the company of 74,000 people and 140 locations that means a lot we run a challenge I'll talk about that in a minute we have a number of training offerings that are particularly around innovation that are very practical I mean in pragmatic that means that you don't look at the value of you can you get to actually experiment with a customer which sounds scary but what we've discovered actually leads to revenue and employer retention so many great things.

We created the mentor Network some some incubation spaces that were experiencing this with but most importantly we really somewhat got our company on the same page when it comes to what are the priorities that we need to innovate on which which really leads me to redefining innovation right I've talked about the fact that in order to run anything cross cross company every employee needs to have a role so in order for every employee to have you need to redefine innovation you need to just say that innovation that could be about continuous improvement that could be about cost avoidance it could be about shorter line in the cafeteria in fact I would argue if the employees in the company cannot shorten the line in the cafeteria it's highly unlikely that they will be able to launch a new groundbreakers product right because at the end it's about the ability for a company to listen to employees and execute so it in order to empower employees we really we built this framework which basically is focused on kind of two pillars one is transformation.

This is all about how do we engage every single employee and communicate to them about innovation what innovation is and isn't and there's a metric right and the metric is very simple how many people actually go there and check it out and do they really care about what the company's agenda is when it comes to innovation right so we measure it and then when we think about empowering ok so everybody knows that these are the priorities we should innovate on it we might be interested.

So there is an offer or there's an awareness of the offer so then it's some power we create basically it's about training it's about coaching and network it's about opportunities for employees to go and engage and these opportunities could be with mentoring other employees teams or startups for example in United Kingdom.

We have an Innovation Center where we extending opportunities to our employees to go and run and mentor startups which really connects Cisco with the outside world on an employee level and it brings a lot of energy back to Cisco.

Where people are going and saying hey we got to do things differently and that's exactly what we want we want those ideas and then we accelerate so we're on the innovate everywhere challenge I'll talk about that in a minute it sounds like fun and games it is fun and games but at the end of the day it's actually a process a replicable process that we've been running for four years were nearly sixty percent of our workforce is continuously participating and we take their ideas to market and we
measure about in revenue right so at the end of the day.

Activation how many people are actually proceeding with their ideas and then are these ideas going into the market and the market is internal and external it could be a new product it could be just a new process it could be a shorter line in the cafeteria because it all matters when it comes to culture and then when you think about giving everybody an opportunity we do not look for inventors we appreciate the inventors our company is far you know our company has roots in technological invention we're actually looking for teams meaning if you're lonely innovator with an idea it's unlikely we're going to review it and if you do not have a cross-functional team we're not going to review it either because we know that teams of five engineers are unlikely to take product to the market right and teams of five marketing people are unlikely to create a product right.

it's like a real startup right so it's it's all about creating that cross-functional collaboration when I talked about the value of the big company it's all about where because big companies are silos it's about breaking those silos and then explaining that a founder needs other people to be successful because that's the difference between an inventor and innovator.

Innovator is somebody who enables other or who is willing to embrace that team and go and take something to the market invent invention is not necessarily going to the market right so it's ensuring that everybody feels that they're innovator and then really talking about inclusion and diversity I think every every large company talks about inclusion and diversity but at the end of the day innovation is about inclusion and diversity because what innovation is is an ability to solve a problem or come up with a solution or identify a problem from different points of view so inclusion and diversity comes from teams only and when people work together and when they welcome dissent.

I think it's disco it's pretty easy we sometimes we argue with each other right and then the global company that's actually easy because you have people there are different places are they working remotely they're in different countries so that really allows us to go and focus on the core and the core is not about the product it's about the people and developing their skills right because we keep we keep saying that everything is about big companies are about talent well innovation is about talent.

So that's why we build programs that at the end of the day are not focused on products they're focused on creating an environment where innovators can take that those products to markets and that's why I talk about the cat line to the cafeteria because it's it's enabling innovators the other thing that we do which i think is very essential going back to my first thing about the business case.

We connect employees to strategy so what people say innovate on something it's essential that we we as a company know what we want to innovate on so again when we run this challenge we talk about what is our innovation ambition for each of these markets or technologies our business models and that allows us a to actually understand what it is and get on the same page and be moved forward right and and that's essential.

Then when we think about the replicable process having a bold vision and executing and some a small measurable milestones is essential there's a lot of belief like oh this is innovation therefore leave us alone and don't measure us come back in five years.

That's actually innovation requires pressure if you look at the way VC world works it works very differently right that you or you're in a milestone if you don't hit the milestone you don't get venture funding so when we think about again the way, we run challenge it it runs on the milestones which creates pressure not only on our business but on our employees and the teams to go and come up with their ideas and execute something.

Within the structured process where things are tied to metrics and outcomes and there are rewards and I think that's an essential thing and the word transparent here is essential because if you have an idea and that idea is not going to go forward we will actually close the loop of you and say why and what we've learned to see people might get upset but at the end of the day they will pivot say yeah okay this doesn't fit with Cisco business.

Great idea but doesn't fit with Cisco business let us work on something else right and then that it's really a learning and developing opportunities you so at the end of the day what we are really trying to do and I think we're worse where we're successful we think about this employee engagement talent in SMEs a core pillar we're able to type corporate priorities we have the executive support with activated coaches and mentors inside an outside company because it's equally important we've made it fun and games fun and games is essential especially large company right there's you you gotta have some fun and we provide resources and tools so at the end of the day it's something that's creates a network which is value and its measured in in practice called business outcomes so what I was hoping to share with you and I'm happy to I'll be here over lunch.

I know we have more great speakers to talk about what we're doing but I'm happy to talk to you about what we've learned at Cisco we have white papers available on how we've done this it's a journey we keep innovating we keep changing this and happy to help you in any way I can and if I Olivia this last slide year after year we're getting those numbers right and it's incredible.

That I'm play employees care about this because the minute that they understand that their voice is heard they're actually giving their ideas to the company and we're doing something about making their ideas happen or 1 we can't we tell them why or we try to tell them why thank you so much that's a thoughtful ending to this questions comments please.

So we're part of engineering right now but generally we have a we're lucky to have our own operations teams right so when you think about continuous improvements I think because this is such a large company we have that in every function right because there's one for engineering another one is supply chain another one and other functions I think course functionally we work with
with pretty much every organization at Cisco and what we try to do is online to their goals right at the end of the day if there is a continuous improvement in organization.

We would say what the what are your innovation ambitions and how we can communicate it to other employees how rejecter idea without Peabody without what oh we talked about this for a long time right so the idea there is a floor can i redirect this question to you actually am I putting on how do i how do we reject the ideas without Zuma obeying the employee by giving them feedback and what do you think employees get to participate or kind of put an angel power and invest the tokens and invest in the idea that these were obscene potentially.

Those ideas was a threshold of toner tokens so from that point those ideas advanced was watching around and then we've got judges that update other judges that reviewed these ideas so from a rejection perspective we encourage teams and so what we've actually seen is that cut teams that do advance to the finals for example and yet were successful in taking that product to market and actually have a real impact so from a rejection perspective.

Alex mentioned he might be right into the touch many times with the judges we get them in touch with the coaches and mentors people on our team across this though that can help them continue building so sort of a soft answer to that with the truth is there really isn't a level of rejection because we keep we keep the dialogue open with these teams and many of them actually come back the following year and submit their idea again so they've gone back to feedback built it a bit stronger and maybe.

I cannot not on a you know on a soft message the there's a there's pre-filtering basically with the tokens if you can't convince your fellow co-workers to work to vote for your idea we're not reading it because guess what you're not you're not going to be able to implement it right which is another thing we're not looking for, people to give us ideas we're looking for teams that are willing to step up and rotate into temporary jobs or with assistance go get those ideas done so if you're just going to give us an idea things but no thanks next right so that's how we look at this
so there's two things that you bring up very exceptional.

One is we're looking for ideas that are not new so meaning it cannot be a part of your Crimean this is not a mechanism to go and jumpstart but to elevate your project to the CEO level right has to be a new idea and then a relative to rotating it to other jobs so we provide money for backfill so there is corporate money for backfill but obviously you can dimension that people that are doing this sometimes they're top performers sometimes they're not so there is an individual manager.

Conversation involved right because all of a sudden you have hey I have somebody who's actually working on this project and all of a sudden he's working on this thing right so it's in negotiation with managers and getting them on board because when people rotate to other other jobs especially their top performers or when they're faced with a choice it's a difficult decision for everybody involved because there's a risk yeah please.

So there's a number of things it's really cash recognition and an opportunity to implement the idea and be heard by others and when we look and cash is significant it's actually when we think about the large teams of florists what's the grant twenty thousand what's the big one but twenty five thousand dollars tax-free its net cash right.

Cisco would pick up the taxes and what we've learned is the recognition and ability to implement the ideas is on top cash is not the biggest incentive it's great I mean we've seen teams that donate cash to charity and make a statement with us and of course and then yeah they want to bring it home and at the same time there are bigger purposes and what we're seeing there are a lot of people that innovate for a bigger purpose please I'm sorry challenge versus what so my worry personally my worry with hackathons is the the do not necessary.

Actually memory status in a large company you need to get others on board right in the nor in getting others on board requires time and purpose so when you think about hackathon it's in my opinion it's not enough time to go and socialize and understand how this aligns with priority find an executive and hold that person accountable because there's a lot of noise right so this is a length for your process where we can go and we can go to execs and say hey not only we have a team we have a market test we have a customer we have an opportunity.

So there's a signature tied to the business I'm not saying that hackathons are a bad idea we do hackathons at Cisco to educate people in our technology the other thing we do is potential phones which is IP harvesting where we go and we encourage people to look at what's patentable right so there are other ways that we use hackathons for the business there's just I feel this really Allah this
process of a lengthier allows us to go and marry this to the business model of the company the time line is six weeks of the validation period so that is where these teams are truly identifying who their extreme users are right not necessarily.

Working on solution really identifying whether or not this really isn't even a problem and so we have found is that many of the teams so what kind of working partnership to the teams that come forward and participating will compact upon then if they really you know see that this will work yeah it's a pipeline into this actually yeah if we think about the hack felt like IT gives us results of their hackathons and take it for the process and by the way I know we're coming back here and there's lunch I'm happy to stew to talk to every everyone here I just want to make sure you guys are not starving but yeah.

About the Author

Agustin Stengel,
Managing Director, Innovation Strategy and Programs,
Cisco.

Alex Goryachev is an entrepreneurial go-getter. He takes risks, thinks ahead, and loves making way for new innovations. Over the past 20 years, he’s made it his business to turn disruptive concepts into emerging business models.

For him, it’s all about a passion to create a strategy and then drive it home to “get things done.” And as Cisco’s managing director of Innovation Strategy and Programs, he has plenty of opportunities to put this passion to the test.

He sparks internal innovation by providing employees at all levels the chance to share their big ideas, many of which make their way into the company’s innovation engine. Alex also carries the torch for co-innovation across Cisco’s ecosystem.

He’s especially excited about Cisco's Innovation Centers, which can be found in major cities around the world. Led by Alex, these hubs bring together customers, partners, startups, accelerators, governments, research communities, and universities in a lab setting. Their goal is to discover, develop, and implement game-changing, outcome-based solutions.

He also heads up the Cisco Innovation Grand Challenges. These polished events help creative thinkers bring their technology ideas to life. And then there’s the Cisco Technology Radar, the company’s engine for identifying emerging technology transitions.

Alex began his Cisco journey in 2004 with a singular focus: Innovation. He defined and operationalized several high-profile Cisco initiatives, including the company’s Country Transformation plan for Cisco in emerging markets. He also held senior roles in Development, Marketing, Finance, and Channels, providing him a 360 view of how a great company ticks.

Prior to Cisco, Alex was a successful consultant with extended assignments at Napster, Liquid Audio, IBM Global Services, and Pfizer Pharmaceuticals.

He was the “Emerging Stars” gold recipient of Brandon Hall Group’s 2016 Human Capital Management Excellence Awards Program, and his organization won golds for “Employee Engagement” and “Innovation Talent Management” programs. A sought-after keynoter and media authority on innovation, Alex has a passion for sharing knowledge, mentoring, and guiding innovation programs. Please reach out at agoryach@cisco.com