By: Christina Le Beau

June 12, 2006, Crain's Chicago Business

Jim O'Connor Jr. and his team at Motorola Inc. review 1,000 ideas a year. That's three new concepts a day (if they worked weekends).

"I can walk the halls of our engineering lab and get 10 to 20 ideas in an hour,'' says Mr. O'Connor, head of Motorola's Early Stage Accelerator (ESA), the company's in-house incubator that he co-founded in 2003 with his boss, Chief Technology Officer Padmasree Warrior.

Unlike the incubators at other large companies, which narrow the field to a couple ideas and throw all of their resources behind them, Motorola spreads the wealth.

"Other companies take a larger-bet approach. Instead of going after 265 smaller bets, they immediately go after the top two,'' says Mr. O'Connor, 39, who previously co-founded and directed Motorola's venture capital arm. "But if the top two fail, you have nothing.''

ESA is well-funded (exactly how well executives won't say), and in three years it has produced products like iRadio (which provides Internet radio over mobile phones) and the Canopy wireless broadband system (which is supposedly quicker and cheaper than other Wi-Fi networks). Speeding innovative products to market has helped Motorola recover from its early-2000s slump.

"For all those years, there were thousands of ideas and opportunities latent in the company,'' says Robert Wolcott, a fellow with the Center for Research in Technology and Innovation at Northwestern University's Kellogg School of Management. "Motorola labs had the equivalent of picture phones and the BlackBerry back in the late-1990s, but they never made it to market.''

SMALL IDEAS

It's been Mr. O'Connor's job to change that.

"From 1999 to 2003, Motorola wasn't putting out the same level of innovation that it had been,'' he says, citing the tech downturn. "We wanted a more systematic approach.''

Idea generation at Motorola still happens organically, coming from employees throughout the company and from customers and vendors. But suggestions are now funneled through the ESA framework.

Individual suggestions find their way to the incubator through various means: a remark in a meeting, a hallway conversation, calls and e-mails. But in the last year the primary vehicle has been a Web site on the company's intranet created specifically for idea submission.

For the most promising ideas, Mr. O'Connor assigns one of his 30 staffers to gather facts and report back on its viability. Their first questions: What problem does it solve? Why is it strategically relevant to Motorola? An interesting idea alone won't cut it.

If the idea moves ahead, it gets the full treatment: market research, financial projections, pilot testing and prototyping. And a business plan. Of the 1,000 ideas they receive a year, ESA staffers do in-depth business analysis on 75 to 100. Roughly 25 actually get funded, and about half of those make it to market.

Many started as small projects that otherwise might have fallen through the cracks. "It's the small ideas that become the next big thing,'' Mr. O'Connor says. Others came from existing research that was put on the fast track.

INNOVATION OVERSEAS

What gets funded and for how much is ultimately decided by two Motorola groups. The first, a 20-member "innovation leadership team,'' includes mostly top technical people, who meet every other month for several hours, during which ESA staffers present their recommendations.

The second, a seven-member senior-level "management innovation investment board,'' makes money decisions.

Motorola also recently set up six overseas innovation leadership teams to vet ideas that might be specific to a local market. This year, about a quarter of the 25 funded programs will be international.

Motorola allocates an initial dollar amount to seed a project, then the venture has to reach certain milestones to keep money flowing toward eventual commercialization. And of course projects needs to progress quickly: The average incubation is only 18 months.

That's directly related to having a big budget. Motorola is keenly aware of "not falling into the trap that other companies have,'' Mr. O'Connor says, "where you have a great idea but it comes up in the middle of the year and you have no budget to do anything about it."'