Distribution

The Innovation Mechanic

How Phil McKinney Is Trying to Rebuild CableLabs Into A High-Octane Tech Engine 3/31/2013 8:00 PM Eastern

Phil McKinney has brought his one-man brand of Silicon Valley creative thinking to cable.

Nine months after taking the helm as president and CEO of CableLabs, he’s already made significant changes in how the research-and-development consortium operates.

Whether McKinney’s attack plan for innovation actually yields any groundbreaking new technologies will not be apparent for several years. And he may yet run into institutional inertia: The cable industry has had a reputation of embracing change with all the passion of a government bureaucracy.

But so far, the MSOs that recruited him are rallying behind his faster-paced approach and ideas. “Phil’s broad experience in innovation and high energy are reinvigorating CableLabs,” Tony Werner, Comcast Cable’s executive vice president and chief technology officer, said.

Other fans include Michael Powell, CEO of the National Cable & Telecommunications Association. “He understands that accelerating cable’s cycle of innovation is vitally important, and I believe the industry will greatly benefit from his leadership,” Powell said.

MISSION RESCOPE

Until about a year ago, McKinney — equal parts showman, engineer and philosopher — wasn’t thinking of becoming the maestro conducting cable technology’s future. He intended to ease into semi-retirement in the fall of 2011 after leaving Hewlett-Packard, where he was chief technology officer of the company’s Personal Systems Group.

McKinney’s Beyond the Obvious, a how-to book on cultivating innovation in organizations, was published last year. He was ready for a few comfortable years on the lecture circuit when CableLabs came calling.

“I really had planned on retiring,” McKinney, 52, said. “But I don’t think I could have laid out a more perfect job for me. I’m in hook, line, sinker — and just having the time of my life.”

To McKinney, CableLabs must serve a very different function than it did when it was formed 25 years ago.

When he arrived last June, CableLabs was all over the map. The consortium was running 69 projects internally for its 39 cable-operator members. “Given that we’re about 175 employees, that math doesn’t work very well,” McKinney said.

CableLabs went through a review process, culling projects that “just no longer made sense,” he said. By this June, McKinney is aiming to have stripped its workload down to 28 active projects, with the highest-profile among them the DOCSIS 3.1 next-generation broadband spec.

“That has a huge amount of upside, because it frees up resources for new projects,” he said.

In the past, often a member MSO would call up CableLabs and say, “Hey, could you think about pulling something together on X?” according to McKinney. That resulted in several dozen smaller, tactical one-off projects.

Now, instead of functioning as a catch-all development shop, the focus is fully on work that will benefit all operators, McKinney said: “We are an R&D company focused on early-stage research work for this industry.”

CableLabs now reviews its project portfolio on a monthly basis with the operators’ chief technology officers, and quarterly with CEOs. The 28 existing projects are aligned against a set of themes identified as critical for cable over the next 10 years — including advanced broadband (dubbed “better pipes” internally), business services and the changing content ecosystem — and CableLabs is in the process of identifying new projects to fill in gaps.

McKinney has “helped the organization focus more on core projects,” Suddenlink Communications chairman and CEO Jerry Kent said. “All of this should result in bringing advanced services to market much more rapidly. His knowledge and contacts in other industries should facilitate cross-industry collaboration, and he’s been very good at bridging the gap between smaller and larger MSOs.”

As it relates to working with vendors, McKinney — who up until now has spent his entire career working for technology suppliers — said CableLabs is trying to better synchronize with their product development schedules. This more open and collaborative approach will get its first test with DOCSIS 3.1.

In the tech community beyond CableLabs, McKinney’s moves have been received positively, but with a kernel of skepticism. The attitude among vendors is pretty much “sounds great, let’s see if he can do it,” one longtime industry observer said.

MR. INNOVATION

In searching for the next CEO of CableLabs, cable operators wanted someone plugged into Silicon Valley as well as a leader who could foster a spirit of invention.

In McKinney, they think they’ve found both: a selfstyled innovation expert — who literally wrote a book on it — with more than 20 years of experience in the computer industry.

He’s eager to expound on the subject of innovation and how his approach can help cable. “The thing beyond R&D we are driving is innovation,” McKinney said. “We’re looking for validation of ideas and hypotheses … that are really outside the scope of any of the R&D areas.”

McKinney likes big, unorthodox ideas. At October’s final CTAM Summit in Orlando, Fla., he held up a sheet of Mylar film, explaining that video circuitry could be imprinted on it to provide a flexible, low-power display — which eventually could be produced at one-tenth the cost of a traditional LCD panel. “Pretty much then every flat surface can now become an effective display,” he said.

Some find McKinney’s mantra of innovation to be a bit abstract. “I keep hearing this term coming out of Cable- Labs, but it’s never been really clear to me what specific innovation they’re looking for,” Multimedia Research Group senior analyst Mike Paxton said.

That chapter of the story has yet to be written. Cable- Labs earlier this year recruited Christian Pape, a 24-year veteran of HP, to run the R&D consortium’s nascent innovation office that is trying to sow seeds that flower into new cable tech projects. (McKinney said he recused himself from the hiring process.)

Currently, Pape is heading up seven projects on CableLabs’ innovation team. McKinney declined to identify what any of them concern (“I’d have to shoot you,” he deadpanned) but said that “in the area of innovation, we expect a high failure rate.”

“The whole purpose is to create a robust innovation pipeline … so you have a regular sourcing of new ideas, through a true portfolio-management process,” McKinney said, adding that it takes about two years to get to the point where ideas can progress into R&D projects.

Pape will be based in CableLabs’ new Silicon Valley facility, to open in late summer 2013. McKinney said CableLabs is close to selecting a final site, which will incorporate its San Francisco office and house staffers of member MSOs.

There have been other changes with McKinney’s arrival. Among them: Longtime executive David Reed, who most recently was CableLabs chief strategy officer, left the consortium last fall. In February, he joined the Interdisciplinary Telecommunications Program at the University of Colorado at Boulder as a scholar in residence. (Reed declined to comment for this article.)

According to CableLabs insiders, morale at the organization is better under McKinney than it was under Paul Liao, the former Panasonic CTO who preceded him. Some CableLabs staffers are now even dressing like the boss: dark-blue jeans, mock black turtleneck and sports jacket.

Others question McKinney’s track record of innovation at HP, which, while he was there, tried — and failed — to enter the fast-growing tablet and smartphone market. Supporters point out that multiple factors were out of his control.

HP acquired Palm in July 2010 in a deal valued at $1.2 billion. McKinney evangelized Palm’s webOS as an operating system that could rival Apple’s iOS and Google’s Android. HP wanted it because “we felt we needed to control our own destiny, and we could see this path where Android was going to run into all these problems because of incompatibility,” he told Fast Company, according to a June 2011 article.

In mid-2011, HP launched a line of tablets and smartphones based on webOS, but scrapped them less than two months later after poor sales. In February 2013, HP sold the operating system for an undisclosed price to LG Electronics, which plans to use it in smart TVs and a range of other consumer-electronics devices.

After leaving HP, McKinney said in an interview on NBC Bay Area’s Press:Here technology program that the company’s multiple changes in senior leadership over the prior decade resulted in strategy swings that whipsawed the organization. “It’s hard to innovate if you don’t have the resources available to you,” he said.

Asked about the webOS tablet, he said, “My biggest disappointment is the HP decision to not give it the time it needed to really mature and become the product it could have been.”

The fact that McKinney never publicly vented his frustration while at HP is the sign of a “true professional,” according to Columbia Business School adjunct professor Len Sherman, who has invited McKinney to speak to his MBA class several times. “Phil was in a very tough spot during his waning days at Hewlett-Packard, suffering under dysfunctional management, which seriously crimped his ability to execute as CTO of the Personal Systems Group,” Sherman said.

Need proof that McKinney’s approach to innovation can work? Corning chairman and CEO Wendell Weeks will give it to you.

Weeks recalled showing McKinney, when he was at HP, a new product concept: a bezel-less TV, made possible through a combination of glass and optics. (The bezel is the frame surrounding the screen that holds it in place.)

“He said, ‘If you get rid of bezel, so what? You don’t change the experience,’” Weeks said. Instead, McKinney suggested, why couldn’t Corning put three bezel-less displays together? That would produce a new form factor for a display, and HP might be able to develop a new interface that took advantage of it. Corning is still developing a product based on McKinney’s feedback.

“He’ll do that all the time,” Weeks said. “He sort of nurtures the idea then creates a tougher set of questions. But not until the idea becomes robust enough to not die of exposure.”

When he interviewed for the CableLabs job, McKinney said he was attracted to the openness of the executives at the member companies. “I spent five months meeting with the CEOs, to make sure we were all on the same page in terms of the role of innovation and their support for that,” he said.

He also stays connected with Liao, as well as with Dick Green — the first CEO of CableLabs, who ran the place for 21 years.

Still, McKinney said the hardest part of his job has been to explain how the organization is different today.

Back in the days when John Malone was running Tele-Communications Inc., “only an organization like Cable- Labs could do R&D” across the entire cable industry, McKinney said. “Now you have operators the size of Comcast and Time Warner Cable, which have resources to do their own development. The role of CableLabs has to transform.”

Snapshot: Phil McKinney

Current position: President and CEO, CableLabs

Previous work: Hewlett -Packard: CTO of the Personal Systems Group (2005-11), CTO for Network and Server Provider Business (2002-05); Teligent (1997-2002): Senior VP and CIO for fixed-wireless service providers; Computer Sciences Corp. (1991-97): Director of communication industry consulting practice.

Education: Studied computer science at the University of Illinois at Chicago but did not receive a degree.

Book: Beyond the Obvious, published by Hyperion in February 2012, touted as “a practical guide to consistently generating innovation.”

Age: 52

Location: San Jose, Calif.; relocating to the Boulder, Colo., area

Other activities: Serves on the board of trustees for the Computer History Museum; board of the Boy Scouts of America’s Silicon Valley Monterey Bay council; and the advisory board for Hacking Autism, focused on developing technologies for children on the autistic spectrum.

Family: Wife, Michelle; three adult children (Tara, Rachel and Logan); and two grandchildren (Audrey and Liam).

Cracking the Broadband Whip

Two years is a lifetime in tech. And Phil McKinney believes he can bring CableLabs’ next generation of DOCSIS to market about two years faster than previous versions.

With DOCSIS 3.1, McKinney claimed, Cable- Labs is going to shave 40% off the time to go from idea to deliver a first product compared with how the organization previously did things. The spec is aimed at boosting the spectral efficiency of cable’s data services and setting the table for Internet speeds of a Gigabit per second — and faster.

“If you look at DOCSIS over the years, we’ve averaged about four and a half years per iteration, and a lot can change over that time frame,” he said.

The spec is on track to be locked down by year-end, with early hardware pegged for late ’14 and products set to ship in 2015, McKinney said.

What’s different with DOCSIS 3.1? A key change is how CableLabs works with vendors: Equipment makers and chip companies are now participating in the process much earlier than before and have meetings with the organization every three weeks.

“By driving a co-innovation culture both with the members and the vendors, we’re able to take out a huge chunk of time,” McKinney said.

To make sure the process hits milestones, CableLabs has “time-boxed” critical DOCSIS 3.1 decisions. What that means: The vendors need to come to an agreement on key technical points by a specific date — and if they miss it, CableLabs and its members will step in and make a decision.

“Does anyone know what the products and services that use a Gigabit are going to be?” McKinney said. “No, but back when you had 256K of memory in a laptop, we couldn’t imagine what you would do with 4 Gigabytes of memory. Now you can’t buy a laptop that has less than that.”

Todd Spangler

March