Ohio Venture - OVA Review Newsletter
News from the Ohio Venture Association meeting on May 14, 2010

Keynote Address:

Driving a Culture of Innovation

Peter Buca,
Vice President of Technology & Innovation
Parker Hannifin Corp.

How does a 90-year-old manufacturer with a glittering past avoid the fate of so many other rust belt manufacturers and component suppliers that have become victims of the global economy and its relentless march toward commoditization? Simple, according to its chief innovation officer: it has to drive innovation through the corporate culture.

But that's not to suggest it's easily accomplished, Parker Hannifin's Peter Buca told OVA members and guests at the May lunch program.

"Corporations love straight roads. But innovation is a crooked path. There is no certainty when you step on that road that you'll get to your end point...I like crooked paths. Many things in my career have resulted from random walks through technology."
He said one of his main roles in the company is to listen to those who come to him with crazy ideas. "Every once in awhile, you hear trumpets." Risk-averse corporate types sometimes need to be reminded that aviation pioneer Orville Wright "didn't have a pilot's license," he added.

Buca has spent 30 years with Cleveland-based Parker, including the first 24 years on the aerospace side of the business, and more recently on the industrial side. Parker, which began life as a maker of automobile brakes, is now a leading global innovator of products involving motion controls. It has about 50,000 employees, about a half million customers and makes and sells about one million products.

The company has some uniquely appealing history. Buca recalled how the founder's son once told him about his memories of playing on the floor of Charles Lindbergh's kitchen, as his father discussed with the famous aviator possible innovations in airplane fuel tank design that might allow him to fly across the Atlantic.
That legacy has given the company a special passion for innovation, Buca said.

"Parker is a 90-year-old company, and I know that even five years ago, if I would have said that Parker has a culture of innovation, very few people would have thought that I was completely sane. As an industrial company in a rust belt city, how do you have innovation in your DNA?" The only way to avoid having your products become commodities, he argued, is to convert them from being accessories in a system to instead being items of primary value in the system. "If I'm the thing of primary value to a client, I can command higher margins."

As an example, he mentioned a ceramic hose Parker makes, which increased the life of the product from two weeks to four years. "Why is that important? Because when the hose fails, the factory has to shut down." The innovation has lead to Parker being able to charge more than 30 times the cost of a rubber hose.

"The things that really happen new do not happen because of your focus and your main thrust and your operational performance. They happen because of the friction between the different things you're trying to do, and spin-offs that happen because of that...My job is to manage the white space in between organizations. We are there to basically be the catchers, the psychologists, the business managers to catch those things that happen between the spaces."

More information:

Keynote Webcast:

Click on the image below to view the entire presentation as video.

Dr. Arthur A. Boni - Keynote Speaker
Webcast produced by Mike Sutyak, The Entrepreneurial Learning Initiative.

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