Inside H-P's Idea Incubator

H-P employees are invited to submit their ideas, and if the idea passes muster (Does it fundamentally alter the economies of the industry? Can it generate a sufficient profit margin for H-P?), the worker is temporarily reassigned to the innovation program office.

"We'll pluck that person out, move them into the innovation office and build a team around their idea," says McKinney, who also serves as the CTO of H-P's PC business.

The innovation office's role is to accelerate the development of ideas into commercial products, and once under the group's aegis, it doesn't take long for a particular idea to either get annexed into H-P's product line or to fizzle out.

The development cycle is purposely kept short at 12 months to 18 months. And there are various tests and milestones along the way designed to weed out the unviable.

"Either we hit the objectives or we need to kill that program and reallocate those opportunity dollars to other programs," says McKinney.

Funding for the projects comes out of H-P's R&D budget, which totaled $3.6 billion in the fiscal year ended Oct. 31, 2006. But the group is distinct from H-P Labs, the company's central research arm that focuses on scientific advances.