The Business Innovation Insider

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November 18, 2005

November 18 Innovation Linkage: the FORTUNE teller edition

The end of process [Ross Mayfield]
Democrats call for 'Innovation Agenda' [IdeaFlow]
Tapping into the wisdom of communities [Irving Wladawsky-Berger]
Why can't real organizations be as collaborative as virtual games? [Dave Pollard]
The 7 circles of innovation [CPH127 via Danish Center for Leadership]
The formation of the Open Invention Network [press release]
Naked innovation [ZDNet]
Eamonn Kelly: Tom Peter's cool friend [Tom Peters]
China's state-owned enterprises lack innovation [China Daily]
The cult of the FORTUNE teller [Flickr]

[image: Chico Bangs via BoingBoing]

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Open Source Everything: Douglas Rushkoff Contest #3

The FORTUNE Business Innovation blog is pleased to announce the third of its "Get Back in the Box" contests. Douglas Rushkoff, a globally-recognized thought leader on media, marketing and Internet culture, has created a third reader contest based around the open source model of innovation as described in his forthcoming book Get Back in the Box: Innovation from the Inside Out:

"The companies most threatened by the open source model of innovation are the ones that see their greatest innovations as behind them. If you’ve already invented your best cell phone, mop, marketing methodology, or catcher’s mitt, you will spend more time guarding your secrets than coming up with new ones. Even if you enjoy a competitive advantage today, you carry on with the lingering knowledge that it’s only a matter of time before someone else figures out a better way to do what you do. To stave off this inevitability, you lock down your advantage and processes as much as possible and maintain a closed source enterprise — even to yourself."

Based on that excerpt from Rushkoff, "What examples can you give of a non-computer-related business that has, nonetheless, opened itself up to collaborative innovation?" For example, did you know Procter and Gamble has an entire division now dedicated to collaborating with other companies on new technologies? That's how they got Mr. Clean Magic Eraser!

Submit your selections over the next few days for your favorite example of an open source innovation model and you could win a free, autographed copy of Get Back in the Box: Innovation from the Inside Out by Douglas Rushkoff. The most innovative entry, as judged by Douglas, is the winner. That’s all you need to know – so start submitting today (either by adding comments to this blog entry or sending email responses with "CONTEST" in the subject line to: basulto@gmail.com).

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Money can't buy you love... or innovation

During the dot-com boom years, the consensus opinion was that an innovation-through-acquisition strategy was the easy (but not cheap) path to innovation success. In a great M&A frenzy, tech giants like Cisco raced to buy smaller, more nimble rivals, in the hopes of staying one step ahead in the technology arms race. According to Wharton assistant professor Saikat Chaudhuri, however, it's only an "innovation myth" that a company can become more innovative through acquisition.

After studying a high volume of M&A deals in a number of innovation-intensive industries, Saikat has concluded that innovation-driven acquisitions present a number of different challenges that make the innovation-through-acquisiton strategy a dicey proposition. Quite simply, integrating these acquisitions is hard work that doesn't always pay off:

"By examining the challenges of the innovation-through-acquisition strategy in detail, Chaudhuri’s work offers suggestions to managers on what kinds of target companies are worth pursuing and what strategies should be used to integrate those companies once they have been bought.

Innovation acquisitions, according to Chaudhuri, present four major challenges at the product, organization, and market levels: integrative complexity due to technological incompatibilities, integrative complexity due to the “maturity” of a target company, the unpredictability of a product’s performance trajectory (“technical uncertainty”) and the unpredictability of that product’s market (“market uncertainty”). Different target companies present different degrees of these variables, he says, and so each acquisition presents its own benefits and drawbacks."

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The Kaos Pilots know how to navigate innovation

If you've read this month's Web-exclusive interview with Richard Florida on the Fast Company Web site, you probably were more than a bit intrigued by Richard's cryptic reference to the KaosPilots in the final part of the interview:

Fast Company: Name a Creative Class TV show, book (other than yours), car, vacation and dessert.

Richard Florida: Let's leave this on a creatively cryptic note: check out KaosPilots in Denmark, which I read about in Ode magazine. Now there's a creativity incubator...

Richard, the author of The Rise of the Creative Class as well as the recently-published The Flight of the Creative Class, is the person who almost single-handedly developed the popular notion of the Creative Class. Thus, it's only natural to ask: What do Richard Florida and the KaosPilots know about creativity and innovation that we don't?

Anyway, I tracked down the Ode Magazine article mentioned in the Fast Company interview. It's an article called The Most Unusual School in the World. Apparently, the KaosPilots are a group of business school students in Denmark who are re-thinking the rules of creativity:

"...They are students at the most exciting business school in the world. Even its name is unconventional - KaosPilots. Located in Denmark’s second-largest city, Aarhus, KaosPilots is a three-year college for action-oriented revolutionaries — and that’s why class assignments, like the project in Sarajevo, are not confined within school walls.

At KaosPilots, young people (starting at 21) learn how to set up and carry out projects, sell their ideas, put together a business plan, stimulate creativity, work cooperatively, inspire others and themselves, take advantage of unexpected events, remain open to new ideas, bring mind and body into balance, and keep their heads cool and their hearts warm. They learn, in fact, how to realize their dreams.

KaosPilots receives financing from the Danish government and support from companies like the Tuborg and Carlsberg breweries, LEGO toys and Scandinavian Airlines, which throw their doors open to allow KaosPilot students an active role in marketing a new product or in leading an internal change process..."

[image: Kaos Piloterne via EPE]

Is Microsoft an inventor or an innovator?

On his The Next Big Thing blog, Don Dodge of Microsoft's Emerging Business Team offers a rousing defense of innovation at Microsoft. First of all, says Don, invention isn't the same thing as innovation: "Invention is the creation of a feature or technology that is totally new. Innovation takes a collection of inventions, combines them with existing products or technologies, and produces a commercially viable product."

According to that definition, then, Microsoft may not be an inventor - but it sure is an innovator. Don explains:

"Microsoft invests billions of dollars in both invention and innovation. The Microsoft Research Labs produce amazing inventions every year. Many of them are incorporated seamlessly into existing Microsoft products. Many others are extraordinary inventions, but don't fit with any Microsoft product...

Microsoft innovations happen every day in hundreds of different products. It happens seamlessly and without fanfare, and goes largely unnoticed. Microsoft innovates by making it easier to get work done.

Microsoft is sometimes criticized for not inventing anything and instead being an imitator or "fast follower". I prefer to classify Microsoft as an innovator, as defined above...

Inventions bring fame, while innovations bring fortunes. Inventions don't solve a customer problem. Innovations take inventions to the next level by adding commercially viable technologies, elegant user interfaces, and focusing them on solving a customer problem. That is what innovation is all about, creating value by solving customer problems."

EDITOR'S NOTE: This "innovation vs. invention" debate appears to be consuming a number of other tech companies recently. Mike Pastore of the Datamation IT Management blog, for example, even questioned whether Google was an inventor or an innovator.

[photo: "Service Suite" by Niall Kennedy via Flickr]

Joyce Wycoff: Extend the "innovation invitation" to everyone within the organization

In this special feature for the FORTUNE Business Innovation blog, Joyce Wycoff, co-founder of the InnovationNetwork and author of two popular blogs on innovation (Good Morning Thinkers! and Heads Up!), explains how the notion of "business innovation" has evolved over the past five years and shares her views on what companies can do to create an environment supportive of innovation.

Over the past 13 years, Joyce has written several books on innovation and developed several key resources for organizations eager to learn more about synthesizing and articulating the principles and practices of innovation. She is also the chief force behind the Innovation Convergence, the annual conference for innovation practitioners which recently held its 11th annual gathering.

Q: How can companies create an environment that best supports wide scale business innovation?

Joyce Wycoff: Change the invitation. Although I don't think it's what most companies actually intend, what generally happens is that only a few people are invited to be part of the innovation process. Only a few people are trained and only a few are invited to participate on innovation project teams. It's completely understandable - training Cargill's 120,000 people would be a monumental task, but I don't think things are really going to change until we find a way to invite every single person in the organization to add to the innovation stew.

Q: What are the best benchmarks or metrics for measuring how innovative a company is?

Joyce Wycoff: Innovation is done by people and I think a critical benchmark is how many people are participating. If we expected innovation from every person and there were an innovation component to every performance evaluation, who knows what new things might emerge. Of course, that means we have to have an inclusive definition of innovation so that every person could participate at their own level. The definition we use is "PEOPLE implementing new ideas to create value." This also means that the organization has to be able to support innovation with approval, funding and recognition processes.

The best article on metrics I know of comes from a paper jointly produced by The Woodside Institute and the strategic management consultancy Strategos. One of the things I like best about this article is that it reminds us of the reasons for metrics - to make better decisions and to affect behavior. If we ask ourselves "What behavior are we trying to change?" and "Where do we need better information in order to make better decisions?" it helps us design metrics that are relevant and important. The historical, accounting measure of the percent of sales from new products or services is a good tracking point but that data comes too late in the cycle to be really useful.

Q: Based on your experience as founder of the InnovationNetwork, how have notions of "innovation" within Corporate America changed over the past five years?

Joyce Wycoff: There are two major changes I see. First, when we started the Network over 13 years ago, the primary interest was creativity and generating more ideas. Now one of the most frequent comments we hear is, "We have lots of ideas... too many ideas... we need to know how to choose and implement them."

Second, we see people starting to make innovation real - putting resources, structure and processes in place to support it. Just in the past couple of years, we've started to more leaders and organizations truly making a commitment to innovation.

One of the most exciting things we see are the organizations that are starting to collaboratively innovate beyond their own boundaries. It's when we start to break down the barriers between people, functions, disciplines, organizations, and even countries that leaps are made.

Q: Are there any new product or service offerings that you have in the pipeline for the InnovationNetwork?

Joyce Wycoff: Because we passionately believe that innovation is part of every person's job, we are working on tools that will change the invitation to participate. How can an organization with 5,000 or 50,000 employees located in 5 or 50 countries spanning multiple languages and time zones collaboratively learn to create new value? How can simple, powerful tools help people think smarter and see the relevance of innovation in their daily jobs? We will be releasing a new product that will begin to address those questions early next year.

We are also launching an innovation book club in January. Network members are currently voting on the reading list for next year. Each month we will focus on one innovation related book and launch it with a short video overview from the author. Readers will also submit questions that the authors will respond to at the end of the reading period. We hope this will stimulate book clubs and conversations in lots of organizations.

Sparking innovation through co-creation

John Winsor, author of Beyond the Brand and a contributor to the BrandShift blog, recently published a new book, SPARK: Be More Innovative Through Co-Creation, that offers a fascinating inside look at how top executives at companies like Nike, Patagonia, Levi Strauss & Co. and Miller Brewing Company have mapped out successful innovation strategies. In total, the book includes 16 profiles of marketing and branding experts who have discovered their own personal secrets to innovation. For all of them, though, meaningful innovation came about through a process of co-creation with their customers, partners and employees.

At times, the number of perspectives and insights presented in the book can be a bit overwhelming - but the book is more like a portable resource full of anecdotes, innovation tips and pointers to useful resources, all tied together by the broad theme of "co-creation." In the intro to the book, John even asks readers to "write in it. Draw in it. Tape stuff to it. Rip it up!" - so the book is obviously intended as a living, breathing resource. At the end of each innovation profile, in fact, there's a list of 10-15 resources provided by John to guide you on the path to co-creation and innovation (as well as some blank space to doodle, draw or brainstorm).

As a result, each chapter offers a grab bag of innovation delights. For example, in the chapter featuring Johnnie Moore (a London-based branding consultant who also contributes to the BrandShift blog), John includes citations from the journal Mechanical Engineering, a link to the Website Improv Across America, and a reference to the New Yorker Book of Business Cartoons. In the section about Rob Bon Durant (director of brand development at Patagonia), John includes (among other items) an article from the Harvard Business Review, a link to the Treehugger website, and a reference to a playful book called Work Like Your Dog: 50 Ways to Work Less, Play More and Earn More.

If you're putting together a PowerPoint presentation about innovation anytime soon, these end-of-chapter resource guides can become a goldmine of cool ideas and links. If you're interested in the book, there's apparently also a companion SPARK blog.

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November 17, 2005

The Nintendo brand as social currency: Contest #2

At the FORTUNE Business Innovation blog, we're pleased to announce the winner of our latest "Get Back In the Box" contest promotion. Scott Rubin's winning entry, which described how the Nintendo brand has become a form of social currency for consumers, was judged as the best overall entry by Douglas Rushkoff.

Douglas explains why Scott is the winner of a free autographed copy of his forthcoming book Get Back In the Box:

"The winner is Scott Rubin, for his astute and multi-faceted appraisal of Nintendo as social currency. Scott's was the only entry that looked at both how the brand is serving as a social currency for old school Nintendo users, as well how the technology itself has been retooled to allow for social interaction between users while they play.

Honorable mention to nominators of Apple - a company that has certainly demonstrated full knowledge of the power of social currency - and Verizon, a company that is showing a growing understanding of some of the basic principles at play. Some of the others, while examples of interesting and clever marketing schemes, didn't relate directly the principles of social currency."

For all the Nintendo fans out there, here's an extended excerpt from Scott's winning entry:

"Apple would normally be the obvious choice for the brand with the most social currency value, but I think that today Nintendo is beating them out.

In the past few years Nintendo has been selling official merchandise through stores like Hot Topic. These t-shirts, hats, etc. are all advertisements that say "I played Nintendo back in the day". People who are in college and high school now are buying this stuff up like crazy. They don't actually want it to have a conversation with Nintendo about the old school days, they want to use the Nintendo brand to find other like-minded people.

Nowadays kids are growing up never having even seen the original Nintendo or even the Super Nintendo. 10 years ago this was unheard of. If you tell someone who grew up with the original NES that the first RPG you played was Final Fantasy 7 or that the first Mario you played was Mario 64 it blows their minds. They'll look at you like some strange creature who knows nothing about video games. So they are turning back to their childhood with shirts that say "know your roots" or "classically trained" in order to find the shrinking number of people they can identify with. There was a machine that identified the first ten to 15 years of their lives and now they are using the brand as social currency to connect with others who had the same experience.

But to give Nintendo the extra points they came out with the Nintendo DS. Not only does the Nintendo DS have great games and everything, but you can use the device itself to communicate with other DS users nearby. It uses wireless internet technology to allow people to write and draw small monochrome messages to each other in a chat room, but not over the Internet (yet). They can only communicate within a certain distance of one another. But what you end up seeing is that at any event where there are likely to be many geeks like LAN parties, anime conventions, geek trade shows, etc. There is an immediate network of Nintendo DS users that forms. They find complete strangers with pictochat and then play games against each other... The Nintendo brand is the most effective social currency out there right now."

Congratulations, Scott!

[image: nahuel31 via flickr]

Richard N. Foster: The evolution of theories of creativity

At the upcoming FORTUNE Innovation Forum in New York City, Richard N. Foster, Managing Partner of Foster Health Partners and author of the best-selling business book Creative Destruction: Why Companies That Are Built to Last Underperform the Market--And How to Successfully Transform Them, will be moderating a roundtable discussion on the topic of "Innovation, Risk and the Threat of Failure." Panelists - including executives from Genentech, Xerox, Hewlett-Packard and a partner at VC firm Kleiner Perkins - will be discussing how innovators can overcome the specter of failure, especially when faced with the opportunity to make big bets.

To kick things off, Dick Foster has provided the following excerpt from a paper ("Who Designed Brunelleschi’s Dome?") that uses the example of Brunelleschi's Dome as a starting point to explore different notions of creativity. During the Renaissance period, Brunelleschi's Dome was considered one of the true engineering marvels of its time - a "big bet" that paid off thanks to an innovative gamble. Looking back at how the dome was designed and built, it's possible to understand the trade-offs between innovation and risk and the factors responsible for breakthrough creative advances, as Foster explains below:

"Brunelleschi's Dome is one of the great architectural works of the 15th century, renowned for many innovations including its design and construction techniques. Many scholars give Filippo Brunelleschi (1377-1446) creative credit for his dome, but researcher and writer Mihaly Csikszentmihalyi asked, "Who designed Brunelleschi's dome?"

Rather than give a straightforward eponymous answer, Csikszentmihalyi tells us:

“Brunelleschi and his friends found themselves in a stream of thought and action that started before they were born, and then they stepped into the middle of it. At first it appears that they initiated the great works that made the epoch famous, but in reality they were only catalysts for a much more complex process with many participants and many inputs. One could say that the stimulation was provided by the city’s bankers."

Csikszentmihalyi’s thoughtful argument underscores the core of two contemporary theories of “creativity”: the first focuses on the individual and his or her methods – Brunelleschi in this case. The second theory, which only clearly emerged in the last four decades, focuses on the context – social, historical, political – in which the “creator” carries out their work.

Needless to say, these are two entirely different, but not independent, models for the creative process. As a consequence, the methods for improving creative output depend on one’s belief’s about which one of these processes is dominant, or the precise way in which they interact. Getting an accurate understanding of the intricacies of the creative process works is thus an essential prerequisite to developing ways to improve creative output. Gaining that understanding is not simple.

There are several factors that contribute to this difficulty...

First, the creative process covers vast territory – including the creative processes invoked by scientists, engineers, authors, financiers, painters and poets. Is one to assume that the “creative” process is the same in all these cases? Or is one to assume that the “general” concept of creativity has no meaning; only the “specific” creative process, such as the process of the biologist, or the mathematician, or the poet, can be understood?

Second, as essential to productivity as creativity is, most scientists, engineers, authors, financiers, painters and poets believe they have some measure of understanding of the creative process, even if there is not yet a "standard text" that lays out the way creativity "works" in the way we have standard texts for such disciplines as cellular biology, medicine, circuit design and software engineering. Reaching an understanding of the creative process is an interdisciplinary exercise melding aspects of psychology, sociology, and economics--yet the challenge of understanding creativity is central to none of these disciplines. Accordingly, if pressed, many would concede that their knowledge of the creative process is more tacit than explicit. Given our confidence that we already understand how the creative process "works" in practice, there is little emphasis on understanding the theoretical underpinnings of why it works.

Third, creativity is very different from almost all other processes we seek to manage. When one tries to define an explicit model of creativity several familiar problems are encountered: It does not respond well to precise measurement and correction. The goals of "creative efforts" are often murky and indeed do not even emerge until the solution to an unknown problem is found. The relationships between control, permission and the assumption of risk are very different in creative systems than from those in conventional operating systems. In operating systems, one often wants to minimize risk; in creative systems, one can be rewarded for taking risk. As such, managing creativity is a profoundly difficult exercise. It is so difficult. in fact, that many organizations, and countries, fail to find ways to improve the productivity of their creative enterprises, except by chance. Managing creativity may require a different mindset from other areas of management. If that is to be the case, then we need to know how and why creativity works. If we do not, we may never increase the productivity of creative processes.

Lastly, creativity is a highly non-linear process. At its heart, creativity is a social-psychological process involving several steps that are not necessarily sequential. It is not, in some respects, unlike the processes one uses to grieve, as Elizabeth Kübler-Ross has described them. Kübler-Ross has identified five stages in dealing with personal tragedy: denial, anger, bargaining, depression and acceptance. One can proceed through these five stages in any order, often repeating steps. There are hundreds of “normal” sequences. It is the same, as we shall see, with the creative process; there are hundreds of “normal” processes. This fact makes it very difficult to pick out and repair, if necessary, abnormal processes."

[...]

The paper goes on to discuss the historical and contemporary development of two major streams of thought about the creative process:

"The first is a cognitive psychological view of the solitary individual as a creative “genius”. The second is a view of the “creative genius” within a shaping and supporting social context that enables creativity to flourish. Not only are both views accurate and important, but the integration of, and feedback between, these views, as Csikszentmihalyi’s discussion of Brunelleschi’s Dome illustrated, offers promise for increasing creative output of our institutions in the future..."

For those of you interested in reading the entire paper, here's a preview of what you'll find:

"This paper presents a selective, but representative, view of what is known and what remains to be known about the process of creativity. The simple chronological story line facilitates understanding of the growing precision and completeness of our understanding of the creative process. The paper begins with historical view of the evolution of the word “creativity” and words that are close in meaning to it. The world has been wrestling with the concept of creativity for a long time. The paper then goes on to describe the development of the basic concepts of creativity in the chronological order they were first developed, labeling the period after the leading thinkers of the time. The paper ends with a summary of the author’s view of the most important lessons learned about the creative process for those who seek to improve their own creative output and the creative output of the institutions of which they are a part.

This paper does not seek to be the "end of the story"; rather it is a beginning. Certainly the model of the creative process will evolve and become more useful in the future. Experts in specific fields will find a great deal to be corrected and completed in this paper. Hopefully, they will add their thoughts to the thoughts expressed in this paper, or write wholly new papers on this important topic. This author would be quite disappointed if, in ten years time, we did not have a much more accurate, much more fact based, and much more useful view of creativity than we do today."

EDITOR'S NOTE: The full 31-page paper is available for download here. There's also an excellent book available from Amazon called Brunelleschi's Dome: How a Renaissance Genius Reinvented Architecture. The image of the dome is from The Brunelleschi's Dome Web Site.

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The state of innovation in the U.K.

As "Innovation!" becomes the rallying cry of corporations around the globe, Clint Witchalls of Computing Business (U.K.) takes a closer look at whether British companies have managed to keep up with the global innovation leaders. According to a number of innovation benchmarking studies cited by Clint - such as those conducted by the GEM Consortium and the World Economic Forum - Britain ranks anywhere between 10th and 13th among the nations of the world in terms of innovation. Good, but not great.

The article does a great job of wrapping up current thinking about the state of U.K. innovation, drawing on insights from, among others, London Business School strategy expert Julian Birkinshaw. There's also a nice goodie at the end of the article - a case study of Shell's GameChanger initiative, which was conceived as a bottoms-up way of encouraging innovation throughout the company:

"When you work for a company with more than 100,000 employees, getting your bright idea recognised, funded and transformed into an innovation can be an onerous task. Not at Shell. The Anglo-Dutch oil giant has implemented a team called GameChanger to fast-track bright ideas...

GameChanger mimics the way venture capital works. Employees submit a proposal via email to a team of mid-level managers. The proposal is more anecdotal than quantitative; at this stage it is just a high-level idea. GameChanger teams meet weekly to discuss the ideas. The proposals are pre-screened to see if they fit the following set of criteria...

If the proposal passes pre-screening, it is allocated a sponsor whose role is to find a qualified Shell employee to champion the idea. Once a champion has been found, a brief screening panel is convened, comprising the person who submitted the proposal, the champion, and representatives of the GameChanger team. A decision is made at the meeting as to whether the idea should be converted into a formal proposal. If it receives the green light, the formal project proposal will be presented to an extended panel and a decision will be made within two working days. The process usually takes between five days and two months. The seed funding, which can be in the region of £50,000 upwards, is used to develop a full business plan."

[image: Vintage Shell, via ssomerfeld on Flickr]

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Does your business model support innovation?

With a pointer to Alex Osterwalder's Business Model Design blog (which looks in-depth at the design and use of business models in both academia and the real-world) Dave Pollard explains that, when you boil it all down, there are really only three types of business models:

"I've been advising clients and prospective new businesses how to document and evaluate their business model for years, and in my experience there are three types of business models, that organizations look at in sequence...

Viability Model: How the idea/project/plan/business will make money, and with which partners. In some cases it is actually about how the idea/project/plan/business will fill an untapped need, and with which partners...

Formation Model: How the idea/project/plan/business will be set up. This model is focused on capital and infrastructure that must be in place before operations can begin...

Operating Model: How the idea/project/plan/business will operate. This model describes the ongoing activities of the organization or project...

It's been my experience that most businesses put insufficient work into the viability assessment, the wrong kind of thinking into the business formation decisions, and too much emphasis on the details of the operating model."

Obviously, for companies looking to jump-start innovation, it's important to understand how to integrate innovation seamlessly into each of these three business model archetypes, while avoiding the classic business model mistakes noted by Dave Pollard.

[graphic: What is a Business Model?]

Technological innovation? Not in my backyard

Is the U.S. really losing its competitive edge when it comes to innovation? That was the premise of a provocative New York Times piece that came out earlier this week. The article by Timothy O'Brien pointed to a recent National Academy of Sciences report ("Rising Above the Gathering Storm"), anecdotal evidence from a 74-year-old professor at The Johns Hopkins University and findings from the Industrial Research Institute showing that - by any conceivable metric or benchmark - the pace of U.S. innovation appears to be slowing. Worse yet, the pace of innovation in places like India and China appears to be rising. Check out the graphic - it shows that foreign-born residents currently account for nearly 50% of all patents granted by the U.S. Patent & Trademark Office.

Not surprisingly, the article created a bit of a buzz in the blogosphere. A few of the bloggers commenting on the New York Times innovation piece:

U.S. innovation slowing down [Ramesh Jain]
Are U.S. innovators losing their edge? [Not in Kansas Anymore]
Have we given up on science? [ChristianSarkar.com]
The challenges of innovation [Julian Bleecker]
Engineering education and innovation [Curious Cat Science & Engineering blog]
Invention is the mother of necessity [Dohiyi Mir]
U.S. innovation and inventiveness are slowing [Economist's View]

[chart: New York Times]

What Hungarian tacos can teach you about innovation

On the Creating Blue Oceans blog, Gabor George Burt continues to provide fascinating - and sometimes amusing - examples of companies and organizations that are implementing Blue Ocean Strategies. As highlighted in the book of the same name, the basic rule of any Blue Ocean Strategy is that a company must search out and find uncontested market space (the "blue oceans"), thereby making the competition irrelevant. One way of arriving at a Blue Ocean Strategy is being able to spot the common needs across various customer segments: "Most businesses are focused on market segmentation and customization, in an effort to better differentiate customers. This is an increasingly complex and costly proposition. Instead, why not seek out commonalities, needs and aspirations that all your customers share, thus creating a foundation for mass appeal and a blue ocean strategy?"

In a PowerPoint slide provided to the FORTUNE Business Innovation blog, Gabor George Burt illustrated this concept of finding commonalities across a variegated customer base with the example of Hungarian tacos:

"In the early 90’s, when foreign eateries began penetrating Eastern Europe in larger numbers, a Mexican restaurant opened in Budapest. Craving some basic Tex-Mex, I went there during its first week of operation, and ordered a basic taco.

Much to my surprise, instead of a crunchy taco, I was presented a traditional Hungarian-style, thick eggy crepe [palacsinta]. When asked about the apparent mix-up, the proprietor energetically retrieved a pack of real taco shells from the kitchen, and exclaimed: Who in their right mind would ever want to eat this hard, dried-out piece of nothing? He had obviously took it upon himself to question the appropriateness of Mexican culinary tradition for his clientele, and opted to mix in strong local elements in order to make his food selection sizzle with mass appeal."

[image: "Hungarian pancakes," Kasiaczek via Flickr]

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How to make innovation sexy

If you're looking for ways to make innovation sexy within your organization, then Sex, Intimacy and Business is the book for you. The latest publication from Brilliance Enterprises takes a provocative look at the world of business through an extended metaphor that compares the boardroom to the bedroom. If you can look past the sexual double-entendres (e.g. OTDs = office transmitted diseases) on nearly every page, there's actually a lot of sensible talk about how to restore energy, passion - and innovation - to the American workplace. In one chapter, the book lists six fundamental ways to restore the innovative drive at any company: Get personal, share risks, offer options, replace fiefdoms with freedoms, share information and trust. Sounds simple enough, but few companies do it well.

As an example of how to leverage several of these tips at one time, the book points to the example of 3M:

"We look to 3M as a great example of the kind of freedom we are talking about. Stuart Crainer writes in his book The 75 Greatest Management Decisions Ever Made, "Among 3M's many innovations was the decision to allow any of its researchers to dedicate 15% of their time to their own projects. Freedom and creativity ensued and were ensured." It was this 15% policy which led to many good ideas within 3M, including the Post It. Now Google has a similar policy for its employees..."

The innovation waiting place

Jeffrey Phillips, who writes the consistently insightful Innovate on Purpose blog, implores managers to stop waiting for innovation to occur. With a whimsical reference to a Dr. Seuss tale, he describes the "waiting place" as "a place where people are constantly waiting for things to happen and not taking action or control." Throughout Corporate America, there are "waiting places" where talented people are somehow unable or unwilling to take action:

"For a lot of people interested in innovation and idea management, they are stuck in the Waiting Place. They'd like to be more innovative, and they can see that many great ideas and initiatives never get considered or even see the light of day. They are constantly waiting for someone, anyone to put a process or template or framework in place and to receive permission from on high to get started.

Well, get comfortable with the Waiting Place. Find a good bench and read the paper. Innovation is not going to come to you, you'll need to go to it. Even as an individual in a company hostile to innovation (and what firm would admit to that?) you can get started and make a difference every day."

With that as context, Jeffrey provides 8 everyday things you can do starting tomorrow to empower the innovative organization -- things like eating lunch with likeminded individuals in order to build a virtual innovation team or starting a blog to share innovative ideas.

[image: "The Waiting Place" cartoon via Christine Spinetta]

November 16, 2005

November 16 innovation linkage

John Hagel's farewell to Peter Drucker [Edge Perspectives]
Supporting innovation in open communities [Irving Wladawsky-Berger of IBM]
Is your business like an opossum? [Creating Blue Oceans]
The Life Cycle of the Creative Soul [Change This]
Will adult innovation be a hit for the kids? [Pasta and Vinegar]
Why copying other companies isn't a strategy [BrandBuilder]
Speaking of innovation, what if...? [Zane Safrit]

[image: SpaceShipOne via Wikipedia]

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Burt Rutan on Innovation

At the upcoming FORTUNE Innovation Forum in New York City, Burt Rutan, winner of the Ansari X Prize and the aerospace developer of SpaceShipOne, will be a featured speaker, offering insights into how he became one of the world's foremost innovators. As the winner of the Ansari X Prize, Burt Rutan launched a new era of space exploration and demonstrated the power and effectiveness of innovation competitions in spurring truly breakthrough accomplishments.

With two weeks to go before the FORTUNE innovation event, Burt Rutan has generously offered his take on the current state of business innovation, including valuable insights into how innovation occurs and the importance of taking market-changing risks.

Q: Who should be responsible for innovation inside a large corporation?

Burt Rutan: Innovation, of course, can take a wide variety of forms. Thus, just about anyone can come up with innovative ideas. Innovation takes a wide variety of forms. My particular area involves technical breakthroughs where we combine innovation with risk-taking to try something new. While many think advances come from the scientists and creative engineers, I’ve found that breakthroughs can just as easily be inspired by shop employees.

Q: What are the key steps that must occur before innovation inside a company can occur?

Burt Rutan: Management must create a working environment with rules that allow employees to take risks. It is OK to fail during the search for a breakthrough. In addition, managers should work shoulder-to-shoulder with engineers and engineers should work shoulder-to-shoulder with the shop.

Q: How much do you rely on research and analysis to guide the development of new innovative services and products.

Burt Rutan: Analysis is a task used mainly during development. Research is not development. If more than 50% think something is impossible, then trying to make it work is research.

Q: What innovative companies do you most admire?

Burt Rutan: Google now. The Lockheed Skunk Works in the 40's, 50's and 60's.

Q: Can you innovate without having access to large amounts of capital? If so, how?

Burt Rutan: You don't need large amounts of capital to innovate. Go to a remote area (the mountains, a beach) to be alone — and think of a new solution to a problem. Innovation cannot be bought by just throwing money out there. It comes by taking risks. This usually happens without big budgets.

Q: How can failure lead to innovative breakthroughs in business?

Burt Rutan: Failure can change your mindset, put pressure on the need for a breakthough, thus force you to take risks.

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Innovation is like a dishwasher

[image: Anders Jangbrand, via Think Smart's Cartoon Challenge]

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What are the right questions to ask about innovation?

According to Gerald "SolutionMan" Haman, the president of SolutionPeople in Chicago and an adjunct professor of innovation at Northwestern University, there's a simple tool for jump-starting innovation in the boardrooms across America: ask a lot of questions. As part of the "Questionate to Innovate" framework that Haman has developed, companies are asked to create "Question Banks" and to think just as hard about the right questions to ask as how to answer them. As Haman explained to the FORTUNE business innovation blog, it's an approach that's enjoyed some remarkable success over the years with some big-name clients:

"Motorola has used Question Banks to stimulate hundreds of employees to brainstorm thousands of ideas on product development, marketing, and performance improvement. Corinne Miller, Motorola’s Director of Global Functional Learning, is an advocate of Question-Driven Innovation. “Too many times we’re looking for the right answers before we’ve established the right questions. Without a focus on questions, people can easily become myopic based on their own worldview. When this happens, the customer and the shareholders suffer,” according to Miller.

SolutionPeople has also helped American Express apply Question Banks to global marketing, customer service, and technology improvements. For a recent meeting with 1,100 American Express leaders in Las Vegas, SolutionPeople created a 45-minute innovation training module called “Express Your Brain” that included eight questions that guided crucial conversations about innovation."

For more on Gerald "Solutionman" Haman, check out recent press clippings from The New York Times, Fast Company, and Crain's Chicago Business. There's also a wealth of information and resources about innovation on the SolutionPeople site, including the KnowBrainer innovation tool and FlashBrainer eTool software.

[image: SolutionPeople]

Shel Holtz: "Companies don't innovate, people do"

In this exclusive feature for the FORTUNE business innovation blog, Shel Holtz, a principal with Holtz Communication + Techn