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January 20, 2006

The innovation bad boys of Enron

If you're interested in a tale of "innovation gone bad," here's a DVD rental tip: check out Enron: The Smartest Guys in the Room - a documentary about the rise and fall of Enron. The promo on the back of the DVD calls it "the shocking inside story of one of history's greatest business scandals... This expose features insider accounts and incendiary corporate audio and videotapes that will have viewers' blood boiling..." As you probably know, the film is based on a highly-acclaimed book by FORTUNE magazine reporters Peter Elkind and Bethany McLean, who uncovered the web of lies and deceit spun by Enron insiders. Extras on the DVD include conversations with Bethany McLean and Peter Elkind, a "Where Are They Now" feature for the (former) innovation poster boys of Enron, and excerpts from FORTUNE magazine articles.

How smart were the guys from Enron? Well, FORTUNE magazine named Enron as "America's most innovative company" for six consecutive years. But, in all fairness, it wasn't just FORTUNE. Everyone was fooled. A host of pundits and people who should have known better named Enron as e-business of the year. The McKinsey Quarterly, one of the most respected management journals in the world, year after year extolled the value of Enron's innovative business model. Strategy gurus like Gary Hamel celebrated Enron for being in the business of "continuously creating radical new business concepts."

Anyway, the timing of the DVD release coincides with the trial of former Enron execs Jeffrey Skilling and Ken Lay, which begins January 30. According to an article on page A1 of today's Wall Street Journal, it looks like the scandal-tarred Enron execs have already crafted a wily strategy: "Everything their company did was legal." This trial is going to be good theater, if nothing else.

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Microsoft Research adapts to the globalization of innovation

Over at InfoWorld, there's an interview with Rick Rashid, senior vice president of Microsoft Research (the company's R&D division), who explains the various forces at work that are leading to the globalization of R&D and innovation. Appropriately enough, Rashid was in Bangalore, India last week for a research conference hosted by Microsoft Research’s Indian lab. After discussing new Microsoft technologies that could make their way out of the lab sometime relatively soon (e.g. surface computing applications, on-the-fly translations of instant messages, new computer techniques for AIDS research), Rashid discusses why companies like Microsoft are establishing R&D beachheads all over the world:

"The reason we start research labs in different parts of the world is because we are trying to attract very smart people. It certainly is the case that the diversity of backgrounds, and the diversity of perspectives among the researchers, as we go into different parts of the world, do impact the work we do, and do impact ultimately our products. But I look at that as a side effect. The first goal is to move to where the talent is, and hire the best people we can."

Later, Rashid addresses the globalization of innovation:

"I think innovation has always been a global enterprise. If you look at the field of computer science, even within the U.S., about half of all PhDs are given to people that were not born in the U.S. Innovation has always been a global enterprise, and I just see that continuing... I am trying to hire the best people I can, and if sometimes that means creating labs in other parts of the world, that is what I do. I don’t spend a lot of time worrying about how many people I have here or there. If I can hire great people in India, I am going to hire great people in India. If I can hire great people in China, I am going to hire people in China. If I can hire great people in the U.S., I am going to hire great people in the U.S."

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Tom Allanson of H&R Block: Innovative solutions for taxpayers

In this exclusive Q&A for the FORTUNE Innovation Insider, Tom Allanson, senior vice president and general manager of H&R Block Digital Tax Solutions, discusses some innovative approaches that the company is taking to help customers maximize their tax refunds this year. (hint: if you have an Apple iPod or a Burton snowboard, they might be eligible for tax deductions). Last week, H&R Block kicked off the start of tax season with the launch of a microsite dedicated to National Tax Advice Day. The company is also integrating principles from the world of design to make its online tax offerings easier to use for customers.

Prior to joining H&R Block last July, Tom Allanson was the co-founder of TaxNet, a San Diego-based provider of customized online tax services. Before that, Allanson served as senior vice president and general manager of Intuit’s consumer tax group, where he was responsible for all aspects of TurboTax.

Q: What innovation lessons from your previous experiences at TaxNet and Intuit do you plan to apply in your new role at H&R Block?

The most important lesson I have learned from my past experiences is to focus on the customer. You have to listen, really understand what’s important and solve the most important problems. Before developing the TaxNet code, I became a certified Tax professional in California and prepared individual tax returns at a store front operation we opened. I did this to interact with customers about taxes and learn. This experience helped us develop the user interface for TaxNet and continues to help us define the user interface for TaxCut. Always focus on the customer – listen and learn.

Q: You recently launched a companion Web site for National Tax Advice Day on January 12. Can you comment on how that site fits into your overall strategic plan for driving growth in the digital tax market?

H&R Block’s National Tax Advice Day is an effort to raise public awareness of five major changes or missed credits that have the most widespread impact on taxpayers this year. It has been estimated that Americans overpay their taxes by $1 billion each year. We want to change that by providing helpful, free tax information on National Tax Advice Day. We have a lot of information to share with people to help them understand why they need to start thinking about their taxes now and help them take advantage of valuable tax breaks. NationalTaxAdviceDay.com focuses on information about commonly missed deductions, like EITC, plus it takes a look at some of the more unusual deduction the IRS has seen – like cat food, school supplies, and even bodybuilder posing oil.

The objective of the Microsite is to bring NTAD and the TaxCut brand to life in the digital space, by connecting taxpayers to relevant, valuable information and to start thinking about your taxes early…to get organized...to get advice, particularly about deductions... and to avoid the deadline-driven mistakes that often lead to missed deductions and lost money.

Our goal at H&R Block is to offer the best possible solutions for taxpayers. We offer all of our clients the choice in how they would like to interact with us. For example, they can start their return with one of our digital products and finish at one of our offices.

Q: What other product or marketing innovations for the digital tax market can we expect in 2006?

This year we have launched an advertising campaign focusing on deductions. The campaign includes TV, online and print and features more unusual deductions, like MP3 players for your business, snowboards for your job, and expenses related to your job search.

For TaxCut software – we have improved the user experience this year by offering a bundled option where the state product is included on the federal disk - eliminating the federal and state rebates so clients won’t have that hassle after purchasing our product. We also have developed and applied design principles, such as 80% of the people that see a given page can find information on it that pertains to their unique tax situation. Focusing on ease of use which includes look and feel, language and navigation, helps make the tax preparation process simpler – adding confidence that customers get the deductions that they are entitled to.

TaxCut Online - Taxcut.com and hrblock.com are dedicated to promoting and selling our full do-it-yourself line of products and services. Again, we have developed and applied design principles to the online program focusing on ease of use which includes look and feel, language and navigation. We also introduced a new 1040EZ program for our online clients reducing by 55% the number of pages a client has to complete for a 1040EZ filing.

We also are offering Worry-free audit support this year. Now, paid TaxCut clients who successfully e-file have access to one of H&R Block’s more than 70,000 tax professionals at no additional charge in the event of an audit. The tax professional will outline for the client what to expect and provide guidance on how to prepare for the audit. An H&R Block enrolled agent will even represent the TaxCut client before the IRS upon execution of a power of attorney. H&R Block can help manage the process – 365 days a year, not just at tax time – and it’s all FREE.

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Halley Suitt visits the Cambridge Innovation Center

After a visit to the Cambridge Innovation Center in Kendall Square, Halley Suitt hints that she may post snippets of her conversation with Tim Rowe and Dan Williams on her blog sometime soon. (Tim was one of the co-founders of the incubator in 1999.) In the meantime, she has uploaded the following description of the Cambridge Innovation Center ("very cool place") to the Halley's Comment blog:

"Overlooking the Charles River and the MIT campus, and literally across the street from the MBTA Red Line station in Kendall Square, Cambridge Innovation Center is the area's largest and most popular flexible office space facility for small and growing companies.

In contrast with traditional executive suites offerings, which have traditionally served as homes for satellite operations, CIC's services are designed to meet the needs of technology-oriented companies where the entire company, including the senior people, are located at our center. Our award-winning facilities and state-of-the-art business and technical services deliver: CIC tenants, many starting out with just one or a few people, have raised over $290M in venture capital since we started keeping track in 2001.

At Cambridge Innovation Center we enable you to focus on making your business successful. The Center provides 'instant on' facilities and enterprise-class services at rates that are more cost-effective for small companies than traditional leases (and, to boot, we don't lock you in to a lease!). Our residents are mostly growing technology companies, service firms, and venture capitalists."

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Disruptive technology conference in Toronto

Bill Ives of the Portals and KM blog points to an upcoming disruptive innovation conference in Toronto. The event, which is being held on February 27 at the Toronto Cricket Skating and Curling Club (posh!), will feature a number of industry experts sharing their perspectives on the "organization of the future."

Speakers at the Disruptive Innovation Conference include Hubert Saint-Onge, Steve Wunker, Cindy Gordon (author of a book on collaboration commerce) and Wayne Ronhaar. Bill Ives, author of Business Blogs: A Practical Guide, will discuss why blogs are a disruptive technology for marketing and customer communication models.

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January 19, 2006

John Patrick of IBM: Innovation podcast of the week

John Patrick was an early pioneer in Internet technology at IBM during the early 1990's, and even after retiring from IBM in 2001, remains one of the Internet’s true visionaries. In this 21-minute podcast for the IBM On Demand Business website, John discusses how blogs and podcasts enable innovation.

As John Patrick explains in the podcast, the combination of content, communication and context - the three hallmarks of blogging - will lead to increased collaboration within organizations. This collaboration, especially when mixed with outside opinions from other organizations, will spur the process of innovation:

"Blogging is a way to communicate. In order to innovate you have to collaborate. In order to collaborate, obviously, you have to communicate. You have to know who you are working with. So there are many forms of social networking software available to find people. Things like Linked In and Tribe and there are various things like that that allow you to use multiple degrees of freedom to find somebody.

So, for example, you may say well I am looking for somebody that is an expert in Linux® in banking. So you go to one of these sites and you search Linux in banking, and you find all these people and you look at what they say about themselves, and you say this is a person, I really want to meet this person. This person has exactly the skills hat I need to collaborate with to develop this new solution that I am trying to develop. And so you look about this person, but you don’t know how to reach them. But then you find out that this person knows this other person, who knows a person who knows a person who you know.

So you send a message and it goes to the person you know, and that person says yes, this person, he is okay, he has got a legitimate problem, I think you would enjoy collaborating with him. And then the message goes over to this person, to that person, over to the person that you really want to reach, and then that person responds to you and now you are connected.

So once you are connected, you may decide, you know, we’re really kindred spirits. We have the same vision for how to solve this problem with Linux in the banking industry. So let’s work together. Great, let’s work it. Well, how do we share our thinking? Through the blog. I subscribe to your blog, you subscribe to my blog. Whenever I write something new, it appears in the folder, it is not in the inbox f my email, hundreds and hundreds of things that – no, it is not there, it is in my blog folders. And there is a subfolder for this person, who I now have recently met, never met him in person, but now we are collaborators and we are working together.

So blogging is instrumental, it is fundamental to the communications element of collaboration, which is fundamental to innovation."

If you're interested in more insights from John Patrick, check out his personal blog: PatrickWeb. John Patrick has also published a book, Net Attitude, that's worth checking out.

[pic: patrickWeb photo gallery]

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Google, the one-stop innovation supermarket

Chuck Frey's Innovation tools [Google Search]
Japanese Innovation Comes in Interesting Ways [Google Blog Search]
Innovation Key to Beating China Threat [Google News]
Corporate Innovation [Google Groups]
What is Innovation? [Google Images]
Sectoral Systems of Innovation and Production [Google Scholar]
Jim Carroll's "innovation and creativity" video [Google Video]
Technology Innovation (a NASA publication) [Google Government Search]
The Microsoft "Hall of Innovation" [Google Microsoft Search]
The Eye for Innovation (Yale University Press) [Google Yale search]
Wikipedia's definition of "innovation" [Google Glossary]
Seirus Innovation All Weather Glove [Froogle]

[image: John Battelle's SearchBlog]

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Two innovators who are re-imagining the world of sports

Zach Kaplan and Keith Schacht of Chicago-based innovation & design firm Inventables recently contributed to ESPN 2015 - a futuristic look at the world of sports in the year 2015. Since ESPN recently celebrated its 10th anniversary, the sports network also decided to look 10 years into the future to see what changes we might expect. Overall, ESPN 2015 catalogued 38 new innovations in three main categories ("FANS, "GADGETS, "ATHLETES"), including these 6 innovations detailed by Zach and Keith:

(1) "Conductive blankets" for spectators that allow them to feel all the sensations on the field. With these blankets, it will even be possible for fans to have their hearts beat at the same rate as the athletes on the field;

(2) "Instant play" for baseball players. The pants and gloves of baseball players will include Velcro, for example, so that it will be possible to prove whether a tag has been applied. In addition, bases will be covered in silicon and glow green or red if a baserunner is safe or out;

(3) "Exoskeletons" for athletes that include "air muscles" and other performance-enhancing attributes. Players will simply strap on their exoskeletons before going into battle;

(4) "Feeling sticks" that enable fans to feel the energy exerted on the field or on the ice;

(5) "Rumble chairs" that enable NASCAR fans to experience the G-forces of each turn and maneuver;

(6) "Health readings" for athletes. These will be micro-needles inserted into the bodies of athletes that enable viewers at home to monitor statistics like dehydration levels or energy exertion. For this reason, marathon races will become must-see TV for serious sports fans.

Inventables also publishes DesignAid, a "hands-on magazine that educates you about unique materials and technologies by using experience as a gateway to understanding." Every issue of DesignAid includes actual samples of the materials and technologies covered in the issue.

In November 2004, FORTUNE magazine also ran a brief profile of Inventables:

"If Zach Kaplan and Keith Schacht had their way, everyone in corporate America would think inside the box... The pair run a two-year-old Chicago startup called Inventables, which four times a year sends a box of 20 odds and ends to subscribers at companies like P&G, GM, and Black & Decker. The idea is that creative types like engineers and designers, just by tinkering around with objects (from microaccelerometers to luminescent nanocrystals), will be inspired. The two spend most of their time brainstorming and meeting with vendors. "Sometimes we think up materials that would be cool if they existed," says Schacht. "So we Google them, and often they do."

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The idea-killing manager

On his Achievable Ends blog, Bill Kinnon discusses the Idea-Killing Manager:

"Have you ever worked for someone who is adept at finding problems (with just about anything) but has no ideas for solutions? They expect you to come up with those ideas - and they will approve them. You end up going back to them innumerable times, only to have them sigh in the end, apparently dissatisfied with anything you've come up with, "All right, I guess that's the best you can do, let's just go with that one." This is normally driven by the approaching deadline which demands a decision be made.

It's important to understand that the problem is rarely with you, but is rather with the Idea-Killing Manager. They have no idea how to motivate creative people. They live in a world where they believe they are the arbiters of all things good and effective - but can't themselves produce those things. (How they've ended up at their level of leadership has always been a mystery to me - but management is populated with these folk...)"

In order to avoid becoming an Idea-Killing Manager, a leader should attempt to create an environment in which creative people can flourish. By harnessing the creative energy of the workforce and motivating others to reach their creative potential, the leader will enable the organization to become more innovative.

The good news, according to Kinnon, is that "hierarchically-motivated, idea-killing managers are doomed in this 21st Century, creative reality of business and social sector management. They are unable to motivate creative people and will not be able to keep them on their team."

Technorati tags: manager, innovation

[graphic: Frame City Killer for the Xbox 360]

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January 18, 2006

Kodak innovates its way out of a strategic hole

The conventional wisdom is that Kodak might just become irrelevant if it fails to adapt to the rapid changes occurring in the digital photography market. Well, according to Jack Cheng in a blog post called A Place Called Kodak, we are now witnessing a revitalized Kodak with a lethal innovative first-strike capability:

"There’s been a lot of talk about Kodak’s rebranding in the past few months. The reaction to Kodak Gallery campaign has generally been positive, and recently, news about the company doing away with the yellow/red letter K box (which stayed consistent for 70 years and is THE icon for the era of 35mm film) and replacing it with a more modern (and debatably more generic) version made the rounds on the Web. I love the direction Kodak is taking... but not for the reasons above. It’s where the company is going with its products that makes me buy into the idea that they’re serious about innovation, design, and digital..."

Jack Cheng points to a USA Today article that describes Kodak's new embrace of design and innovation and, later in the blog post, describes a number of innovative product offerings from Kodak, such as the EasyShare One (the first consumer digital camera with built in Wi-Fi) and the EasyShare V570 Dual Lens camera. Kodak has also announced a deal with Skype to let people voice-chat with friends and family as they share the pics in their photo albums online through the Easy Share Gallery.

Kodak appears to have innovated its way out of a deep, dark strategic hole:

"The bottom line is that the company is building a new lineup of camera products that are like nothing else out there. Where everyone else is merely getting higher-resolution and more compact, Kodak is going beyond that- exploring blue oceans and coming up with new categories of products and services. How long it takes for the other manufacturers to start copying these things is anybody’s guess."

Technorati tags: Kodak, innovation

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Design 2.0: design, strategy and innovation in New York City

You've heard about Web 2.0, now it's time to learn about Design 2.0. That's the premise of a brand new initiative launched by Core77, the industrial design supersite. DESIGN 2.0: Discussions on Design Strategy & Innovation will take place at the Union Square Ballroom in New York City on February 28. Already, a number of A-list participants are onboard, including Kevin Farnham (CEO, Method), Marissa Mayer (VP of Search Products & User Experience, Google), Jeneanne Rae (Co-founder, Peer Insight) and Andrew Zolli (Founder, Z-Plus Partners). They will be participating in a panel discussion called "From Complexity to Clarity: Distilling the ingredients of great customer experiences."

Technorati tags: Design 2.0, innovation

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Meet India's top innovation guru

If you're interested in Indian innovation, check out the profile of Vijay Govindarajan ("VG" to those in the know) on the Rediff site. Apparently, his new book (Ten Rules For Strategic Innovators - From Idea To Execution) is already drawing packed audiences in Mumbai and steadily climbing up the ranks at Amazon.com. If VG's background is any indication, the book is worth checking out:

"He is the Earl C Daum 1924 Professor of International Business at the Tuck School and founding director of Tuck's Centre for Global Leadership. He is in the Top 50 Thinkers ranked by The Times, London; in the Top Five most respected executive coaches on strategy, rated by Forbes; and Outstanding Faculty named by BusinessWeek in its Guide to Best B-Schools. He has also been named among the Top 50 management gurus in the world.

Before Tuck, he was on the faculties of The Ohio State University and Indian Institute of Management (Ahmedabad). He works with CEOs and top management teams in Global Fortune 500 firms to discuss and challenge their thoughts about strategy, and boasts a client-list that includes Boeing, British Telecom, Hewlett-Packard, IBM, J P Morgan Chase, Price Waterhouse Coopers and Sony.

On the academic front, he received his MBA with distinction, as well as his doctorate, from the Harvard Business School. He also got his Chartered Accountancy degree in India and was awarded the President's Gold Medal for obtaining the first rank nationwide."

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Death by innovation... and other unintended consequences of corporate strategy

Over at Brand Central Station, Mike Bawden suggests that companies should think twice before jumping on the innovation bandwagon. Of course, innovation is important and, of course, innovation is a key driver of competitive advantage. However, according to Mike, a program of innovation carried out for its own sake may actually backfire: "Businesses must be careful to avoid innovation without reason. Product innovation without suitable backing of customer insights can lead to some unpleasant consequences."

Mike also includes a great quote from consultant, author and speaker Reva Nelson to illustrate this point:

“... What happens with innovation gone wrong, innovation for its own sake? It forgets its roots, it moves too far away from the main trunk, it tries to disconnect and communication gets shot to hell. There are some consultants, managers and CEO's who forget about connection and communication, and think innovation is an end to itself. It's not. All innovation, like all change, must be well-communicated. It needs to take its time, and stay connected to the source."

Mike has also posted another half-dozen or so thought pieces about innovation over at Brand Central Station, where he examines the role of innovation in the corporate workplace. The blog posts discuss methods of using customer insights to stimulate innovation, ways to keep up on innovation, the problem with silver bullets and insights about ways to stimulate client-centered innovation.

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Generation Y optimistic about the pace of innovation

According to a recent MIT study, "teenagers have some seemingly high expectations about what technology might bring over the next decade." When asked to make specific predictions about the future, 33% of teens predict that gasoline-powered cars will no longer exist within 10 years, compared to 16% of adults. Moreover, 22% of teenagers predict desktop computers will become obsolete by 2015, compared to only 10% of adults.

The real optimism of Generation Y, though, shows when they are asked about global problems such as hunger and disease:

"The teens queried also said new inventions -- over any time frame, not necessarily by 2015 -- can solve such global problems as unclean water (91%), hunger (89%), disease (88%) and pollution (84%). Adults were less optimistic about hunger, with 77% saying technology will play an important role. Merton Flemings, who heads the Lemelson-MIT program that conducted the survey, said he was encouraged that teenagers believe science and technology may hold answers to our biggest issues."

The survey did not specifically ask teens about the chances for "world peace," but one suspects that an overwhelming percentage of Generation Y would also be willing to place a bet on that, too.

[graphic: Albright College]

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January 17, 2006

Can a business be #1 in its market and still be irrelevant?

That's the question asked by Gabor George Burt over at Creating Blue Oceans, the blog companion to the best-selling business book Blue Ocean Strategy. Pointing to the examples of Kodak and Coca-Cola, Gabor explains why even industry-leading businesses need to be on the lookout for signs that they are becoming irrelevant:

"Companies which are focused on benchmarking and continuous improvement, instead of on continuous redefinition of their business and search for blue oceans, run a deadly risk: They could be best at what they do, yet become irrelevant to the world. And the most unsettling aspect is that no company, no matter how successful or iconic, is immune to this."

In the case of Kodak, it was the inability to adapt to rapid change in the digital photography market. In the case of Coke, it has been the inability to expand its business into new "blue oceans" (i.e. non-carbonated drinks). As was pointed out earlier on the FORTUNE Business Innovation blog, PepsiCo now has a greater stock market valuation than does Coca-Cola for the first time in history, primarily as a result of its blue ocean strategy.

[graphic: "Vintage Coke" via Creating Blue Oceans]

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Deepak Chopra on creativity (and other delights of Google Video)

I've been browsing Google Video for interesting clips on innovation and creativity, and quite honestly, there's not much there. There are a few clips from innovation guru Jim Carroll that might be worth checking out (he's on our blogroll, after all). There's also this brief 1-minute clip from Deepak Chopra walking along the beach while discussing The Secrets of Creativity (available for download from Lime.com): "Where does creativity come from? Deepak Chopra illustrates the lifecycle of creativity from its birth to its incubation, to its full realization."

Hey, it may be a bit New Age for you, but the Deepak Chopra clip is the #1 search result for "creativity" on Google Video. You can also check out IntentBlog, Deepak Chopra's blog on creativity and fulfillment.

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Chinese innovation through the eyes of a European

In early December, The House of Innovation (a Belgian weblog on marketing and innovation) took an exploratory trip of China, where innovation consultant Joris Claes recorded his observations about "the products offered in large shopping malls, the specific habits of Chinese subgroups & the commercial messages communicated below, in & above the city." For anyone curious about new innovation, marketing and design trends in China, the brief blog postings (and colorful pics) on the House of Innovation weblog are a good first place to start.

In a three-city tour of Hong Kong, Cheng Du and Shanghai, the House of Innovation encountered an innovative marketing tactic from Coca-Cola, Chinese cosmetics and fashion trends, a subculture of healthy eating deep underground, and well-intentioned efforts by the Chinese government to crack down on Chinese money laundering. There's also discussion about the emergence of Xiao Zi (the urban Chinese yuppie) and examples of Hello Kitty marketing for Chinese women.

[graphic: House of Innovation]

For more on Chinese innovation, check out these links:

China's Five Surprises [Edward Tse of Booz Allen Hamilton]
The sixth Chinese surprise [ChristianSarkar.com]
China's cultural and structural advantages for innovation [Innovate on Purpose via Strategy + Business]
Chinese Premier Wen Jiabao calls for innovation [China Daily]
Design innovation for the Chinese market [Kaizor Innovation]

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The innovation culture at Genentech

In FORTUNE's ranking of the "100 Best Companies to Work For" 2006, biotech leader Genentech came in #1. What's interesting is that so many of the company's workers don't seem to care about all the perks that make the company such a great place to work (i.e. the onsite day care, the concierge service, the made-to-order sushi, the stock options or the free cappuccino). What they do care about is being part of an innovative corporate culture that enables them to pursue their passions and research interests. In fact, similar to Google, Genentech encourages its employees to spend fully 20% of each workweek pursuing pet projects.

Anyway, here's an excerpt from the article about the company's innovation philosophy:

"True innovation takes guts. Industry-wide, new drugs on average cost about $800 million and take up to 12 years to develop. More than 90 percent of the drugs in clinical development never reach the market, including half of those that make it to late-stage clinical trials. That's why so many big drug companies are running out of new drugs. For a long time it was easier and lucrative enough to pursue what Vishva Dixit, vice president of research, calls the "detergent" strategy -- creating me-too drugs in big established markets as if they were laundry soap, and then spending big bucks on marketing to steal share from rival pharmas.

At Genentech, using market data or return-on-investment analysis to drive the science is strictly taboo. "At the end of the day, we want to make drugs that really matter," says CEO Art Levinson. "That's the transcendent issue." Not that this company considers itself a philanthropy. By decade's end, it aims to be the leading U.S. oncology company in terms of sales and a leader in both immunology and tissue-growth disorders, setting ambitious new product goals in each of those categories. It has a salesforce of fewer than 1,000 and licenses with Roche and others to sell its products overseas. Levinson really believes that if the company does the right thing, sales will follow. The strategy: Fund enough basic research in targeted areas of interest, and the results will yield multiple drugs -- or drugs that can be used in multiple ways."

If you happen to check out the print edition of the FORTUNE issue (now available on newsstands), flip to page 84. There's a picture of the Genentech management team (pictured here) dressed as Snow White and the Six Dwarfs.

[graphic: Genentech's management team]

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Toshiba's "innovation by design" marketing campaign

Anyone notice Toshiba's latest print ads? In the Toshiba ads that I've seen, the tagline is "Innovation by design... Where can innovation take you?" What's interesting is that Toshiba is a technology company. So what's a technology company doing emphasizing "innovation by design" rather than "innovation by technology"? Here's an idea: sleek, well-designed technology products (e.g. iPods) sell at a premium, and Toshiba is recognizing that fact. By integrating industrial design into the innovation process, Toshiba is hoping to optimize the consumer experience. Anyway, Toshiba is calling its new emphasis on design "360-degree innovation":

"Toshiba is always striving to make notebooks smaller, thinner, lighter - without compromising functionality. The Portege R200 (pictured) is the latest result of that philosophy. Its sleek chassis is built from materials similar to those used in fighter jets. And starting at 2.68 lbs. and just over half an inch thin, it still has enough battery life to last up to five hours. Portability plus performance. Size plus stamina. That's 360-degree innovation. That's Toshiba."

NOTE: The print ads mention ToshibaByDesign.com. However, if you type that into your Web browser, you will be automatically re-directed to Toshiba's Innovation 360 site.

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Saatchi & Saatchi Award for World Changing Ideas

The 11 finalists to win the fourth Saatchi & Saatchi Award for World Changing Ideas were announced last week. The winner of the $100,000 award will be announced by Saatchi & Saatchi at a ceremony in New York on January 26. While the depth and breadth of ideas is truly fascinating, a few ideas really stand out:

(1) BIO-SOLAR ENERGY NANODEVICES (USA) -- Minute solar cells that use spinach to convert sunlight into electrical energy.

(2) FROZEN ARK PROJECT (UK) -- Plan to save the DNA of all Earth's endangered species.

(3) OPTICAL STRETCHER (Germany) -- Uses laser beams to detect cancer cells, and can also isolate adult stem cells for medical research.

(4) PHOTO-FORM TACTILE GRAPHICS (USA) -- Creates bas relief tiles of 2 dimensional images, so 'pictures' can be 'seen' by a blind person's touch.

The full description of each of the 11 finalists is available via the Saatchi & Saatchi press release.

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January 16, 2006

January 16 innovation linkage, the MLK tribute edition

Black innovators and entrepreneurs under capitalism [Andrew Bernstein]
More on customer-driven innovation [How to Save the World]
Charlie Rose on Silicon Valley innovation [$0.99 Google Video]
The Fortune 500 Business Blogging wiki [SocialText]
The Carnival of Tomorrow [The Speculist via The Dynamist]
"My Dream For India" video [Wharton India Economic Forum]
How Apple Could Mess Up, Again [Clayton Christensen]
Musings on possible breakthroughs of 2006 [Pasta and Vinegar]
Naked Conversations hits #1 on Technorati [Shel Israel & Robert Scoble]

[image: Strategy + Business]

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Outmaneuver the CAVE people

In his latest book It's Not What You Say... It's What You Do, best-selling author Laurence Haughton goes behind the scenes at companies such as IKEA, Home Depot and Time Warner to find out the secrets of a successful corporate strategy. At the end of the day, says Haughton, the key is being able to follow through on a plan from start to finish. The exact strategy of the company is not so important - it's far more important that employees at every level of the organization are able to follow through on a clearly-defined course of action. Needless to say, the same thinking is valuable for any company considering a program of innovation or change. Too many companies embark on an innovation strategy without considering the difficulties of following through on that innovation strategy.

In discussing why some companies are able to consistently out-perform their competitors by executing on a corporate strategy, Haughton identifies four critical building blocks: setting a clear direction, assembling the right people, getting "buy-in" from employees and management, and establishing a culture that encourages individual initiative. However, assembling these four building blocks within any company is easier said than done, as Haughton points out in a chapter called "Outmaneuvering the CAVE People":

"The single, most powerful piece of advice for overcoming the law of inertia and thereby improving your organization's follow-through can be summed up in four words: outmaneuver the CAVE people.

In this context, CAVE stands for "citizens against virtually everything." Just as our bodies have an immune system that assaults everything new and unfamiliar, organizations have their own auto-immune response that instinctively and impulsively attacks every new idea, novel solution, and call for change. Overtly and covertly, these antibodies in human form (aka the CAVE people) chip away at your team's willingness to trust and try new things, poisoning the environment in order to keep necessary changes from taking hold...

Like doctors preparing a patient for a transplant, managers must take steps to outmaneuver the inevitable onslaught by the CAVE people. These steps must be planned and implemented before your team can begin to follow through."

[graphic: BBC]

Related links:
A synopsis of "It's Not What You Say..." [Laurence Haughton]
A consulting firm that takes on the CAVE people [TBM Consulting Group]
Smart Man Online [Lipsticking]
The keys to execution [BusinessPundit.com]
Excerpts from "It's Not What You Say..." [Slacker Manager]
"This book will cause people to get fired" [Stl Recruiting]

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An up-and-coming innovation thinker you've probably never heard of

Let's face it, most of the innovation and design blogs that you read each day are put together by innovation professionals - consultants, strategy gurus, academics, best-selling authors and Big Media veterans. In 2006, it's time to discover some of the untapped thinking about innovation that goes on everyday, in some unlikely places, from people who are not yet part of the innovation establishment. With that in mind, I recently had a chance to browse through some of the innovation lenses that have been put together over at Squidoo, Seth Godin's latest venture. As might be expected, the #1 innovation lens was put together by a futurist and trendwatcher who also contributes to Fast Company magazine. The #2 innovation lens was put together by an inventor and futurist who is also a contributor to Fast Company magazine. Both innovation insiders, it appears. (Not that there's anything wrong with that.)

The third-highest-ranked innovation lens ("Think Different: A Guide To Business Innovation"), however, was compiled by a 22-year-old management student in Portugal: Goncalo Moura. In contrast to the first two lenses, which were updated 41 days ago, the innovation lens from Goncalo Moura was updated five days ago. And, to a large degree, Goncalo's lens has a better selection of the types of business innovation links that I'm looking for each day. He also has a WordPress blog called (play) that's updated fairly frequently. Check it out and say "Bom Dia" to Goncalo.

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Europe's innovation superstars: Sweden and Finland

Late last week, the European Commission released the European Innovation Scorecard, ranking the 25 member states across five broad categories that measure different dimensions of innovation performance. By far, the two standouts were Sweden (#1) and Finland (#2):

"Finland is one of the EU’s two star performers on innovation, a position that it shares with Sweden. It ranks second out of the 25 EU countries. Finland ranks among the top three countries for each of the six European Innovation Scorecard (EIS) composite indices with the exception of applications. Consequently, Finland has no readily identifiable weaknesses, with above average results for all EIS indicators except one.

[...]

With Finland, Sweden is an innovative leader within the EU, ranking first among the EU countries. Sweden has above average performance on all EIS indicators. It ranks in 1st place for innovation & entrepreneurship and IPR [intellectual property] and in 2nd place for the three other EIS indices. For individual indicators, Sweden only ranks below the EU average for the share of university R&D financed by business and in high-technology exports as a percentage of total exports."

Denmark, Germany and Austria were also ranked in the Top 5. With the exceptions of Estonia and Slovenia, the Eastern European nations (Czech Republic, Poland, Slovakia) and the former Soviet republics (Lithuania, Latvia) ranked at the bottom end of the innovation spectrum. The full reports for each country are available here.

[graphic: TrendChart Innovation Policy in Europe]

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