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February 18, 2006

Managing in times of rapid change: Richard Parsons of Time Warner

In Friday's Wall Street Journal, Matthew Karnitschnig profiles Richard Parsons, Chairman and CEO of Time Warner, as part of the newspaper's regular "Boss Talk" series. Now that the barbarians (i.e. Carl Icahn and his horde of hedge fund troublemakers) are no longer at the wall, Parsons takes some time to ruminate on what's next for Time Warner and to talk about some of the challenges of growing the company's diverse media holdings. (full disclosure: FORTUNE is part of the Time Warner family) Along the way, he shares five tips for managing an organization during a period of change:

Rule #3 ("Don't treat creative types like they are just cogs in a machine") is particularly interesting. During the Wall Street Journal interview ("Defending Time Warner"), Parsons explains exactly what he means:

"We are cranking on cost right now. But here is where guys like Carl [Icahn] don't get the joke. In a creative enterprise, you can't treat people like they are just cogs in a machine. They have to feel like they want to be where they are. They have to feel like they have license to be creative, which means to hit the mark sometimes, not hit the mark sometimes. It is not just a process of, as Carl says, I talked to some consultant and they told me that they could come in and take $1.5 billion out of your thing. A $1.5 billion cost program. Well, hello! It doesn't quite work that way."

Tags: TimeWarner strategy RichardParsons

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February 17, 2006

February 17 Innovation Linkage

Funding Invention vs. Managing Innovation [Putting People First]
An "idea book" that's half-empty [The Idea Book via Seth Godin]
Venture capitalists and the offshoring of keiretsu [Disruptive Thoughts]
Wipro chairman Azim Premji on innovation and creativity [Rediff.com]
The new McFamily: an innovative work arrangement [Creating Blue Oceans]
Trends are worth, well, a lot of money [House of Innovation via Tom Peters]
Brat Pack 2.0 [Flickr Groups]
Robots as educational toys [Pasta and Vinegar]

[image: European Centre for the Experience Economy]

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A white wine that's perfect for creativity and collaboration

According to The Wine Enthusiast, some of the best values in wine now come from South Africa. Check out, for example, the Cape Indaba Sauvignon Blanc 2004 ("loads of tropical fruit meshed with floral nuances"), a great bottle of wine for less than $10 (even at expensive wine stores in New York City). It's also the perfect wine for that collaborative brainstorming meeting taking place off-site, at least according to the label: "Indaba is the traditional Zulu forum for sharing ideas, and it is in this spirit that we collaborate to produce great wines. Enjoy this meeting of minds and souls."

Sure enough, it looks like indaba really is the Zulu word for collaborative forum: "A Zulu term meaning 'topic'. A meeting to discuss an important topic. A social gathering where discussion and debate takes place."

[image: pabulum.ext212.com]

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An innovator in cold pursuit, and other Olympics-inspired neologisms

On Thursday, Barry Newman of the Wall Street Journal provided a fun look at "Olympic Games Geek Speak." In an attempt to demystify some of the jargon used by athletes during the Winter Olympic Games in Torino, Newman provided descriptions of the gliding herringbone (a big cross-country skiing no-no), the Flying Camel Death Drop ("a precarious solitary leap that looks at first like a flying camel, and then more like a camel jumping out of a window"), death cookies ("chunks of ice disgorged by the grooming machine") and lateral bullets ("skiers crossing a mountainside sideways").

Maybe some (but not all) of these terms could be adapted to discuss everyday business life in addition to winter Olympic sports? After all, aren't some of our favorite business phrases ("slam dunk," "time out," "chip shot") lifted directly out of the everyday sports lexicon? Take for example, a term from the world of curling called "throwing a rock into the house," which is defined as "sliding heavy stones along a sheet of ice, hoping the stones will come to rest within a bulls-eye." Isn't that what project managers do everyday - sliding heavy stones across a sheet of ice (i.e. corporate bureaucracy), hoping to reach their goals? As in: "The boss really threw a rock into the house with that innovation project, eh?"

There's another Winter Olympics term that might have some real-world applicability: Cold Pursuit. In the world of long track speedskating, there's an event called Team Pursuit, which pits three skaters of each team against each other on an oval ice track. (see photo above) Barry Newman of the Wall Street Journal explains what makes the event unique:

"In speedskating, the long and short of it is that short is fun and long isn't. Short-track winners cross the finish line first. Long trackers wend their separate ways, racing the clock. Short track - a horse race in a hockey rink - came to the Games four years ago and wowed the crowd. Now long track is playing catch-up with a new game: "pursuit." You might think "pursuit" means that speedskaters will be chasing each other, but no. The teams of three start out on opposite sides of an immense oval. The chances of one team catching the other are zero. So round they go, watching two clocks, until each team crosses a finish line of its own. Faster is better. But each of the three skaters on each team clocks a different time. Which team wins? The one whose slowest skater skates faster than the slowest skater on the other team..."

In other words, even if your top two skaters clock impressive times, if the weakest link on your team (skater #3) comes in sixth overall, you lose the event.

Anyone want to take a stab at this one? Maybe two teams furiously competing with two different technologies, racing to solve the same problem? Each team (i.e. company) is watching two clocks: a clock of internal deadlines and a clock of their competitor. As in: "Yahoo is in cold pursuit of Google in the Internet search industry."

Anyway, back to my PC, where I'll be executing a Flying Camel Death Drop later today.

Tags: innovation Torino

[image: NBCOlympics.com, speedskating]

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Developing leaders for innovation, one toothpick at a time

Mark Vanderbeeken of the Putting People First blog recently pointed to a minisite of the Chicago-based Institute of Design called Developing Leaders for Innovation. If you check out the minisite, there are numerous examples of recent and ongoing work at the Institute of Design, ranging from fundamental research to real-world tools and processes. I spent a few minutes browsing through the various offerings: there's a description of a user observation and early prototyping project, as well as details of a book from ID professor John Heskett called Toothpicks & Logos: Design in Everyday Life. Finally, there's a project called ViaChicago, which is a real-world application of design principles to relieve traffic congestion in Chicago:

"ViaChicago, a graduate research and demonstration project by Joanna Barth, Matt Beebe, Jeff Ettenhofer, Tim Murphy and Jeff Tull (M.Des. 2001), is a design plan and supporting system of products and communications to relieve traffic congestion in Chicago, by motivating and enabling travelers to engage in congestion-reducing behavior. Through observation and secondary research, hundreds of issues surrounding transportation were identified, and then sorted and clustered using Structured Planning, a design method developed at ID, to reveal patterns and generate insights.

These insights led to a system in which individuals are motivated to reduce congestion through incentives like ViaPoints, which are earned for engaging in congestion-reducing behavior and then redeemed for various benefits, and in which transit riders are also provided with better accommodation, like dynamic transit kiosks and information services, to facilitate their new behaviors."

So, if I'm reading this correctly, the way a system is designed can have a dramatic impact on the behavior of users. A well-designed system - combined with the right incentives - can help solve some of the world's most annoying problems (e.g. traffic congestion).

Tags: design innovation

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February 16, 2006

Pigs may not fly yet... but cars do!

Looking for a different kind of hybrid SUV? Check out the new Transition Personal Air Vehicle, an SUV with retractable wings, which will be exhibited at a Wisconsin air show over the summer. This is an SUV that drives as well as flies. It's designed by Terrafugia, a start-up founded by some super-smart MIT grad students:

"The Transition Personal Air Vehicle is designed for 100- to 500-mile jumps. It will carry two people and luggage on a single tank of premium unleaded gas. It will also come with an electric calculator (to help fine-tune weight distribution), airbags, aerodynamic bumpers and of course a GPS (Global Positioning System) navigation unit.

The company hopes to eventually have the vehicle classified so that it can be piloted with a light sport aircraft license. No complete prototype exists yet, but the company has a one-fifth scale wind tunnel model (along with computer simulations) and will use the $30,000 from the Lemelson prize to build something to show off at the Oshkosh show. A fully operational prototype is expected to come out in 2008 or earlier, according to the company, while Transition vehicles are expected to hit the road, and the sky, by 2009 or 2010."

Anyway, the article from CNET lists a whole smorgasbord of other flying contraptions, like aerial taxis and the funky AirScooter. You can also check out a QuickTime movie of the flying car at the Terrafugia site.

Tags: flyingcar innovation Terrafugia

[image: Terrafugia]

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The secret to a successful business, courtesy of Tom Peters

In a post called D-Squared MP, Tom Peters boils down the essence of a successful business to one basic principle: D-Squared MP. At which point, of course, even the MBAs are scratching their heads. Wait, didn't you mean the four P's? No, D-Squared MP:

"D-squared, or Dramatic Difference: Too many people risk their life savings on a not very original idea. No, I don't mean that you have to start a Google, but I do mean that you must be clear, very very clear, about how your new Italian restaurant or real estate agency will be "dramatically different" from the current offerings in your locale-market...

M, or Money: And far too many people with a genuinely rippin' idea forget to get the "money guy," the "businessperson," on board from, more or less, day one. I'm less talking about the funds raiser here (for the moment, I assume you'll use your carefully squirreled away war chest of $175,000, and another $50,000 borrowed from Aunt Matilda), and more focused on the person who "gets off on business" as much as you get off on your genuinely better-startling idea for a financial-planning boutique in Upper Podunk...

P, or People: Obvious? Of course! Not so fast! That inspired dreamer, that finance aficionado ... are often wretches when it comes to hiring and inspiring, day in and day out, the waiters and waitresses or receptionists who will "Wow" the clientele—or not.

There you have it: the #1 ingredient in starting a successful business is having an original, innovative idea. Then, you need to come up with a feasible plan for executing on this idea. Finally, you need the right people in place to make that idea a reality.

Tags: TomPeters innovation

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Innovative skyscrapers for the urban metropolis

On his SharkRide blog, Matthew Jaunich discusses an innovative idea about sustainable urban development that might be appropriate for a "mega-city" or any other fast-growing, sprawling metropolis (i.e. cities in China): the neighborhood urban tower. Such a tower would embrace many of the principles of New Urbanism:

"Wouldn’t it be great to incorporate new urban elements within cities instead of simply building more and more and higher and higher apartment buildings? My vision: apply new urban neighborhood elements in multi-level, sky scraping structures. The structures would capitalize on new design, engineering, and construction technologies, which allow engineers to realize architectural projects of unprecedented scale and complexity. The structures would accommodate conventional buildings – homes, commercial spaces, community buildings, and trees – on multi-levels. There would be an artificial sky on each level that dims and brightens according to the time of day. The structures would be mostly open-air, but each level would have a perimeter of possibly glass, or other type of strong, transparent material to keep inhabitants from falling.

There could be high-density condo units on one level, and luxurious, single family homes on another. The first level could be commercial and retail space, which is easily accessible to tower residents, as well as to the broader city. One level could have a community club house, and recreation activities, including a gym, tennis courts, swimming pool, and golf driving range."

There's a hand-drawn picture of these urban neighborhood towers on the Sharkride blog. Unfortunately, in the process of image-slurping, it turned out the graphic doesn't display well on the Innovation Insider site. Apologies, Matthew.

Tags: NewUrbanism skyscraper innovation

[image: Livable Cities for the 21st Century]

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"I made my company a massively parallel computer"

With insights from Ray Morgan, who led a design team for the record-setting Helios solar plane, Talentism explains how to design a corporation so that it thinks innovatively:

"Think of your organization like a computer. Like a computer there are inputs, outputs, translators, memory and processors. Most organizations are set up to ensure that one or two key individuals are the processors: they take the information from the various input devices (their advisors), call upon memory (in the form of regulations, financial information, etc.) and then process the information into a decision (output) that they then expect executed by the rest of the organization.

In a small organization this “computing architecture” may be optimal. In fact, you see the “one main processor” design in many early-stage start-ups. But the larger your organization becomes the more inefficient this design becomes. Think of your computer at home: the more data you put on the disk, the more programs you have open, the greater the load you put on your processor. This causes your computer to slow down and eventually crash. It’s the same thing for an organization: put any one processor in the critical path, no matter how advanced, and your computer eventually stops working."

The role of a leader, then, is to make every other worker become a better processor:

"As long as there was some ordering mechanism for outputs (i.e. more processors didn’t just create more confusion) having as many processors as possible helped his organization be more creative, solve problems faster and reduce turnover. No matter how big it got and no matter how complex the tasks before them, his division seemed to be able to work through it."

Instead of trying to be the "biggest, the fastest or the best processor in the organization," the head of an organization should think of himself or herself as a system architect - someone who sets up the information channels, processes and systems to ensure that each team member (processor) adds as much value as possible. Yet, how many people are talented enough to become a system architect?

"Being a system architect is probably the most difficult work that an individual or team can undertake. This explains why so few managers do it well. As individualists and capitalists we are raised to be the best possible egocentric mega-processors rote education can produce. We are told that if you want to be a leader you have to be assertive and controlling. This means that when things go wrong most managers feel the undeniable urge to take control of the situation. And since there is always something going wrong, it is easy to feel that we are delivering the most value for the organization when we are the biggest and best processor of risk and cost information, parsing information and making decisions that send other people marching to put out the myriad fires.

This is most likely why most organizations lack for a coherent approach to resource allocation, process design and business model realization. This is also a key reason that people don’t usually reach the top when they play the role of the thoughtful background players. We are not programmed for architecture, especially when processing is so much more viscerally and socially appealing."

FOOTNOTE: Ray Morgan was an executive with AeroVironment, which was named as one of FORTUNE's "cool companies" in 2004.

[image: Comcast Microtivities newsletter]

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Nicholas Negroponte steps down from MIT Media Lab

Do what you've always wanted to do with the rest of your life. How many people actually do that? According to CNET News, you can add Nicholas Negroponte, chairman of the MIT Media Lab, to that list. On Wednesday, he stepped down from his position at the MIT Media Lab to pursue his innovative $100 laptop computer initiative full-time. Negroponte first unveiled the One Laptop Per Child initiative, which is working to develop low-cost, hand-cranked laptops for the entire world, in September. Since that time, he's picked up the support of the U.N. and a number of educational institutions.

Tags: Negroponte MITMediaLab laptop innovation

[image: $100 Laptop Launch from David Weekly via Flickr]

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February 15, 2006

What is design thinking?

The Stanford Daily has posted an interesting clip about the new Hasso Plattner Institute of Design at Stanford (aka "d.school"), which is pioneering a way of thinking called "design thinking":

"Launched just last year, the d.school, a unit of the School of Engineering, draws graduate students from a variety of departments across campus, including the Graduate School of Business, computer science, mechanical engineering and education. By gathering different disciplines together, the program aims to teach collaborative innovation - a special skill the school’s leaders dub design thinking.

“Design thinking is a different way of thinking,” said Alex Kazaks, a member of the course’s teaching team. “There are all different kinds of intelligences, and one of these is creative intelligence. Design thinking is an analog for that. This is not something usually taught in a university setting, and we’re trying to make it available to students.”

Also listed as ME 206A and OIT 333, ME 377 ("Experiences in Innovation and Design Thinking") is the flagship of the fairly new d.school, which will not confer regular departmental degrees of its own. Introductory in nature, the class focuses primarily on teamwork.

“This is a class for students interested in leading teams and leading innovation within teams,” said teaching team member Perry Klebahn. In an effort to reach beyond theory, the class is built entirely around team projects. ME 377 students have 24-hour access to their own classroom workspace — a comfortable-looking space with couches, workbenches, whiteboards across every wall and pink carnations in the plastic cups that hold markers."

For more about the goings-on at the Hasso Plattner Institute of Design at Stanford, be sure to check out Diego Rodriguez's MetaCool blog.

Tags: design Stanford dschool innovation

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The Texan Innovator, grilled armadillo and a cold beer

Over the past few months, I've noticed increased online chatter about BarCamp, an "un-conference conference" for cool technology types based in innovation hotspots all over the country, from Palo Alto to New York City. The next BarCamp takes place in Austin, Texas on March 11. So far, though, the wiki for the event has only provided limited details about what to expect:

"What is BarCampAustin? Think of it as a way to get the tech/geek community together in Austin during one of the coolest music and media events of the year: SXSW. Non-Austin equivalents? Well, Dallas beat us to it (not sure how that happened) but think: Usenix? SXSW Interactive? Burning Man? BarCamp PaloAlto? Only one thing is certain: It's up to you to decide. The most important thing you should take away from the event? Relationships with other geeks!"

Interestingly, most people planning to attend BarCamp don't really seem to know what it is:

"But I honestly don't know what it is. I have visited their Wiki and followed their links and even happen to know a few of their un-attendees. But I'm still not sure if it is a drunken weekend for techno-new-dweebies (think Burning Man for nerds), or a way for like-minded technology professionals to network and learn? Maybe it's a little of both? The name itself leads me to believe drinking might be involved?[...] As an outsider I'm left wondering if I should come ready for a couple of days of debauchery or if I should bring a stack of business cards?"

Intrigued by this, I did a little extra poking around. (When was the last time you attended anything that you didn't know what it was? Especially something involving armadillos...) Here's what I found: BarCamp is "an ad-hoc un-conference born from the desire for people to share and learn in an open environment. It is an intense event with discussions, demos and interaction from attendees. Anyone with something to contribute or with the desire to learn is welcome and invited to join." I guess that's the answer: BarCamp is not meant to be anything, it just becomes something along the way. Hey, if it involves beer, it can't be all bad...

Additional BarCamp linkage:

What exactly is BarCamp? [Bauart Group]
The open-source equivalent of a traditional conference [Boxes and Arrows]
Tidbits from BarCamp NYC [Horse Pig Cow]
A full weekend of technology love [Amit Gupta]
Podcast on BarCamp Dallas [Like It Matters]
BarCamp Dallas presentations [Nontrivial exercises]

Tags: BarCamp innovation

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Better than Myers-Brigg, a quiz for the sci-fi innovator

One of the most rewarding aspects of editing The Innovation Insider is learning about new Web sites and blogs with funny little names and quirky content that would never (methinks) appear in a mainstream business publication. For example, one site that I stumbled upon last week was RetroJunk, a cool little "nostalgia community." Today, I ran across SF Signal, a science fiction fan site that linked to one of my pieces about science fiction writer Bruce Sterling. Anyway, if you've ever taken the Myers-Brigg Type Indicator personality test, you've got to check out the science fiction version of this test: What Science Fiction Crew Would You Belong To?

After answering a 48-question quiz ("Do you believe wormholes exist? Does living on the frontier appeal to you?"), it turns out that I'm a prime candidate to join the crew of the Nebuchadnezzar from The Matrix. You know, the futuristic dark coloured mechanical hovercraft captained by Morpheus....

Tags: MyersBrigg sciencefiction personality matrix

[image: MatrixFans.net]

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Too much cash leads Google on an innovation scavenger hunt

Barron's is running an online open house this week, and it's worth checking out some of the free features (all of which are typically hidden behind a paid subscription wall), especially the cover story on Google. According to Jacqueline Doherty of Barron's, Google's stock price could become unexpectedly volatile on the downside over the near-term future:

"Investors have been fixated on Google the past few weeks, as its shares have tumbled nearly 25% from a peak of $475 -- and the fact is, there could be a lot more tumbling ahead. The share price could well be cut in half over the next year as the Internet giant grapples with growing competition from Microsoft and Yahoo!, increased pricing pressures in its online ad sales and mounting concern about what's known as click fraud...

The list of challenges the company faces is nothing short of mind-googling. As if Microsoft weren't enough, the search concern is headed for brawls with content providers like newspaper and book publishers. Phone and cable firms may also join the fray. Google's cost structure, meanwhile, is ballooning, with the company hiring thousands of new workers and mulling projects as far afield as space travel. If Google trips on even a few of the challenges, its earnings could easily disappoint."

I've actually been working on a similar type of investment thesis for Google in 2006. In an article called "Is Google Too Innovative?" (written right before the Chinese censorship scandal broke), I suggested that Google might be building earnings castles in the sky with its long list of innovative projects that attempt to beguile investors with dreams of future riches. (After all, investors value companies on the strength of FUTURE earnings, not current earnings) Some of these "innovative" projects from Google go too far -- the creation of a worldwide Wi-Fi hotspot? a Napster-like music subscription offering to compete with iTunes? a collaboration with NASA research scientists? Riiiiggght.

Every month, like clockwork, Google seems to announce a new world-changing innovation worth potentially billions of dollars. Over the past six months, the number of innovative market moves emanating from the Googleplex has been mind-boggling: Google Video (January), a $1 billion strategic partnership with AOL (December), Google Base (November), Google Reader (October), Google Blog Search (September), Google Talk (August), and a new Google R&D facility in China (July). Most recently, it was Google’s acquisition of California-based dMarc Broadcasting for $100 million in cash - a deal which requires Google to pay up to an additional $1.1 billion in cash if the company’s plans to dominate the radio advertising market play out as expected over the next three years. Is it possible, though, that Google has become too innovative for its own good?

Certainly, Google should be applauded for its innovative search technology. There is no doubt that Google is one of the most innovative companies in America and that the company’s founders have some truly visionary plans for the future. However, one has to question whether the company is stretching too far, too fast. After all, each new innovation from the Googleplex is positioned as a potential billion-dollar market opportunity. According to Google watchers, these are intended as disruptive, market-changing innovations, not as ho-hum incremental innovations. Google Video is a direct response to Apple’s iTunes Video, intended to position Google as the leader in the video download market. Google Base has been portrayed as anything from a Craigslist clone to an eBay-killer. Google Talk could be a way to capitalize on the success of VOIP companies like Skype and push Google into the communications market. Then, there are the quixotic Google offerings that materialize every now and then - like the plan announced in September to build a free Wi-Fi network for San Francisco.

As every investor knows (or should know), the classic way to value a company is using a model of discounted cash flows. The greater the projected future earnings, the higher the likelihood of future positive cash flow, and hence, the greater the valuation in today’s terms. Taken in this light, the huge run-up in the stock price of Google (from $85 at its IPO to a skyscraping $475 on January 11) represents unflinching investor faith in the future earnings potential of Google. Broadly speaking, to keep the stock price inching ever skyward, Google must continually roll out new initiatives to enter new markets, claim additional market share in old markets, or transform old markets into new markets. As long as investors buy into the “innovation = growth” story, the stock price should increase.

However, as even America’s most beloved companies find out sooner or later, Wall Street has the capacity to punish swiftly and surely any publicly-traded company that fails to meet its expectations. There is no better example of this mindset than the obsessive focus on the quarterly earnings number reported by each public company. Make that number and Wall Street leaves you alone (maybe). Recognizing that fact, companies work hard to smooth out the earnings number each quarter. Some allegedly manage their earnings by keeping a number of one-time earnings events in their back pockets, just to be safe.

So what happens when Google fails to meet the expectations of its investors? Does Wall Street forgive Google, citing a spectacular 18-month run of creating wealth, or does it punish its new favorite son? After hitting a high of $475.11 in January, Google’s stock recently fell below the $400 mark, largely on fears of a legal dust-up between Google and the U.S. Justice Department. In its own way, Wall Street has already punished Google for its hubris in daring to take on the U.S. government.

In a worst case scenario, of course, Google could be pushed into deals that it has no real business pursuing. Consider the latest deal involving dMarc Broadcasting. The idea of dominating the radio advertising market is interesting, to be sure, but isn’t Google all about New Media and not Old Media? Why isn’t Google investing in satellite radio? Or in Internet radio? Or even podcasting? Doesn’t boring old terrestrial radio seem like an unlikely endeavor for Google?

It is, perhaps, until you consider the money involved. According to the Wall Street Journal, the estimated U.S. spending for terrestrial radio advertising in 2005 was $20.6 billion - more than twice the size of the relatively undeveloped Internet advertising market ($10.0 billion). The Wall Street Journal even speculated that the television advertising market could be next as Google prowls for innovative ways of applying its Internet advertising technology to existing media markets. After all, total U.S. spending on TV in 2005 was a whopping $55.4 billion! The idea is not so far-fetched, considering Google’s $1 billion strategic alliance with AOL.

In business, as in life, it’s best to under-promise and over-deliver. Let’s just hope that the Google guys (Sergey Brin and Larry Page) don’t over-promise and under-deliver.

Tags: Google innovation

[image: Barron's]

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The MIT creativity cocktail

Over the weekend, Renee Hopkins Callahan of Idea Flow pointed to various ways that the arts could be used to stimulate creativity within corporations. This seems to be an emerging trend. For example, Fast Company recently highlighted the interesting things that happened when a bunch of edgy New York City artists led by Vito Acconci mixed it up with MIT quant jocks:

"Acconci dropped in on the Massachusetts Institute of Technology to mind-meld with, and provoke, every department he could. Invited to lecture and open a traveling show of his work, Acconci and his protégés spent a frenetic two days with campus heavy hitters...

You'd expect a disconnect between an out-there conceptual artist-designer and archetypal straight-ahead engineers and scientists. But Acconci has morphed into something of a chief creative officer, working through and with more conventionally trained designers. For its part, MIT may be the most entrepreneurial and interdisciplinary university around..."

Until I read the Fast Company article, I wasn't familiar with Vito Acconci's work, but apparently, he's inspired a number of designers and creative types with his ideas. Check out the fascinating New Hotels for Global Nomads feature from Pixel Press: if you scroll to the right, you'll see the Japanese Car Hotel created by Acconci Studio: it's a car that has been converted into a hotel!

Tags: MIT creativity

[image: Japanese Car Hotel, Acconci Studio]

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Emphasize innovation when your company's stock price is going nowhere

Yesterday's Wall Street Journal felt a bit heftier than normal. (Usually, just by picking up the paper, you can tell if there's going to be some kind of special section within.) Lo and behold, there was an 8-page, full-color advertising spread from GE right smack in the middle of the first section called Picture a Healthy World. The GE advertising spread highlighted various types of healthcare-related "imagination breakthroughs" taking place at GE, such as Early Health ("a completely new way of looking at healthcare that focuses on early detection instead of late diagnosis"), Vividi ("portable ultrasound technology that allows doctors to see the heart in real time") and PET/CT technology that enables doctors to detect cancer early.

The "imagination breakthroughs" advertising campaign at GE is truly impressive - there are literally pages and pages of sample print ads that the creative types have cooked up for GE, highlighting anything from wind turbines to hybrid locomotives to breakthroughs in healthcare. Pretty impressive stuff, but stuff only a hugely diversified conglomerate could come up with.

And that's the essence of the problem: it looks like GE is trying to boost a stagnant share price and change investor perception of a fat, sluggish conglomerate plodding along. Gotta make those numbers look sexy, even when they're not. And the answer appears to be a massive "imagination at work" ad campaign to show investors (i.e. the readers of the Wall Street Journal) why the company is a "buy" and not a "hold." Always emphasize innovation when your company's stock price is going nowhere.

My new rule of thumb: if a company buys a splashy, full-color ad emphasizing "innovation," it's a safe bet that the company is furiously treading water, trying to boost a sluggish stock price.

As partial proof, check out this excerpt from last Friday's Washington Post called "GE's stock glide downward surprises some investors":

"The recent stock woes of General Electric Co., a Wall Street darling through much of the 1980s and 1990s, is attracting interest from an unusual group on Wall Street these days: value investors. The company increased earnings at a 10 percent clip in 2005, has forecast an earnings growth rate that will be at least a few percentage points higher for this year, and has an enormous order backlog. Yet the stock hit a 17-month low earlier this week. Although 21 of 22 analysts who cover the stock have a "buy" or "outperform" rating on GE, its shares are trading at prices that make it attractive for "value" investors, a breed that likes fallen angels or stocks in the midst of a turnaround."

In fact, one big money manager pointed out that shares of GE are trading around the same price-to-earnings-ratio as Tyco's (and we all know what Dennis Kozlowski did to that company). One potential problem: 45% of GE's earnings come from two different FINANCIAL divisions. (Yo, what's a conglomerate doing acting like a bank?)

Tags: GE imagination breakthrough innovation

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February 14, 2006

February 14 innovation linkage

The business of future gazing [BBC News]
Mouse Brains for advertising creatives [Innovation Weblog]
What painters, sculptors and poets can teach you about innovation [Idea Flow]
Spray-On Solar-Power Cells Are True Breakthrough [National Geographic]
The trust factor: the future of product innovation [Frog Design]
Torino 2008 World Design Capital [Putting People First blog]
The Inventor's Handbook [Lemelson-MIT Program]
The Hall of Best Knowledge [Ray Fenwick via Jack Cheng]
Vietnam Innovation Day, a World Bank production [VietNam News]

[image: The Featuritis Curve, via Creating Passionate Users]

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Are sites like Digg and Slashdot the future of media?

David Kirkpatrick of FORTUNE magazine describes why Slashdot just may be the future of media:

"Two things distinguish it -- it's the most popular news and information site with the tech cognoscenti, particularly programmers and engineers. And all of its content is created by its users. They submit about 700 stories per day, which staff editors vet and reduce down to the 30-35 that get published. Of the site's 5.5 million unique visitors per month, about 25% post comments about those stories."

Kirkpatrick goes on to call Slashdot "among the most important and emblematic Internet businesses of our age." Take a loyal and far-flung user community, high participation rates (i.e. lots of comments and article submissions), a quirky metric called "karma" that appeals to the human ego, and a vast reserve of knowledge about a particular niche - and you have the formula for success for any user-generated media company:

"As a journalist [Slashdot] especially fascinates me. What it seems to represent is essentially open-source journalism. People fight to make their submission the one out of those 700 each day that will make it to the front page with a byline. "The ego value of that is huge," says Jeff Bates, OSTG's vice president of editorial operations and one of Slashdot's two co-founders.

Creating something of tremendous widespread utility for the ego value is a new phenomenon in contemporary business. It's part of what motivates open-source software programmers. As a well-paid professional journalist, when I hear that ego alone motivates contributors to a news site with 5.5 million unique visitors a month, I find it a bit unnerving, but unquestionably exciting."

While Slashdot appeals primarily to the science & tech crowd (the site's byline is "News for nerds"), there are a host of other similar community sites that are springing up to fill other niches. At the Innovation Insider, for example, we're turning into huge fans of Digg. Similar to Slashdot, Digg is a community site in which users submit stories each day in a number of different verticals, like technology and design. By submitting votes on these stories (called "diggs"), users can quickly move an article onto the front page of Digg. Once the article hits the front page of Digg, watch out! Huge traffic spikes are possible. Instead of one human editor attempting to categorize hundreds of stories each day, Digg users do the bulk of the editorial work for free.

Anyway, at the bottom of this story, you'll notice a small link called +digg. This link allows any reader of this site to submit a story directly to Digg. Try it - it's pretty cool once you get the hang of it.

Tags: Slashdot Digg innovation

[image: the Slashdot guys, via ThinkGeek.com]

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Gandhi, the iPod and innovation

In an essay for India's Business Standard, Subroto Bagchi looks at the nature of business innovation from a number of different perspectives. Starting out with an abstract notion of innovation, Baguchi gradually peels away the various layers that a company must take into account when designing new products and services. The key to innovative products is not "engineering complexity" or "functional sophistication": "It is about feelings and simplicity. The greatest innovations usually begin with a simple idea."

According to Bagchi, Apple takes this notion of "design simplicity" one step further with its lineup of popular products, especially the iPod. It is not so much Apple's technological innovation that is so impressive, it is the simplicity of design that reaches through demographics and across generations. In fact, many of these ideas of design simplicity are reminiscent of Mahatma Gandhi's ideas. As Bagchi explains, there is a common link between Gandhi, the iPod and innovation:

"The state of nature is about simplicity. The state of human thought has become progressively complex because we seek sophistication over simplicity. The most wonderful things in the world are also the simplest. Simplicity delayers confusion. When confusion evaporates, attraction begins. What is complex about a child's toothless smile? It does not lend itself to multiplicity of interpretation. Response to it is not regionally varied or culturally dependent.

What is complex and sophisticated about Mahatma Gandhi's theory, which delivered independence to the world's largest democracy? As elements of design, it had two things: non-violence and non-cooperation. They were simple enough to convey the same meaning to an illiterate indigo grower in Bihar and the Harrow-returned Jawaharlal Nehru.

Even in terms of his personal manifestation nothing about Gandhi was complex - he never tried to appear sophisticated. As a result, nothing about him required complex interpretation. He stood there in such simplicity that he almost appeared naked. That simplicity gave him the power to liberate us. Had Gandhi donned a designer suit, I suspect we would have been a very different nation today. But, speaking of simplicity in design leading to innovation, let us consider the Apple iPod...

The simple white "thin-to-the-extent-of-not-being-there" design is like Gandhi's own functional specifications. A pair of glasses, a loin-cloth, a stick and a pair of cobbled sandals. A display unit, a plain white exterior, a dial and a pair of white earplugs. Simple."

Tags: Gandhi design innovation iPod

[image: Apple Celebrities @ The Apple Collection]

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