Category: Innovation

• Govindarajan on the new innovation

  William J. Holstein interviews Dartmouth professor Vijay Govindarajan for the New York Times. Here’s an excerpt:

  Q. So would you say the chief executive has an important role in making breakthrough innovation possible?

  A. A tremendously important role. I consider the C.E.O.’s role in the modern corporation to be building the capacity to continuously innovate in a breakthrough way (emphasis mine). The C.E.O. doesn’t create the strategy, but should be listening to the voices of people who are able to see the future. It is the role of the C.E.O. to spot and encourage them. Then, once an idea has promise, you must help build a separate organization around that person.

  1/4/2006

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• Old school look at innovation

  There’s a flurry of innovation talk from the old school business guard lately. Reading through it, it seems like those concerned with innovation are repeating ourselves, possibly because we’re not aware of what other work has been done and because we’re using discovery tools that aren’t revealing anything new.

  Jaruzelski, Dehoff, and Bordia from Booz did some financial analysis and found

  1. You need to spend the right amount of money, not too much or too little
  2. Big companies have more to spend
  3. Process and collaboration are important

  BCG’s annual survey (PDF) found

  • Executives will increase spending on innovation
  • Generating organic growth through innovation has become essential
  • Less than half of the executives were satisfied with the financial returns
  • Globalization and organizational issues were two of the biggest challenges

  In both cases I’m struck by the research tool used: both firms use familiar tools that are useful but (IMHO) result in limited answers. Financial analysis tells us what happened quantitatively but not why. Surveys show us perception of the situation, but not necessarily the real situation. Neither used qualitative research that, incidentally, can help address the problems they uncovered.

  In Not All Innovations Are Equal, Govindarajan and Trimble talk about the wider application of innovation beyond continuous improvement and products to strategic innovations. That classification has existed in the form of Doblin’s Ten Types of Innovation. Their conclusion, that “Limits to innovation have less to do with technology or creativity than with management skill” has been discussed by Gary Hamel and is now championed by MIG.

  That these ideas are becoming more widespread is great. But unless this is all just marketing bravura, we need more cross-pollination of ideas and experience to make progress rather than repetition. I’ve got a little project started to make that happen, more details in the New Year.

  12/6/2005

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• Tools for Thought

  I just discovered Howard Rheingold’s Tools for Thought is online. It’s usefulness should be obvious from his introduction…

  Tools for Thought is an exercise in retrospective futurism; that is, I wrote it in the early 1980s, attempting to look at what the mid 1990s would be like. My odyssey started when I discovered Xerox PARC and Doug Engelbart and realized that all the journalists who had descended upon Silicon Valley were missing the real story. Yes, the tales of teenagers inventing new industries in their garages were good stories. But the idea of the personal computer did not spring full-blown from the mind of Steve Jobs. Indeed, the idea that people could use computers to amplify thought and communication, as tools for intellectual work and social activity, was not an invention of the mainstream computer industry nor orthodox computer science, nor even homebrew computerists. If it wasn’t for people like J.C.R. Licklider, Doug Engelbart, Bob Taylor, Alan Kay, it wouldn’t have happened. But their work was rooted in older, equally eccentric, equally visionary, work, so I went back to piece together how Boole and Babbage and Turing and von Neumann — especially von Neumann – created the foundations that the later toolbuilders stood upon to create the future we live in today. You can’t understand where mind-amplifying technology is going unless you understand where it came from.

  11/21/2005

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• A bakeoff of product innovation methods

  Malcolm Gladwell’s The Bakeoff is now online, in which the food R&D firm Mattson tries to create the perfect cookie. Project Delta created three teams: one traditional in-house team, an “XP” (extreme programming) team of two people, and an “open source” dream team of the industry’s best working remotely. For anyone thinking about how to arrange people to create innovative products I’d say it’s a must read primer. With a couple caveats:

  1. The “open source” and XP methods are for building products, not for inventing new ones. The article illustrates why they don’t work well for inventing new things. We need some vocabulary to distinguish between innovation teams and building teams.
  2. Either the implementation of the methods or the description of them lacked key elements of what make them work. Open source is not simply an unstructured group of people contributing independent pieces. In Linux, for example, code is tested and reviewed by a central committee. And XP uses structured roles for programming vs. reviewing.

  The explanation of getting team size right alone is worth reading the article for. Some expertise on the team is good, but too many people create friction in the process and impedes progress. Also see What Makes Teams Work?

  11/10/2005

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• Bootstrap 1.0

  In response to David Hornik’s Bubble 2.0 I responded that it looks more like Bootstrap 1.0 to me. Scott blogged this topic a month ago…

  With customers using a working product, decisions about what type of additional capital will be needed to scale are much easier to frame. And if you do decide to approach an outside investor, you’ll be holding more of the cards. …Bootstrapping is the new black.

  I think we’ll see more overall innovation in the world if smart people aren’t only spending their time at investor presentations, waiting with their hands out instead of getting down to work.

  It could be more profitable too. Today’s Wall Street Journal covers the topic, reporting the amount Flickr received from Yahoo! ($25 million?) was “significantly higher than the value Accel Partners had put on the company and Accel’s proposed investment.”

  There’s still a place for venture investment of course. But VCs might need to evolve, making a greater number of smaller investments.

  And incidentally, how funny is it to see the name Ludicorp in the Wall Street Journal?

  10/31/2005

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• Steve Jobs and the parable of the concept car

  We thought a lot about concept cars last year and how we could translate this practice to other industries. So it’s fun fun fun to hear the latest Steve Jobs metaphor…

  You know how you see a show car, and it’s really cool, and then four years later you see the production car, and it sucks? And you go, What happened? They had it! They had it in the palm of their hands! …What happened was, the designers came up with this really great idea. Then they take it to the engineers, and the engineers go, ‘Nah, we can’t do that. That’s impossible.’ And so it gets a lot worse. Then they take it to the manufacturing people, and they go, ‘We can’t build that!’ And it gets a lot worse.”

  Of and course, he counters that with a “No, no, we’re doing this…Because I’m the CEO, and I think it can be done.” It’s good to be the king.

  Link courtesy of G-Bomb.

  10/24/2005

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• Better management at younger, more competitive, freer companies

  Management Practices across Firms & Nations is a survey of management practices in over 700 firms in France, Germany, the UK and the US with interesting results and implications for innovation capabilities…

  …We also find a surprisingly large dispersion of management practices across firms with a long ‘tail’ of poorly managed firms. This presents a dilemma – why do so many firms continue to exist while apparently deploying inferior management practices? Our analysis suggests that this is due, in part, to a combination of: (i) competition, with tougher product market competition fostering better management practices; (ii) firm age, with younger market entrants utilising better management techniques; and (iii) regulation, with stronger labour market regulation apparently inhibiting the deployment of best practice management.

  9/15/2005

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• Pollard on why innovation is hard to sell

  Dave Pollard laments that although everyone seems to agree innovation is important, few companies seem prepared to bring in someone professional to help them do it better. He offers four reasons for this:

  1. People don’t like to change.
  2. Everyone thinks they can do it themselves.
  3. It’s a ‘dragon’ issue, so it involves a lot of trust.
  4. It requires understanding of how and why the market has moved on without you.

  I’ll add one more:

  5. Clients want outsourcing to result in less work for them, but collaboration and co-creation requires more work.

  Link courtesy CPH.

  8/25/2005

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• The profound shifts in innovation are produced by…

  Gary Hamel parallels our thoughts on management innovation…

  Q: Why “management innovation”?
  A: There’s a hierarchy of innovation. Economic progress is driven by three forms of innovation: institutional innovation, which includes the legal and institutional framework for business; technological innovation, which creates the possibility of new products, services, and production methods; and management innovation, which changes the way organizations are structured and administered. Management innovation has produced the most profound shifts [in business productivity].

  8/16/2005

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• Product instinct & venture capital

  I had a great conversation with Phi-Hong the other day about how despite our having seen the insights and risk management that user research can achieve, some companies seem to do just fine without it, thank you very much. Apple’s product design, the early Google, much of Amazon.com.

  While teaching others the product development process, I know there’s a point at which one synthesizes audience desires, trends, content, function, esthetics, price point, revenue model etc. etc. etc. together not in some grand spreadsheet but in our subjective little minds. It’s a hard thing to teach, and not terribly surprising that companies could produce great products by hiring individuals who are very good at this synthesis.

  I witnessed this recently watching a CMO reviewing new product concepts. He wasn’t too interested in concepts that were mostly new UI ideas; I think it’s hard to look at a couple screens and see a whole new product, much less a whole new business. Who of us who saw Google in 1999 saw the potential? I know I was skeptical, figuring any algorithm that relied on popularity would devolve into presenting a tabloid. Their modest response seemed to acknowledge that even they knew they were running a big experiment…

  
I don't think we will turn into a tabloid. But, time will tell.

  -Larry


  Reading through Google’s official history paints a picture of UI+algorithm innovation being tough to identify, based on the highly subjective perspective of whoever they presented it to…

  Among those they called on was friend and Yahoo! founder David Filo. Filo agreed that their technology was solid, but encouraged Larry and Sergey to grow the service themselves by starting a search engine company. “When it’s fully developed and scalable,” he told them, “let’s talk again.”

  …

  Andy Bechtolsheim, one of the founders of Sun Microsystems, was used to taking the long view. One look at their demo and he knew Google had potential — a lot of potential. But though his interest had been piqued, he was pressed for time. As Sergey tells it, “We met him very early one morning on the porch of a Stanford faculty member’s home in Palo Alto. We gave him a quick demo. He had to run off somewhere, so he said, ‘Instead of us discussing all the details, why don’t I just write you a check?’ It was made out to Google Inc. and was for $100,000.”

  The lesson? Designers need to shop their idea around to different people before giving up. Investors — whether it’s CMOs or venture capitalists — need to occassionally throw money at an idea to try it out in the real world to ultimately know if it’s successful or not.

  6/3/2005

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• Lawrence Lessig on innovation vs. the law

  Lawrence Lessig’s recent speech, Clearing the Air About Open Source actually focuses more on the war between innovators and those that profit by impeding innovation: lawyers, lobbyists, and the companies that employ them. He illustrates how the courts are used to litigate companies into bankruptcy, how companies like Microsoft are hiring boatloads of lawyers to use the reality of patent law to fend off open source, and how on the macro level it is countries who are making decisions about patent law and software investments to further their interests.

  Most importantly, he points out that these arguments are rarely framed as threats to innovation, but that they need to be to protect innovation. You can see his influence on the EFF’s website.

  During the Q&A he offers some specific ways the open source community can fight this war, e.g. by supporting political points of view that both embrace liberal (allow innovators to compete against BigCo) and conservative (stop government from meddling in the market) points of view. Still, he paints a dire picture for anyone building software from the OS to the application layer, and I’m glad I’m not in that business.

  5/29/2005

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• Manufacturing crisis

  Innovation sometimes springs from crisis: a company sees a dire threat and takes drastic steps to recover. But what if one person perceives this threat before it becomes obvious to the organization? Can this person manufacturer crisis to initiate change?

  It seems that’s what Thomas Friedman is doing with his book The World is Flat, changing the conversation about offshoring to one about fixing our national innovation capabilities…

  And it is our ability to constantly innovate new products, services and companies that has been the source of America’s horn of plenty and steadily widening middle class for the last two centuries. This quiet crisis is a product of three gaps now plaguing American society. The first is an ”ambition gap.” Compared with the young, energetic Indians and Chinese, too many Americans have gotten too lazy… Second, we have a serious numbers gap building. We are not producing enough engineers and scientists… And finally we are developing an education gap. Here is the dirty little secret that no C.E.O. wants to tell you: they are not just outsourcing to save on salary. They are doing it because they can often get better-skilled and more productive people than their American workers.

  5/10/2005

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• Disruption in home audio

  If you’d like to see the process of a disruptive technology take hold before the disruption, look at the home audio industry.

  In the past year or two home audio has taken some interesting turns. Before you basically had two configurations: simpler, inexpensive all-in-one systems or more flexible and expensive separates. Cambridge Soundworks, then Tivoli, erased the difference by bringing us small, high-quality separates mostly by reducing speaker size and increasing speaker efficiency, thereby requiring smaller amplifiers.

  Next we saw stereo-computer communication and integration. There’s stereo components with computers inside (e.g. CD+DVD+MP3 for $39) and “sound cards” have turned into receiver replacements. Naturally there’s the next generation of devices that distribute the signal throughout the home. The big question for the consumer amid this mess is: does my computer become the audio hub, do I bridge the computer and stereo together, or do I buy duplicate functionality and keep the systems separate? Expecting the consumer to be home audio network architect isn’t helping anyone, except those who install custom setups for the wealthy.

  The phase that’s emerging now is the audiophile killers, true audiophile sound in small packages at previously unthinkable prices. This was started by 47 Labs’s Gaincard amplifier that works not via tubes or traditional solid state circuitry but by using a single chip for amplification. Because it so reduced complexity, the DIY contingent created copies called gainclones that achieve the same sound quality at prices you might pay for an average consumer amp. The next, inevitable, step was to mass produce this approach, which is what Sonic Impact did with the Class T amp ($39, and as low as $19 recently at PC Mall). Audiophiles are going ga ga over it.

  The next phase — the distruptive bit — is a when a clueful industrial designer (e.g. Bose, Apple, Griffin, or Taiwan’s BenQ) leverages the chip amp’s low complexity, price and small size to create a $199 stereo system that also solves the audio network architecture problem. The latter, IMHO, means a stereo that is still a stereo (or home theater) that let’s the computer handle the digital audio file part of the equation. This is based on the premise that listening to music/watching television is usually, for most families a different and sometimes simultaneous activity from computing. In this scenario, all the stereo has to do is receive an audio signal over wi-fi and — via a user interface — send some simple signals back to the computer (“Give me the X .mp3 file now”). The computer continues to do everything it does well, with a simple mod to the mp3 player software to broadcast music over wi-fi, as iTunes does today. This results in ease-of-use that crosses the usability chasm, and control over music selections from either the computer or the stereo, something you don’t get with most systems today. All this in a great sounding, small package (chip amp + efficient, small speakers) that will be better than anything home audio can currently offer short of a professionally designed custom system. We could see this by the end of 2005, with competitors playing catch up in 2006.

  1/25/2005

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• Where creative thinking meets critical thinking

  In all the bruhaha on business innovation and creative thinking, the focus is often on new ideas, and by extension how different the ideas are. I very rarely see an important dichotomy represented, that of developing ideas that work both inside and outside the organization. In companies, this translates into making money while also serving customers well.

  Cheskin’s page on design and innovation touches on the dichotomy:

  “Design can also be more effective than traditional consultation, again because consultation works from the inside out. Though they’re very good with internal processes, they don’t know how to connect with real customers through real products.”

  In the realm of product design, I’ve written about this before in terms of balance in the user interface [ 1 – 2 ]. But how this gets done is still an unknown. Jeanne Lietdtke describes a sequential approach in Strategy as Design:

  Strategic thinking accommodates both creative and analytical thinking sequentially in its use of iterative cycles of hypothesis generating and testing. Hypothesis generation asks the question what if…?, while hypothesis testing follows with the critical question if…, then…? and brings relevant data to bear on the analysis. Taken together, and repeated over time, this sequence allows us to generate ever improving hypotheses, without forfeiting the ability to explore new ideas.

  But the ideas themselves must express both constraints: service to the customer and service to the company, all while being novel. I’ve worked with people highly skilled in generating balanced ideas and from what I’ve seen they don’t alternate between the two, they conceive of both simultaneously. Such people are directed by a moral compass and a pragmatic embrace of amoral economics, blended seamlessly. I’m reminded of F. Scott Fitzgerald, who said, “The test of a first-rate intelligence is the ability to hold two opposing ideas in mind at the same time.”

  12/21/2004

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• Distributed processing on a chip

  Details are emerging on IBM’s “supercomputer on a chip”, which essentially seems to take the logic that distributes operations to multiple chips that used to be done in applications or the operating system and integrate it at the chip level. This has the potential to exponentially speed up everything that’s not already a supercomputer, as software doesn’t have to change to accommodate more than one processor per machine.

  From a design perspective, we could think of this as a process innovation rather than one of hardware engineering, as the advantage was gained by taking work from one stage of the system and moving it to another stage.

  12/3/2004

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