Innovating To Win

Gleaning Innovation Insights From The News

If you live in the world of innovation, you know that stay current on things is important and not just those things that are directly related to your work.  You need to look around at everything and ask yourself some key questions.  What does this mean?  How does this impact other things?  What is the opportunity that this reveals?

Here are some examples from today’s newspaper (I like the Wall Street Journal) to consider.

In Nevada, some people have found playing hard-rock music to be an effective way to repel Mormon crickets.  Hmm…  What is it that makes this so?   Is the underlying principle useful more broadly?  Is there an abstraction to be made here?

Ford is still losing money, but has slowed its cash burn.  It looks like Ford is showing it will be able to something that the other Big-3 automakers can’t—rebuild their company without taxpayer assistance.  Kudos for this!  What else does this tell us though?  What had allowed Ford to be different and how does this translate to other industries?

Microsoft is reporting its first ever decline in quarterly revenue.  What are the predictable impacts on the rest of the software industry?  How does this tie in to other high-tech sectors?  What about the relationship to the consumer space?

More entrepreneurs are taking a pass on paying themselves to keep their businesses going.  What does this tell us about the investment climate?  What pressures does this create on the costs of services and the costs of personnel?  Should larger companies consider similar measures?

Apple gets egg on its face over baby-shaking game.  Makes you wonder who’s minding the i-store.  What lesson does this misstep hold for us?  Was this simply a failure of management?  How could this have been prevented?

These are just a few of the headlines from today’s WSJ.  What news items are you seeing that can provide useful insight for future innovation?  Are you just reading the news, or are you analyzing it and extracting out useful innovation lessons?

BCG Innovation 2009 Report

The Boston Consulting Group has released its annual report on the state of corporate innovation.  It’s rather interesting to note the press coverage that the report has spawned.  Strangely, the commentary seems to focus on a reported increase in the number of companies forecasting a decrease in R&D spending.  Even self-proclaimed innovation guru, Bruce Nussbaum, reported on his blog that “most corporations are cutting back on R&D and other innovation investments.”  It makes one wonder if anyone actually read the report.

I did, and I suggest you do too.  There are some very good insights in the report.  Until you get around to it, here are some of the highlights.

While the economic crisis has caused some companies to lower the priority of innovation, most companies (64%) still consider innovation a strategy priority.  This priority is quite justified.  The BCG report cites that there is a strong connection between innovation competence and corporate success.  Putting their money where their mouth is, fifty-eight percent of participating companies plan to increase their spending on R&D.  Many of these companies plan to shift the emphasis of their innovation to cost control.  Only 14% plan to reduce their innovation spend.

CEOs are considered the most visible champions of innovation, yet few CEOs see themselves this way.  This represents a serious gap in the expectations of management and innovation workers and may be a factor contributing to why only slightly more than half of the respondents are happy with the return on their company’s innovation spend.

The report also finds that there is a tendency to pull back on innovation investment in rapidly developing economies, with innovation taking on a more local flavor.  It will be interesting to see if this is an early indicator validating Nussbaum’s recent prediction of a slowdown in globalization.

Responding companies identify their biggest innovation challenge is move from an idea to a delivered product.  This isn’t very surprising.  All too many organizations confuse ideation with innovation.  The emphasis on collecting lots of ideas rather than the full cycle innovation best practices undermines the ability of organizations to achieve their innovation objectives.

The BCG report is full on other fascinating information.  You can find the full report here.

Mass Innovation Nights

I am off for a few days playing in the annual Foxwoods chess tournament, so I haven’t had a chance yet to mention a great little innovation event for folks in the greater Boston area.  For the rest of 2009, every second Wednesday of the month will see a launch party at Charles River Museum of Industry & Innovation.  Each of these events, Mass Innovation Nights, features 10 companies showing off their new products & technologies.

I dropped in on the first Mass Innovation Nights event this week.  It was a lot of fun and very well attended.  Here are a couple pictures from the event (courtesy of Parna Sarkar).

Me with Renee Callahan of Innosight and Jim Belfiore of Invention Machine

Jeff Boehm of Invention Machine explaining the Siphon Flush to the Boston Globe

You can find more information on Mass Innovation Nights here.

Innovation Climate Survey

The results of a new Innovation Climate survey have just been made available.  The poll conducted by Chuck Frey reveals some very encouraging insights.  It seems that over 47% of respondents find the climate for innovation has improved in these times.  Most people I talk to agree that innovation is even more important in these times to fuel success and prepare for the future recovery.  It is good to see this point of confirmation.  You can find the survey results here.  They are well worth a look.

The Trouble with Twitter

Like many people, I have jumped on to Twitter.  Just in case you have been living under a rock recently, Twitter is a communication service that broadcasts your messages (limited to 140 characters) for all the world to see.  When people subscribe to your message feed (“following” in Twitter speak), they can be sure to see your tweets in their personal view of the global message stream.

People chat about many things on Twitter.  A favorite topic seems to be Twitter itself.  In the stream of tweets on innovation, several comments have gone by recently suggesting that Twitter is a disruptive technology that may displace Google.  This notion raises some interesting questions.  Is Twitter a disruptive technology?  What are the prospects for Twitter to emerge with a viable monetization strategy?  Is Twitter long for this world, or will it vanish as quickly into obscurity as it emerged on the scene as it is replaced by fast-followers?

In examining these questions, let’s start by asking what customer need Twitter actually serves.  Generically, Twitter provides a interpersonal communications platform.  In this sense, it competes with a wide variety of technologies and products.  These cover traditional web sites, blogs, video sharing (Flicker, YouTube), e-mail, instant messaging, hosted discussion lists, community/social networking sites (Facebook, LinkedIn), SMS, and phone based communications.  It is a wide field of application serving a broad range of specific needs for the users of each.  What distinguishes Twitter?  Here’s my quick list:

• Real-time model
• Highly engagement
• Voyeur friendly
• Concise messaging
• Medium independence

On the flip side, here are some things Twitter seems weak in:

• Deep exchanges (I still am laughing about the person that expected me to explain a complete theory and methodology of sustainable strategic innovation practice and deployment 140 characters at a time.)
• Direct rich content
• Continuity of exchange
• Easy navigability of information

In a very nice article, Renee Hopkins Callahan suggests Twitter’s target customer is the person needing an easy one-to-many means of communication.   I think this is not an accurate characterization of the customer that Twitter needs to identify for success.   Why?  A painful truth that Twitter will need to come to terms with is that the one-to-many communication space already has a few strong and established players (Facebook and the like), and the real-time aspect of the Twitter model is not a significant barrier for these established channels to overcome.  [In the interval between my writing this article and posting it, Facebook has announced that it will be adding real-time status capability in the near term.]  This will bring into sharp focus the limitations of Twitter and force them to find the factors and hence refined use model to which they are uniquely suited.

Already, I have seen bands of Twitterati forming discussion group off the tweetin’ path.  Why?  So that they can break free of the limitation of 140 characters and poor discussion continuity.  Real-time fast-followers have strengths in areas of rich content and media.  They also have much further community reach than the fledgling Twitter.  (These days, 6 million registrations is probably not critical mass.)

The bottom line is that when community/social networking sites start rolling out real-time, and instant messaging services roll out one-many syndication, Twitter will find itself in a very awkward position.  So, where does Twitter turn?

They are unlikely to be able to withstand the entrance of a big player into their current niche.  They have not carved out a sufficiently distinguished value proposition.  This really just leaves Twitter with two options:

1. Find a more defined value prop that can secure a real and significant revenue stream
2. Hang the “For Sale” sign on the front door and auction the technology asset off to the highest bidding fast follower that wants to get a jump on adding a missing piece of capability to their offering

We’ve all heard of Twitter’s secret business plan, but time is running out as companies like Yammer are already trying to establish a lead in specific niche markets that are aligned with Twitter’s current service.  Evan Williams’ recent talk at TED doesn’t give Twitterati much to hang their hopes on either.  The window of opportunity is closing very quickly, and Twitter needs to stop being so cavalier about its future.

I suspect that option 2 is the most likely outcome for Twitter.  There are many strong market forces converging that could push this choice on Twitter. 

Granted this is not a deep analysis of Twitter’s outlook since I am not privy to their business plan, and only time will reveal the final outcome.  But at this time, I don’t see any evidence that Twitter presents a significant threat to Google as some have suggested, and I do seen many indicators pointing to Twitter being just another interesting paragraph in the history of the internet.

Industry Focus on Innovation: Automotive

PricewaterhouseCoopers (PwC) recently published its 12th Annual Global CEO Survey.  In a special summary on the automotive sector, PwC reports some interesting items.  Some the key data points follow.

37% of surveyed CEOs feel they need to focus on greater penetration of their existing markets, while 24% felt that new product development was the key to future success.  This is a reversal of priorities from a year ago.  A whopping 92% of the responding CEOs acknowledge that innovation is key to their long term success, but most feel the current priority is on short term survival.  This latter point is not too surprising in a climate when auto makers in many countries are getting government assistance to stay afloat.

The report cites a few specific examples of innovation coming from auto manufacturers, but these are not necessarily surprising new lines of thinking.  All the cited examples are in the area of alternative fuel technologies.  While these are welcome advances, they can hardly be called highly original at this point in time.  But then originality doesn’t look like it is in the cards for the automakers.

While 95% of the CEOs mentioned that information about the customer was important, the report talks about understanding customer preferences.  Now in all fairness, this could be a defect in how the questions were posed by PwC.  But if we assume that this is in fact what the automakers are actually interested in (and historical behavior would support this assumption), then the automotive CEOs are content to drive their businesses by looking in the rear view mirror.  They should be interested in looking beyond mere preferences to understand what the unexpressed desires and aspirations of their customers are relative this product which has secured such an important role in their lives.

The report is an interesting snapshot of an industry in the spot light.  You can find the PwC automotive summary report here.

Obama’s Innovation Vision – What You Said

Given Obama's picks to lead his innovation agenda, what do you think of Obama's innovation vision?  This was the question asked in our latest innovation poll.  With the stimulus package expected to be signed this Tuesday, the results of this poll seem especially timely.

It seems that Innovating To Win readers are split between the patient and the skeptical.  Only 13.6% of you believe Obama’s early moves are the right things to help the US improve is innovation abilities.  The greatest share of you, 45.5% are willing to wait and see what transpires.  But a whopping 40.9% of you have already concluded that Obama isn’t putting us on course for a bright innovation future.

Why so little optimism?  Historically, governments don’t drive innovation.  With a few notable exceptions, governments are more apt to protect the status quo than champion change.  So, it should come as no surprise that early indications are that Obama’s innovation agenda is focused on improving the efficiency with which government delivers its programs and does little to promote the innovation capabilities of the nation.

Once again, your participation in the innovation poll has provided some interesting insight. A little skepticism can be a healthy thing.  Those who wait for Obama to solve their issues that they feel are inhibiting their ability to innovate are likely to be in for a long wait.  Those that take control of their destiny and execute to their own innovation agenda will be the winners in this economic climate.

With that in mind, our new poll probes to see how we are preparing for the tough innovation challenges by practicing our innovation skills.  You can find the poll in the left hand sidebar. Please remember to vote.

Once More on Innovation Versus Transformation

If Bruce Nussbaum’s recent posts on the death of innovation have done nothing else, they have generated a lot of reactions in the blogosphere.  Although that inner voice is shouting “Enough already!”, I can’t resist making one more comment on the subject.

There have been some very nice pieces written on this topic in past two weeks.  You can find some great examples of these at CounterNotions, Fleishman-Hillard Innovation, and here (of course!).  In Kathie Thomas’ post (Fleishman-Hillard), she referenced a passage from Bruce’s arguments for transformation that I found particularly amusing.  The passage reads:

"Innovation" implies changing what is. "Transformation" implies creating what's new. That's what we need today, a huge amount of totally "new."

Well Bruce, let me help you out.  Let’s crack open the dictionary and see what we find.  Hmm… Oh yes, here we go.

in•no•va•tion   \i-nə-vā-shən\ noun
1 : the introduction of something new
2 : a new idea, method, or device : novelty

trans•for•ma•tion   \tran(t)s-fər-mā-shən, -fȯr-\ noun
1: an act, process, or instance of transforming or being transformed
2: false hair worn especially by a woman to replace or supplement natural hair
3 a (1): the operation of changing (as by rotation or mapping) one configuration or expression into another in accordance with a mathematical rule ; especially : a change of variables or coordinates in which a function of new variables or coordinates is substituted for each original variable or coordinate (2): the formula that effects a transformation b: function 5a c: an operation that converts (as by insertion, deletion, or permutation) one grammatical string (as a sentence) into another ; also : a formal statement of such an operation
4: genetic modification of a bacterium by incorporation of free DNA from another bacterial cell; also : genetic modification of a cell by the uptake and incorporation of exogenous DNA

As you can see, Bruce, you have simply got your definitions backward.  Innovation is the creation of something new; transformation is the act of changing something in to a different state which may or may not represent something new.  If “totally new” is your prescription, then innovation is the cure for what ails you.

Meanwhile, the EU has pronounced 2009 to be the Year of Creativity and Innovation.

Enough said?

[Definitions excerpted from Merriam-Webster Online]

Is Innovation Dead? Hardly!

Well, Bruce Nussbaum of BusinessWeek appears to be in the process of rather firmly lodging his foot in his mouth.  In two recent posts on NussbaumOnDesign, Bruce has declared that innovation is a notion that has been hyped to death and that the new emphasis should be on transformation.  In ‘"Innovation" is Dead. Herald The Birth of "Transformation" as The Key Concept for 2009’, Bruce makes a case for why the concept of innovation is dead and presents the notion that transformation is more meaningful in the current climate.  He further expounds on the topic of transformation in ‘The Transformation Conversation: Is "Transformation" a Better Concept Than "Innovation" to Guide us Forward?’

With all due respect to Bruce, these arguments are a steaming pile of thinly considered pontification.

It can certainly be said that many terms come into the limelight and become the center of popular dialogue from time to time.  While most of these topics come and then fade into obscurity, innovation is one topic that has a history of becoming a focal point of conversation on a regular basis.  This is because innovation is all about the creation and delivery of value, and as such innovation is a timely basic theme for business.

It is for this reason that contrary to Bruce’s pronouncements, companies that are serious about creating new value, monetizing new opportunities, and thriving in times of great challenge and shifting climates are redoubling their focus on their innovation agenda.  Transformation is a term that can be used to describe some possible outcomes of innovation.  However, it is too narrow to capture the full scope of the possibilities available to agile companies.

Sure, companies that like to make noise publicly about the great things they are doing, but that really just want to feel good about not doing anything are always looking for a new buzz word to toss around.  But organizations that are serious about being the leaders in their spaces are not concerned with trying to find new ways to talk the talk.  These leading companies are always focused on walking the walk of value creation, of continuous redefinition of the rules of the game, of high-performance innovation. 

As to the laggard companies, they should make 2009 the year they stop talking about innovation and start operationalizing it.

New Report: Innovation Strategies for the Global Recession

Chuck Frey of InnovationTools and Renee Hopkins Callahan of Innosight have released a report titled Innovation Strategies for the Global Recession.  This report is a compilation of insights from many of the foremost practitioners and thought leaders of innovation.  You can find the report here.

A few of the themes highlighted in the report are cited below with some brief commentary.

Redouble your focus on customer needs
This is a recurrent theme in product development and innovation.  Yet, brilliant execution in this dimension is often elusive.  This is because customers are not always able to tell you directly what they need.  This is the big challenge to the innovation practitioner.  We need to develop the right listening skills to not merely hear what the customer is saying but understand deeply what is the opportunity.

Prune your innovation portfolio
I especially like seeing this theme highlighted because it is something that is often forgotten.  Every decision has a time, a place, a context in which it is made.  Even a great decision may lose its relevance when the business environment changes the context of meaning.  You can create new resources to fuel innovation by jettisoning the deadwood from your portfolio.

Conduct a disruptive threat assessment
This theme has two meanings as I see it.  The first is mentioned in the report.  Proactively identify new threats and eat your own lunch before someone else does it for you.  However, there is another angle to be considered here as well.  Many companies make the mistake of hunkering down in tough times to weather the storm.  This is especially true of market leaders who may have become complacent and therefore take their edge for granted.  This means that there many potential opportunities created as these companies open the door to the industrious disruptor.  Could that be you?

There are many other thought provoking viewpoints in the report.  Enjoy!