innovation playground Idris Mootee

Strategic Innovation And The Quest To Reinvent Management.

I spoke at a number of conferences the last few weeks on the same topic of Strategic Innovation in the Age of Reinvention. Reinvention is the word as every individual, practicing professional, multi-nationals, non-profits, education institution and government ought to be thinking about “reinvention”. We desperately need to “totally reinvent ourselves” in order to transform our economy, organizations, politics and societies.

Corporations adopted strategies 20 years back to outsource their production and resulted in loss of ability to innovate and compete. Many corporations cannot even define their core and what they are really good it today, their perceived competitive advantage was merely channel assess and a warehouse of intellectual property and patent documents.

Business leaders and governments are also experiencing a profound crisis of trust and legitimacy and all these factors have triggered a loss of confidence in traditional ways of doing things. The new world of reinvented strategic management requires applied design thinking across all management functional disciplines.

Today the very core of many management theories are being questioned and “management” is close to a point of failure. Leaders are looking to find something new to grasp onto in order to make sense of what’s going on and are looking to organize for a future of unprecedented uncertainties. Companies that fail to make the transition and missing industry breakpoints will be forced to play catch-up or risk being irrelevant or extinction.

One of the problems is we are still training our managers (MBAs) based on theories developed in post-Wold War II which was adequate when there were very little competition and technology was not a key drivers of competitive advantage. The M-form organization design is functionally oriented and the idea is every manager should manage a piece of the business as if optimizing each function means optimizing the whole. They are specialists and as as a result everyone is sub-optimizing the whole. Resulting in turf battles, lack of collaboration and unhealthy internal competition that causes satisfactory underperformance.

The strategic process occurring when the organization already realizes that it is facing an immdiate crisis, usually leads to strategic plans in the way of drastic cost reducing changes - closing of plants, cutting down of manpower, cancellation of investment plans or a change in their direction. These actions can only help them temporary. These are no changes in the present cognitive frame of the organization and these efforts may only enhance the sliding of the organization toward its doom.

The new world of reinvented strategic management requires applied design thinking across all management functional disciplines. The very core of many management theories are being questioned and “management” is close to a point of failure. Leaders are looking to find something new to grasp onto in order to make sense of what’s going on and how to organize for a future of unprecedented uncertainties. Companies that fail to make the transition and missing industry breakpoints will be forced to play catch-up or risk being irrelevant or extinction.

Successful Business Transformation Requires A New Logic To Handle Ambiguity And Change.

The future is scary and there are reasons for it. I have been giving a lot of keynotes lately to different professional organizations and senior executive roundtables and my keynote topic of strategic innovation and design thinking went beyond innovating to find growth and adapting to new economic, market, political and social order. I shared ideas on the future of economic development, the come-back of manufacturing, developing glocal innovation networks and creative or self-destruction of old establishments and the renewal and transformation of the modern enterprise.

There were never ending questions from the audiences on these topics. I can write a book on them, I guess I won’t have time. I hardly have time to get enough sleep. Everyone is looking for a theory to anchor. The future has never been so uncertain and almost any economic theories invented decades ago has become another working white paper again. The very old ideas of management and strategy taught in b-schools are so dated and when I look at the 800+ management books I have on my bookshelf, I am guessing 80% of them are completely irrelevant (50% were irrelevant when they were first written).

Some turn to other knowledge disciplines to look for sources of inspirations. The field of business strategy borrowed heavily from industrial economics and the filed of management sciences borrowed heavily on organizational psychology. What about "Strategic Foresights?” Where can we look for anchors and new inspirations? How about mathematics?

Fuzzy logic is the branch of mathematics that says that science isn't about absolute truth; it's just a heap of guesses at a reality that's much more complicated than that. The term “Fuzzy Logic” emerged in the development of the theory of fuzzy sets by Lotfi Zadeh (1965). A fuzzy subset A of a (crisp) set X is characterized by assigning to each element x of X the degree of membership of x in A (e.g., X is a group of people, A the fuzzy set of old people in X). Now if X is a set of propositions then its elements may be assigned their degree of truth, which may be “absolutely true,” “absolutely false” or some intermediate truth degree: a proposition may be more true than another proposition.

Professor Bart Kosko (Professor of Electrical Engineering in the University of Southern California's Viterbi School of Engineering and a Professor of Engineering and Law in USC's Gould School of Law) draws out some pretty interesting applications of that theory. He lost his faith and rediscovers it in science. The fuzzy future is part bog-standard libertarianism (with a side of Reaganomics), part extropian hooting-and-hollering, part small boy reveling in the Tolstoy and Clancy school of military exchange, and part Rube Goldberg engineering of unlikely theory, all bound up in hundred of pages of inscrutable equations in the footnotes.

My teaching on 'Design Thinking" goes beyond many simple (and shallow) creative tools. Forget those three wheels of design, technology or whatever. Those are complete BS. "Design thinking" is comfortable with change, it is disruptive and provocative by nature, and promotes new ways of looking at problems, often through new lenses. The strategic framing of complex and ambiguous issues requires thinking approaches that are free from organizational dogmas, codified limitations and old assumptions.

A large part of the design thinking process is to step out of roles conventions and free oneself from these dogmas and explore new frames of thought and approaches to problem solving. I am using "Design Thinking" to push us to rethink everything from scratch, including the tools of logic itself. Most people believe creativity means there is no logic. But what is creativity anyway? Or what is design? We need to look at the world or our business or social challenges with a fuzzy prism. It is like watching 3D movies without the 3D glasses. You can never make sense of the present and the future by using conventional lenses and logic.

In a world of full of chaos, unpredictability and fuzziness we need to look at the world through a fuzzy prism. Here is what Dr. Bart Kosco has to say, "How do you upload yourself onto a chip?" The fuzziest fact of all. The problem with current schemes in theory is a binary shock, when all of a sudden you die in meat, and wake up in chip. So how do you do it consciously? We could cut out that little chunk of your brain and replace it with an equally functioning chip, maybe a more powerful chip. We could keep doing it, while you're wide-awake. So in the end, you've completely transferred to a network of chips, and your brain is a bunch of sodium chunks in a jar of formaldehyde.

For the modern enterprise to evolve, survive and even prosper in the future, any change and transformation effort cannot just be putting on bandages. There is no one single future state to map against current state. There could be a range of different strategic futures and companies need to be ready for all of those. It takes a very different kind of transformation process when the future state is unknown.

You Think Innovation Is Hard. Business Transformation Is A Hundred Times More Difficult. And In Fact It Is The Number One Barrier For Strategic Innovation.

People think innovation is almost just about new ideas. Funny how many think Blue Ocean Strategy is a big wake-up call when all it does is communicating the very the basic and simple idea of strategic innovation – how not to compete with your competitors in the same game and instead create a new game.

A strategist has the choice between getting back into the fight with existing competitors or creating a new space when there is no competition AND no proven customer demand. This is the hardest part - "no proven customer demand" and let's see what the board has to say when you tell them that your strategy cannot be validated quantitatively. New game strategy is extremely difficult to make happen for a number of reasons:

• It is hard to convince the board to bet on a market that has yet to exist
• Successful founders CEOs are stuck seeing things with an old mental and underestimaing the threats
• It is hard to change the minds of people who wanted (and have vested interest in) the old business to work and not willing to give up
• It is hard to make the switch as it requires new mindset, capabilities and organization design
• It is hard to be credible using the the current brand entering or creating the new market space
• There is the question of how sustainable the new value logic from a customer and market perspective

Looking back at the history of industrial revolution or our information or technology revolution, red oceans vs. blue oceans or a better way to describe it is “today cash flow" vs. "future cash flow" or "defender vs. "attacker" etc. Avoiding competitions in the red oceans give rise to innovation opportunities that create new market space and could triggers a new round of industrial transformation. The author did not address the dynamics of the industry transformation.

Straegy is never that simple as red and blue oceans, organizations are increasingly inter-connected as they leverage brand, patent, talent, technology, knowledge, channels, products and services from each other often located in disparate parts of the world. These complicated inter-connections often prevent companies to reinvent themselves even the opportunity is obvious.

There are many hurdles and barriers for transformation including cognitive, resource, capabilities, motivation and political ones that prevent making a new game strategy implementable. Idea Couture Brand-driven Strategic Transformation goes beyond creating, communicating and maintaining a sense of identity and belonging for the employees, we bring foresights into the process and connect the align the brand with the business strategy and the strategic futures.

The brand is used like a savings account for emotional equity while we develop an engaging and energizing feeling of commitment to the organization by creating and co-creating a shared destiny; this is where it creates the highest impact. Conventional visioning and mission writing exercises often fall short to drive transformation. The idea is to get executives and senior managers in front line employees to move beyond empty, slogan-driven communications, which are more likely to lead to detached cynicism than to engagement, and to help them develop a clear personal commitment to an organizational purpose that will reflect in all aspect of managerial actions.

Business transformation is the execution of an integrated, corporate-wide program aimed at aligning the present and future as well as the organization, strategy and brand, it ensures alignment and internal consistency by reshaping the leadership, strategy, finances, organization and operations of businesses as a whole. It is not a Power Point, it is the energy flow of an oranization.

There Is An Inherent Conflict Between Logic, Emotion And Creativity. So How Should We Deal With It?

When peope ask the quesion "Do you know the correct answer?" I don't like that question at all. It is not a smart question as a start. The biggest problem with our formal education systems is our over-emphasis on finding the correct answer to a particular problem. While the quest for correct answers helps us to function at work, it also impedes us when it comes to making the bigger, more important decisions, largely because many bigger, real-life business issues are ambiguous, complex and dynamic. If you have been around for over 50 years and have travelled to more than 20 countries and speak a few languages and have a few degrees under your belt, you probably know there is no right answer, may be a lot of wrong answers.

Creativity is not a license to be wrong (you have been reading too much Fast Company), strategy is not a license to be boring or lack of imagination (Reading too much HBR). A PhD degree is not a license to overintellectualize and being irrelevant to the real world and use words that you need to explain what you mean. And an MBA is not an automatic license to make key business decision, you need to earn it.

However an MBA does teach you a few important concepts if only if you understand how to apply them. You should know how to re-org your in-laws into a 'team-based family.' You learn to refer having babies as pilot market testing. You should understand the cost structure and sytem implications of starting a family. You know the cost of capital when your spouse decided to purchase a Hermes Birkin. And most of all, you know how to talk about your past relationships as ‘sunk costs.’

I definitely school needs to teach more creativity. Not the crazy useless exercises but applied creativity and design thinking in everyday life from science to economics. Today (and I should say it has always been) creative thinking is critical to business strategy and innovation; however, If you look at the top 20 MBA programs around the world, you will be challenged to find any courses, core or elective, which teach, train or even inspire students to be truly creative. Instead, most MBA programs and courses focus on numbers, analysis and the logic of deductive reasoning.

There is an inherent conflict between this kind of logic and creativity, and in most business settings, logic is usually quick to get in the way of creativity. Creative ideas can run into the walls of business logic because 1/ it does not quickly, clearly or at all connect to 2/ business strategists often operate within the boundaries of defined roles, and decisions are made based on those boundaries – they draw on what they know and what they have learned including formulaic behaviors, processes and the “best practices” that have evolved through mass consensus – to shape how they think and act.

That explains how many MBA students had Adam Smith on their reading list. The 18th Century idea that people – given their limited time, information, resources and budgets – act purposefully to maximize their own satisfaction is epistemologically central to business thinking. In Smith’s view, all human behavior is rationally self-interested and we are innately selfish. Thanks to this model convinces many how “easy” it is to predict individual or organizational behavior. It is not quite that simple.

When it comes to human behavior, this is where many economic principles, particularly Smith’s, break down. I am not rational (ask those people who work wiht me) and many of us are not. The economist's notion that people act rationally only implies that they try to act in ways that are consistent with their own personal objectives, even if those objectives seem absurd to outsiders. That's the beauty of being human. Read more about creativity in this coming issue of M/I/S/C - The Creativity Issue.

Does Management Needs Creativity? Is It A Gift Of God Or Product Of Preparation, Practice And Training?

This has been a very crazy week between meetings, conference calls with London, Mexico City, Shanghai, Seoul and Paris, magazine deadline and cover shoot, staff party, a number of other social events, and London Business School's worldwide alumni celebration took place last Thur in over 80 cities, and it was great to catch up with many familiar faces.

The next issue of M/I/S/C is the big "Creativity" issue - the magazine is doing so well and it is putting some pressure to keep up the quality. I started them magazine in a few weeks and operate it on a "zero planning" basis - meaning I do not have an editorial calendar, or editorial meetings and everything is sponstaneous. Scary thought for some. I was wondering what should I do about the cover last Monday. Decided to use a dancer instead of a model for the cover on Tuesday. Picked up the phone and called a dance school the same day and talked to Karen Duplise of Ryerson Theatre School (Performance Dance Degree Program) and went in for a quick casting the next day. Studio booked and shooting session scheduled on Thurs. Friday was for picture selection. I am pretty happy with it. You have to wait 10 weeks to see the next cover. Here's a peek.

Dance is like design, the question is always about how much art (the craft) and how much creativity. Celebrity choreographer Twyla Tharp choreographed Push Comes To Shove (1976) which featured Mikhail Baryshnikov and is now thought to be the best example of the crossover ballet. The crossover was a perfect example of creativity in a highly disciplined art. 

Tharp has written a book about creativity - The Creative Habit: Learn It and Use It for Life.  In the book she shared what she has learned about creativity and how those lessons apply to anyone with creative impulses. She believes that creativity is not a gift from the gods, but rather the product of preparation and effort. Some truth here but not sure I torally agreed with that.

 

Like to share a reprint of my interview with London Business School Alum News on new thinking that is crucial to innovation, first apprared in LBS Alumni News and then LBS IMPACT.

What do you see as your impact on the world? My LBS degree was my second graduate business degree. I was able to have the luxury to put more focus on the quality of the learning in one specific subject area rather than multiple foundation components. I was excited about learning from inspiring teachers such as Sumantra Ghoshal, Tom Stopford, Jules Goddard and many others. They inspired me to think about deep management and leadership and helped me to realise the difference between good managerial practices influenced by bad management theories and good management theories applied through bad managerial practices.

Business and government leaders are experiencing a profound crisis of trust and even legitimacy and that has triggered a loss of confidence in traditional ways of ‘managing’. The very core of many management theories is being questioned and ‘management’ is close to, if not passed, the point of failure. My mission is to help Fortune 500 companies make sense of what’s going on and to rethink, re-imagine and reorganise for a future of unprecedented uncertainties and opportunities through applied design thinking. I operate at the intersection of design thinking, competitive strategy and organisational change.

What indelible mark do you want to leave on the world? As a side project, I publish a design thinking and innovation magazine called M/I/S/C/ (Movement/Intuition/Structure/Complexity), the idea came to me when I was in Milan trying to decide what magazine I wanted to read on the plane. I really wanted one about innovation and change but the ones on the shelf were not hitting the mark. So I decided to start one. It is doing amazingly well selling in over 22 countries. Now we’re doing a Spanish edition as well as an iPad edition. I hope it can take on a life of its own and leave a mark by inspiring future managers and business thinkers.

What is the greatest lesson you’ve learnt? I learnt that it is very important to embrace failure. I should have failed more and more often when I was younger. But unfortunately people did not encourage ‘embracing Failure’. I didn’t take many risks and I played it very safe with every project I started. I did everything I could to make it work because failure was seen something that holds you back. I know now that you learn more when you fail often. Trying to avoid failure only prevents growth but once you alleviate that fear many more opportunities present themselves to you. Slowly, ‘failure’ is starting to gain acceptance and it will make future professionals much stronger and wiser.

What was your biggest mistake? Not listening to my intuition. It’s difficult to trust yourself when everyone and everything around you is telling you something different. Trusting your gut is one of the most important things you can learn. Also, not leveraging the opportunities that come with any crisis. Every situation presents obstacles but also opportunities – you just have to look for them.

What is the next step for you? I’m very excited about helping companies power into the future through design thinking. It is the reason I go to work (or the airport) every morning. Our company started as an experiment and is now fast becoming the most talked about innovation firm. The next step is to secure a global presence and build the next generation of leaders that will propel our growth. The future is exciting.

'Purpose' Can Consciously And Authentically Infuse Workplace With Positive Emotive Energy Beyond Money Can Buy. There Is No Strategy Wihout 'Purpose'.

Teaching and practicing strategy is what I love. Strategy or strategic innovation is like a chess game except the chessboard keeps morphing into different shapes and there are always players entering and leaving the game. My experience is that it is subject that is undertaught in business schools and least understood in the business world. It seems like my students at CEDIM Master of Innovation Program are all having a good time. And I got a bottle of Tequila from Carolos and Michael. You need that to teach innovation I supposed.

First you cannot separate strategy from strategic innovation, competitive strategy can sustain you but cannot leapfrog others. Second strategy has a soft side, such as the putting ‘Purpose’ into the strategy equation. You cannot differentiate around something that you don’t have a heart for it.

Finding differentiation is hard enough, making sure it is relevant and sustainable is even more difficult. Putting ‘Purpose’ into it is the most difficult, you simply can’t fake it. When it comes to strategy implementation, purpose is even more important. Often you will have to make very difficult economic trade offs, without that, you will simply make those decisions based on short term economic benefits.

If Zappos did that, they would not have offered one year return policy or have their call center in India instead of Las Vegas. These all add up to the happiness indexes of Zappos which is the core of its strategy. Strategy implementation is also iterative, a process inducing various forms of individual and organizational learning, because both external threats and strategic responses are shaping these decisions on an everyday basis.

What every organization needs to achieve enduring success and power up true differentiation is ‘Purpose’. It is critical and can break the most robust strategy if there is a lack of one. It is not a mission statement or something that hangs on the wall. It is core reason for people to come to work and to mobilize all managers and employees to act consistently, responsibly and decisively. It triggers innovative thinking and trustful working relationships.

‘Purpose’ can consciously and authentically infuse workplace with positive emotive energy can impact every aspect of performance. It is the heart and soul of strategy.

The New Game Of Strategy: Applied Design Thinking In Business Innovation And Transformation

Just when I thought I can have 2 days in an office then I realized I have to be In NYC tomorrow for a few days. I am writing this post on a flight after missing my connection in Houston, and just finished teaching a three days Strategy graduate course with a focus on strategic innovation and design thinking. What I did was bringing the Harvard Business School case study method of teaching and apply it to design thinking and innovation, it is really interesting and probably an innovation itself because innovation means going against the conventional analytical thinking.

The shift from teaching competitive strategy to strategic innovation changes how the case studies were originally written for. I am using the same teaching material but instead applying atotally different pedagogical focus – which is how to avoid the very obvious and how to develop and apply ‘New Game’ in strategy making. It was intense for the students but they were liking it. I theorize, practice and teach these concepts and so for me, it is not academic, it is real.

Strategy is never that simple as picking the right competitive positioning, segments or competing on different dimensions. It is often complicated because it involves changing of mindset and mental models – mindsets that inspire individuals and teams to think imaginatively, to take risks, to seek out, and to expand the boundaries of a business or redefining customer value. It is hard.

Then there are structural, systems and processes for sharing of ideas, sense-making of data and working together. This includes developing new perspectives and collaborate on ‘white space mapping’ which was never taught at business schools. The very nature of competitive advantaged has changed and I challenged anyone who tell me if they really have a real and relevant competitive advantage that they thought they have.

The information revolution continues and is enabling companies to easily (and sometimes cheaply) match current competitive differentiators and rapidly create new ones. The result is that competitive advantage is evolving from simply focusing on differentiation, low cost or focus. The idea is to do all, the stuck in the middle can be a desirable position if you understand the underlying economic forces. Most business school students and even professors hardly understand how to apply the Five-Forces properly and let alone adapting it to a very different business environment where speed, empathy and community become key strategic elements in addition to bargaining powers and competitive dynamics. We need a new framework that takes into consideration the use of community in business strategy development. I’ve used cases including Method, Microsoft X-Box, Loco Motor and a few others to illustrate the concepts.

I think I should start developing teaching notes based on the original case study but with a different teaching emphasis. Classic views on strategy include Joseph Schumpeter focuses attention on innovation and entrepreneurialism. He suggested that bigger the company the more resources and diversification one can bring to R&D and as a result get better return on innovation. Michael Porter, following Alfred Chandler, focuses attention on business organization and competitive strategy and introduces the concept of cluster to explain competitiveness.

Today’s the nature of strategy and competitive advantage is drastically shaped by strategic innovation -- powered by customer co-creation; desire of consumer to change the status quo and powerful social innovation networks; integrates customer deep into business organization; demand chain into supply chain and contrasts inter-firm relations in terms of market, and closed or semi-closed and open-networks.

The attempt to develop competitive advantage is only the first step. It is sustaining the advantage that is far more challenging. How often companies invested millions and millions of dollars to create barriers for entry only to find out they lasted only for a short a few months. Waking up one morning seeing that your industry value chain was being reconfigured and the expiry date of your business model was last week is not exactly a fun thing. If you find that every six months you have to innovate on something the market will embrace is too exhausting, it is time to embrace design thinking.

Design Thinking And Value Creation. Two Things That Every School Must Teach.

I believe design thinking is less about design and more about creative ways to create value. It should not reside in any particular type of schools. Any schools should be training people to recognize value when they see it or creative means to create them. Business schools may have an advantage of teaching people to capture value. We didn't teach students enough about what creating value means.

Idea Couture is now becoming more and more like a school, we’re training (or retraining) our people from wrong practices everyday. We’re also helping clients to look for hidden value and show them how to unlock them. We’re also starting external programs on design thinking so people can learn what it is beyond that yellow stickies and fancy buzz words.

I see Idea Couture as a place of design thinking projects, everything is a project and some shorter and some longer, always on and always moving, and always something to learn for everyone. There is no office, only project spaces, and workshop spaces. People work long hours sometimes, travel across the world, constantly learning from others and collectively pushing each other. High trust and high pressure. Plenty of fun and plenty of caffeine. Everyone needs to earn his or her credibility here; it doesn’t matter where you came from. Everyone is passionate about insight, design, strategy and innovation.

We will be broadening our partnerships this year with two schools and will be working with other to develop educational programs and events. We are operating in different intersections between design thinking and social thinking; strategic innovation and design innovation; strategic foresights and emerging behaviors. And I am making sure that we always have a few our own projects running all the time parallel to client projects.

Design thinking is part of our day-to-day problem-framing-and solving approach - in another word it is work. It is something that we preach and breathe. It is no buzzword or marketing slogan here, it is real. Design thinking is where D-school meets B-school. Why is design thinking unique?

Design thinking proposes a cross-discipline learning-by-doing experience. It allows us to accommodate varied interests and abilities through project/action learning experiences. The good and bad thing about it is that it is not a subject area you find in a textbook.

Design thinking integrates imagination into the strategy process. It opens up the future and invites us to look at uncertainties and allow us to be comfortable and working with many unknowns. Design thinking expects us to cope with inadequate information and multiple levels of unknowns in order to create a tangible outcome.

Design thinking is a dynamic constructive process in nature. It requires ongoing definition, redefinition, representation, assessment and visualization. It is a continuous learning experience arising out of a need to obtain and correctly apply knowledge to achieve goals that may change as knowledge of the problem; its context is acquired and new behavior unfolds.

Design thinking promotes empathy. It encourage the use of tools to put us in the shoes of customers and allows us to observe and identify any unarticulated and unmet needs. It puts users at the very core of everything. And we can use these insights to develop new knowledge through creative learning and experimentation.

Design thinking can create meanings. Power Point and Excel spreadsheets cannot not create meanings. Creating meaning is the hardest part of the design process; you're not going to get it right the first time. But you can iterate it, again and again. And you need to have something to touch and feel. Design thinking allows you to create things that you can experiment with and see what happens.. and in the process you may be able to find meanings.

I can go on and on. but have a plane to catch.

The Most Important Feature Lacking In ERP Systems Is The Kill Switch. If You Want Innovation To Happen Fast, Look For That Switch.

Innovation happening in different sectors, such as adcanced technology, government, social enterprise, multi-national corporations and non-profits is exciting. As we explore different organizational design that best support innovation, we are always missing an important ingredient for success, the human factor adn the system constrains. Ideas are easy and in many ways a commodity.

Ideas are cheap and the whole concept of a creative director is such a thing of the 80s, who is not creative. Who can afford not to be creative these days? Every design grads tell me they have lots of ideas and want to work for Idea Couture, I tell them we have too many already and ideas are in oversupply. Let’s talk what else you can bring to the table. It is usually followed by a 10 minute of silence.

As we look at innovation from coming up with new ideas to making them work, we have to be equally interested in the human factor and organizational design and structure charged with making ideas actionable. Our current organizational design and management systems were not designed to support innovation. Actually it is designed to work against innovation. Almost most components of our management systems are designed to improve predictability. In an idea world, we know what we want to be; we know how much it cost to build, and how much it cost to sell and how many we can sell. Then we align that with our resource allocation system. In an idea world we can predict out topline as well as bottomline and ideally over a period of 5 years.

We know all these are bullshits. We all buy into that and B-schools and capital markets all use the same bullshits. So these bullshits are fully institutionalized in our system and everyone ended up playing the system at whatever costs. As increasing regulations, management systems, business processes and efficiency initiatives become less flexible, new organized spaces need to be created in order facilitate product, service, and experience innovation on a global scale.

Any corporation can drastically benefit from a 24-hour open innovation network and the process of innovation can also benefit from this open ideation network – essentially, it would allow for innovation beyond product development functions. It is the new open enterprise. And it is time to press the kill button on your ERP and start thinking what an open enterprise will look like. Think about it, many innovation be in product or service opportunities span industries and business units, things can become complicated.

Even the line between product innovation / development and corporate entrepreneurship will blur and the mission extends beyond conceptualization and prototyping of a product, to new business design and business model. You might be interested to read the piece I wrote for PDMA on product development which was published yesterday. I talked about number of ways companies can organize around innovation and to what extent each model opens up outside the enterprise. Each model has its own merits and pitfalls and there is no one size fits all. It explains why some companies innovate more successfully than others? Please share your thoughts.

The State Of Design Thinking And The Future Of Management (And Education)

I’ve a lot of requests to speak to the business and design communities iabout the state of "design thinking" and how it is being practiced. Talking about what that means is one thing but practicing it in the real world is a different thing. Idea Couture is probably the first large scale experiment that was built in day one to apply design thinking in the most sophisticated setting. Here's photos of our SF office. I am really liking it. Still a lot of work needed and new talents to add.

I see Idea Couture as still a work in progress (and will be for another 3 years) and serves as real world laboratories in fostering collaboration between the information design, engineering, foresight, visual art and industrial design in applied complex business problem solving. Our firm practices reflective collaboration – bringing interdisciplinary and multidisciplinary teams tegether to visually model complex systems and industry structures to yield new insights and foresights, the results improve the quality of our thinking in a predominately right-brain biased world of decision-making.

I like to think of our offices as a global network of "encounter spaces” that design thinkers from differing disciplines are assembled together as teams to work on specific projects and share insights, uncover foresights -- it is a collaboration among the arts + design + economics + technology in support of clients who are looking to create meaningful differentiation, economic value and strategic impact through design thinking and design doing. It is basically the future of management. And the future of education.

I see serious challenges with people coming out from design schools (as well as business schools) and I wonder what are they teaching these people at some schools today. The missing interdependency of broader functions and the lack of visual sensibilities are impacting the quality of graduates.

Through art, students can learn to have alternative contact with any kind of knowledge or information about different thematic topics. When a student is interacting with a piece of art, he/she can live a holistic experience, with his mind by the symbols, with his/her body by the senses and with his/her heart by the emotion evoked. A piece of art is a very special because it carries the human history and provoke ways of developing perspectives, which is lacking in MBA education.

Teaching is an art, engineering is an art, urban planning is an art, photography is an art, business is an art, and design is an art. All have form as well as content, like a piece of art; therefore, a business person, a technology architect or a school teacher can be an artist, too. Both jobs can be creative, imaginative and communicative.

A new generation of hybrid-thinkers (art+business) is extremely valuable to companies and they will be hot potatoes. Why? They are hard to find and they are best positioned to solve many complex or wicked problems that are way over the head of people trained with one skill set. These hybrid or design thinkers (design doesn’t mean design as a craft taught in many design school) are the creative forces behind creative industries. They are not the creative types from ad agencies; they are real strategic creative thinkers.

At IC, our jobs are solving complex problems, helping our clients to deal with massive changes in consumer behavior, technological disruptions, global competition and many will face extinction unless they figure out how to innovate their way out of hyper-competitive landscape. That’s why we are recruiting people that we can train to become hybrid thinkers or design thinkers. I use the term interchangly. At the root of hybrid thinking is the ability to transfer - to use knowledge from one discipline in another. That's what I teach them to do everyday.

Adorno Refuses To Choose Between Music And Philosophy. Now Idea Couture Refuses To Choose Between Design And Business. We Wanted Both.

My dining room as well as other 6 rooms in the house are now turned into back office and soon we will move in the SAP servers. Between my work, hobby and personal projects my life is a mess and I really have no time to eat and sleep. The paper monster is taking over the house and the kitchen is the last defense…not for long.

On another note, I am very excited to recieve the advance copy of my magazine M/I/S/T which will be in newsstands in London, Germany, New York, Hong Kong, Tokyo, Sydney and every Barnes and Noble and Borders in a few weeks. I love the cover design and it stands out among other magazines. Why another magazine? I don’t know but I think it is just a good idea. What's next after a magazine? I have another idea.

I wanted to see a design-thinking magazine that talks about design and business as one. Design and business is part of our culture. Question for myself is if I have to ask Therodor Adorno what magazine should I publish, I think this is it. M/I/S/C is a about ideas, it is about culture, it is a magazine about business innovation and design thinking.

Every issue the content are organized around four key concepts: Movement / Intuition / Structure / Complexity (I jsut thought of the name one night while having ice-cream) The magazine original idea was originally devised as a straightforward collection of random thoughts around innovation, design thinking, business, culture and technology. It is for exploration of creativity, collaboration and co-created meanings that sits at the intersections between the culture of art, design, business, filtered by an unique editorial lens.

When it comes to media, I think I belong to the Frankfurt School. It has been more than 20 years since I last read the English translation of Dialektik der Aufklärung: Philosophische Fragmente (1947 Max Horkheimer and Theodor Adorno). The English title is called Dialectic of Enlightenment: Philosophical Fragments.

My favorite part of the book is what Horkheimer and Adorno called the culture industry. It was their contention that the culture industry was the result of an historical process that with an increase in technology (including mass communication technology or social media of today if you wish) there was an increase in the ability to produce commodities, which then enabled increased consumption of goods.

The consumption of mechanically reproduced cultural products—predominantly magazines and film—led to formulas of producing them for entertainment purposes, and it did not occur to consumers to question the idea that the entertainment presented to them had an ideological purpose or purposes. Consumers adapted their needs around these cultural products, and in doing so no longer knew of anything else that they might desire, or that there might be anything else they could desire. While we’re all part of the Facebook culture and occupied with media streams from everywhere, we don’t even notice that we are being manipulated (maybe there is a better word) and in fact even our lives are going through a commodization process.

According to Thomas Mann, Adorno refused to choose between music and philosophy throughout his entire life, believing that he was pursuing the same objective in two disparate fields. Sometimes I think about myself, I have been pursuing business and design my entire life and for a long time I kept them separate as two disparate fields. Now I realize it is one. Business is not just about the economies or making money, it is a great part of our culture, just look at Fast Company or better Monocle. Now business, design and technology are co-producing our culture and it is to be debated whether we’re destroying authenticity or promoting it. For Adorno, popular culture on film and radio did not bother to present itself as art. They were instead a business, and this in turn became an ideology “to legitimize the trash they intentionally produce”. Can we say the same for social media?

Design Thinking, Visual Sensemaking And Personal Transformation. Can't Separate The Three.

I was listening to John Seely Brown’s presentation last week in SF on his ideas about the future of learning and education. He is extremely well respected, now retired and a visiting scholar at the USC. His view of the world is very tech bias naturally as a scientist, struggling a bit in terms of understanding the world of large organizations’ behavior and decision-making. He was the Chief Scientist of Xerox Corporation and the director of the famous Xerox’s Palo Alto Research Center (PARC) for many years, it is worth a debate whether PARC was worth the investments from Xerox’s perspective but nevertheless it was a place where the smartest people worked on the coolest projects that still influencing us in our everyday life.

His perspectives on education is probably more interesting that his ideas on business. His ideas of learning mainly evolve around social learning, not only “learning about” the subject matter but also “learning to be” a full participant in a field. This involves acquiring the practices and the norms of established practitioners in that field or acculturating into a community of practice. He put a lot of emphasis on tacit learning and use examples such as the studio system in architecture represents a good example of social learning under the guidance of an established practitioner. In this system, students work together in a common space and peripherally participate in each other’s design process; hence they can benefit from their instructors’ comments on and critiques of other students’ projects and not just from comments on their own work. This sounds exactly like how we work at Idea Couture.

Clients often put an over-emphasis on the processes and transfer of explicit knowledge in the innovation process and neglect or avoid dealing with tacit learning and sensemaking. It is the opposite of what business schools teach and many find themselves uncomfortable dealing with what they perceived as unknowns. Those are not exactly unknowns, may be uncodified and unstructured.

Dreaming up scenarios and sensemaking of these scenarios are often the toughest part. Seeing bits and pieces of data and the ability to connect them together to develop visible “data maps” of what are making sense around us, it is the learning organization at work and often requires some degree of personal transformations or basic shifts in how we think, frame and interpret.

As Edwards Deming says, nothing happens without "personal transformation." And at IC, we’re trying hard to provide a safe space to allow for this transformation as a social learning community. Everyone is encourage to dream, but also asked to anchor themselves on the reality of business dynamics and competitive forces. In additional to imagining, we use design thinking and system thinking to avoid the quick-fix mentality that makes us "system blind."

Think about it, many of today's problems come from yesterdays what were considered creative solutions, and many of today's creative solutions will become tomorrow's wicked problems. The most perplexing thing is that many quick fixes are being implemented by snart people even though no one actually believes they address underlying problems or they work at all. But we still feel compelled to implement these "solutions" just to show progress.

Hey a bad decision is a bad decision, whether it takes a second or a month to make that decision. We need to learn to apply design thinking and sensemaking as part of our everyday life decisions approach and learn to use unstructured data to enhance human decisions rather than automate them. The mortgage crisis is partially due to the automation of calling the loans even though it may not be necessary. On that note, next month we will have training sessions on strategic framing and sensemaking for our folks ... design thinking at work.

 

People Talk About Building An Innovation Culture Mainly By Cultivating Creativity. Culture Of Innovation Is A Lot More Than Just Creativity.

Long week in our SF office running our Innovation Masterclass and it is extrememly intense and people are overloaded with ideas and learnings. Post sessions discussions happen in the evening in the bar unsupervised. We covered the whole innovation process from the fuzzy-front end to opportunity mapping to strategic innovation and social innovation, everyone is now well equipped to bring our core capability to the filed including our new team members in San Francisco.

The office is coming together very nicely and when I walked in I felt the positive energy. We may open up this training to outside people later in the year. First thing this week we started with defining strategic innovation as an organization’s ability to adapt and evolve repeatedly and rapidly to imagine, capture and execute on opportunities that emerge. To do that, not only you need all the mechanism to collect, socialize, deposit, filter conversations and stories, at the end of the day, you can have all the processes you need, but without a culture to empower it, it will not work.

A culture of innovation (another overused phrase) when done right (different depending on organizational and cultural context), can provide you with a competitive edge because it makes you more agile and increase your organization’s ability to sense and respond to change. A culture of innovation may has less to do specifically with new products, new processes, or incentive system. It is not about more ideas and more brainstorming or dressing something funny to go to work, or those weekly creative events. A culture of innovation is more than new ideas. It needs to be closely sitting next to the core and to some degree to be sustainable. This only happens when you treat innovation like you treat all other capabilities in your business.

If you have it, let the good times roll and you have a lot to celebrate. At Idea Couture, we make sure everyone understand what it means and it is part of our core and reflected in everything we do. Not about creating novel ideas, but creatively framing and reframing issues and challenges for our clients. You almost cannot separate an innovative culture with some elements of fun, but for us, it is more than fun, it is also about our seriousness about innovation. We take it very seriously at Idea Couture. And I am a pretty serious person (my business schools’ legacies). But that never stops me from making fun of other and ourselves. Ask my folks, I optimize every opportunity to make fun of everyone. A good sense of hunor is also a strategic capability.

Our partner in Korea told me that we are really good at bring tangibility to something that otherwise very intangible so people can act on it. So not only we do it well from both substance and style, we inject a strong sense of passion into it and people can feel it. We have so much enthusiasm for new ideas that not just cool but also transformational in nature. And I am quick to get rid of those who do not make sense and people won’t feel bad about it. They are never discouraged, as they understand that’s ok. The notion of experimentation and crazy thoughts are part of our everyday work.

All of us have a portfolio of wicked challenges in the back our heads that we want to solve; we also have a portfolio of ideas that constantly manifesting in our everyday dialogue; and accumulated sleep debt that we have built up over working on great projects and the travel (just learned this from Adam Ruben). There is a lot of trust and I do everything I can to empower them and support them, I don’t mean a few words of encouragement, I mean hands on involvement and showing them a framework to get started. I don’t think many CEOs do what I do. And that's why my sleep deficit is reaching a dangerous level, I need to restructure my sleep debt.

Apple Should Forget The Movie Studios. Go After The Banks Instead. I Want My iMoney.

This sign is up for our San Francisco office. The archtiects and the girls are working day and night to get this right and a lot of furniture are still in the Atlantic Ocean. Shipping furniture from Europe to US is always slow. Hey we need to get the righ stuff we need to wait.

Congrats to Nick Hughes (managing director of Signal Point Partners and LBS alum) for picking up the Social and Economic award at the Economist Innovation Awards a few weeks ago held at the Science Museum in London. Nick was recognized for his part in creating the M-Pesa venture in Kenya, a mobile money-transfer initiative – something that is long overdue in the world of banking unmet needs.

M-Pesa was first launched in 2005, allow people to transfer money, pay bills and save using a mobile phone, without NO bank account. Handset to handset money transfer, you would wonder why we don’t have it here. Now it is widely adoption in different parts of Africa with over 12 million users in Kenya alone. I see this is more than a technology innovation; it is a social innovation to facilitate economic development in the developing world.

Today, it still takes weeks to clear a check, transferring money is still a pain and fees are hefty. It is time for disruptive change. PayPay was great; never really get beyond the web. It should have been Twitter Wallet or Facebook Money that we are using now. Twitpay is one of those; the service has only 15,000 users to date. They are not the only one trying to attack the payment ecosystem, seeking out ways small and large to tear down the fortress the banks and credit card companies have built to defend their businesses.

PayPal is trying to harness the creative powers of the open Innovation to rethink payments. ClickandBuy's Facebook application allows Facebook users will be able to easily execute money transfers among each other and purchase Facebook apps quickly and conveniently. Another one called Square, a new company founded by Twitter cocreator Jack Dorsey, lets anyone accept physical credit card payments through a smartphone or computer by plugging in a free sugar-cube-sized device — no expensive card reader required. I don’t know why Google is not attacking this seriously, big markets and big money. I guess that’s the problem with bottom-up innovation and efforts are not aligned with opportunities.

And I'd rather using Apple i-Money and use i-Tunes to manage my banking. Steve, forget the movie studios..go for the banks!!!! I am looking forward to getting rid of my wallet…so I have more rooms for gadgets.

Off to San Francisco for IC Innovation Masterclass and BTW our street sign is up. Competitors alerted and we are in game. Magazine gone to the printer. New staff starting this week. Partnerships discussions with a few firms. Busy week and now looking forward to catch up with my couple of dozens of frineds in the Bay area.

I Miss Bruce Nussabum's Business Week's Innovation Pullout So Much That I Decided To Publish A Magazine Focus On Design And Innovation.

I was having a casual dialogue with a friend/client in London about strategy making and paradox of resources management between investing in today’s business vs. tomorrow’s business. As usual I went into explaining the 50 reasons why innovation is so hard for larger organizations (and the 50 tactics to deal with each of them). There is no simple and quick answer to that question; it is like asking how a company can become more profitable. The answer is growing your top-line and control your bottom-line. That doesn’t help. The same for innovation, the quick answer from consultants is separate the business and treat it like a new venture. Well yes and no. If only if it is that simple.

The answer lies in how strategic planning is being carried out today and company quickly ignore any of non-quantitative and non-financial data. And there are a lack of tools for them to collectively imagine the futures and sense-making of massive data in large organizational settings is another challenge. And how different organizational designs can allow the strategic agility needed to cope with external shocks. There are so many things in our current management practices that are outdated and even business schools are behind. 

My friend was complaining that he didn’t find magazines such as Harvard Business Review useful or interesting to read anymore. For me, I stopped reading that about 3-4 years ago, especially after they switched to monthly from quarterly or bi-monthly and the quality of the editorial was not as good as before. At least 90% of the content are not of interest to me anymore. Not sure if it is me or it is them. But I am sure they are doing well from an advertising revenue perspectives as well as circulation, it has gone mainstream and mass market and did a great job optimization every revenue opportunities from the content. But it is no longer a publication for senior management at least that’s not what I think. But it is a solid publishing business with a healthy bottom line.

On the other hand, MIT Sloan Management Review and California Management Review have not been able to get beyond being academic journals but produce very high quality academic content. Both are more managerially friendlier than the other 100 plus academic journals basically catered for small academic communities.

Strategy+Business is the shinning star and has remained to be extremely relevant for senior corporate managers and the editorial and layout design is far better than HBR and others. I think it is the only magazine that circulation was still growing last year.  I think they get it right. I personally like the editorial direction, design and the format. There's a very consistent senior management perspective across all issues and riogr in editorial selection. And it is not academic, very practical in everysense.

Rotman’s magazine offers a lot of fresh ideas and has the most up-to-date ideas on management, although the design is pretty bad from a readability perspective. It is just difficult for me to read. I suspect their circulation base is very small.  LBS' Business Strategy Review has gone through a completely redesign and not sure why they decided to go for a smaller size, but it has become less academic and more managerially relevant, always there is a seriousness in it the LBS style. Very global in nature and almost aims solely at the C-suite and policy makers.

And then there are Fast Company, Fortune, Forbes and Business Week.  Other than Fast Company, all are very traditional business magazines and other than Fast Company, everyone is getting a bit boring. I don’t have time to read magazines, but I always love having a copy of Fast Company lying around and occasionally pick it up and scan for 5 minutes. There are also a dozen of local magazines un the UK, Netherlands and Australia on design and innovation, but they are very local in nature.

In view of that, I decided to publish our own magazines.  Here’s what I think is needed: We need a magazine that talks about innovation including design, art and business, which have traditionally been viewed as three totally different domains. There is no innovation magazine out there, Business Week used to have an innovation section which I like so much when Bruce Nussbaum was still there. That should be the future of Business Week. They missed that opporunity big time. Unfortunately Bruce left and there was a big restructuring. So far, only Fast Company is the sole business magazine that bridges the gap between design and business.

The idea of this new magazine is bring design and business together - the d-shool meets b-school idea. I want to see a magazine that is easy to read, non-academic and professionally relevant, provides alternative concepts and ideas on design, strategy and innovation, blurs the boundaries of design and business, talks design not in technical sense or as a craft but as a way of problems solving, introduce new innovation frameworks and processes to power up strategy, illustrated by contemporary photography and delivered in a cool and edgy editorial design. Some one mentioned it will be Wallpaper plus business and innovation and minus furnitures and fashion. Interesting. I do want a nice cover that makes you want to leave it on your coffee table. That’s kind of the implicit goals and will probably take us a few issues before we get it right.

Here's a frist glimpse of the cover, the cover pic was shot in Milan and the cover model was chosen from a dozen of models to best reflect elegance. The magazine name MISC stands for Movement/Intuition/Structure/Complexity. The name just came to me one night while I was talking on a conference call with a client, but I like it. First issue in newstands late Jan/early Feb 2011 in UK, US, Canada, France, Singapore, Hong Kong and Japan. Here is a preview of the different cover designs. I am excited about it. And I really need to get some sleep.