innovation playground Idris Mootee

Success For Organizations Comes From The Ability To Drive The Strategic Transformation At The Most Critical Points. “Business As Usual” Is A Very Dangerous Expression These Days.

What is "Strategic Transformation?" For some, it is the framework and process of altering the way in which an organisation does business using new technologies and processes. For others, it is the effort to develop a measured, goal-orientated response to marketplace events, or to improve performance by becoming more customer-centricity. But the most stratgic reason is the design and execution of an integrated, future-oriented, enterprise-wide program aimed at moving to an improved future and achieve stretch goals.

In the multitude of voices and noises, strategic and organizational paradoxes, CEOs and their executive team need to learn to navigate, transition and lead their organizations into a new future. Companies that failed to transform their organizations because they put too much emphasis on tools and technology and not enough on foresights, mental mindsets and leadership behaviors. Their leaders failed to develop the shared visions, values and beliefs that serve as foundation for dynamic culture and to engage all employees to co-create the new culture and to provide opportunities for them to initiate and participate in a shared destiny.

They need to start by identifying the specific beliefs and practices that need to be changed, challenge them to create new “experiences” that form those new belief. Convincing someone to change is hard and trying to convince and mobilize a large organization to change is an almost impossible task. But it is still possible. You just need to know where to start and where to push and pull.

There are many reasons why transformation efforts failed, because they over emphasis on the business processes redesign and not enough attention on the underlying human behavior. Strategic transformation is not just about helping people to rethink and reflect on the past and the present; it is also a way to prepare people for future unknowns.

The heart of any transformation lies in finding and embedding the “purpose” of the business and what they individually must do to accomplish that purpose, how to build trust, create networks and innovate. In the course of Idea Couture six years journey of helping large companies to transform, we determined that to create a new level of performance or jump back into a growth mode, a few things matter most. Most transformation will include building a culture of purposeful innovation and high performance. They consist of the following core components: mental mindsets, purpose and meanings, innovation practices, co-creation and measureable results.

When mental mindsets are anchored on a perspective of the future and the executives, board of directors, managers and employees are all aligned, they generate managerial actions that, in turn, lead to superior business performance. An exciting future state and here executives can leverage this to create the cultural momentum that is critical to ongoing innovation success. This cultural capital can help companies to deal with the ambiguities of technological disruptions and external market uncertainties and to direct their energy to adapt to fast changing competitive conditions. Facing increasing complexity applying a single-dimensional focus is absolutely fatal. And any attempt to emulate a successful strategy of your largest competitor is also fatal.

Transformation leaders understand the importance of using “strategic foresights” to help their companies maintain relevancy to the future and it is an ongoing attempt rather than a one-off exercise. Transformation leaders also understand the need to invest a disproportionate amount of time in bringing the organization together and function as one, not as departments or business units that ended-up sub-optimizing the business performance.

Executives in lower-performing organizations complain that they don't have time for the "soft stuff" and needed all the attention for a real business strategy. Yes we need a strategy on where and how we compete and what part of the value chain we can leverage and how to leverage from the economics of scale and scope. Executives are sometimes confused about managing conflicting strategies and they think they have to make difficult trade-offs. It is 100% possible to manage two conflicting strategies without keeping them apart. But to do so first required to develop a strong culture of trust and the ability to accommodate a new management mindset. That's why trasnformation is needed.

Apple's Biggest Challenge Is What To Do With $100 Billion. Just Write A Check And Buy Sony Before They Further Destroy More Value.

Apple's current biggest problem is not the next iPhone. It is the 100 billion dollar problem. Microsoft had been criticized for years for having too much cash and not putting them to use. They eventually started paying dividend starting 2003. It is not easy to deploy them in a way that creates the expecatation of return Apple's investors are expecting. I think they will eventually start paying dividend.

With Apple's war chest hitting $100 billion soon (currently around $98 billion but was originally estimated to be $60 billion) investors are asking the same question: What are you doing with the money or return it to shareholders? Putting that kind of money to work is not easy. It is over $100 in cash per share. $100 billion is roughly the same as California's 2012-2013 state budget and can literally buy a few countries or pay for a year of student loan for every college student in America.

Apple's core business is like printing money. Apple recorded a $16 billion increase in cash sequentially and there is no sign of slowing down with 66% rise in revenue with 36% rising expenses. That makes Apple the most valuable company at $300+ billion, which is close to the sum of the market cap of three computer giants: Microsoft ($200.2 billion), HP ($72.5 billion) and Dell ($29.2 billion).

Unfortunate big acquisitions don’t always work because of many reasons. And there is no magic formula for successful strategic transformation post acquisitions and most companies ended up underperforming post acquisitions. The problem is the inability to articulate the strategic logic of an acquisition and developing an organization and cultural integration plan.

At Idea Couture, we help acquirers in visualizing the future state and show how the pieces fit together in a very tangible (and credible) way. The future strategy is manifested in a well-articulated way showing its value creation potential. It is done through applied design thinking. Power Point cannot do the job. We bring the future state to the present to excite shareholders, employees and customers.

Apple’s history of acquisition has always been late stage start-ups that bring unique capabilities or technologies rather than revenue. With $100 billion you can literally buy up every early-stage start-up you want. Google has $44.5 billion for comparison.

Apple can use the money to purchase all patents over the years developed by Kodak, Research In Motion, Xerox Parc and Erickson and that can only account to a maximum 15-20% of the cash that they hold, but that patent portfolio allow them to sue anyone competing in their space in the next ten years.

Or Apple can use the money to buy up HP and Research In Motion and swiftly end Windows dominance in the enterprise market? Or buy Amazon and Netflix to reinvent and dominate content distribution.

Or Apple can just buy Sony? Funny Sony was looking at buying Apple when the company was at its worse shape in 1995. I still have a strategy deck I produced in 1996 about how Sony can leverage pieces of Apple and how the deal can create value for Sony. Now Apple could easily afford to buy Sony with its market value around $18 billion. If I am Apple’s CEO, that’s what I’ll do. Sony has been poorly managed from a corporate strategy level but does have great technologies, products, brand and talents. I would sell the studio business and concentrate on entertainment appliances. This deal can immediate further increase Apple's enterprise value. The integration part would be a nightmare.

Or just make it easy, Apple can acquire with cash HTC, Sony Ericksson, Samsung, Nokia, RIM, LG, Motorola, Nintendo which together has a combined value of roughly $93 billion. That's a lot of fun to figure out what you can do with these companies. And you still have $7 billion left to play with. Perhaps acquire New Balance for $400mm, Jobs probably would like that idea if he is still around. We miss him.

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.

Can We Really Quantify Future Innovation Opportunities? Or Is It Just A False Sense Of Predictability?

What a month, from Phoenix to Cincinnati, then New York City, then Monterrey (Mexico) to Moscow and now in London. Meetings after meetings and I don't know where I am. It is like that guy in the movie. I need to have a week sitting down and do some work. Perhaps next week. Saw my magazines in Selfrides and it is flying off the shelves everywhere. We still need to expand the distribution from the current 22 countries to 30. And getting the iPad version out. This has been a productive couple of days in London. I realized I haven't have the chance to work with Morgan for a long while. We just finished our deck for tomorrow's presentation. It is going to be a good one. And really looking forward to meet some of the people there again. Just adding a few more slides on intuition. I always love talking about this topic. And I like Morgan's Burberry shirt.

Henry Mintzberg once suggested some twenty years ago that managers need more than just analytical skills to do their jobs well; they also needed the intuitive (right brain thinking), he was right but he didn’t write a book about it. He should have.

Intuition is hard for many and good use of intuition often requires deep introspection. Chester Barnard in The Functions of the Executive (1968) suggested that managers use non-logical decision-making, which balances rational and intuitive.

“I have found it convenient and significant for practical purposes to consider these mental processes consist of two groups, which I shall call ‘non-logical’ and ‘logical’. These are not scientific classifications, but I shall ask you to keep them in your minds for the present, as I shall use them throughout this lecture. In ordinary experience the two classes of intellectual operations are not clearly separated but meld into each other. By ‘logical processes’ I mean conscious thinking which could be expressed in words or other symbols, that is, reasoning. By ‘non-logical processes’ I mean those not capable of being expressed in words or as reasoning, which is only known by judgment, decision or action."

Not that I suggest we need to start a MA degree in Strategic Intuition. Although it might attract a good number of students, I think it should be part of business school foundational teachings. I teach this at my Harvard Design Thinking Program and other in-company programs, people were excited as if they have just discovered this untapped potential. Intuition is something that should be reorganized and managed like any other element in the decision-making environment, particularly in a team environment.

The over reliance on quantitative analytics are common, numbers are very important, but it needs to be combined with other things. Often the most promising innovative ideas with long-term strategic upside are exactly those that are impossible to quantify. And they ended up being shelved.

Freek Vermeulen of London Business School just wrote a very good piece on how insisting on early quantitative validation is creating a problem. He said the reason why companies are still so eager to see numbers because the long-term, uncertain aspects of strategic investment decisions make us rather insecure whether we’d be doing the right thing; therefore, we really would like to see some numbers to lull ourselves into the belief that we’ve been thorough and have uncovered the facts and have a solid basis on which we’re accepting or rejecting the proposed course of action. Of course that’s just make-belief (you can make numbers say whatever you want them to say) and may make you quite myopic; missing the things that are difficult to quantify but just as important.

He is obviously not suggesting that we should get rid of numbers in strategy altogether. Heck no; forcing yourself to go through some sort of quantifying exercise can sometimes make you uncover and realize things that you hadn’t thought of before. He suggests that once we’ve carefully and painstakingly produced all the numbers then toss them aside and sort of make a decision based on our gut feel and experience. Very good advice.

Do You Practice Intuition? If So, Do You Know Where It Comes From? Do You Keep It Secret?

Do you trust your intuition? And if so why? Intuition is most practiced and least understood. And why some people are betting at it and some not? Can intuition be rational and strategic? Is there something called ‘strategic intuition?’ What makes your intuition strategic and mine not?

Most see an interesting connection between innovation, imagination and intuition. Often intuition may even exert a paranormal or even magical influence on everything new and unknown. What do we mean by intuition. In Educating Intuition Robin Hogarth describes various ways we can improve our intuition. He points out two notable impediments to the education of intuition. One is the presence of confusing or “wicked” environments where feedback is unreliable. The other is the limited scope or “domain specific” nature of intuition. Intuition can therefore inhibit innovation because such obstacles exist.

• A person who has a giant database of ideas and insights and supported by fast access to those information as the brain processes these knowledge in a non-linear way and as a result the person is more likely to guess correctly in a more educated than others who do not posses the data points and fast access. In another word, a large database, faster access like a SSD drive and better classification of data.
• A person who has a strong theoretical or philosophical understanding of why things happen through life experiences or as a scholar and therefore can quickly draw on those theories and associated metaphor and as a result can look at these very complex problems and not overwhelmed by its complexity. Getting right to the core and a possible decision pops out disguised as intuition. They perceive wholes and compress much into a flash. Philosophers and prophets are often intuitive. It is wisdom secretly disguised as intuition.
• A person who has a strong logical and deductive reasoning capabilities and it to eliminate the impossibilities and therefore left with the more realistic options and by probability the person is in a better position to conclude. This can be dangerous as the person can be very wrong if the answers lie outside conventional logic. But in 90% of the time, the guess is correct due to the narrow nature of the problems. It is fast logic disguised as intuition.

Intuition is a very general word, it is not taught in school (may be art school) and we don’t know what prompt some rely more on it more and some completely ignore it.  The value of intuition is not celebrated in the world of scientific management but commonly practice in the world of design thinking. Many CEOs made important decisions based on it but won't admit it. In the world of data-dominance, it is not easy to find a place for intuition, you can still use it discreetly. Or just call it innovation or sense-making.

Apple iPad Is More Than A Tablet, It Is A Window To New Behavior That Has Yet To Fully Emerge. And I Want A New MacBook Pro With A New Design Before The Summer.

Microsoft and Apple are both great companies for different reasons and operate under very different philosophies. The interesting thing is as Apple grows bigger and bigger, will it begin to behave like other large mature organizations such as Microsoft or IBM? Ever since Apple market cap surpassed Microsoft, it signified an indicator that the investment community was sending a message to the industries..

But Microsoft is still a much bigger company from both topline and bottom as well as other measure. What it means, now Apple is given the currency and blessing to go out and play the next game. Who’s the next big target? I don’t think is Microsoft, I don’t even think Apple sees Microsoft as competition. They are onto the next game.

I have three companies in mind that I think Apple will be out there trying to push out. Apple was set out not to beat Microsoft, but IBM. Are they still on that mission? Apple is still a fraction of IBM’s. Both companies have significant customers lock-in for different reasons and both are tied into the fabric of our economy. Let’s face it, the primary reason for Apple's stellar growth and valuation was due to their track record of repeatedly innovating and creating new products while at the same time maintaining a long-range vision – most companies do one at the expense of the other.

Apple's advantage is that it has a good view of the end game and driven by strategic foresight – not by today’s balance sheet and they can afford to be strategic. The iPad is not important not as a tablet, there are enough tablets out there. It is the first member of a growing family of 21st century computing appliances from Apple that co-creating a new behavior. Much like the first generation iPod. I think there will be a wave of innovation from the industry as people realize this is not just another computing device to fit between a phone and a computer. Many still don’t get it when I talked to people in CES. Tablets are dead, iPad is an appliance.

I am looking forward to the next gen MacBook Pro and I hope we will see something in 3 months. For sure it will be thinner, Light Peak will replace firewire, and the DVD drive will disappear (it should) and equipped with solid state drive. he next update to its MacBook line to make way for Intel's Sandy Bridge processors. There is 90% chance that Sandy Bridge processors will be used on the 13” MacBooks Pro, it is the first to feature a graphics chip grafted atop a processor. I hope they provide a choice of different colors (unlikely) such as silver, white and black. I will take black. I don’t think they will upgrade the 15’ and 17” until later in the year. I don’t think MacAir will survive long when the MacBookPro gets thinner. It is too pricey.

I am interested to see when the revenue stream from the iPad will eventually overtake the Mac's -- much as the iPhone did a few years ago and the iPod did before that. MacBook will eventually become just be a small business unit of Apple.

Powerful And Affordable Real Time Data Mining, Visualization And Interactions Are Powering Up A New Culture Act - And Enabling "Infovation".

Just landed in Rhode Island and spendin the next 2 days in Providence, long working sessions ahead, expect to some productive knowledge exchange. The topic will be around where arts meets science, design meets technology.

We talk about how information changes our life and how it affect the way we make decisions both as individual and as a team or society, I think we are still unaware of the true power of change information visualization can have and the impact when applied in an interactive and social mobile settings.

Imagine a scenario everytime a politician suggests an idea and you can see realtime information in simple graphics visual data to confirm his/her coment or when a company makes a statment you can see how other respond with an instant trust index? That's a very likely future, an idea which I am working on. Can't say more.

And I don’t mean just data visualization such as bar chart and 3D chart etc, primarily it is the study and application of the visual representation of quantitative data, meaning "information which has been abstracted in some schematic form, including attributes or variables for the units of information."

Infodesign of infographics is actually different (it is like when I was trying to explain the differencne between customer experience and user experience/usabiity 10 years ago) from data visulaization. Information graphics (or so called infographics) instead of visualizing data, it is the strategic use of data by incorporating interactions, icons, charts, diagrams, graphs, tables and maps to present information that could bring new knowledge and sense making. Not only it helps to explain oterhwise difficult to understand data, but also illuminate and explain system complexities or system relationships in an easy to digest manner.

This is not new, in our human history our ancestors created cave murals and giant paintings to show us what was happening including what their understand of the the world, an event or even the universe. The power of infodesign lies in its effectiveness in simplifying complex data into understandable visual representations that can be universally interpreted.

The power of real time interactions with live data brings the potential to a whole new level. The human minds are real time computing machines that works to constantly changing and creating value and meaning of objects; the interactions between human brain and semiotics is conducted every time we see a visual representation of a scenario and makes possible of expanding our human cognition to absorb large amounts of data at just one single glance or click.

Here comes the most interesting part, infodesign is powering up an “infoculture” where massive real-time socailly digitally distributed (useful and useless) information is enabling a new form of cultural act. It is where science meets arts, and will continue to power up new possibilities as we learn how to use them. I will be the first one here to call it “Infovation.” Remember you hear it here first. Will write more about it next few days.

One more thing, how many schools out there actually teaches information design? Not many. We are still training people yesterday's skills for yesterday's job. No wonder it is hard for designers to find work. I think design schools should be paying for the continuous education of their graduates, becasue they never trained them enough or properly in the first place.

The iPhone Is A "Creative Destruction". So Is An iPad. So What Do We Mean By "Creative Destruction"?

Earlier this month Michael Tompert, a San Francisco digital imaging artist, violently destroyed some brand-new Apple products for the sake of art and the results are a collection high resolution prints with a statement "our relationship with fetish, fashion, freedom, and bondage.

The collection of giant prints including one called "Targeting" that shows a 3G iPhone that's been shot with a Heckler & Koch handgun. I guess we can call it “creative destruction.” What’s “creative destruction?” It is of communist origin --a term originally derived from Marxist economic theory which refers to the linked processes of the accumulation and annihilation of wealth under capitalism. These processes were first described in The Communist Manifesto and were expanded in Marx's Grundrisse "Volume IV" (1863) of Das Kapital.

It is about economic innovation, the way in how capitalist economic development arises out of the destruction of some prior economic order. Only since the 50s the "creative destruction" has become more readily identified with economist Joseph Schumpeter who popularized it as a theory of economic innovation and progress. The idea is company needs radical innovation (radical new proposition and business design) and even the most exceptional, enduring corporations cannot continue to beat the capital markets indefinitely – there is no built-to-last. In order to continue to maintain excellence and remain competitive, they must adopt the dynamic strategies of discontinuity and creative destruction. In a simple word-innovation.

Foster and Kaplan (McKinsey) in the late 80s examined more than 1,000 companies in 15 industries and discovered that even the best-run and most widely admired companies are unable to sustain market-beating levels of performance for more than 10 to 15 years. This was in the 80s’, with today’s technological progress, we are talking about 5-8 years.

Their research suggested that: "Corporations are built on the assumption of continuity; their focus is on operations. Capital markets are built on the assumption of discontinuity; their focus is on creation and destruction. The data present a clear warning: Unless companies open up their decision-making processes, relax conventional notions of control, and change at the pace and scale of the market, their performances will be drawn into an entropic slide to mediocrity."

Every company should engineer its own “creative destruction” while they have the resource based to do so and have the luxury to examine and explore new organization design and new mental models. At Idea Couture we use strategic foresights and scenario development to show clients the future of "creative destructions" that could happen to their industries. They are so real and executives can actually feel the future. May be an idea is to take a framed copy of their vision and mission statement, shot it with a Heckler & Koch handgun and hang a giant high resolution print in the board room to remind them. More business for Michael Tompert and his digital print shop.

In 2012, Facebook Will Give New Meanings To 'Social Services' And Will Pass Yahoo In Revenue And A Key Player In Mobile Space.

A week away from Christmas and we're not slowing down yet. Still plenty of things going on and I plan to spend the next 5 days in the office (a first in a year). This is the time I usually make predictions and I am working on a long one to share with our clients. Give you some ideas of what I am looking at:

At the end of 2012, there is the mass push to the clouds and consolidation will happen and India will probably own 25% of the world’s market. Not finished with my spreadsheet models, 25% is close.

At the end of 2012, the idea pf 'customer engagement' will finally emerge as a disciline that sits on top of all CRM, direct marketing, brand activiation or social media marketing activities. Big agencies continue to struggle as they are far behind the curve.

At the end of 2012, social innocation will hit a new high as corporations come to realization that CSR needs to be more than just corporate public relations. It is about issues management, stakeholders dialogue and social empowerment through emerging technologies and interactions design. True experts will emerge to help corporations to navigate this landscape.

At the end of 2012, Yahoo will not exist as a public company and will reach the end of a slow death; its valuation would dropped drastically and ultimately get acquired. The shareholder value destroyed over the next 18 months will be significant and they wish they’d sold it earlier.

By the end of 2012, smart phones/pads will significantly take away from PCs as the most common Web access device globally both from consumer device sales and usage.

By the end of 2012, someone will figurte out how to use iPad as a platform for education. It is a school for everyone and everywhere. Earn your credits or even degree with just your iPad. And free iTunes music for high score students?

By the end of 2012, Facebook will be a key player in the mobile space. What’s the big idea? They will have a platform that includes hundreds of standalone cross-platform applications for iPhone, Android and Blackberries. They would provide mobile developers with tools and support to create and push new 'social' apps.

Today Facebook generates only a little less than $3 per user per year in revenues while Google generates about $25 per user per year (more than $25 billion in revenue from about 1 billion users). Facebook has plenty of rooms to rethink and create new “media” space to capture some of that money. Facebook targeting potential is more attractive and it is an always on for many user (including me) already, it is far better than TVs.

But the bigger disruption is outside the 'media' space; it is payment and shopping – FB social shopping and payment mechanism. Imagine if they plug in product targeting (with what they know about you) and allow users (to be categorized as searchers/opinion shapers/advocates) to use some form of Facebook money to pay for it. Do the math here: FB Shopping + FB Mobile + FB Money.

Facebook will give new meanings to 'social services' and create new shareholder value. Facebook’s value (currently privately held valued between $35-$50 billion) would surely surpass Yahoo’s (publicly held current valued at $21 billion with operating margin at 12%) revenue by end of 2012 and Facebook can get a margin of 37%, multiply that by a moderate 14X P/E and you get a sense of what’s Facebook worth.

If you're interested in trends and forecast, here's a company TrendHunter that produced a good general trend reports and used by many firms. Will provide a review of some of the themes in the next two weeks.

It Is Hard To Decide Between Getting The "Best" And Getting "Enough". Muji Thinks "Enough" Is The New "Best".

I am not a superfan of Muji but I am very impressed with their last three years of repositioning or finetuning of the brand and after spending 15 mins in one of their stores in Tokyo I can see why they are doing well. The concept is exporting well to the US too. If you’re in Tokyo, check our their fashion line, you’ll know what I mean. What attracted me was Muji Lego, not sure how they get away with it. Why Muji Lego? Tempted to get one but I decided I have enough Lego.

What I like most is the Muji-to-Go concept stores. There is one in Narita Airport and one in JFK Airport too that I know of but there are more. It is a small footprint store focus on smaller items and travel accessories. I did find a few interesting things there while killing 30 mins in Tokyo's Narita Airport. The sheer simplicity of design is not boring; it carries some novelty ideas and there is a sense of design in everything.

Not sure people know much about the history of this brand; it began as a generic brand old in Japan’s Seiyu department stores covering some snacks and household stuff, not very exciting then.

The last five years it came back as a cool movement with more than 8,000 SKUs. In 1989 it was incorporated as an independent company and since it sent through some ups and downs. Muji represents human ingenuity, efficiency and put our bottomless consumption on display 30,000 square feet at a time. That’s an interesting way to put it. They don’t’ see Muji as a brand. Muji’s philosophy is that they create products with a view toward global consumption of the future. This means that they do not create products that lure customers into believing that "this is the best" of "I must have this." We would like our customers to think that they don’t need the best but this is "this is enough." The "Best" becomes "enough". I think teaching people “enough” is a very interesting idea. Credit card companies don't like the idea for sure.

We have quite a few "Mujirers" in our offices and they are used to small space, highly practical but good taste for simplicity. Cheesan is a big fan I know. Not sure it is a sign of post-materialist shift or people simply like to make things simple. Or a bit of both. Here’s excerpt from Muji “Unless we adopt values informed by moderation and self-restraint, the world will find itself at an impasse. All people living today deep down are probably already beginning to consider greater self-restraint as a way of life.”

And by the way, Muji does not stand for low price. Spend more and get less is part of the idea too, but they don’t say it that way. Or call it smart consuming. Buy less and get more? Oh get the Muji iPad app, it is nice and free.

Japan's Structural Barriers To Innovation Is Hurting Them. Korea And China Are Just Around The Corner Ready To Take Over.

It is nice to be back in Japan this week although I am just here for 3 days and off to Seoul. Went to this restaurant in Subuya,impressive design where the kitchen is raised and opened like a theater and the manager is the conductor. Although he looks more like a headmaster standing on a podium. I wish the chefs can come out and sing a tune or two once 30 minutes.

I used to spend a lot of time in Tokyo 15 years back and it was probably the most innovative city in the world for a long time. Is this still the case? I don’t think so. Many ask me the question why is Japan so innovative and at the same time so conservative? Obviously many top Japanese companies are struggling with the speed of change outside Japan as well as the switch to software-based competition. As a gadget geek, Japan was a paradise I don’t find much excitement these days when I walk the streets of Akihabara, I feel they are now years behind the curve. May be because I am ahead of the curve or my expectations need to be managed.

Here I define innovation as "the application of knowledge in a novel way, primarily for economic benefit," Japan, Switzerland, the United States and Sweden used to the top, I think Korea and China is quickly moving up on the list. Japan as a resource-poor economy has long taken an 'innovate or die' approach, but the legacies is hurting them. China is not the second largest investment in research second only to the US, and Europe is still in a catch-up.

Things are doing wll here. At least this chain of used goods department store are growing. This is the first in the world I think. Why Japan struggles with innovation? It is not the lack of technical expertise, hard work or creativity.

First, there is the curse of large domestic market and combine with intense local competition, the executives of these large Japanese companies cannot afford the distraction. Second, many of the mental models of design in Japan do not transfer to overseas, it is basically exporting the Japanese behavior and hopefully it will be picked up elsewhere. And third, the obsession with quality has prevented many Japanese companies to successfully compete time-based. Plus the country’s working population is shrinking daily and has the oldest population on record. The people are living comfortable but not as rich as they were in the 1980s and domestic consumption was once the lifeblood of the Japanese economy. Manufacturing (hardware) is moving overseas to China, Thailand and Malaysia and the components are from everywhere. The high value work are the concept development and interface/software design, US is still the leader. South Korea has usurped Japan's seat as the leading consumer electronics maker or on its way.  I think all Japanese consumer electronics giants need to seriously rethink their long term strategy, reimagine their future, restructure and reset.

What Designers And Design Thinkers Can Learn From Complex Adaptive Systems?

Early 1995, I was obsessed with the new science of complexity and have spent a lot of time on cellula automata and was looking for new clues to illuminate strategy making when emerging technologies were causing uncertainties in the world of business. I questioned the relevance as well as applicability of many social science theories and economic theories in understanding the nature of change bought by complex systems.

Complexity science seems to shed some lights on the behaviors of network effects of people/computers, immune systems and termite colonies. I was intrigued by what I was seeing and ended up writing a book on its complexity theories and business strategy. It helps to explain the role of network influences and behavior, connections and interactions. Fascinating to the business applications of concepts of emerging orders, self-organizing, nonlinearit, I realize the value of pattern recognition, difference between the whole and the mere sum of the parts, the value of outliers and diversity, and the way some very small inputs can lead to big changes.

15 years later, now when I revisit the ideas, these concepts seem to make more sense as we see with what’s doing on around us. It is important to understand that this science is not a single theory or a theory of everything. It is a lose combination of different ideas, theories and concepts from a variety of disciplines--biology, anthropology, economy, sociology, management that together helps explain complex adaptive system.

What does it mean for designers and design thinkers? The new science (or art) helps us to understand how complex adaptive systems work the patterns of relationships within them, how they are sustained, how they self-organize and how outcomes emerge. It is highly relevant when we are dealing with introducing a highly innovative products/technologies to the market where different elements interact to create a new behavior. Until they use the products, it is hard to see how it will be actually used rather than what was envisioned. It invites us to examine the unpredictable, disorderly and unstable aspects of organizations and human behavior.

Think social media and think sustainability. Think how activities at a local level can shape individual change and activate organizational capacities of communities and ultimate affect structural change. If Blockbuster understands these ideas, they might have a good chance of not letting Netflex eats their lunch. If GM understands these ideas, the might have come up with a new business model. If Visa understands these ideas, their market cap could be doubled from the current market valuation. If LG understands this, they can create the next tablet that beats iPad.

Sustainability: What's Is The Right Thing To Do? Transformable Space Or Minimalist Living? Is It About Consuming Less?

I am at a stage when I really have too much stuff. My house is full of furniture from Philippe Starck’s Costes chairs to Le Corbusier lounge chairs to Barcelona day bed and Eileen Grey stuff….  and then there are a collection of French country and New England styles Ralph Lauren furniture in the basement. These are stuff I accumulated from my days in LA, HK, Boston, London and Milan.  Now I don’t know what to do with them. My basement is filled with things from art pieces to cameras; high tech gadgets to old French magazines date back to 1980s. I seriously think I need less, but I am getting more everyday. I carry an iTouch, iPad and iMac to work, plus my Leica, solar charger, Blackberries and portable GPS and all chargers and cables. My life is dependent on all those things.

When Graham Hill (founder of Treehugger) tells everyone that less is more, he has a good reason. He is now inviting people to submit design ideas to Life Edited, a design competition for a 420 square feet apartment that embodies this philosophy and demonstrates how we can "radically reduce our urban footprint, while living better and saving money."  I am sure people who live in Tokyo have plenty of proven ideas for this. You don’t need to have a competition, just fly to Tokyo and check out those tiny apartments. I am heading to Tokyo in two weeks.

Life Editor’s idea is to get people to think about transformable space furnished only with the essentials and digitized media. The idea is to own less. Now we have plenty to learn from Buddhism philosophy. The Heart Sutra espouses the doctrine of “emptiness.” One of its famous lines teaches  “Form is emptiness, emptiness is form.” Design schools should design a new elective called 'Buddhism and Design.' I like that idea. I will teach that.

Don’t misunderstand that emptiness here in a nihilistic, nothing-exists sense. Rather, it means that nothing is absolute—everything is relative and impermanent, and everythng in a constant state of change. Therefore, there is no point in becoming irrationally attached to things. Don’t get upset if you can’t get your hands on the latest Louis Vuitton limited edition bag. I feel that embracing “emptiness,” rather than clinging to the material aspects of existence, opens us to a more direct, genuine, and fulfilling experience of life.

Graham is using his own 420 sf apartment as a reference for what the space ought to include living space, a home office, a work area with a rolling tool chest, and a retractable kitchen.

Is it less? In a paper recently published in the prestigious Journal of Economic Perspectives, Paul Ehrlich joined a group of nearly a dozen of the world’s most ambitious ecologists and economists to try to put some hard numbers behind sustainability. They boldly entitled the paper “Are We Consuming Too Much?” I suggest you get a copy of that.

The authors suggested the problem is not consuming too much. It’s that they’re consuming far too little. Think Africa. Consumption is obviously inadequate when people are dying of malnutrition. But insufficient investment also means that the next generation of Africans will have less than this generation, and the generation after that still less. This is a death spiral of declining consumption and investment, two keys to well being and sustainability.

But what about us? The answer Ehrlich and his colleagues came up is a surprise to many.  It turns out that even we with our Priuses and SUVs and venti lattés might not be consuming too much, as long as we are investing enough in the future to ensure that generations to come enjoy standards of living at least as high as ours. And that suggests that we might be worrying way too much about how much we consume and far too little about how to invest in the poorest regions of the world, many of which are home to some of the earth’s greatest biodiversity as well as its most desperate people. I definitely buy the idea, investing in biodiversity is the most important step to secure our future.

Don't Waste This Crisis. It Is The Best Time For A 'Reset'. Sometimes It Takes A Life Shake Up To Put Us Back On The Paths We Need To Be On.

There were tours visiting our office last week, people were curious about what we do and what kind of people we hire. It is an interesting question. I guess our job is to help large companies go through mid-life crisis.

Crisis is a popular word these days and it seems like there are no shortages of them. We use the term in today's economic, humanitarian, political and environmental climate. The word is much associated with extreme negative 'tests' of our human abilities or survival as a species. This is also a test on our intelligence and also a test of humanities and to what extend it exists.

How do we get out of this crisis and what can we learn from them? How many of our crisis are man made? How many of them are systemic? How many of them are truly avoidable? I think this is the big midlife crisis of capitalism and even humanity. Wherever a crisis occurs there are creative successes resulting from adversity and that’s not what you see when you’re in the middle of it.

Crisis creativity a fundamentally part of our human characteristics. War is no question the worst type of man-made crisis and lot innovations were attributed to war ironically.  Here are some examples: The very first chemotherapy drug was developed from mustard gas, which ironically was the first weapon of mass destruction. Binging hospital equipment to soldiers in the South African conflict medicalized field dressings and X-rays were used, although initially the machines were large and cumbersome and could only be used in hospitals. During the First World War blood transfusions were performed in the battlefield, and saline transfusions for fluid loss were also used. Some branches of medicine, such as orthopedics, plastic surgery and rehabilitation, mainly benefited from the large number of war casualties and lessons learned under these conditions were applied to medical treatment for civilians.

So what crisis creativity can we get from the current midlife crisis of capitalism? Before we can delve right into how to cope with a midlife crisis we have to understand what it is. It is time when you realize your youth has passed by and it creates tremendous feelings of self-doubt. These feelings can lead to depression or worse self-destruction. 

It is exactly what’s happening in the word of business and management. The idea of profit maximization at any cost is creating an imbalance and the many theories of management have proven itself to be flawed. A lot of retrospection and reflection needs to happen here.... assessing one's goals and seeing how far one has come. Many start anew when they are in their mid-40s, the quintessential “mid-life crisis” is really just another manifestation of the search for self and transformation, whether it is for an organization or individual oreven ideology.

What a person needs to do most when he or she is going through a crisis is gain control of his or her own life. Obviously when crisis occurs there is some external force we can't control causing us great stress. Great stress creates great emotion. Double Whammy! For a person going through a mid-life crisis, he or she needs to do is to make change and commit to it. This is the point where it would be wise to actually map out your life. The same thing for business, there is no better time to map out the future of your business, bring in a new sense of purpose and energy to power up the organization.

Rethink about the past; reimagine the future and preparing for a big reset for it. Don’t waste this crisis, get something out from it. Crisis can create opportunity for change. Sometimes it takes a life shake up to put us back on the paths we need to be on.

Deciding On Your Big Strategic Innovation Move? Don't Forget One Small Detail: How Do You Make Money?

Technology-based companies typically make one common mistake: They get too caught up in technological innovation, particularly developing new technologies, or get too obsessed with the next killer technology and thinks the world evolves around their latest invention. Even if they find the right applications for their technologies, they often defer the serious effort needed to figure out how they create economic value – or how do they make money? They did not come up with the answers but insisted sailing forward ending up with business without a business model. I find that funny, a business without a business model should not be called a business in the first place. It is different when a company needs to change their revenue strategy as they move up the value chain or extend their activities in the business eco-system. That's a different story.

A business without a clear idea of how it makes money is like a zombie, and for a business without understanding their roles and purposes is like a zombie without a heart in additional to a brain. Not sure what is the technical name for that? The walking dead?

Traditional technology innovation often leads to a strong internal focus and thus being too fixated on pursuing engineering development and lacks early consideration on commercialization, marketability and industry architecture. As a result, many technologically innovative firms fail to bring their products successfully to the market or create a sustainable business economic model.

Every company should have an idea how they would like to compete (create value) and make money (capture value) and that guides the strategic planning and implementation of all its innovation and planning activities. Strategic innovation should be about highly selective market entry with the intent of subsequent market domination.

There is too much hpye on business model design. The truth is there are only a handful of options so there is no need to glorify the effort. Organizations are increasingly inter-connected as they design, source, buy, make, distribute and market their products and there are many configurations you can play with. But that is not about the business model, that is the business design or value chain or value network (I think this is a better phrase). Business models are primarily about how to capture the economic value by extending the revenue sources. It is not uncommon for companies to operate outside and across traditional industry boundaries and definitions.

Any strategic innovation effort could lead to reconfiguration of assets and capabilities. When you hear the name Skype, what do you think? Probably free Internet calls. What is Skype’s business model? Well they never really have one unitl now. It is a great offering and good user experiences and the customer value proposition is compelling—free.

How do you make money by providing free voice calls? At least it looks like they finally figured it out, it is now “free plus paid services” model. Is there any business model innovation here? I don’t think so. They charge you for calls outside of Skype user base. They did try a new innovative experiments including sending money via Skype. However, when your corporate parent also owns PayPal, that won’t work. It was shot down very quickly. I don’t think they will try Skype auction next.

Next they should be putting their innovation effort on mobile, there are lots of opportunity for innovation that brings in new and real revenue. So they end up becoming a telecommunications company? They need to find a real problem to solve? Go back to the unmet needs? money from “upstream” partners. The local cost or free customer proposition limits their abilities to charge more, so they need to go somewhere to find revenue. Serving ads won’t get them where they want to go. The mobile area is still where the money is..at least for now.

I remember the analyst conference last year when Josh Silverman’s presenation was to address the following:

• How does Skype generate revenue?
• What drives Skype’s cost model?
• How will a software company change real time communications in ways that legacy telcos cannot?
• How is Skype structured to address its various market opportunities?

The net message was that they expect to double their revenue to over $1 billion in 2011 from their 400 million registered users. And maintaining segment margins of 18%-20%. Solverman stated that there is a communications paradigm shift going on where hardwired networks and devices are gradually being replaced by software-based networks and flexible devices.

For Silverman, Skype’s “opportunity is to become the world’s leading communications software company. To reinforce his point, Skype will not simply be on familiar telephony devices, it will show up in intelligent TV sets, car dashboards and intelligent public access terminals such as bank ATM’s all tied to a common network. Well that's a nice aspiration, but hardly a business strategy with a business model. At the end of the day, can they just tell me what are they planning to do in the next 3 years and where the revenue will come from. This is not the question people like to address.