innovation playground Idris Mootee

The Question Of "Market Focused" And "Strategic Extension Into Adjacencies".

In a recent journal article “How to create market-focused product winners” by Roger More (a marketing prof at the Richard Ivey School of Business) talked about why companies fail due to lack of market-focused.  Prof More has a unique and entertaining style of delivering which is hard to find, he has been teaching marketing for decades at Ivey. Him and I often have very opposite views on many aspects of marketing. I did enjoy his classes.

He observed that many companies lost their way because they diversified across too many markets. He writes about why market focus is imperative today and how managers can create and sustain it. Here I will use this to bring up some arguments and I think there are more to the questions of “over-focused” and “over-extending”.

There are no questions the Fortune 500s are facing the most challenging climate in 50 years. The intensity of competition from low cost base countries such as China; the ever-shrinking product lifecycles and the media/channel proliferation are making life difficult for CEOs and CMOs. In this environment, more suggested that the need for market focus has never been more critical. According to More:

The challenges facing General Motors and Nortel illustrate the importance of market focus. For GM, particularly in the critical low-priced, small-car segment, the loss of market focus has become a major problem. In past years, different divisions of GM have made a long and difficult series of many product entries into this market segment, including an entirely new Saturn division. Over these years, GM lost significant cash flow. The problem is that, in this low-price car segment, it has had too many car models, too many brands, too much cross-divisional product replication, too many product variations and customer choices, slow product redesign cycles, too many dealerships, and too many divisions competing for the same customers in the same segment. All of these realities have combined to present a large, growing and confusing set of choices to GM car buyers. In many cases, price points for GM small cars overlap price points for larger cars, creating even more customer confusion. This proliferation of models and confusion has resulted in some serious quality problems. These factors, coupled with high, inefficient manufacturing, distribution, and other cost structures, have led to near disaster.

Using this argument, Mercedes and BMW should not have expanded their product platforms and Mercedes would not have enjoyed the successes of the C series and BMW would only be selling 3 series.  BMW was very successful in bringing the '60s Mini back and extending their product choices. BMW is constantly exploring new and niche segments to boost both volume and profits, of which the X6 'coupe' 4WD is a prime example. And the Isetta (photo above) which is rumored to be BMW secret ecocar.

It is an overly simplistic proposition (although in the case of GM his argument is correct) and his article missed the other half of the story. A growth strategy is about new products and new customers. The world is full of possibilities and isn't just a question of making a choice. Before reaching that stage, management must establish a list of alternatives, potentially valuable uses and extensions of the firm's core competencies. Part of a CEO’s job is to manage corporation's scope to maximize potential to generate the best shareholder returns. There are other factors that affect a corporation’s performance, adjusting the breadth of a corporate business portfolio represents a large portion of contribution to shareholder return.

There are no questions easy to point out that lack of focus is typically a problem for many. While conventional wisdom maintains that "market-focus is the answer", long term research points out (empirically) that investors allocate capital among diverse businesses more efficiently than corporations do and that good projects can typically attract funding in public or private capital markets.

So it is not simply an either or question. CEO knows that no matter how focused his or her business is, innovation (that leads to diversification) is necessary to regenerate growth and create value over the long term. Companies must actively extend themselves into new businesses to compensate for the maturing of the old ones.

Maintaining market-focused is important (and very important), but it should never be a the expenses of innovation that leads to “strategic diversification.”  When Mercedes-Benz first moved down in size and price to compete against BMW, it was not only answering to customer needs but also leveraging their R&D and bringing scale to many of their technologies. The Mercedes R-Class has not been the most successful product is no big secret and has not lived up to their original plans. But is this a question of market-focus or a question of execution or they still benefited from it by buying the “option” to play in that segments.

Going back to Mercedes’ decision to develop the C-class, that strategy has proved to be a right one. For Mercedes, to have produced one million C-Class vehicles in less than three years was a major achievement. The C-Class marked the first time the company has based a complete model family comprising sedan, station wagon and sports coupe on a single platform.  No question managing the portfolio has become a strategic undertakings, an example is they are making the decision to cancel the name CLK (I am a big fan of the CLK and I have two including a CLK5 convertible), the current plan is to call them E-Class Coupe and E-Class Convertible and the CL-Class becoming the S-Class Coupe.

The down market (R and A class) moves decision is a strategic one for Mercedes. 70% of people who bought the previous model Sports Coupe traded in another brand, while 40% of those buyers traded up to another, more expensive Mercedes. The average age of buyers was also about 10 years younger than the company’s usual average, at 35 to 40 years old. You get it? It is about creating customers of the future.

Prof More criticizes that while many of these companies have literally hundreds of MBA’s from the best business schools the world in management positions. Clearly, at the critical conceptual and operational levels, many managers are having difficulty understanding, creating and managing market focus. Further, many of these managers have problems creating and managing the critical conditions necessary in their company for achieving and sustaining market focus. It clearly presents a very difficult task.

I’ll add to that while many of these companies have literally hundreds of smart managers spending too much time on their current markets and segments and leaving opportunities for disruptive innovations. The notion of “market-focus” is creating many side effects; “over-focus” will result in systemically ignoring any unserved segments. The concern for cannibalization is another factor. The thing is if you don’t cannibalize yourself, someone will cannibalize you anyway.  Challenge with management writer is they often advocate a consistent view of how best to manage a company's scope, which is elusive. While it is a no-brainer that a constant focus generally leads to better performance, the ongoing processes of innovation and strategic diversification is even more important in today’s chaotic business environment.

Putting Disruptive Innovation To Work - A Conversation With Lead Author of The Innovator's Guide To Growth

There’s no shortage of disruptive innovations out there and every start-up has a disruptive idea to create the next big thing. Lots of media play as it is an industry that will continue to attract disruptions due to its very nature. Just look at Joost and Vudu. Joost founded two years ago to provide a global TV distribution platform, melding content owners, advertisers, and users into a single community. They have been struggling for a while and now with a renewed effort to try and regain viewers to its online service by introducing a browser plug-in for its video service. Still in beta, the new plug-in should give viewers the possibility to view the online video service without the need to download the dedicated client software, which was needed until now.

What about Vudu? 16 months ago the maker of a movie-playing set-top box was generating splashy headlines in publications like NY Times. Now the company, which bills itself as a video store in a box, and is struggling on many fronts. I have heard that they are developing a download service that is intended to rival Blu-ray quality. Dubbed HDX movies, these ultra-high-def flicks are currently being watched by folks willing to wait a two or three hours for a film to start, but we are probably 24 months away. Most people would scoot down to Blockbuster and rent a Blu-ray Disc and pick up some beers.

These companies face the typical challenges of bringing disruptive innovation to the market. There will be no question they will evolve the business and think of every idea to increase adoption. Some argue business models like Joosh and Vudu will fail because they tend to 'cram' the new disruptive thing into an old business model (broadcast television when everything is about content) in order to prop up the old declining business. They have to revisit the some key questions for any disruptive innovations starting with this one:

Disruptive solutions usually offer a fundamentally different bundle of performance. Is Joosh or Vudu offering “good enough” performance on dimension that matter to mainstream target? If convenience is the key, are they offering a superior experience. The 3 hour wait for download may work well for someone who lives in a remote area, but not those who lives 5 minutes away from a Blockbuster.

A good example is when BlackBerry started in 1999 as a non-Windows compatible, non-Palm compatible e-mail only device.  Until recently (the Bold which I am using and it is great) it’s browser sucks and the voice quality was not so great. It was inferior to the average cell phone every dimensions... but it did one new thing really well by solving a new problem: It gave access to instant information anywhere.  They have been very successful in sustaining innovation while not losing focus of their core.

On the topic of disruptive innovation.  Here’s my interview with the lead author Scott Anthony, The Innovator’s Guide to Growth, which takes the idea of disruptive innovation as part of a virtual book tour.

Idris: One challenge of innovation today is that it is unclear whose mandate it is within current organization structures, and only a handful of companies have the luxury to create a dedicated innovation team, let alone innovation budget. What is your view on setting special innovation team or it is better to be assigned to corporate strategic planning or to business units level marketing? And what’s the best to decide on the budget or should it be a percentage of the marketing budget?

Scott: As is always the case, there isn’t a one-size-fits-all answer to this. I think P&G CEO A.G. Lafley has it right when he describes how critical it is for the CEO, or Business Unit leader to be actively involved in innovation. Without the active involvement of the most senior leader, it’s just too easy for a company to default back to what worked before instead of what’s necessary for the future. 

Generally speaking, I’d rather have a few people focusing all of their energy on innovation than a large group that has innovation low on its collective priority list. So the most important thing to me isn’t where responsibility resides, it is where innovation falls on that group’s priority list. If it’s lower than #2 on that list, I get worried. Then, it is a strategic choice. The closer to a going business the group resides, the less likely it is to step out and develop truly disruptive ideas. On the other hand, the further the group is from operations, the less likely it is to implement ideas. The best outcome is to have multiple innovation groups; one at the business unit or even brand level, and another at the corporate level.

In terms of the budget, it is wholly contingent on what kinds of results you are expecting. However, we do think companies should “grow into” their innovation budgets. Allocating too much money too soon can be a good way to set a company up for failure.

Idris: The concept of “overshooting” is proven very useful in analyzing products with a large technological components or pure technology-based products playing the s-curve, how do you see it’s applications in other less-technology-intensive industries? Suggestions of any industry(s) which you think are ripe for disruptive innovation outside of media and communications?

Scott: Our experience is that overshooting applies to just about every industry. In some industries it can happen more slowly, or can be more “hidden,” but the forces of overshooting are always at work. Consider the health care industry. What physicians can achieve today is amazing. But in pursuing the most challenging conditions, we have predictably created an expensive, complicated health care delivery system that overshoots the diagnosis and treatment of basic conditions. That’s one reason why we are so optimistic about concepts like MinuteClinic or other nurse-based delivery approaches. Similarly, think about the legal services industry. Someone in the industry once told me it is the only industry where prices go up in both boom times and recessions. While high-end law firms provide great services for their best clients, they are way too expensive and complicated for simple cases. You are beginning to see the emergence of disruptive models in legal services, but there will be a heck of a lot more in the coming decades.

Idris: Going after non-consumers is a very effective to identify corporate blind-spots and help them to see markets that have yet to exist. Given that 90% of the growth of 90% of most companies out there are dependent on current consumers or more specific 20% of their customer case provides the 80% revenue, how would looking for non-consumer makes sense for these companies?

Scott: It’s all a question of your time horizon. In the short term, it almost always makes sense to prioritize providing better products and services to your best customers. If you don’t figure out ways to reach new consumers in new contexts, however, you are bound to find yourself falling behind the competitors who see the opportunity to reach those nonconsumers. Put another way, do you think the 20% of customers who are providing 80% of today’s revenues are going to provide 80% of revenues five years from now? Competitive forces and market saturation mean that almost every company is going to have to figure out how to reach today’s nonconsumers. And it’s always better to do it when it’s a luxury instead of when it is a necessity. While spotting nonconsumers is hard, and developing winning solutions to target them is even harder, it is well worth the effort.

Idris: One chapter of your book talks about innovation metrics. Can you share your thoughts on what’s the most commonly useful and irrelevant innovation metrics and how should they be measured? Pls talk about the timeframe for innovation projects of this nature, you mentioned 3 years in the book, explain why 3 years?

Scott: This is another tough question, because I really haven’t seen one metric that works for all type of innovation. That’s why the book recommends using multiple metrics that track inputs, the process, and outputs. Although any individual metric has issues, the metric I am most skeptical of is net present value. It’s not the metric that’s wrong, it’s the application of NPV that causes trouble. The typical application biases companies to safe, known, low-potential ideas. At the project level, you need to track an idea’s rough profit potential and its residual risk. Senior leadership should use the potential and the risk as inputs into judgment calls about whether to kill an idea or move it forward. At the company level, a reasonable thumbnail view can be percent of revenues from products or services that didn’t exist 3-5 years ago. It’s important that these are truly new products and services, not just incremental line extensions. The reason why we suggest 3-5 years is it provides enough time to really see the impact of an idea – in most industries at least! For what it’s worth, I see tremendous opportunity for researchers and practitioners to address some of the issues related to metrics. The Innovation Movement won’t reach its full potential unless we have more satisfactory answers to these kinds of questions.

Thank you Scott. This is definitely a must read for those who are interested in disruptive innovation.  The Innovator's Guide to Growth, authored by Scott Anthony, Mark Johnson, Joseph Sinfield, and Elizabeth Altman take the subject to the next level: implementation. The authors explain how to create this crucial capability for unlocking disruption's transformational power. If you are interested, continuing on this book tour this Friday,visit Creativity and Innovation.

It Will Take A While Before We Figure Out How "Open Source" And The "Economics Of Abundance" Work

Open source has been around for more than a decade but we have not quite figured out how it works. It is easy to explain why people will use free software, but what’s the motivation behind investing in the development? Other than one simply doesn’t like the big software companies or cannot afford them, is that a viable business?  Is open source equals to Fair Trade? So yeah, there’s the advantages of being able to tweak and customize to do exactly what your need, but if you are not rolling up your sleeves to do some work, your voice won’t be heard since you did not pay anyone to produce this. You can argue Open Source may distribute value, but it doesn't create or even if it does it won't be able to capture value.

This is a simple view and may still apply to 90% of open source software. Take a deeper look at Red Hat you might discover something more. They have their own set of economic value drivers, including the needs of their customers, which they then apply to the calculation around their participation in certain projects. As the reach of open source extends, so do end users actually start to get an indirect say in what happens. But it is not really free.

In recent research published in Production and Operations Management, Deishin Lee (Harvard Business School) and Haim Mendelson (Stanford Graduate School of Business) are using them to teach a course on how to "Divide and Conquer: Competing with Free Technology Under Network Effects." Is open source just a cheaper substitute? If so its long-term impact will probably be marginal, not revolutionary. The question is whether you see the "market" the same as the "community?" And whether you see "non-consumer" (those who cannot afford to buy but need it) will play a role.

They suggest that
...[T]he ideal scenario for the commercial vendor is to bring its product to market first, to judiciously improve its product features, to keep its product "closed" so the open source product cannot tap into the network already built by the commercial product, and to segment the market so it can take advantage of a divide-and-conquer strategy.

It is about owning the network (or community). It can get ugly if the open-source product gets to market first. In that case, the commercial vendor does well to enter the market with a compatible product and then quickly invest in new features to make its product compelling. In this case, being "open" actually helps the commercial firm tap into the network created by the free product. Then, the commercial firm must compete by out-innovating the free product to justify its value.

Red Hat's CEO, Jim Whitehurst was interviewed by Bangkok Post earlier this year. Read his interesting views on the "the economics of abundance" versus the old notion of "intellectual property." Whitehurst spoke of "the economics of abundance" that applied to software, and how, in the digital age, when intellectual property could be copied for free the question was "How do you build economics around that?" And he noted how the use of "old-world concepts" such as "it's mine and it's property," by calling it "intellectual property," built on an old-world sense that it had value and cost a lot to duplicate.

Emphasizing that Red Hat was a very strong believer in intellectual property rights, he said that in the old-world, with physical things, you couldn't give away a product for free to try out, "but if you think about the economics of abundance, where bits can be copied for free, why shouldn't that be a business model?

"It's kind of flipping business models on their ear," he said. "Rather than apply old-world physical products' commercial principles, let's start from scratch and say 'is there a whole new way to create value?' And that's what we think we're doing and that's pretty extraordinary too. We still have a long way to go. And I don't think that we're fully there in understanding yet. All content, music ... how do musicians make money? Should it be using DRM, or is there another way to do it?

What Is A Designer? What Is Good Design?

Design has historically assumed to be an offshoot of visual art and sure there are commonality in thinking and tools, but this is a overly simplified way to looking at design. Many designers use visual metaphor and take inspiration from sketching raw ideas. But does this have to be the case.

If design is abut critical thinking and problem solving, then there are plenty of other tools; designers can look to technology, nature or even everyday object for inspiration. Or should design school start using Legos and Playdough? Amazingly with a few basic tools -- just craft materials -- people could actually start to think about things from different points of view and be creative. My personal toolkit includes dozens of Playmobil soldiers. I used that for my competitive strategy simulation.

What is a designer? Is that someone who went through applied art training in Pratt or Arts Center or St. Martin on someone who is trained as an architect and decide to apply his or her skills in problem solving? There is the requirements that designer works are both objective and subjective. The objective requirements are easy to understand. They are technical and business requirements that allow for measurement and direct comparison. What the best way to build this? What is balance between form and function and performance?

Then there the subjective, creative side of design that’s hardest to explain and hardest for most people to understand. Some “designers” hide behind the curtain and spin and spin and hoping they will come up with a idea. Others work in a collaborated fashion and bring out the best in others.
The aesthetic (sexy) side of design relates to fashion, human behavior, emotion and cultural influences such as the cultural meaning of symbols. Designers are immersed in the visual (and increasing audio) language of their culture and industry specialization. Not only making things look pretty (that’s important too) but also bring human and cultural values to business problems, humanize a product or services and turn a corporation into a trustable entity.

But many neglect the less sexy side of design, solving very complex problems of the world. Designers are strategist too, although sometimes they don’t know it. In the course of finding solutions, their ideas are shaping business and markets. Or another way to look at it, strategists are designers. They design new business models based on creative re-engineering of value chains. Design has always been an important element and very much neglected by B-Schools. Design as “strategic thinking”, not as “visual thinking”. That's the premise behind the Wharton School’s new executive program -- Design, Innovation & Strategy -- scheduled in Milan and Copenhagen. The course was conceived by a group of senior executives. What’s their rationale? Design is often path to innovation. Strategy is Design.

Design change is a reaction to pressure--and this is true of both evolutionary design and human design.  In a completely stable system (which there’s no such things), there is no pressure to make design changes. In today’s chaotic environment, there’s a bigger demand for designer for change.  Expect to see more B-school program on design and innovation.

Design is essentially a rational, logical, sequential process intended to solve problems or initiate change in man-made things and nature. The process begins with the identification and analysis of a problem or need and proceeds through a structured sequence in which information is researched and ideas explored and evaluated until the optimum solution to the problem or need is devised. The problem is in the traditional process (many still practice today), the work of expert in the process was often compartmentalized, each having little if any input in matters which fell outside the boundaries of their specific domains. Thus, participants explored their ideas unilaterally, with one or another participant, through virtue of their “expertise”, imposing constraints upon all others. As they pass the buckets, the product designer has a veto on matters to do functionality, the engineer had a veto on technology, and the human factor in usability.

Look back at the years of the Bauhaus movement when they attempted to knit the design process into a coherent whole in that students were encouraged to study design in a way that was both total and detailed. That is, designers were expected to balance all the considerations that came to bear upon the design of particular artefacts, systems and overall environments. In this way, though, design quickly evolved into a closed activity - an activity in which all but the designers themselves has little if any valid input to make on questions of base materials  etc. That was the birth of the multi-disciplinary designer. 

So what is good design? This week in London there’s "The Good Design Manifesto", created by Richard Shed. Which is a collection of 100 brief responses from industry experts to the question "What is good design?" Here you can find video clips of interview with Sam Hecht, Jamie Hayon, Libby Sellers, Thorsten van Elten and others.

Good design...
...makes ordinary people's life more meaningful. (Lavrans Lovrie, Livework)
...brings the intelligence of nature together with man's production capabilities. (Jonathan Prestwich)
...is finding new places where what we can dream meets what we can make happen. (John Miller and Anna Hart, Mark)
...is no longer about 20th century debates around form or function. Good design will ensure we got a future on this planet.
...is sooo boring. We need GREAT design: Vision. Humanity. Sex. Death. Art. Love. (Richard Eisermann)

Have a great weekend!

In An Economic Downturn Like This, Smart Companies Will Do Different Things And Do Things Differently. It's Called "Innovation".

In today’s chaotic world of business (that's a true and accurate description), traditional management consultants have little to offer beyond cost cutting and consolidation, the adv agencies are keen to remind you to keep your media spend and the technology consultants continue to lure you to outsource your whole company to a low cost country, you are almost guaranteed to fail if you do all of these. I can say for sure.  It was once said that  “Winners don’t do different things, they do things differently”, my advice today is “Winners do different things, and they do things differently.”  So how?

This is the perfect storm for two things 1/ innovation 2/strategic acquisitions. Am I crazy? No, organizations often behave in counterproductive ways when hit with bad news. They get conservative and systematically switch to a defensive mode. As revenues slow and margins get squeezed, companies naturally switches its focus to cutting costs and outsourcing. The company protects its balance sheet—an approach leading to the deferral of growth and of low-priority investments, the shelving of innovation and acquisitions and its competitive advantages eroded.

When times get tough, senior management’s reaction may inadvertently lead to the creation of an innovation-stifling culture.  The insistence on short term results can have potentially devastating effects on a company’s innovation culture. The winners take a different approach. They see a downturn as a time to increase their leads and make acquisitions. They pounce on the opportunities it creates with an alacrity that is the stuff of legends: think of GE’s speedy dispatch plane load of strategist and dealmaker to Asia right after the Asian financial crisis in 1998.

Why did so many great companies and products come from the Great Depression? While there's no question that a bad economy makes it tougher to raise capital and launch new products, the reality is that good ideas executed well always have room to succeed.  A different way to look at it, a shrinking wallet means that more attention is given to every purchase, and therefore the best customer value equation have a better chance of success during a downturn.

Companies are quick to cut discretionary spending and claim to have no budget but actually have then committed to the wrong (non-strategic) activities. When times are tough, companies have to be ruthless innovating their way out. You can cost-cut your companies to greatness. Many great ideas are prematurely dropped.

Smart companies will do different things and do things differently. Many complain about the shortermism of Wall Street and its negative impact to innovation.  Two academics Gerard J. Tellisand and Ashish Soog researched on the full impact of innovation. They set out with this research to help managers better understand and quantify the investments they are making in innovation.
 The research reveals that, of the three sets of innovation activities, returns to the development activities are consistently the highest across and within categories. 

According to Sood, “The big surprise was that the markets actually react more to the development phase than the commercialization phase, which shows that the stock market is not so short-term in its outlook. Because the stock markets reward firms for making announcements in the development phase, it is in the firms’ interest to be open to the market and to update progress on an innovation project.  When people complaint that there’s no reaction from the market when they made an announcement on an innovation undertaking, it is probably due to the quality of innovation. A credible innovation story can boost your stock price, even before you invested in the project. Now that's quick ROI.

Sustainability Is About The Engineering Of Humanity As Much As About Ecology. Green Alone Is Not Enough.

I have been to quite a few so claimed green buildings lately from Chicago to Minneapolis and London to Berlin, I always have questions about these so called green buildings because everytime I asked them questions, I never quite got the answers. Building account for more CO2 emissions than any thing may be except factories and power plants.  There are so much greenwashing by companies recognizing the market value of green and making PR claims. It is easy to say green, but what does it mean? There are so little we know about green. Give you an example, many believe that some material such as wood is more ecological than plastic, no brainer? Wrong, Although a product made with ten kilogram of wood causes fewer emissions than the same product made with the same amount of plastic, sometimes the paint and coating required to preserve the wood are factored in, it can be a very different story.

The above is an energy-efficient building that’s scheduled to go up in Haifa. According to Cory, green building isn’t just the future for altruistic reasons–he believes that an eco-friendly building is more likely to succeed on the market. The SunSail is certainly a wave of the future: it will have its own water purification system for waste water, a ventilation system that takes advantage of the breeze outdoors, maximum exposure to the sun for natural lighting, and a curved surface that is designed to contain photovoltaic cells that will provide 40% of the building’s energy.

Sustainability is best defined as the ability to meet today’s needs without compromising the future or the ability of future generations to meet their own needs. Unless this goal is applied to everyone, it’s impossible for us to have a sustainable global society.  Sustainability is about humanity as much as it is about greenery and ecology. It includes engineering of Humanity and Socialibility and not just energy efficiency.

Europe is a little bit ahead with countries like Sweden, Denmark and Germany.  Sir Norman Foster's iconic Commerzbank building (not impressive as some may think from the outside) in Frankfurt (built in 1997, still the tallest building in Europe), this nearly 300-meter tall high-rise is actually four smaller buildings, with "sky gardens" ( or green roofs) on many floors and a sophisticated ventilation system for each floor, including natural ventilation within a double-skin building.  As planned, it has just gone through a renovation and upgrade at the ten-year mark, adding a new "dynamic façade" element: movable blinds.There are so many innovations designed into that are not easily recognizable.

Foster's concept creates a low-rise appearance in Frankfurt's central city, keeping the streetscape pedestrian-friendly.  It works well and one enters the building without being aware that it's a 60-story structure, until one looks up through the glass covering the lobby or the first-floor cafeteria.  

By German law, no office worker can be more than 10 meters from a window, to afford adequate day lighting to each worker.  I really like this idea. This makes office buildings need to be longer and narrower than office buildings in North America, in which many workers don't have access to day lighting and further blocked from windows by their cubical partitions.

Another German innovation is how smartly they deal with “leasable” space, Foster placed all the elevators at the triangle's three ends, effectively removing them from the core, but allowing completely free views toward the building's interior, including the "sky gardens."  So ordinary workers get Frankfurt's skyline view from the outer windows and  managers in the inner windows get to look at the sky gardens across the way.

Bank of America Tower at One Bryant Park is probably the greenest in the US. This $1 billion, 54 storey, 1,200 foot tall tower will house 2.1 million square foot of office space.  Architects Cook + Fox designed the tower to be extremely efficient so that waste and rainwater is reused, heat from the sun is maximized and office space is flushed with natural daylight. Most of the raw materials used in the construction of the tower are from renewable and recycled sources within 500 miles of New York in line with the ideology of sustainable building practice. It should come as no surprise therefore that this tower has been accredited with US LEED Platinum status, the only skyscraper with that reward.

This is the 803 foot tall Residence Antilia, owned by Indian property mogul Mukesh Ambani. The tower has been designed by Perkins + Will using traditional Vastu design, which means this will be the tallest living wall when completed and act as a large carbon sink in the heart of Mumbai. Not all of the floors will be occupied; some are going to be used exclusively as gardens in the sky. According to Vastu philosophy the central column of the building will angle upwards to symbolize enlightenment. The design is certainly innovative and I do look forward to seeing it when t is completed.

BTW, there will be only one family living here, the mixed use serving as the headquarters for the Reliance Industries with the upper levels being the private home of Ambani so work, play and live in one building, no carbon as a result of driving to work, just press the elevator button. Green for one family?

Business Innovation Lessons From One Of World's Leading Ensembles And The Father Of Photojournalism.

Business lessons do not just come from business, they come from art, biology, physics and music. There are tremendous analogies from these fields to teach corporate innovation. And I have two to share with you here.

I was first exposed to Henri Cartier-Bresson (1908-2004) at the age of 16 when I began admiring the work of the French master (and father) of photojournalism.  By 1932, at age 24, Cartier-Bresson had begun to devise a whole new manner of shooting pictures that display an intuitive knack for choosing "the decisive moment," as it came to be called, that instant when a shutter click can suspend an event within the eye and heart of the beholder, an exhilarating confluence of observer and observed. His lyrical, loose, ingeniously composed images were a revelation.  He used a Leica like a violinist uses his violin. I was using a Contarex, which my father gave to me since he was not on the Leica camp. I switched to Leica at the age of 20.

Here are two quotes from Cartier-Bresson:

“For a subject to be strong enough to be worth photographing, the relationship of its forms must be rigorously established. Composition starts when you situate your camera in space in relation to the object. For me, photography is the exploration in reality of the rhythm of surfaces, lines, or values; the eye carves out its subject, and the camera has only to do its work. That work is simply to print the eye’s decision on film."

The analogy here is business in today’s hyper competitive world requires agility that goes again the traditional notion of strategic planning. An agile business responds rapidly to changes in its business environment. These changes can be regulatory, competitive, market or disruptive innovation. The trick is to explore in reality of the rhythm of technology, customer behavior and customer unmet needs, much like a photojournalist waiting for its subject and other elements (lights/shadow/lines etc) to fall into place. An agile enterprise must re-examine / re-architect their strategic, structural, human characteristics and technology infrastructures.

“I'm not responsible for my photographs. Photography is not documentary, but intuition, a poetic experience. It's drowning yourself, dissolving yourself, and then sniff, sniff, sniff – being sensitive to coincidence. You can't go looking for it; you can't want it, or you want get it. First you must lose your self. Then it happens.”

The lesson here is when the very nature of strategic innovation cannot happen when we are carrying too much industry legacy thinking and orthodoxies. In order for any organizations to become the innovators in their industries, they must fist lose themselves and dissolve themselves to play the innovation game, immerse themselves in new ways to redefine competition and product performance. Imagine new product performance curve that is entirely different today or service innovation that transformative.

The other analogy is about the business of creative collaboration. HBS Prof Robert Austin talked about what innovative businesses can learn about managing creative people in an interview with HBR Working Knowledge’s senior editor Martha Lagace.

Here’s the story. He first met violinist Paul Robertson (ensemble Medici String Quartet) in Copenhagen and came to mind with the idea to explore the process of creative collaboration, a central theme not just in music but also in knowledge-intensive businesses. According to Prof. Austin, businesses emphasize technical mastery and the creation of predictable patterns. The Medici String Quartet aimed for more. The goal of each performance was never to render a piece exactly as the composer intended, but to interpret it in fresh and new ways.

In business, preparation means thinking something through and establishing a plan. The execution phase is then managing to the plan. That's not remotely how the quartet prepared. Early in their career together they, especially Paul, had learned something of great value from Sir Clifford Curzon, a legendary classical pianist. From Curzon they learned to destroy a piece by making a metronome play the wrong tempo; then they tried to play against it. They would come up with ways to make a piece harder to play and would keep adding constraints until they basically couldn't play it anymore. The idea was to rebuild it after they had destroyed it.

“In a way it's the opposite of planning that happens in business sometimes, which is all about creating patterns we expect. There are certain situations that require that we innovate because we're in the world of the unexpected. Think of crisis management. It's very important in crisis management not to fall into a comfortable pattern because you may be misperceiving the data. Psychologists talk about the initial hypothesis problem: In a crisis, in your eagerness to get control of the situation, you often grasp at an explanation that is incorrect. Afterward, though, you see only confirming data, not disconfirming data.”

What's The Difference Between A "Strategic Designer" And A "Creative Designer"?

I received over 50 emails on this controversial blog post "The Death of Creative Director" and thanks for those who expressed their views here. Here's one from a friend of mine Barry Robinson (a CD) which I want to share with you. It. It is good to see a digital agency Creative Director's view of this topic.

Interesting take. Funny enough, I buy this hook, line and sinker. But I feel it is less about death of the Creative Director and more about death of self interest. And in corporate North America, that isn't an easy change to achieve. But it should be something that corporations strive to achieve.

I was asked to help define Agency.com's process. One of the key aspects of that was to level the playing field. We'd have a lead for each small group of 'creatives' (group being a designer, copywriter, IA, strategist, interface developer, technologist, depending on the project). Anyone could be the lead, and this was tied to deliverable responsibility than the 'say so' person. That lead could be a copywriter, an IA, a strategist, or for that matter anyone who had relevant experience to that project. But from a creativity standpoint, everyone was on an even footing.

In this set up a CD isn't defining those ideas, but is there, when requested, as a catalyst. A CD is less to do with being the sole idea machine, and more to be there in support when needed. The question being... is this needed?

It depends on the team. A core team should always be capable. Some rely on the CD's to support teams that are not as capable as they should be. Or to save the day because due to poor planning the team simply doesn't have the time required to develop solutions that are good enough.

To me, the sense of self interest, career growth and territory is something that has seemed far more prolific in North America. But it was a growing phenomenon in Europe. Change is the responsibility of the corporation. Reward mechanisms need to be rethought. Recruitment strategies reassessed. The way projects are approached and project teams are built needs some serious thinking.

I mean, how do you know who you need until you know what it is that is needed? And if we're truly offering a bespoke creative solution to our clients, then wouldn't the point at which you know be some way into the project?

I could easily switch the titles in you argument and it would be just as relevant. If I was to list the most 'creative' people I have known, the top 10 would be a mixed bag of PMs, an MD, an accountant friend of mine, a handful of strategists, two copywriters, a guy I know who runs a battery firm in the UK, and a couple of designers. Point being that even though I know many many designers who can craft a beautiful mock, book, poster, logo, it takes a different sort of capability to deliver solutions. True creativity. An effective creative is a masterful thinker and craftsman - thinker+graphic design, thinker+branding, thinker+copy, thinker+coding. Ignoring one or the other is going to get you in trouble.

A successful initiative needs faultless multi-disciplinary thinkers with unique skill-sets at it's core, it also needs supporting skill-sets at hand. As the initiative progresses, needs get defined, the supporting skill-sets change. The core team stays connected for reviews, but if their specific skill set is less required, there involvement becomes less.

If you think of corporate structures, where people are brought together to achieve stuff, and collaborative structures, where people choose to come together through common interest to achieve stuff, at a point somewhere between the two is where we should be aiming towards. Supporting infrastructure and hand picked core teams, with collaborative working practices where involvement is not limited to title.

My point being, you can't swap out the role of a CD until you change the way your corporation works. Any CD of worth would welcome this change.

Thank you Barry. Good thoughts. The advertising industry is no question in a state of flux. The big shops are scrambling to buy and build capabilities in desperate attempts. Many of the first generation of interactive agency is carrying their shares of legacies. Customers are bombarded everywhere with advertising, free offers and can't-miss opportunities. Where once there were one or two companies in a particular niche, there are now tons all competing for the buyer's shrinking attention span.

With the need to communicate ever more complex messages to their audience, marketers have begun to seek out creative thinkers for everything from brand development and new product ideas to the development of the company's mission-critical digital infrastructures. More and more, designers are being invited to participate in senior marketing and strategy discussions. As a result, a new breed of strategic designer thinkers has emerged – called them the Strategic Designer or Design Thinking Strategist. In fact, if you looked at the most successful creative directors in the advertising world, they were Strategic Designers rather than Creative Designers. They designed the greatest brand of the last few decades.

What qualifies the Strategic Designer (or Design Thinking Strategist) to sit at the table with senior management, discussing brand innovation and marketing strategies? Very few designers are trained in business or marketing (and even branding), what can these creative individuals offer to the process of developing a company's innovation strategy?

Strategic Designers are "conceptualizers"". They have the ability to create order from chaos by breaking down complex business stories into bite-size chunks. Difficult concepts are reduced to a simple visual element. Complex marketing systems are captured in simple elements.  Suddenly everything makes sense and comes together. They build prototypes both to test the design and to align stakeholders in the process and help clients navigate through the system.

Strategic Designers are creative "metaphor" users. When they start looking at a problem they usually express their ideas as a metaphor.  In design, metaphors are viewed as heuristics that help organize.  Metaphorical reasoning is an iterative process through which designers gradually increase their knowledge of a situation. Basically, the use of metaphors aids in structuring business problems, which by definition are non-routine Thus, when solving non-routine design problems, it is difficult to predict what a solution will look like. In solving a business problem, they use when fuzzy metaphors aid reflection about the essence of a situation. Reflecting on a design situation was seen to have a strong effect on the perception, analysis, and framing of a problem. Not only can metaphors assist in problem reflection but also help to break away from the limitations imposed by initial problem constraints. Many great creative directors I’ve worked with are so good in using metaphors to lead in a strategic solutions.

Marketers Need To Understand The Difference Between Demand Creation, Demand Enhancement and Demand Fulfilment Tools.

There’s one debate that keeps coming up in my professional career among CMOs and CFOs, it is marketing accountability and how they should be measured.  Instead of thinking about what is needed, most just make some adjustment based on their last year spend without questioning “why”? That’s why CFOs questioning marketing spend but never given a simple answer to justify them. The problem isn’t the absence of an ROI on marketing’s expenditures; it’s the absence of any semblance of coherence and rationale for why the investment was made. On the marketing side, the issue is the changing face of media makes it even hard to justify any spend on emerging media.

Finance is frustrated that marketers don’t seem to understand the concept of opportunity cost which is not marketers use to evaluate spend. The opportunity cost does not mean much particularly you are close to year end, if you don’t use the budget you will not get it again next year. So what opportunity costs? Marketing people frustrated that finance don't seem to understand brand infrastructure spend is necessary.

So much is said about how effective the Internet is as a marketing tool. Equally many struggle to measure it outside of direct transaction, particularly the transaction happens through a broker.  Online marketing has many enticing characteristics like tractability and targeting, but I’ve witnessed more than a handful of times when clients and agencies struggle with linking that with larger business goals.

The Internet is not different from traditional branding tools when it comes to measuring brand building effectiveness, never easy to draw a direct link. It is not about online or offline. We need to understand the very nature of the campaign and whether it use for demand creation, demand enhancement or demand fulfillment. Demand creation is about sending the right messages to the right target with a compelling propositions, demand enhancement is to educate the target the benefits of the products particularly for high-involvement products and demand fulfillment is closing the transaction and getting the sale.

Digital marketing fulfills demand much easier than it creates it. TV and print are primarily demand creation medium with some exceptions. The digital tactics that work best (search marketing, social media etc) work because they reach an audience that is either already aware of your brand or a need was already established.

Branding spend should be considered infrastructure spend. And social media capabilities should be considered infrastructure too, as well. They enable firms to engage with customers and prospects in ways that the firms weren’t able to previously have. Trying to measure the ROI on all these investments could be a challenge.

The Death of Creative Director. The Birth Of The Multi-Disciplinary Design Thinker.

What do we know about creativity? We mistakenly narrowly associate creativity with film director, musician or an egotistic advertising creative director. The very idea of a creative director is so 70’s.  It may be still relevant in the field of performance art as it is more about personal style, but in the world of marketing and design, the title is becoming irrelevant. I’ve seen many account planners who are more creative than the “creative directors” although they don't wear that hat. Having said that, there are also some great creative directors but they are better off with a different title. On another note, most creative people cannot manage, or may be another word better than manage is most cannot lead. They are good at self-glorification.

I think the advertising industry (particular the digital agencies) should stop using this title as it’s so irrelevant. Are we saying that only the creative director is responsible for creative outputs and everyone else are paper pushers? True creativity is not necessarily a product of a single mind.  Although a creative act may be stimulated by dialogues and debates (and often a good bottle of wine), the human brain usually synthesizes all facts or impressions. 

In a world when competition are moving faster than the new 3g iPhones. Creativity has typically been defined by ideas that are both novel and useful. Most research on creativity was person-centered, focusing on the personality traits of highly creative people.  They are saying either you are a creative person or not. How simple. Highly creative individuals were found to have traits such as independence of judgment, autonomy and self-confidence and may be non-conformist too. Because creative ideas are often deviant most people are reluctant to express them out of fear of receiving negative evaluations from other people. If you can create an environment where judgment is encourage and there a high level of trust among the team, then these traits are less relevant.

Let’s talk about the two types of thinking, convergent vs. divergent thinking. Convergent thinking tends to move toward a single solution to a problem, and involves the generation of multiple ideas that are of the same general category. And for divergent thinking, it involves the generation of many ideas that are qualitatively divergent from one another. Divergent thinking is widely considered to be an important antecedent to creativity because creative solutions are defined as unique or original in nature. I don’t think this is the case. You need both to optimize any group creative output.

If you have worked in a group environment, you've probably experienced how it can hamper creativity (or how bad it can get).  Animosities arise, adrenaline starts flowing, and before you know it, group members are thinking about territory instead of constructive creative dialogue. People zealously protect theirs especially they were given glorify titles such as Global Chief Executive Creative Directors.

First thing about productive group creativity is to reduce turf-consciousness and promote a spirit of jamming, the creativity of such a group can be unleashed.  Creative group dynamics is not a popular practice but lots of techniques are available to improve group creative productivity.

The multi-disciplinary and cross-disciplinary nature of a team is a key factor and the team spirit that often develops nourishes imagination and creativity.  Is size an issue? Yes, imagine a group 30 people jamming in a room.  Although the optimum size depends on many things, five or six is often a good one. I personally prefer no more than 8 but I’ve seen it worked even at 10 but suggest avoid it if you can. A few large innovation labs have succeeded at innovation in big teams (aerospace etc), but in terms of creativity per person, I'd bet history has favored the 4-5 person groups.

Although outside stimulation can promote creativity, there's such a thing as too much of a good thing.  Some creative people are often better left alone, immersed in problems for as long as a week at a stretch. I know many very creative people who can only work in a cave.  Although interruptions are not preferred, but I find the value of creative loners are way lower than creative collaborators. The best creative minds not only create ideas but also good at real time remixing ideas from others. That, to me, is the true creative mind

The Four Areas Of Innovation Beyond Just The Fuzzy Front End

There was the Front End of Innovation Conference in Boston last week and as usual attracted a lot of thinkers and practitioners of innovation. People shared their stories and experiences in innovation by changing the way people think and act - shifting paradigms and orthodoxies that aren't being challenged.

When talking about innovation, most people referring narrowly to idea generation. The innovation process is actually divided into four phases: the fuzzy front end (FFE) which involves a lot of insight gathering, ideation and early conceptualization, them the new product development (NPD) process which involves design and engineering prototyping, next is go-to-market early-stage commercialization (ESC) is where ideas are needed to inform how the product is being brought to market (usually small underserved or unserved market/segments) and the final stage is driving mass adoption (DMA) is where innovation is applied to mass market the product/service and considering include how to use this disruptive innovation to upset the market dynamics and economics. Innovation is required along the four stages. Our expereinces show us that clients need mroe outside help on stage one and stage three.

95% of people out there think of innovation as first two phases. The skills and business imagination requires for phase four is even more hard to find. You don't need a new product to innovate. Innovation can be finding an application for a dying or even dead product. Here's an example. 

Cassette tape is dead and in fact dead longtime ago. So if you are in the business of manufacturing and selling cassette tapes, you do have a problem. There are probably no nostalgists who lyrically pine for the days of tape, no audiophiles who swear by the purity of the format as cassette hadn't never been like vinyl records. It takes a lot innovative thinking to find its place in the world. One man was still investing in cassette tape.  Even CDs are slowing going away, why cassette tape? 

Bob Paris had a big idea. According to Bob Paris, owner of North Hollywood's Pack Central (a mail-order business exclusively dedicated to selling cassette tapes) "Five years ago, people thought I was nuts when I invested tons of money in analog prerecorded music on tape." Now? Paris' business steadily brings in a million dollars a year. But who is buying Paris' cassettes? America's 2.3 million prisoners. Which brings us to the second advantage of tape over compact disc: a tape can't be broken apart and used as a shiv. So prisoners are allowed to have them. Imagine this will become the only company left in the world to supply to prisoners around the world? Imagine they expand to include new content such as inmate personal development, spiritual development and even a serious called "What's going on out there?" to keep them informed of the fast changing world. This is a typical example of using innovation to bring old products back to life.

There are disproportional attention on the front-end activities that precede this formal and structured process designed to increase the value, amount, and success probability of high-value concepts entering product development and commercialization, we have built a large toolbox in an attempt to perfect the art and science of not only the fuzzy front end but along the whole innovation lifecycle. Most of the time we find great satisfaction in bringing innovation to old products. Innovation doesn't need to start with the new.

Here’s some highlights on being customer-focused from the Front End of Innovation Conference :

- A.G. Lafley (P&G CEO) is outspoken and insightful. When asked about how P&G became so customer-centric, given we understand how difficult it is for companies of that size, he recalled his first days on the job as CEO. "We were all so busy every day, so much so that our heads were in our phones/computers and our behinds were facing our customers." First thing he did was to get people out of their offices and into customer's lives and watch them. This is very simple and true. The reality is how much managers can afford to spend time watching customers. Meetings, admin and emails take up 90% of senior managers’ time. That’s why it is so valuation that this needs to be institutionalized . For Idea Couture, instead of bringing client to our ethnographic field trips, we capture these observations on tape and put them up on our innovation platform, that way, clients can have access to these anytime and be able to read/watch our anthropological analysis to help stimulate their thinking.

- There are lots of talks in on “Humanization”. Apple isn't selling computers or gadgets, Apple is selling a human experience. An experience that empowers us. Apple is about imagination, innovation and design It is also about Steve jobs. Jobs builds the Apple brand and now the the Apple brand build another super brand Steve Jobs. Jobs magic touch can be extend to anything.

- A.G. Lafley: "we have to understand what customers can't articulate." Customers might be able to express what they dislike, but they won't necessarily be able to tell you why or how to fix it.

- Peter Guber (Mandalay) - storytelling  (see my last post) has been the key to his success, and the key to the success of just about everyone he knows (in entertainment or not). When you can tell a good story (about yourself, your company, your brand, your mission, your goal), it resonates with people emotionally and memorably. Good storytelling is not informational, it's emotional - it engages the heart and the mind.

Pls share your thoughts.For those bicycle lovers, here are pictures of latest innovation in bicycle from The Bicycle Exhibition. Below are photos of our end-of-summer party at Scott's house and his new wood burning pizza oven.

 

Does Your Company Manage Its "Imagination" Capacity The Same Way It Manages Its "Production" Capacity?

The China factory phenomena and accelerated technological innovation are causing business models to age faster than ever. Not many companies that formed the Dow Industrial Index decades ago remains on the index today (the only exception is GE). The others were either acquired, dropped or went bankrupt.  And the companies that comprised the original S&P500 some 40 years ago over 80% were off the list after 30 years, and only 12 outperformed the index, In 2 more years, if we look back the last 20 years we can expect 85% of those companies would be gone.

The rules of business have changed, technology disruptions and globlalization have caused many once great firms to fail, some faster than others. The scale and resource based view that dictates managerial decision-making is becoming less important as innovation takes over as the competitive play.  The implications of this are far-reaching. It means that every dimension of growth must be exploited as fast as possible and that that many of the traditional barriers can only sustain a shorter period of time. Scale play is simply not enough, it is now Speed Play and Ideas Play, all three are needed. Find great ideas to experiment and move fast to scale—welcome to hyper-competition. Organizations that don’t keep pace may well go the way of those firms that droped out of the indexes.

Why is it so difficult to recognize any industry breakpoints and take preventative actions? One of the most challenging things to do in any large, system and process driven organization is to get the larger management team to see the futures let alone change their paradigm. Because imagination is a creative act, where individuals and groups create an interpretation of reality, future and different scenarios, changing that shared view can be very challenging.  It is not easy in large organizational settings when there are so many silos and the systems and structures that work against innovation. Creating a break point you need front line people (and outside people) to scan early and weak signals. These signals can help us to see different futures.

The first help they need is to ask imaginative questions that create the groundwork for innovations. Management are good in asking question about hard analytical data and generally not good asking questions about future. You should yourself the questions: “Does your company manage its imagination capability the way it manages its production capacity?”

The Next Competitive Front For Brands Would Be To Own The “Best Stories” And Most Relevant "Search Key Words” .

I attended a meeting today with my team and clients on a project around transmedia storytelling. Very exciting, but won’t way more than that.  Storytelling has always been the universal human activity in any culture and society; they capture memories of the past and hopes for the future. In fact, when properly used, it is the most powerful tool to build brands and engagement.

Any business strategy or marketing strategy is in fact a story. Top marketers know how to use the elements of stories and storytelling to drive change.  There’s a great story behind every great brand…Nike, Apple, HP, BMW, Louis Vuitton or Tiffanys. What is new today about the art of telling stories is the purposeful use of narrative to achieve a practical outcome with innovation and business strategy. Storytelling is becoming the key ingredient to managing imagination, driving change, and innovation in the 21st century

Take Nike as an example, the sneaker was just a sneaker, in every way pedestrian, until Phil Knight and Nike came along and connected the aspirational and inspirational rewards of sports and fitness with world-class innovative product performance like that of the Nike Air shoe. Nike’s ad communicated on a deeper, more inspirational level what the product 'meant' within the wider world of sports and fitness. It transcended the product. It moved people.

Storytelling has the power to change the destiny of a person, company, an industry, a nation, and--ultimately--the world. I was watching Obama telling a story of how an old lady was teaching him the idea of  "firing up”… meaning "stay positive and confident."  He is a great storyteller.  He tells them with conviction and authenticity.

For the last fifty years, marketers have been attaching brands to images and turned them into signals. The visuals were meant to allow the customer to imagine herself transformed by the brand/product into an object of envy for others. Consumer stories tell stories of success, desire, hope and happiness in the lives of people who consumes the right brand. Marketers’ trick was to engineer the transfer of meanings and values to generate signs. This is slowly changing and markets should now turn to social networks and other online/mobile channels to do the same thing. Advertising no longer evokes this  “this is me” felling as everyone knows he/she is a paid actor. 

Real-life customer stories will fuel the re-invention of marketing, all brands in the future will exist between the intersection of a value system and stories around them.  Expect that in 3 years the competition of noises and images will evolve into a stage which I call stories war. Every brand will fight not to own a positioning (that’s so old school advertising) but to own stories.  The next competitive front for brands would be to own the “best stories” and most relevant "key words” for search. Who cares about tag lines and slogans. Most of them don’t mean anything anyway.

What Is Your Organization's Carbon Strategy? Expect To Hear More Of This.

Businesses exist to solve customer’s’ problem and marketing’s job is to uncover, define, articulate and communicate those solutions to consumers. We have been doing a reasonable job so far and may be too good a job when we start focusing too much on fixing their problems only for the short term. These “fix-it” solutions, whether is for consumers or businesses rarely solve the real problems. The pharmaceutical companies want you to believe there’s medical solution to each of your problems. The business consultants want you to believe that their best practices can help you create competitive differentiations. The technology providers want you to believe that their CRM will drastically improve customer loyalty if loyalty exist at all in your category.  The marketing agency wants you to think that their direct campaigns can kick-start your businesses. And politicians want you to think that they can fix all problems of this world if they are elected.

In fact many of these problems are solvable. Take energy for example, the climate problem is neither necessary nor economic, but is an artifact of not using energy in a way that saves money. Climate change can be prevented by taking markets seriously—letting all ways to save or supply energy compete fairly, at honest prices, no matter which kind they are, what technology they use, where they are, how big they are, or who owns them. Internalizing carbon and other environmental costs will be correct and helpful but not absolute essential.

Think about the clean water problem. If you think oil wars are scary, just wait for the water wars to happen.  Over population and ignorance is a deadly combination… and the mechanics of fixing the problem are the same, find more oil and water and continue the same ignorant misuse of resources.

On the first glance, none of these are businesses’ problem. It is the world’s problems. Think again. Is climate change and corporate carbon footprint art of any companies’ business strategy?. Apart from talk and annual report, what must companies do to address climate change, and most important how can they profit from what they do?

No instant fixes work for one's personal life or business, extremely rare in most cases. The key difference is that those big technology solutions touted as instant solutions are orders of magnitude more expensive than the supposed instant solutions for one's personal life – and the purchase price is only the small part – there’s cost of running and opportunity costs for unnecessary distraction.

If current climate science holds true (although there is considerable questions in the estimates) global greenhouse gas emissions should ideally decrease from today’s levels by 90% as of 2050 in order to contain global warming below two degrees centigrade. To reach this ambitious goal, taking economic growth into account, the global economy’s carbon productivity would have to increase by 5% to 7% a year, compared with a historic rate of just 1%, in the days when carbon emissions were not an issue.

Economic growth must be fully decoupled from emission grow. Companies need to use “design thinking” to imagine products —say, computers, cell phones, air conditioners or cars—that are made from more carbon-efficient raw materials and consume less energy and emit lower levels of greenhouse gases in operation.  According to a McKinsey research, one global manufacturer analyzes its total carbon footprint as follows: its own emissions and electricity consumption, 10%; its suppliers’ direct emissions and electricity use, 15%; and the carbon content of the raw materials used in its products, 75%.

Radical innovation is needed to decouple emissions from economic growth. In forestry and bioenergy, for example, a major new value chain seems likely to appear around the large-scale supply of biomass to power plants. Another value chain may build on cellulosic ethanol, which could significantly change the supply patterns of transportation fuels if its cost comes down as quickly as many predict. These are not quick fixes. Companies that have the visions and commitment to make the gradual transition to a global low-carbon economy will be big winners of tomorrow.  By then we will all be using an eco-friendly laptop like this one.