innovation playground Idris Mootee

Can Product Designers Please Standardize All Chargers, Cables, Batteries And Accesories? That's The Easiest First Step.

The Greener Gadgets Conference is underway in NYC this morning, with intros by Jill Fehrenbacher and Marc Alt and Keynote from Saul Griffith.  This is a great event to bring people together to share ideas to deal with our current accelerated pace of creating electronic toxic waste that create series threat to our environment. How many chargers we are throwing away every year? The area of consumer electronics, in particular, needs to make a radical shift from products that are replaced every few months or years to what Griffith called "heirloom" products, like a Mont Blanc pen or Rolex watch that lasts decades. Long-lasting products have a significantly lower embedded carbon footprint, he said.

"We need to give products to consumers with one-tenth the power consumption and that last ten times as long," Griffith said. "That implies service economies (for refurbishing or repairing products). Those will be the business models of the future."

I like the idea of this solar strap power attached to your cell phone, this thing from Strap-Ya features a tiny solar cell which is capable of harnessing the power of the sun to charge your handset.

How many cell phones you have given or thrown away? And all associated accessories and chargers? Why can’t they standardize the chargers? Batteries are the worst in terms of sustainability issues. We’re all hooked on our consumer electronics — iPods, cell phones, laptops and gameboys — but we’re all starting to hear about some of the pitfalls of our gadgets’ manufacturing processes and power consumption habits.

There are a lot of humanitarian and sustainability efforts driving innovators to think globally while creating products that work locally. Empowered by emerging and self-sufficient energy technologies including human, solar and rechargeable energy, panelists will describe how eco-designed products can create simple yet life changing solutions for these global dilemmas. This is the second event and they also awards competition that highlights sustainability and innovation in consumer technology. This one day event brings together folks from electronics industry, inventors and designers to address key green topics including product design, recycling programs, product marketing, energy efficiency and more. 

One idea I like is called Recompute. It is a new way of thinking about computers that layers sustainable ideas throughout its lifecycle to make an overall sustainable product that can be easily replicated. Recompute address sustainability along three main points during its life.

Manufacturing: Rather than making a large tower constructed from numerous materials (ABS plastic, aluminum, steel, etc.), hundreds of manufacturing processes, and dozens of individual components, the Recompute case is made of corrugated cardboard (recyclable and renewable). There are four low-impact manufacturing processes to assemble Recompute: Die cutting, gluing (with non-toxic white glue), printing and electronic assembly. Recompute uses only three major electronic components: A motherboard with processor & memory, power supply, and a hard drive.

Use: Recompute is designed to allow the user to take advantage of existing hardware. For example; use the keyboard from a previous computer. For additional flexibility, external hardware customization is easy via 8 USB ports.

Disposal: Electronic components need to be properly recycled as they contain toxic heavy metals. However, this is often skipped because dismantling of computers is difficult. Recompute can be disassembled without tools, so the electronics and case can be easily recycled individually.

Very cool ideas. I would like to see the whole office machines environment be designed with the same concepts in mind. In fact, I would like to see Apple making them. In that case, the carton used would be white instead.

Should Technological Innovation Be Geared Towards The Best Interests Of The Larger Societies?

Here's a picture of Andrew and KengWei when we were at the MaRS center before our meeting. MaRS connects communities of science, business and capital and is a place where smart brains meet world changing ideas.There is a very good energy from the people there not to mention the building design is a masterpiece.

The current market failure makes us wonder what is really wrong with our system. It brings out the age-old debate about the efficacy of state intervention versus laissez faire. The primacy of the concept of market failure in policymaking - the view that state intervention can only be justified when it can be demonstrated that free markets cannot do better - comes in for particular criticism.  Not least, this is because market failures emerge due to a typically prevalent lack of information transfer between the different agents in an economy, something that is affected by, among other things, the level of trust between different agents. Economists have very different views among themselves.

As I wrote in my last blog, we need a major technological innovation to get our economy back on track. Should the government pour money into advanced technologies or rather giving money to the automakers?  What is the government role in investing in science and technological innovation? Public investments often raised questions on whether it is an effective means.

Many believe that scientific knowledge is most effectively gained through processes of investigation independent of its application. Therefore it is important to accept that it relies upon institutions with a central interest in the pursuit of knowledge without regard to its immediate practical application. This is the tricky part. Military is one of the largest backer of advanced research and historically many today innovation including the Internet and GPS are all military inventions. Is there anything wrong with this?

Governments are pouring money into military innovation gearing for the future warfare. I can't imagine if the same resources and talent were instead invested into healthcare? Here are some of the advanced research taking place:

Software that compiles meteorological and topographical data from a certain area to create new patterns for camouflage. This software in combination with advances in temporary camouflage technology may allow soldiers to paint trucks and other hardware for a single mission and then wash it off later on.

Once reserved for only the richest armies in the world, infrared technology is now ubiquitous. To combat this, scientists and defense contractors are designing fabrics that block human heat-signatures and allow soldiers to move undetected. Others are working on similar products for military hardware.

Engineers at Lockheed Martin have developed a radar system, Foliage Penetration Synthetic Aperture Radar (FOPEN for short), that allows pilots to see military hardware covered by foliage or netting.

I am definitely not suggesting that there should not be any funding for science and technology from military sources. I am simply thinking that the system is too heavily weighted towards these interests and hence the scientific knowledge produced will often not be geared towards the best interests of the larger society.  We have a lot of global challenges to deal with from poverty, heathcare to sustainability, it is more important than inventing the next tactical laser fighter jet. 

Economic Problems Aside, We Are Dealing With A Growing Shortfall Between The Rising Number Of Difficult Global Challenges And The Supply Of Creative Ideas To Deal With Them.

Here's me and Nick having a drink at the W after work. Continuing on my one city a day trip, I landed tonight in New Jersey Newark from Minneapolis via Chicago, not a bad flight at all given I know sometimes how bad it could get in Chicago. Everywhere I go these days, people asked me the question  when will this slump end? And will this go on forever? The taxi driver in Minneapolis today was talking to me non-stop for 30 minutes about how bad it already is and the new US administration will not make it better anytime soon. He suggested we should let things fall and let the market correct itself. Good idea in theory but dangerous in real life. Again, not knowing what I do for a living, he asked me when this slump would eventually end.

My simple answer is soon but not too soon. The early seeds of eventual recovery are now being planted and the system is painfully adjusting to it. Housing starts have fallen to their lowest level in 50 years. Translation, the supply of houses is lagging behind population growth and demand will dice hours’ price up or stabilize it at the minimum. It will a be weak and fragile recovery this time. 

For companies, you cannot manage your way out of this by thinking recession, you need to switch gear and look for new ways to create and deliver value.  We cannot manage based on pessimism and fear. Our friends from Best Buy today walked us the through the history of the company how twice the company almost went out of business but eventfully emerged stronger. What a great story about the spirit of the American enterprises.

Innovation has become critical for organizations. I often remind my clients every business model has an expiry date except management board don’t check them often enough. What about economies? Do they have expiry dates too?

Technology innovation has been the number one driving force behind the past two centuries of enormous improvements in the productivity and standard of living. Technology and productivity and standard of living are closely intertwined. This means, for fuller understanding of the process of economic growth, we need to understand how those innovations came about, or more broadly, the process of advance in technology. There are a lot of myths about innovation and many organizations still not seeing it’s central role in strategy making. Government money can only provide some relief but cannot get us out of this slump. Technological innovation is the only answer. We need an equivalent of another personal computer revolution to jump start the world's economy and create new industries. America's future is in technology.

Outside of technologies, what the human sciences bring to a strategy for innovation? Technology is linked to human behavior. Any technological breakthroughs always bring along the need to adjust to them, and quite often, give rise to heated debate. Just think for a second about the intensity of feeling and argument over genetically modified oranges, over DNA based biometric system, or genome mapping for life insurance policies.

Canadian political scientist Thomas Homer-Dixon believes that our human society faces a growing shortfall between the rising number of difficult human issues and the supply of new ideas on how to deal with them—a phenomenon he refers to as the “ingenuity gap.” His book, The Ingenuity Gap: Can We Solve the Problems of the Future? He provides many example of problems that only ground-breaking innovation and ingenuity in the social sciences and humanities will be able to resolve.

Here are a few of these big challenges:

• How can we make sure that inevitable cycles of economic transition and “creative destruction” of firms and industries do not force many less privileged people into deep poverty?
• How can we leverage the unused capacities and/or infrastructures of larger global corporations to create social value as part of their corporate social responsibilities?
• How can we benefit from the wisdom and knowledge of an aging Boomers workforce while still creating the room for bright and inexperience young people to fully apply their talents?
• How can we govern ourselves – our cities, towns and states and nations – when many of the major economic, environmental and political forces that affect us operate supra-nationally?
• How should we reform our financial systems to include microfinancing and allow it to be fully integrated in the much broader world of mainstream capital markets and financial systems?

Law, Economics, Religions And The Notion Of “No Free Lunch”.

I am reading the current issue of MIT Sloan Management Review on my flight, there’s an interesting piece “A Manager’s Guide to Human Irrationalities” by MIT behavioral economist Dan Ariely. Dan is one the world’s foremost behavioral economist.  He wrote about pricing new products and consumer product choice behavior. Among his research findings is when selling a new product, companies should always compare it with something that consumers know even the innovative product is so novel and offers different performance and features.

He talked about an experiment he had at MIT Media Lab a few years ago seeing how people feels the need to say something slightly different from what someone else said. They called the software “Anti-Groupware”, I like that name. The idea was to investigate why, when you take a group of good people and put them in a room, they generally make bad decisions as a group. They wanted to come up with a technology to prevent this. A very cool idea indeed.

While we are on the subject of economics, traditional economics holds that humans (as rational beings) make choices to maximize their own welfare (not the best side of us). I always think that it is dangerous to think that all human behavior can be explained by economics. Life would be simple and predictable if that’s the case.  As an economist by training, I like taking economic principles and test them in places where markets have little roles.  How about economic and religion?

Let take one of the basic laws of economics: There’s no free lunch. I always tell my teenage sons that there is no free lunch in this world, everything they have to work hard for, unfortunately they always come up with ideas to show me there are (all those gigabits that they download for free).

Back to economic and religion. Let’s look at Judaism; the basic laws of economics should also apply to Torah because Torah directs Jewish behavior. ("Torah" refers to the 5 Books of Moses: Genesis, Exodus, Leviticus, Numbers and Deuteronomy. But the word "torah" also refers to the entire Jewish bible or Old Testament).

Where’s the Torah at on “no free lunch”? The Torah tells Jews that they are in a covenantal relationship with God. A covenant is basically a contract and all Jews are bound to God by a contract requiring to do some Mitzvoth. It is not simply some random good deed but an act commanded by God. The Torah tells them that God redeemed them from slavery to do as commanded. It is a duty.

Law schools teach students that a contract consists of a promise given -- in exchange for a promise received -- and that each such promise must be supported by “consideration” given by each party to the other. But, what is “consideration”? Consideration is simply some form of payment whether it is one dollar. Each party to the contract must pay for the benefit promised by the other. Simply, there is no “free lunch.”

And the contract between God and the Jews is the same, God promises that they will be rewarded if they do as commanded. Traditionally, Jews are obliged to study the Mitzvoth and to “Do” them. “Doing” is the payment for the beneficence God has bestowed upon them. They should talk about the Mitzvoth in order to “do” them because “There’s No Free Lunch!”. “Doing” is the payment for the beneficence God has bestowed upon Jews.

Let’s switch over to Buddhism. A big part of that is the concept of 'No Self'. This concept is very foreign to western culture in many ways. You may have heard about the five Skandhas? The Buddha taught people that an individual is a combination of five aggregates of existence, also called the Five Skandhas or the five heaps. These are: Form, Sensation, Perception, Mental Formations, and Consciousness.  So the “Self” is “No-Self”.  What's most important is to understand about the skandhas is that they are empty. They are not qualities that an individual possesses, because there is no self-possessing them. This doctrine of “No Self” is called anatta.

Very basically, the Buddha taught that "you" are not an integral, autonomous entity. The individual self, or what we might call the ego, is more correctly thought of as a by-product of the skandhas. If only we can see through the delusion of the small, individual self, we experience that which is not subject to birth and death. And you need to give up many of many human desires to get to that stage. “There’s No Free Lunch!”, “No Self” is the payment for the beneficence the Buddha has bestowed upon believers.

I can find more examples from Islam, Hinduism and Christianity. My conclusion today, there is really no free lunch. The airline is the latest to adapt this concept, you have to pay for your lunch and they are not included with your ticket.

Radical Innovation Requires 3 Distinct Capabilities: Ability To See With New Creative Lenses; Ability To Apply Creativity And Imagination In Solving Customer Unmet Needs; And Creativity With New Business Model Design.

We are seeing a lot of industries maturing, some faster than others. From automobile to media and banking are facing unprecedented stress. What they need is not a Botox job but radical rethinking of their business models. Innovative products and technologies, falling real prices to consumers, and abundant new product will slowly transforming stagnant markets into growing ones when consumer confidence eventually returns. The fact is if your organization wasn’t prepared for this downturn you probably have no much of a choice than trying to keep you heads above the water. If you can see beyond the next 6 months, you should be preparing for challenging industry leaderships.

For those just barely keeping their heads above water, you have no choice but to take radical step. Radical innovation is the only way to put you back on the map. Deep customer insight, applied imagination and collective creativity are the starting points to radical innovation. It is where the brave and creative mind taking up leadership, the pinstripes can worry about how many beans make five later on, we will deal with that. First, we want to imagine a brave new world that might have wonders in it. The challenge is to move from a blank page, a sharpened pencil and a lot of white board drawing to a model that is a part of your future.

Radical innovation for any maturity business has to be considered as three distinctive sets of capabilities, not one. Each requires its own skills, ability to see insights with new creative lenses, ability to apply creativity and imagination in solving customer unmet needs and creativity to play with new business model design without burden from legacies. All requires creativity.

The main characteristic of creativity is the ability of divergent thinking, bringing different approaches together to find new solutions for complex and ill-defined problems, we call it B-school meets D-school, often easier said than done. Creativity people are not necessarily designers; it is not the craft but the thinking that is most needed. On the other hand, not all MBAs are necessarily strategists; it is the creative mind that makes an idea strategic, the analytic is only for validation.

Creativity originates in the individual and it is the basis for idea generating. In my experience, you can optimize one’s creativity 30%, but it depends on your base level. It doesn’t help if you start with 10%. Creative people are unique personalities with characteristics who need to be stimulated in a specific way. We also need to accept the weakness often associated with creative people.

Creative people like to be future oriented, taking on super challenging projects and imaginative customers, and make solving problems as their personal missions. Receiving the recognition as being the innovator is important, both within the company as in one’s professional field of interest. These intrinsic motivators are related to radical innovation.

From information to emotions, creative leaders understand the power of emotion and that emotions of pride, anger and even humility are essential to “unfreeze” an organization and power it forward.  Story telling becomes the most important executive skill for any radical innovation. I remember a few years back, I was running a 3 days offsite for a Fortune 500 company, 25 senior global executives and business units owners attended and each was asked to stand on a stage (a real auditorium) and talk for 30 minutes the three reasons their business units should continue to exist and how they create value for their customers and the organization. No power point, no new product talk, no spreadsheet and nowhere to hide, just a human plain story that translate their strategies into a simple stories. It was hard but they thanked me for making them think hard about their respective businesses. They wished they’d taken drama and improv in their college days.

On creativity and unmet needs, how often you've seen your colleague's lunch being stolen by a co-worker? Company 'fridge is no safe place for your lunch even your name was written all over it. Designer Sherwood Forlee came up with an idea. These sandwich bags are printed with convincing renditions of mold on both sides, meaning your coworker won't even think about it when he/she sees this package. $10 for 25 bags. Not sure what people think when they see you eating out of this bag everyday? Enjoy the weekend.

Change Is In The Air. From Insurance To Healthcare And Banking To Workers Union.

2009 is the year of "Change", from politics to lifestyles. We probably won't see the "End of Oil" but will definitely see the "End" of many things...some good and some bad things. Corporations, governments and even non-profits all need to embrace change. We have all become trapped in a disconnected system that was not adapting to a new and changing realities, not adapting to the changing needs of our customers and societies.

Reinvention and transformation is not a choice, it is a matter of survival. We needed to adapt or die, to reinvent or to wither.Many industry leaders see this coming and are externalizing "change" as part of their communication platform. It is not only smart but also timely. There's never a better time to tell the world.  Organizations are more than just systems, resources and assets, and definitely more than a set of income statements. Companies as living systems, part of our societies and therefore their actions cannot be separated from other social responsibilities. There are more than one bottom line. Expect to see many companies re-emerge after this crisis as kinder and more responsible corporations.

Global insurance leader Aviva has taken advantage of the wind of "Change" and launched a very successful marketing platform to advocate "Change" in the insurance industry. It is one of many industries that consumers wanted to see change. The site Let's Change Insurance allow people to ask any questions about insurance. I mean any questions. (Disclosure: Aviva is an IC client and this is one of our creation).

Healthcare is another industry waiting to be transformed. Humana launched a site as healthcare reform ChangeNow4Health is a blogging community site designed for healthcare reform. The goal is to engage healthcare bloggers to come together to share ideas on ways to change healthcare for the better. There are a few communities on the site that focus upon that include simplifying the business of healthcare; prevention and health maintainence and making healthcare simple. It is a snart attempt as part of a Health 2.0 movement.

Another "Change" campaign was from a union of unions, Change to Win was founded in 2005 by seven unions and six million workers to build a movement of working people with the power to make work pay for everyone. Their goal is against how the Bush-appointed majority of the National Labor Relations Board (NLRB) stripped workers of their most basic rights and protections through a sweeping set of decisions issued in Sept 08. The ad is part of a wide-ranging public education campaign launched over twenty cities throughout the country, from Washington, D.C. to L.A.
No question "Change" is in the air.

  

Designing The Microsoft Retail Store Experience. Here Are Three Good Ideas.

Microsoft last week announced it’s plan to start opening retail stores everywhere in the country, people immediately think of Apple stores. But what is Microsoft going to sell?  Microsoft makes very little of it's own hardware unlike Sony. But even Sony’s retail strategy is questionable. The Sony stores are so boring. Remember those IBM stores that existed 10 years ago? Even the Nintendo store in NY City is nothing more than a showroom. There’s very little reason for Microsoft to have its own stores.  Ok you have the Xbox360 and some mobile stuff, what else? Microsoft said it has hired David Porter, a 25-year Wal-Mart veteran, to head the retail effort. Most recently, Porter was at DreamWorks Animation, heading product distribution.

Expect to see Microsoft evangelists walking around in the store in Window Ts with some Windows mobile gadget. The stores won’t ne white…as it will be too Apple. I was in an Apple store today to pick up a new MacBook Air as mine is schedule for repair, I see long lines of people, some shopping and some just hanging out there who knows what they are doing.  This is not going to happen with Microsoft. Having a store doesn’t make a company hip. Let me try to imagine the unique store experiences. Here are three ideas to start:

Instead of Apple's sheer walls of glass and white décor with friendly staff in colorful Ts, Microsoft's stores will have steel and metallic design with Windows color accent, and the staff will wear different colored golf shirts. With each color representing Starter, Basic, Premium, Professional, Enterprise, and Ultimate. Make sure you talk to the right person otherwise they will keep referring you to others.

Instead of a "Genius Bar" Microsoft will offer a “Stress Bar.” It will be staffed by Microsofties trained in the art of making life more complicated and fixes that often lead to more problems. The store will offer Windows branded painkillers. There is a security device and will display warning on the big screen such as “Windows had detected that you are Mac users and not welcomed in this store.”

Store hours are pretty unpredictable, it will generally stick to mall hours but at any given time the store randomly shuts down instantaneously for no apparent reason.  A sign will be posted outside “Windows encounters an error and needs to shut down.” Kind of pop-up stores hours with no real pop-ups.

Sounds fun.

My Advise To Executives - Use The Next Six Months To Invest In Innovative Capacity And Strategic Agility. Think Spitfire.

It seems as businesses have been anticipating and preparing for this downturn for 2 years, constantly predicting it and pushing it off as long as we could, all the while listening to CNN telling us it was just around the corner. And now that it is here and the media is making it worse by repeating the "R" word thousands of time a day. Every news story seems to have the addendum "in a downturn or recession" attached to it. I suspect that soon there will be new category/products "Recession PC", “Recession Music”, “Recession Food”, “Recession Lego” or even “Recession Travel” marketing to us. You can use some imagination to think what they look like (innovation opportunities here!!)

I’ve been speaking to many groups and associations on how best to deal with downturn, I've been sharing my perspectives about how leaders can survive and even thrive during downturns and how to see and prepare the light at the end of the tunnel. While you run your business on a day-to-day basis primarily dealing with the current crisis, you can only design your future business by seeing beyond current challenges.

The first thing we have to do is ask ourselves a fundamental question: Do we believe things will get better? Or this is the end of the world or our economy? If you think this will be the end of the world, go and spend your money and enjoy it when six stars luxury are selling at 4 stars price. Make sure you get the best of what ever is still available. If you think and understand this is the part of the cyclical nature of our economy, then you have a lot to do to prepare when the economy slowly starts to swing back to the other side. Although life (and business) will never be the same again.

My call to action is clear: Use this time to invest in your organizations’ and your own future. In fact, the best investment you can make right now is to invest in the innovation capability of your organization and reorganize to become a agile corporation. Strategic agility is the key to winners of tomorrow’s success and over 90% of all organizations today are over burdened with systems and kept prisoners by their inertia and organizational silos. When I speak to senior executives, I often refer to military planes and strategies as analogy. RAF's Spitfire is the best example of agility. It became the symbol of the Battle of Britain because of its speed and agility.

This is the perfect storm to redesign your organization and bring their clarification to drive recommitment to the organization's values and purpose.  No one will do this when the market is hot and every CEO looks like a mini Jack Welch.  This requires a lot of passion, foresight, time and energy, but not much money (usually with a little help from outside consultants) And it will yield substantial returns and provide sustain the organization through difficult times, and even more when the economy rebounds.

A wise executive team will view this as a big opportunity to build greater trust and behavioral cohesiveness and realignment once they have dealt with the survival thing.  For those paper pushers this is not good news as they will most likely end up not having a job. For those innovators and dreamers, this is one of a lifetime opportunity to make a mark in an organization and be part of those who shape its future. Portfolio management needs to become an innovation undertaking as part of a bigger re-alignment; it takes new lens to see things from customer's perspectives and will raise questions around industry and category attractiveness. We believe what is missing is a specific lens through which to examine the portfolio that reflects a deep and detailed understanding of the customer. In this article, we present a powerful way to incorporate the customer perspective into all the critical portfolio decisions: what to maintain, what to modify, what to streamline, and what to create.

If you invest wisely in the next 6 months to become more innovative and agile, both your organizations will emerge stronger than ever when the economy turns around, with a real innovator’s advantage over competitors. That's because most of those competitors will probably flail during down times, frantically searching for a tactical way to swim upstream and defy the storm, leading to even more frustration and angst than is necessary. It takes a different kind of skills to sail through the storm. In the end they'll simply be more weary, depressed, scarred, and unprepared.

Better-The-World Is One Of The Coolest Social Ventures In 2009. Why Aren't Our Governments Supporting Social Ventures Like These?

There are plenty of ups and downs this week with everyone in the office busy with a million things. Tonight we were having a private launch party for Better-The-World  in our office and there were more than 100 people attended. They included friends, partners and investors all celebrating a big milestone.  Prof Michael Rouse from Ivey  (their advisor) was here proudly supporting his students (and investment) who decided to become social entrepreneur after graduating from b-school.  Idea Couture is proud of these people as their incubator.

There’s never a better (and more difficult) time to start a social venture. First, you must have a very neat idea. Second, the idea needs to be able to change the world. Third, it needs to create adequate shareholder return for investors and fourth, it needs to same time deliver on its social mission.  And there are many more…who says social venture start-up is easy? The team did a fantastic job the last 12 months. This is no questions it is the coolest social venture start-up in 2009.

There are a lot of frustrations with large organizations how little they are doing from a social responsibility perspective. The combination of a new US administration, an economic crisis highlighting systemic failures in our approaches to capitalism and a growing frustration with promises to change the world and come up short, the idea of new, pragmatic approaches to tackling our toughest problems will continue to captivate. Smart governments understand the power of social ventures and will support it with new policy. The banks will never get this. I would rather give money to these social ventures than bailing out those bankers.

So what are the hottest trends this year?

Open social innovation education platform - More universities and B-school will incorporate social entrepreneurship and social enterprise into their curriculum. These institutions will develop programs to support youth-led innovation beginning as early as high school. These educational platform will be global in nature.

Social enterprise hedge fund - It is time to put the tools and skills of hedge fund managers back to work, but as social hedge fund managers. Imagine having using real options approach to investing hundreds of social ventures, derisking these social ventures by investing in a large portfolio of social enterprises.

Bottom of the pyramid innovation - There are a lot of ideas coming from developing countries and expect that there will be many green innovators, particularly those focused on the bottom of the pyramid to drive change. Social ventures will be seen as a cooler than tech start-ups and many young brains will be aspired.

The firewall that exists between business, social ventures and non-profits should never have existed. The way we measure corporate performance should based on the ability to create the largest set of overall returns possible-financial, social, and environmental-to maximize total value and total returns on investments. We must start from there in order to change management behavior and decision. If a triple bottom line positively impacts a company’s valuation, guarantee new behavior will emerge.

D-Schools Can Use Some Design Thinking For Reinvention In Response To The Reality Of Jobs And Employment.

I don’t know how many design students are being pumped out of D-schools globally every year. My estimate is for US an Canada alone, we are talking about 180+ four-year under grad and one-year grad programs conferring B.A. , B.Des, B.F.A. and M.F.A degrees. About 5,500 are graduated annually. This doesn’t include associate degrees and design diploma, if we start including those, we are talking about 30,000+ students graduating every year US and Canada alone. These numbers may be off. I wonder how many of these graduates actually find work in the design field and how many did make a serious career in design? If we ignore production design work, how many are actually working as a design thinker?

My conversation with D-school deans is that we estimate that less than 45% of graduates actually find a job in design related field within the first year. And over 55% of B.A., B.Des, and B.F.A. graduates or diplomas holders actually quit design within a year after graduation.  Over 70% of M.F.A. grads actually continue their design career. That number is certainly higher than engineers and accountants.

There are many reasons, here are enough design jobs around and many programs provide inadequate job counseling. These young people are not well prepared for the workplace. There isn’t a lot of collaboration between D-schools or Engineering Schools not to mention intern partnership with large organizations. The quality of the students is also a challenge, while the straight As students usually for an engineering or medicine career, many who are end up in D-schools are not the brightest thinker and problem solvers, they merely study design to learn the craft, and don’t have intellectual power to solve the world’s biggest problem. My guess is less than 5% in an undergrad design program are bright enough and aspire to take on larger challenge than making a pretty poster or brochure.

There is a tremendous demand for design thinkers today. In industry and in consulting (like Idea Couture), those who can marry creative right-brain thinking and analytical left-brain thinking are at a premium. That's because innovation often happens not in the center of a discipline but in the space between disciplines, and right now a lot of new value is being found at the intersection of design, technology and business.  So who is going to lead this new world of design? You might think that D-schools would have the strongest claim. That’s definitely not the case. I hope this doesn’t upset some of my friends, it will take a very different kind of design education to produce people who can apply design thinking to solve business problems. D-school can use some design thinking to reinvent themselves.

Dyson, a keen supporter of design (who ditched plans to found his own design school) is finding alternative ways to support design education. The cash, which releases £1.6m of match-funding from the UK Government, is the biggest single donation that the Royal College of Art has ever received. Dyson says he is concerned that the Government is not doing enough to support UK manufacturing. He made an interesting point about design employment. He tells The Observer, ‘You often hear of British designers who’ve gone abroad and designed things for Apple, Volvo, Sony and so on, but if we are able to go on training very good designers, and manufacturing is given the right sort of support by the Government, we can turn the tide and start exporting more than we import – and have great fun in the process.’

Design can revitalize industries, if I am running a government, I would carefully craft a plan to incentivise designers and use them to create industries. Designers can create a lot of jobs, if politicians are smart about it.

The Coming Transformation of Broadcast Media. It Just Has To Be Google-ized And Facebook-erized.

Here’s an interesting question: Is traditional media on a permanent decline? Will they ever recover in full when this downturn is finally over?  The media companies are watching their life blood -- advertising -- erode at a rate not seen in a generation. No one knows how this will turn out as evidence of audiences increasingly get more and more fragmented and less accessible to mass marketing is becoming clear.

Disney’s CEO Robert Iger told analysts last week that some of the entertainment empire's businesses, like its broadcast television network, are feeling "signs of secular change as competition for people's time is increasing and the abundance of choice is allowing consumers to be more selective. He was suggesting that something more than just the economic downturn was behind Disney's 32% drop in fiscal first-quarter earnings and 8.2% revenue slide. 

News Corp.'s recent results underscored the reasons for concern. The company swung to a loss for the quarter totaling $6.4 billion thanks in part to an asset impairment charge of $8.4 billion stemming from the 70% drop in its stock price over the last two years. Its revenue was down 8.1%. Time Warner Inc., with its stock down 56% over the last 2 years, logged a $16 billion quarterly loss last weel with asset write-downs totaling $24 billion as its magazine publishing and online media segments suffered sharp declines. This is serious money that they are losing here. CBS shares are down 73% over the past year.

I don’t think the valuation will recover anytime soon even if the advertising money returns. This is simply a perfect storm as they write down bad acquisitions over the last 10 years and the current stock price is reflecting those write offs. Many of the digital media acquisitions were 1/overvalued 2/lack of synergistic value 3/lack of a strategy to monetize these assets.

Media fragmentation is a good thing and a bad thing. A bad thing for advertisers since it is more difficult to effectively reach the mass. The good thing it is now possible to use media to build communities and engagement.  The future is niche media and niche is the new mass.  Newspaper and TV may end up following the niche model.  TV and newspaper will not go away, but will be transformed.

We are not watching less TV today; although we ignore most of the ads but still leave it on in the background while we are serving the net. According to Nielsen’s findings, Americans watch more TV than ever before.  The results show that time in front of the tube actually ratcheted up 4% for the average American from only a year ago. Among traditional TV watchers, those aged 65 and older watched the most, while the 35- to 44-year-old age bracket took the cake for Internet use. Those aged 18 to 24 prevailed in a more specific category: watching video on the Internet, living up to the “YouTube generation” moniker.

TV is not dead but it is losing its influence as it fades into the background. Broadcast media just has to be Google-ized and Facebook-erized.

Will Singularity Results In Integration Of The Human Nervous System And The Mobile Networks And Interfaces? So You Are Your IPhone.

Remember what you've read about Singularity? The technological singularity is a theoretical future point of unprecedented technological progress, caused in part by the ability of machines to improve themselves using artificial intelligence. Remember Ray Kurzweil? Inventor. Entrepreneur. Artificial Intelligence. Futurist. Author: "The Age of Spiritual Machines: When Computers Exceed Human Intelligence" and "The Singularity is Near." In 2045 the human race "breaks the shackles of its genetic legacy and achieves inconceivable heights of intelligence, material progress and longevity." Kurzweil's Law of "accelerating returns." Material progress faster than Moore's Law. The "Singularity" is that postulated point in time when technological progress, led by machine intelligences designing their own replacements at an ever-increasing rate, becomes so rapid that we mere humans can no longer comprehend or control it. It is no sci-fi,many think it is real.

Microsoft started early playing with the idea and the singularity project in now its 5th year. One focus of the project has been to throw away the past- the OS we have today (Linux, Windows) evolved from designs in the 60s and 70s when computers were limited in resources and not very networked. What could you get if you design for today’s CPU power?

There are people believe that this point will eventually be reached in the real world, may be in 10 -20 years? I think that they are underestimating other limits to progress, such as bandwidth limits for data gathering, power of data analysis, the difficulty of comprehension, and the inverse relationship of speed to reliability in data analysis. They're also mixing up exponential growth curves (which lead to arbitrarily high growth rates) with S-curves (which apply to real-world situations in which growth rates increase for a period as key limits are overcome, then slows again), those two behave very differently.

But while we're waiting for God to emerge from machines, some of the people promoting the concept of the Singularity are looking for practical ways to turn technological progress into social progress. These are very good intent. The questions are when will artificial intelligence out-compete humans? Or when computers can have personalities?  Or when I can transfer my knowledge as well as personality traits to a computer? Or will artificial intelligence eventually manifest themselves as brands and run all marketing activities (who needs an ad agency?)  These are interesting questions. What other technologies and applications which may take us to Singularity? Here are some examples:

• Computer software endowed with heuristic algorithms (heuristic is an algorithm that is able to produce an acceptable solution to a problem in many practical scenarios, but for which there is no formal proof of its correctness). It means computer can provide answers to right and wrong without formal logic. I can see computers become political.
• Our real life is simulated by computers in a virtual world so if we die, our virtual self lives on. So if you are being murdered, they have to do it twice. It brings new meaning to what is defined as murder of the first degree. May be you can sue someone's virtual self and the real person as part of the collateral damage.
• Artificial entities generated by evolution within computer systems, need some imagination to think about what are those entities? Stephen King loves this.
• Integration of the human nervous system and computer and mobile connectivity and interfaces. You are your iPhone. Just hope it doesn't crash. Interface designers have a bright future ahead of them. Apple Care has new meanings.
• Dynamically organizing social networks so the system help you to pick, manage and organize your social life. The next Facebook?

All these ideas are disruptive and scary in some cases. But we are moving towards that direction.  Many are pushing that idea and they include Ray Kurzweil, Peter Diamandis (X Prize Foundation), and Google co-founder Larry Page. They formed a Singularity University aimed at both students and executives in various technology disciplines (including Space & Physical Sciences, Biotechnology and Bioinformatics, Nanotechnology, Neuroscience & Human Enhancement, AI, Robotics, & Cognitive Computing, Energy & Ecological Systems and Future Studies), the objective is to close the gap in understanding and applying fast-developing technologies to solve what they called humanity's grandest challenges...such as poverty, hunger, and pandemics. In another word, applying Singularity to safe the world.

I don’t think the answers to many of these problems will come from technologies alone. We cannot think about the problems today without keeping in mind what caused it. What cause our sustainability crisis? It is not technology issue, it is a planning issue. We simply cannot ignore population issues, standard of living per capita and what are the limits? The earth has limits. Everything has limits.  My biggest concern is whether the top-down, capital intensive management systems will dominate the thinking and cloud the visions of people who might make other choices if they only saw the potential for them. And technology is always a double-edged sword. Same as Singularity. Let's not deal with the symptoms and work on the causes. The future is always dangerous…and exciting.

Have a great weekend.

Innovation Is About Strangeness. You Don't Need A Xerox PARC, Just A Few Creative Wierdos.

This year marks the 25th anniversary of the publication of In Search of Excellence, by Tom Peters and Bob Waterman. Tom is a crazy man (in a good way). He is a corporate rebel. He has a very similar background like me (strategy consulting,writing) but he is angrier an d more rebellious.  Their ideas shaped new management thinking for more than two decades. Peters is not a philosopher like Peter Drucker or Charles Handy. He doesn’t have any all-embracing theories of the world of organizations or any 5 steps formula for change. What he does well is he gets under the skin of organizations. When asked what has been the single biggest change in business over 25 years, Peters replied: “The obvious answer is the Internet …….we survived much the same thing when we went from the speed of the train to the speed of sound with the telegraph. Perhaps the biggest implication of the Internet is that it has caused the half-life of old, giant companies to go way down.” He is right.

Peters’ advice to executives is Strive for strangeness”: Creating a portfolio of the weird and encouraging "freaks" to flourish inside the company will help ensure the steady stream of innovative ideas necessary to survive in an hyper-competitive international business environment. Where do you find the “weird’ and the “freaks”? More importantly how do you make them productive? Innovation happens when an organization, through outside help, brings in varied ideas, sees the same old things in new ways, and see new patterns otherwise unnoticed. Wear different hats, stand in different places, play different music and play with different things.

A few months back we came up with the idea of producing a book for just about that. Weird ideas, great ideas, powerful ideas, silly ideas and world-changing ideas. Organizations that want to develop a capacity for continuous, game-changing innovation need to teach its people how to dream up, conceptualize, define and manage their ideas.

Four months later we will be finally seeing our books next week.  So many people spent time on it and it is not without pain. The final product is beautiful 200 paged color coffee table book. It is fun, interllectually deep and crazy. The book is divided into 3 parts. All three are almost independent and can be read in parallel, switching from one to the next. The first part provides some readings on innovation written from both economic, cultural and anthropological perspectives. The second part is a photographic journey of our first 12 months. The third part shows a selection of our innovations as illustrated concepts. You may think that some of these ideas are whacky, namely that the lines between demand chain and supply chain are blurred, that customers’ experiences become the marketing, that jobs are avenues of self-expression and that users un-design your products.  Here's a first peek.

 

 

Being A High Performance CEO Is Simple. It All Comes Down To Three Things: Foresight, Energy And Focus.

 History suggests that even the deepest downturns can create huge opportunities for companies with money and ideas. HBS’s prof Tom Nicholas went back to data in the 30s and examined valuable lessons from the downturn. It is all about investing in innovation. This is the true test of any CEOs. What does Richard Branson, Martin Sorrell, Indra Nooryi and Jeff Bezos have in common? Read on.

Executives and managers are often told to maintain investment during downturns. It’s easy said than done when they can’t see beyond 6-12 months.  Many companies hesitated to innovate during the 1930s.  Yet several successful companies did not delay such investments. One was DuPont. In April 1930, a noted DuPont research scientist, Wallace Carothers, recorded the initial discovery of neoprene (synthetic rubber). Although the company’s price levels and sales fell by roughly 10 and 15%, respectively, that year, DuPont boosted R&D spending to develop the new technology commercially.

A buyer’s market for research scientists and low raw-material prices helped the company to keep the cost of its research investments manageable. Neoprene, which DuPont publicly announced in Nov 1931 and introduced commercially in 1937, became one of the 20th century’s major innovations. By 1939, every automobile and airplane manufactured in the US had neoprene components. Similarly, DuPont discovered nylon in 1934 and introduced it in 1938 after intensive R&D and product development. There are many stories on how investing in innovation resulted in a long boom for companies. The question is what kind of leaders can demonstrate leading the industry by innovation.

It takes a very different kind of management to manage in this climate. This is the true test of management quality as there are no bull market to hide behind under performance.  So what are the management qualities that are needed to thrive?

It’s pretty simply, whether it's the young or mature, male or female, b-school trained or self-taught, it all comes down to three things: Foresight, Energy and Focus. Many CEOs lack one of the three, either lacking in foresight or lack of focus. This is key for purposeful action-taking. According to research by two management profs (The late Sumantra Ghoshal, London Business School and Heike Bruch, University of St. Gallen.), these are the common management behavior:

• 30% of executives procrastinate; they hesitate and fail to take initiative because they suffer from low-level energy and focus. This is very common behavior in the corporate world.
• 20% of managers exhibit disengaged behavior; they are highly focused but have little energy. This is purely a function of energy and dedication.
• 40% of executives exhibit distracted behavior - busyness - by being highly energetic but engaging in unfocused activity.  This happens not only within top management, a lot of middle management suffers the same problem. It is about applying the 80-20 rule, find 2 or 3 things that if executed right can create significant value. I often see a lot of executives bouncing from one meeting to another and blackberring the world in between. Lots of speed and activities but not much progress.
• Only 10% of executives take purposeful action, a type of behavior that combines high energy and high focus. These are the truly the great leaders that are capable of bringing the company beyond the economic crisis. This 10% are the top CEOs (everyone pictured here is the top of the top CEOs)

A good CEO not only needs to posses high energy. He/She must possess strong execution skills. In fact, rather than team-related skills, being able to successfully execute decisions (with limited data) is particularly important in this environment. Being more execution-focused does not hurt team-related attributes and research shows execution skills are shown to lead to higher rates of success.  If you can roll up your sleeves and executive, provide laser focus to guide your executive team and bring high energy, you belong to the 2% of the 10% high energy and high focus group. It is very difficult for you to fail.

The World Needs More Better-The-World And B-Schools Need To Produce More Socially Minded MBAs. Should MBA Be Renamed MCC (Master Of Creative Capitalism)?

Better-The-World officially flipped the switch today to open to the public. It is a big day in the office. After 12 months of crazy work it is now live.  This social venture has a big vision – to raise a billion dollars for charitable causes by coming up with new and innovative ways to leverage the power of Web 2.0.  There is never a better time (or more difficult time) to pull off a new venture not to mention a social venture. But they did it. The idea is not only clever but very much in tune with the behavior of a younger generation. The plan is to bring this to Europe and Australia/Asia quickly. We are proud to be associated with them. I first met these three Ivey MBAs a year ago telling me about this crazy idea…so crazy that it is now live. The world needs more socially minded MBAs, for ten of years we trained generations of selfish, greedy and power hungry MBAs that push capitalism to a wrong direction. That needs to change. B-schools are the best places to begin.

That brings the question, which are the top B-schools that produce most socially minded business people? How do we measure the success of B-schools? How does CSR play in B-schools ranking? Is it just a few electives or it is a fundamental transformation of business education? I don't have any answer or are we interested at all? The Financial Times has released its annual global MBA Rankings in Jan 09. There are 6 business schools from the US in the Top 10 list; the other 4 schools are from UK, France, China and Spain. 


Not everyone is happy when their alma mater ranks top. My fellow LBS graduate Andrew Newton (co-founder and editor of APEsphere) wrote “ While I hate to dis my alma mater, what does it say about FT MBA rankings if LBS, a school with poor CSR integration in courses, is ranked no.1?  Here’s what he wrote:

“The seeds of my disenchantment, however, were planted when in my final year the business ethics elective was cancelled because only 6 people had signed up to take it. The closest I got to studying any aspect of responsible business at the school was the Leadership and Corporate Transformation elective designed by the late Sumantra Ghoshal and taught by Don Sull during my last term at the school. Subsequently, as my interest in and understanding of progressive business has advanced, I have noted with concern that LBS has a very immature understanding of corporate responsibility. While it has at last made "Business ethics and CSR" a part of the core curriculum, it still appears to regard CSR as a niche subject and teaches it much as it has always taught business ethics. It still appears to find it difficult to integrate CSR into the same mental frameworks that it promotes in each of the other core disciplines?

The Indian School of Business is in 15th place second year in a row.  ISB is also one of the few B-schools in India that also provides accommodation for the spouses of its students. It is also one of the most expensive B-schools in India, with a fee of Rs 20 lakh for the one year program which is a pretty good deal compare to what you have to pay for London, Harvard or Stanford. I've never tried to do a real ROI analysis for what I've paid HBS and LBS and what return I am getting for my school fees. I think it is definitely worth it. Here’s the list of the Top 10:

1. University of Pennsylvania
2. London Business School (UK)  
3. Harvard Business School
4. Columbia Business School   
5. Insead (France)
6. Stanford University GSB   
7. IE Business School (Spain)
8. Ceibs (China)
9. MIT Sloan   
10. NYU Stern   

Other included in the rankings:

11. University of Chicago
15. Indian School of Business
19. Yale School of Management
21. Kellog Business School
34. Cornell Johnson
47. University of Toronto Rotman
48. University of Western Ontario Ivey
71. University of British Columbia Sauder

There are a lot of critics and a bit of blame at B-schools for what happened today and how we ended up with this crisis. We trained generations of greedy managers that push capitalism into the wrong path. Henry Mintzberg (McGill) has been a critic of management education for more than a decade,  "Conventional MBA programs train the wrong people in the wrong ways with the wrong consequences." Despite these positive indicators, there are deep-rooted concerns about the "industry."

B-schools faculties are to blame too. Warren Bennis (USC's Marshall) suggests that they are "institutionalizing their own irrelevance" by becoming too focused on scientific research that has little connection to business reality. This is very true. Too much time wasted writing these working papers that no one reads. It is like digging bones from one graveyard and buries them in another one.

What more should a business school like Harvard should do? They believe that in general there isn’t enough training in soft skills, such as self-awareness and the capacity for introspection and empathy. They also found MBAs lacking in critical and creative thinking, as well as communication skills.  I think that is something difficult to teach in school. I’ve hired and coached more than at least 150 MBAs in my career; the biggest challenges are soft skills and creativity. 8 of 10 told me they studied or specialized in “strategy” in their MBAs, this was usually a red flag. When I asked them a few questions around strategy, most didn’t know what they were talking about. I don’t think you can teach strategy in school at all. Strategy involves more than a few tools and frameworks, it needs to take into account of people, culture and leadership. Every time I interview an MBA fresh grad and he/she started talking “strategy”, that’s pretty much bring to a quick end to the interview.

Is there something like MBA in CSR? The Global Executive One MBA program at RSM Erasmus is one such that explores how environmental and social performances do (and do not) go hand-in-hand with financial performance in a global economy. Nottingham University Business School (Ranks 100 in FT rankings) and the University of Geneva are two schools that have specialty MBA programs that focus on corporate social responsibility. I do like to find out what they are up to and report back here.

That brings up an interesting question. Does CSR really matters? If we need to change the future of business, we need to start with business education. When do they start teaching “creative capitalism”?  In a much admired and debated speech at the World Economic Forum last January, Bill Gates said that many of the world's biggest problems cannot be fixed by philanthropy, but instead require free-market capitalism—"creative capitalism"—to solve. According to Gates, creative capitalism is "an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities."