innovation playground Idris Mootee

In Algorithms We Trust. Do We?

Let's try to paint a likely not-too-distant future. In this future, everything around us will be managed by algorithms. They manage and recommend what we want to watch; they control traffic of our driver-less cars; they control those drones which deliver our pizza; predict for you which one of your friends will become your future spouse, etc. They will make our life effortless and predict what things will happen next or what's best for us. We all wish that it is that simple.

As we are picking up massive data every second, algorithms are critical to how we make sense of them and our reliance on algorithms is growing by the second. But how much faith should we put into those algorithms, and how reliable they are depends on who you talk to. The accuracy of the algorithmic differentiation (automatic differentiation) is key in dealing with data volatility in many complex cases where accuracy of data is critical to the final outcome. I don’t know when we can have statistical evidence comparing how often driverless cars mistakes and how often human drivers make mistakes or how well a software program investing in stocks makes mistakes and human making investment mistakes.

We need to develop programs to check whether algorithms are working as they were intended and monitoring algorithms by the results they produce based on machine performance metrics. Vetting algorithms in advance isn't practical at all as many are too complex for their outcome to be predicted. Algorithmic differentiation is used to fine tune algorithms that are complex to optimize. We will be placing our faith into the accuracy of these algorithms and trusting that they will deliver. I think we may be over-optimistic and mining a lot of data using statistical analysis still has a very strong random component to it. To optimize these models we need algorithmic differentiation and sometimes it feels like a scientific random number generator. The more data we have, the more simulation is needed and the more reliance on the significance of data, and significance means sensitivities. We’re in the midst of a transformation when industries are exploring how to use big data to create new business models.

There’s one certain thing in big data, it’s that all algorithms are not created equal. The biggest question is how many jobs will disappear when algorithms take over human jobs? People ask the same question during the first industrial revolution when machines started making goods a lot faster and cheaper. Are we entering a world in which the algorithms themselves will be competing with humans? Honestly, I just don't like it when algorithms make decisions for us. They can help me analyze my options and probabilities, but not making a decision until they prove that they can think smarter than me. And so the game begins…

Design Leadership Is More Than Simplicity. It Is About Design Discipline.

El·e·gant, an adjective and define or characterized by or exhibiting refined, tasteful beauty of manner, form, or style. Marc Jacob? Chanel? Jil Sander? Hermes? All are unquestionably elegant by design in the fashion world. How about smartphones or interfaces? Can they be elegant? Or what about customer experiences? Can you describe a banking or customer service experience as elegant? Most people don’t.

Is elegant a word reserved solely for tangible product? The design world likes to use words such as “elegant”, “simple” and “user friendly”, many designers understand how to subtract in creating simple and elegant design solutions. Human factors usually subtract more than add. Good designers often take away complexity in objects or interfaces. Design is more than just making things simple. They appears simple but not necessarily simple. Design is the most complicated process but least understood.

Design should be strategic. Being strategic also means being human. 9 out of 10 designers barely understand what that means. Most are trained as design craftsman. There are very few design visionary and I only know a handful of them. They are also very few design managers. And that’s the reason why designers never made it to the boardroom and they complain they don’t have a voice. Because they are not strategic. Design becomes a competitive advantage for corporations when it is used strategically. At a meta level, design connects the dots between mere survival and humanism supporting by the underlying economics to make it feasible to produce and sell.

I have been hiring and mentoring designers (including some of the very best talents) for decades and can tell you which typology they belong in 5 minutes. It is very easy to find designers, it is not too difficult to find good designers, it is very hard to find design visionary. Because they are not trained in design schools. They need to be cultivated.

But there are so much business can learn from design. If the best design can be elegant, then can a business strategy be “elegant”? Or can a particular management style be described as “elegant”? Anything elegant is often simple; not everything simple is elegant. Things that are simple are often user friendly, not everything simple is user friendly. Sometimes complexity is needed. Simplicity has different meanings. Good businesses need to be simple and easy to understand, and that’s the investment criteria for Warren Buffet. Businesses are getting too complex these days and same for design. Long gone are the days where a few talented young folks sketching out ideas in a room. That's a mindset that stops designers from growing up to a highly complicated world.

Design process is never simple, it is often very messy as everyone has an opinion. Don't try to make it simple. But the result shouldn't be complicated. Design needs strong leadership and no different from other disciplines. Design never works in a highly politically environment and as a result you get design by committee – which is a recipe for disaster. Design management is to take the politics out and allow the essence remains. And the process is true to the mission - design to delight and make profits - not one but both.

Design needs strong leadership. Design never works if it is not managed. Best designers perform well in a professionally managed environment. Not the most desirable for many, but it is necessary. Apple design team is professionally managed and same for Mercedes and Burberry or BMW. There is no design without discipline. There is no discipline without intelligence. Strong design leaders are never popular, because they need to cut out the non-sense that designers to hide behind. To force people to unlearn old theories of design.

Designers wants to remain small, fully independent and less disciplined and that’s why most design firms cannot scale beyond certain size and fail after a few years. They want to ignore the commercial complexities and stay pure. I appreciate that too but companies cannot afford it. Unless it is your own business and you don't care about making profits.

Design for elegance is better for design for simplicity. Oliver Wendell Holmes Jr. once said, “I wouldn’t give a fig for simplicity on this side of complexity, but I would give my life for simplicity on the other side of complexity.” Elegance is “far side” simplicity that is emotionally engaging, profoundly intelligent, and artfully crafted to be two things at once: simple and powerful. In today's super connected world, the proliferation of digital devices and experiences require designers to create new ways of harmonizing software and hardware with elegant connectivity – connecting humans in an elegant way. Industrial designers, human interface designers and mechanical engineers need to explore new theories for them to make physical products real and meaningful and elegant. Why elegance? It is not an elusive target? Industrial designers should stop thinking about functional ease and simplicity, that is an over simplify way of thinking design. Some times people love things that are not so easy. Think about your personal relationships, you don’t go for the easiest one, you go for where your hearts is. Design is the same. How do you put love in an industrial produced object? That’s our job.

China Is Pushing The Frontiers Of Innovation. It Needs To Move Beyond Just Technological Progress. China Is Behind In Commercialization And It Is A Big Gap To Fill.

There were lots of interesting debates about "new thinking around innovation and future development of enterprises in China.” With almost three decades of sustained economic growth and orchestrated government support for advance technology research resulted in a large talent pool (but still not large enough) and many are well trained by foreign univerisities and companies.

China has made impressive achievement in many areas including network technologies, article physics, structural biology, genomics, human space exploration, supercomputing and high-speed rail which is part of China's centrally designed and state-led innovation model. Moving towards a more innovative economy is one of the main challenges facing China's President Xi Jinping. He understands what is important for China to sustain prosperity and development. China has developed a range of policies to create "indigenous innovation" to reduce dependence on foreign countries for advanced technologies including government procurement, competing technology standards, and requiring technology transfer from multinational corporations in return for access to Chinese market. Is this enough?

At the same time there is more proof that the western style of management is becoming more and more less effective and sometimes even becoming a barrier to innovation reform. To achieve China’s vision and development goal, China must produce and support innovators whose ideas and execution will enable China to create greater and broader economic wealth beyond manufacturing, infrastructure and real estate development. For most companies in China I've talked to, they are a long way from understanding what it takes to make innovation real beyond basic R&D and to compete outside of its demestic market.

China’s innovation cannot just rely on progress in science and technology but in both education and research; the most crucial piece is to be able to own the core technologies and design applications (let me stress - technology alone is not enough, without design), which China is still reliant on foreign companies. The most important strategy is to acquire innovation skills as a core capability so China’s companies will be less dependent on foreign IP and can create ecosystem of technologies that local companies can build upon.

Innovation goes beyond idea generation but also commercialization. It requires a new level of thinking and cross-industries and collaborative-competition that is currently not happening in China. Currently, the model of business education doesn’t deliver on innovation training as they basically modeled after the west.

Most of today's Western style of management and business problem-solving is primarily made up of prescriptive remedies still very much rooted in decades-old conceptual frameworks, developed in the 80’s as a response to pressing events then. They not only have long outlived their usefulness for Fortune 500s, they were not designed to handle today’s unprecedented pace of continuous disruption nor are they irrelevant when applying in emerging economic power such as China which has a very different historical, political and cultural values as well as a unique operating environment and a well deserved national aspirations.

My guess is that 80% of what they teach in business schools MBA’s curriculum today are not applicable for managers in China. Despite managers in China being thirsty for management development training, the net results are less to be desired. In short, we are beyond the point of questioning the effectiveness of western management practices; we need a China approach to management. Or perhaps China should take on the role to reinvent management.

What Is Happening To Sony? Can Sony Be Saved?

2013 was a good year and a very busy one for me. Having been on the road for over 120 days; delivered some great projects and worked with some of the smartest and most creative people around the world was all fun and also exhausted. Now is the time to think about what the future holds?

I really don’t know what to write these days, I want to write about a lot of things from economics to politics and from luxury brands to consumer electronics and from rethinking management to education, so much to do and so little time. I hardly find time to write for my own magazine these days.

2014 will be a year of big change or beginning of one for many.. We’re seeing most dominant designs of our everyday technologies reaching the end of the S-curve and it will hard to see any breakthrough unless we change the way to look at the industries. Some big innovation is needed to create demand. Not speakers and headphones and other accessories although it helps retailers a bit.

Innovation is hard to come these days and most innovations today are mostly incremental in nature. In the world of consumer technologies, from smartphones to tablets and PCs or digital cameras to TVs, everyone one of them is facing serious challenges whether you’re the market leaders (defenders) or followers (attackers). It is hard to drive new behavior and predict on their adoption rate and the low end is flooed with commodty players. On the other side of the coins, opportunities are plentiful. Microsoft, Sony, HP are all in the process of rethinking their business strategies.

Sony was once the most loved and most innovative company. The company is both strategically vertically and horizontally integrated; once designed and produced the best TVs, video cameras, music players, home audio systems and game console, today they are struggling on all fronts. Sony was my no. 1 brand for a long time. For many, Sony is already dead or what turned into I call a zombie brand. It might seems like an overly pessimistic view given the size of the company and they still have a lot of good products, strong brand (in some markets) and a lot of technological innovation, but then what went wrong?

Sony used to be the synonymous with Japan and innovative products. They even considered buying Apple at one point and decided it not worth acquiring (Can't imagine if they've done that and there would be no Apple today). In 2012, Sony’s net loss of almost US$6 billion mainly came from heavy losses in its TV business. Of all eight divisions, only music and financial services units managed to boost a little profit from a year ago.

When I visited Sony stores the last time a few weeks ago, they were so 1990s even though some of the products are pretty impressive. In fact, I was very impressed with the latest camera line-up and I use a RX100 along my Leica M. I am not sure if good products are enough these days.

Sony have made a lot of mistake including alienated smaller retailers, limit itself to internal innovation capability insteadn of using outside consultants to come up with new ideas and heavily rely on local markets (30% of their sales) and as a result ignore what’s going on out there. Sony CEO Kaz Hirai has proclamed that Sony must chart a new course, his quote: "I believe Sony can change." So far it is not happening.

This Japan's technological prowess, wowed the world with the Walkman and Trinitron TV and PS2 and PSP is now struggling to stay relevant. Is it just Sony or "Japan Inc." that is in trouble?  They missed the while digital music wave, missed the smarphone wave, missed the tablet wave, missed the social face and now probably will miss the next whatever wave. Even Google missed the social wave and left the door opened for Facebook and Twitter, but they do have a few wins such as Android.

And for Sony, my advise for you is to stop behaving like a Japanese company. Adopt new practices and move fast. Speed kills. The world has changed and you need to wake-up. Play catching up is not enough and you’ve been doing a good job producing a decent tablet, a nice phone and a set-top box, a not so smart smart watch and whatever, does it matter?

You don’t have a strategy. You want to win in every product category and that's impossible. You should get rid of at least 50% of your product lines. And at least make 10% of your product spectacular ones - iconic. Rethink if you want to play in the smartphone game, may be you should exit it for now.  Your strategy of “One Sony,” will not work, it is an ideal strategy only on power point or paper. Apple works with “One Apple,” but if you consider the context of Sony's situation, it may not be the best move for now. Sony needs to think different and should not make the mistake of try to replicate Samsung or Apple, those two companies are unique in their own ways. The two will own the market (already did) and eat you dinner, since they already took your breakfast and lunch. 2014 is a critical year for Sony.

Strategic Foresights Is Used To Make Sense Of Patterns Of Threats And Opportunites. Companies Barely Understand How To Use It.

“Don't despair: despair suggests you are in total control and know what is coming. You don't - surrender to events with hope.”   ― Alain de Botton

What's the future of interactive glass windows, interactive eyeglasses and 3D mirrors etc? Via a pair of glasses information and apps can be projected into the air and controlled by gestures and eye movement or just a thought? It is hard to imagine what's the future of Nokia, Ericsson or even Blackberry. What does strategy mean to these companies when there are so much unknowns?

Strategic planning is changing and many organizations are not designed or equipped for the changes we see happening. And with many business models going out of date in such rapid mode, every manager is trying to find ways to see the future. And they must adopt a different approach and mental mindset as it tries to embrace disequilibrium. The ability to imagine, analyse and prepare for the future is becoming very important. It does not only apply to technology or biotech industries. It is about survival for every business.

Preactivity basically guides all approaches to future studies, forecasting, scenario planning and strategic foresight. Proactivity aims to bring about the desired changes by means of strategic planning to effectively deal with not just the speed of change but also complexity, uncertainty and paradox and that's the reason why Strategic Foresight goes hand-in-hand with Deisgn Thinking. The future arises from a constant stream of individual, organizational and policy decisions, strategies and commitments that have to be made in the present, with as much understanding of risks, possibilities, wisdom and foresight as possible.

Strategic Foresight is not a tool kit. Or some wild card ideas.It is not fancy (and useless) diagrams or algorithm. It is both a process (transformational) and an outcome (results in knowledge and artifacts for, from, and about the future). Strategic Foresight is not about predicting the future. Rather it is more about framing, reframing, informing, opening up minds, and inspiring strategic dialogues about possible futures. You still need a good understanding of industry economics in order to apply it. It is not a design exercsie.

Strategic Foresights is still in its early stage of adoption and takes a while before it comes a core part of strategic planning. It enables companies to use weak signals to identify opportunities and threats. Weak signals are defined as poorly understood drivers of change and/or signals which are currently unconnected with a trend, industry or market and appear irrelevant on the surface. The identification and correct interpretation of weak signals can be vital to the success or survival of an organization.

An executive team equipped with powerful foresight capability will be able to make sense of, and respond to, the emerging pattern of threats and opportunities, and to use this understanding to manage risk and capitalize on opportunitie. It is not just about keeping the bad from not happening, afterall business is a continual dealing with the future; it is a continual reframig and reshaping your plan.

3 Paths Towards A Creative Life. It's Not The "Aha" Moments Or Being Perfect.

You want to be more creative? Sometimes it is not about trying harder to act creative. I see a lot of people trying too hard. Sometimes it’s not just about giving one the space to be creative.  Sometimes it is just being strategic. And sometimes it means apply a healthy dosage of common sense. 

Strategic creativity is more valuable than creativity.  Not everyone needs to be “creative” the same way as other think you should be “creative”. It is not about ideas. It is an attitude. Everyone can live a creative life and be creative how he/she sees live. It seems that when creative people (artist) with certain carft try to solve a problem or achieve a certain end result, particularly when the goal is related to their craft or specialized skills, they have an advantage. But when the problem is too big for them, it takes strategic creativity on a more sophisticated level.

Creativity is in such demand today and it is not the years of schooling or what art schools you attend. The word “Creatives” is used in advertising world to describe those who work on creating advertising campaign or providing craft for production. People in these roles like to believe that they are more creative than others. It is not the case at all.

Creativity is not a job title, crafts, capability or skills. Creativity is state of mind, which you can use in everything you see and do. People should live a creative life rather being creative. By living a creative life and having that state of mind, one naturally becomes creative. Creative is independent of discipline, culture and tools.

So how do you live a creative life? Here are three specific ways that can help you to live a creative life.

1. Be Bipolar. A little madness yield great artists, designers, inventors and scientists. The evidence is growing for a significant link between bipolar disorder and creative temperament and achievements. Seeing the extremes of both sides of anything help you to understand the spectrum of choices and options.  Go to places you don’t normally go and use that space. It is not available for everyone.
2. Be Foolish. Be lazy. Everywhere people are telling you rules and the right ways to do things.  Be acting silly and even lazy can sometimes help you to see easy paths to complex problems. Agatha Christie wrote, “I don't think necessity is the mother of invention. Invention . . . arises directly from idleness, possibly also from laziness. To save oneself trouble.”
3. Be Strategic. Most people see this as the opposite of creative. This is total rubbish. Being strategic can also be creative. And being strategic you need to be very creative. The best strategists are often most creative people who can apply creativity in the context of a specific problem. They don’t’ dress in a funny way or even trying to act like artists. They may wear suits and even a tie, but they could also be the super creative types.

Creativity is not just about “aha” moments or interesting ways to look at things. Creativity is about putting empathy to work. Creativity is not about perfection. Weisberg and Csikszentmihalyi both talked the importance of motivation in creative performance. A notion of Csikszentmihalyi’s concept of creative flow is that reaching peak performance is “autotelic”, meaning it is enjoyable for its own sake. So the ‘creative person’ is simply someone who enjoys creativity and therefore does it all the time, even with no reasons and gains nothing from it. Someone just want to be creative all the time. That's different from peope who are strategic in applying creativity. Nothing good of bad. Just two very diffferent creative types.

Creativity is not about opening new doors because something said creativity people have no doors and doors are for those without imagination.

Design Thinking Is A Cognitive And Intellectual Process That Balances The Rational And Emotional. Not Included With Your MBA.

What is Design Thinking? Because of the word “design” and many automatically associate it with the craft of design or design as a profession. Actually it is less to do with “design” and more with “system”. There are many ways to define "design thinking" and this list is not exhaustive:

• A way to instill customer-centricity and empathy
• A framework for exploration and experimentation
• An approach to sense-making and problem solving
• A methodology to foster exploration and experimentation
• A design buzzword to tell you a designer can do more than design
• A management buzzword sold as the “next” strategic tool
• A marketing slogan or tag line
• A self-gratifying term for those who think they are creative

The term “design thinkers” implies that designers are craftsmen and not thinkers, which is NOT always the case. It is also a stretch for traditional industrial or brand/graphic design firms to claim to be able to use "design thinking" to solve complex strategic issues. These firms need to go through a radical transformation and close a big capability gap before they can even attempt to implement it for others.

Today, "design thinking" is frequently compared and contrasted to business. This is often an over simplification that forces us into predetermined roles along with their associated rules, conventions, behaviors and formal expectations. It Is important to recognize that "design thinking" is NOT exclusive to designers or unattainable to those in another discipline. Design thinking is natural and inherent in all of us who are smart and creative.

"Design thinking" is a cognitive and intellectual process that balances the rational and emotional – in effect combining left brain and right brain thinking. When applied, it harmonizes with other modes of thinking and closes knowledge and information gaps, creating order and refining meaning. Because "design thinking" is a dynamic, constructive process that is iterative in nature, developing ideas requires ongoing definition, redefinition, representation and assessment.

To achieve those tangible outcomes, you need to open the process to multiple participants and socialize the process and outcomes, visualization is a very critical part of the process, not an outcome. Even the Department of Defence recognizes the needs to train "design thinkers" that are capable of critical and creative thinking to plan operations in dynamic environments with fast-changing uncertainties in extremely complex conditions.

People who are capable of using "design thinking" to identify and develop different military response options within the context of a big strategy are crucial to successful military operations. The development of such skills requires a shift in their focus from the operational and tactical environments to the strategic environment. This is an extremely challenging undertaking given that many military officers spend the majority of their career starting at lower levels and their advancement depends upon how well they perform tactically. This is very much like managers in large organizations who were promoted based on their ability to execute tactically.

To develop senior commanding officers with "design thinking" capabilities require DOF to train them new skills including analysis as well as synthesis. "Design thinkers" possess the ability to think critically on a "system" level; break concepts into simpler parts and mapping out their relationship and system impact before rearranging the elements into a new whole; in other words, to produce something through imaginative skills and quick experiments. And yes, imagination is always needed.

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

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

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

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

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

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

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

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

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

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

Why Traditional Apporach To Business Transformation Don't Work Anymore?

Over 60% of companies out there are operating on a dated buisness model and 20% operating with a mental model that had expired for more than 5 years. There are little reasons for those 20% of companies to survie another 5 years or even 3 and for the other 60% they have a short window of opportunity to design and orchestrate their transformation.

Rapid changes in external environment, consumer behavior, global economics and disruptive technologies are throwing off the most rigor business strategies and the best trained managers. Although everyone expect to see big changes ahead but people reacts differently to change.

Many people become accustomed to the status quo and don't want to alter the way things are being done -- regardless of the potential benefits or the disruptive threats from emerging competition. For many, fear of the unknowns and the concerned about the ramifications on their careers are barriers to acknowlege the need for change. People don't like change. And winning belongs to those who thrive with change.

Success for operating in a neck-breaking speed and unknown environment often comes from the ability to drive the proper (or mulitple) transformation at different critical points -- for industry breakpoints. “Business as usual” simply means "end of a business or an industry." Being able to reimainge and reinvent offerings and models are critical to addressing economic volatility and staying on top of the market.

Business transformation traditionally takes the form of unfreezing to refreezing and briding the gaps in capabilities, mindset and performance. And these changes which can take the form of business strategy, management style, culture, organization design and business processes.  One most popular model is the classic model proposed by Lewin which argues that the process of change involves three stages 1/ unfreezing, 2/ change and 3/ refreezing. This model was valuable in recognizing the importance of not only new learning, but also “unlearning” old attitudes, habits and behavior patterns. Today many question the practicality of this model suggesting that a “refreeze” implies a resistance to future change and partucular the future is uncertain.

The Idea Couture Brand-Driven Transformation Model has a strong future oritentation and focused on bringing strategic foresights and organization insights to reimage futures. It uses a lot of Design Thinking principles and makes the process very tangible and collaborative. It is a process of organzation co-creation which people put their stake on what shared destinies they wanted to particiapte in creating and thus releasing energy in the process. It will take 80 Power Point slides to illustrate the process, a high-level view of this model is captured by the following formula: Successful Brand-Driven Business Transformation = P+N+C+M+I+F

• P = Develop a perspective of the future(s) informed by strategic foresights (both customer and technology contexts) and deep organizational insights;
• N = Develop a co-created brand narrative that inspired people of possibilities and put purpsoe at the core of the story;
• C = Develop a compelling case for the need for change developed and shared by all executives, investors, employees and B2B business partners;
• M = Develop a practical means to tie innovation (roadmap) and projects to the desired future(s);
• I = Design an incentive systems that are aligned to identify and encourage appropriate behaviors compatible with the desired future;
• F = Develop feedback mechanism for each stage of the process to monitor progress and provide input for continuous improvement.

Any Business Transformation process is painful. The way many organisations manage change or transformation using existing model is facing the challenge of speed. They are too slow and by the time they refreeze, the market has shifted and they need another transformation. The other important issue is key decisions are made in isolation and the change piece comes later which I argue often is too late. The future of Business Transformation is a co-created one.

On Building The Creative Culture And Learning How To "Forget" Creatively.

We had our Idea Couture Christmas staff part last week. Looking back there were a lot being accomplished and a lot more to do. What started as a little experiment bringing multi-disciplinary design thinkers together and now becoming a key driving force and intellectual engine advancing the practice of design thinking in innovation and business applications. Idea Couture is where multidisciplinary thinkers come together with shared purpose and where creativity flourishes. I am looking forward to have our London and Mexico City offices running in 3-6 months. I feel I have the right people in place and that's a great start.

At Idea Couture, creativity means more than just novelty ideas. It means new ways to frame problem, using new lenses and developing new perspectives. I am so happy when I see happy people in the company doing great things. I am happy to see people growing and that's gives me tremendous satisfaction.

At the end of the day, we're in the business of producing the non-conforming super smart and creative thinkers and doers. I am pushing the envelope everyday and so far no one is complaining. Heartiest thanks to my management team who did a great job of putting togther the first Idea Couture Award.  You guys rock!

On the road this week and spending time with people hearing them talk about their innovation challenges and how they apply design thinking. Lots of great meetings. We're aware of the big changes coming ahead. Every business, government and instirutions will be impacted. Change does not creep up on us every 10 or 20 years, it is an ever-present business and organization phenomenon that is disrupting industries and causing firms and industries to disappear. Although the degree and velocity of change is unprecedented.

Everyday we’re dealing with more and more unknown and unknowable, but decisions still need to be made. Many of the challenges today are unique and have few or no precedents, so textbook solutions (and no guru don’t waste time buying whatever best sellers) or trying to find aHarvard Business School case study. Past solutions do not necessarily apply today. The external environment is constantly absorbing shocks from technological advancement, cultural change and systems failure.

Creativity is needed everywhere to rethink and reimagine products, experiences, companies, processes and even industries. Top executives are looking everywhere for new thinking and solutions that are outside the routine of orthodox strategies and old paradigms. So where can you look for new ideas? And how can you design an environment in which creative people can survive, thrive and flourish? We can begin by asking, how can you make people creatively forget what they know in order to reinvent the future? This is where sensemaking comes into play.

A big part of sensemaking is creative “forgetting” and it is first thing you must do. We all create our own environments and then constrained by them. Being able to aware and realize the impact of our own behavior in creating the environment in which we’re in is a very important first step. Forget who we are is something worth practicing. There may not be any scientific evidence to suggest that those who know what to forget can think more creatively about the future, but in the formulation of business strategy, creativity can be seriously constrained if it is burdened by the past. The problem lies in the notion of “core competencies,” which suggest that companies should stick to what they know best. If that’s the case, then why many of those once great companies should still be around.

The Economics of Co-Creation. Can What Happened To Microbrewery Happens To The Auto Industry?

A lot of talk and interest around the concept of co-creation. It is no question that this is going to have asting implications of how products and experiences are designed, developed and marketed. In 3-5 years, customer co-creation will be the part the norm of everyday business. Much like early days of ecommerce when people struggled with the legal, technical, operational issues. Slowly these issues will work their way out and we would look back and say “that’s simple…. makes perfect sese.”

What’s a great example of co-creation? Let’s first try to define it here as sometimes people refers it to anything from idea crowd-sourcing to technical expert groups to simple product/service/marketing customization. One good example of real co-creation is a company called Loco Motor.

I met Jay Rogers (founder and CEO) at the PDMA Co-creation Conference when I was moderating a panel. He was hosting the event and I was extremely impressed with what he is trying to do and has achieved to date. It is the first co-creative automobile design and purchase experience in the world. Just as the auto industry is dying for new ideas and change and Detroit needs a new strategy and it is more than making a better car. There are many structural issues to deal with and it is complicated. Jay is attempting to disrupt the auto industry by using co-creation as the strategic core.

The people in the car industry that have tried to innovate in the last 100 years and mostly fail, what makes him think he has a chance? Perhaps Detroit should concentrate on redesigning the business model and the whole experience before redesigning cars.

The first product Rally Fighter sells for just under $60,000. It’s an incredible car that looks like a life size HotWheel and gives me fond memory of my childhood. Remember the Hot Wheels yellow track?

The Rally Fighter is designed by the online community and ismanufacture at the microfactory in Phoenix, Arizona with a sustainable and highly efficient process. Jay wanted to build cars all his life, after raising $10 million seed capital, he launched the company with a simple idea that is extremely difficult to pull off. Loco Motors hosts a passionate online group of car-lovers or fanatics who compete to design vehicles for some regional communities in contests that run about once a month. The winning designs is then produced and sold to the communities.

There is more than to the flexible and customizable micro-factory, the concept here is when you give people tools, a strong community network with shared passion, some inspiration, small incentive you are in game. In fact, he is reinventing the customer co-creation experience for automotive. There are more than needs to be done in order to reinvent the economics of the industry. I think every business should look at Loco Motots and see what is relevant for their industries.

Will Loco Motors remains to be a niche business or eventually springing into a platform that supports a auto-cottage industries I don’t know. But we also need to think how we reduce traffic including rethinking local supplies network for certain products and cutting down unnecessary traffic.

An example is to look at how we replace pizza or UPS delivery with perhaps flying delivery drones – pizza right through to your windows. I am not sure if someone has thought about flying delivery drones man by 14 year old part-time students that doesn’t even have a driving license. The military drones can be converted to do the job. It is more realistic than flying personal transport, because in the event of an accident the worst is you don’t get your pizza. May be this is another idea of Jay, his Marine Corps background can be very useful. A central drone delivery operations theater that supports the nation’s takeout industry.

Design Thinking And Growth: What’s The Connection? Why Do We Need Growth?

The Harvard Design Thinking Semina was a great one. High quality particiapants and great turn out with beatiful New York City spring weather. Lunch on the rooftop is way better than a banquet room or a faculty's dining hall. No place on earth can beat the view of New York City. So much energy and creativity. Many participants came all the way from China, Argentina, Mexico and Korea. Thinking of the nex one outisde US, perhaps somewhere Europe and Asia?

Growth is a funny word and often misunderstood just like other words such as strategy or innovation. I have heard from people from 25 year old young smart people to 45 year old seasoned executives and often they struggle with the idea of growth. Why we need to relentlessly achieve growth and what growth means?

Growth is often perceived as a proactive (not defensive) strategy, as the Red Queen says in Lewis Carroll’s Through the Looking Glass, “Here it takes all the running you can do to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!” We're at a point that you can't run faster anymore and is close to the physical limit of how fast we can run. Both organizations and even economies. We ned to develop out talent pool to match the economy of the future and harness the full capabilities of the our human capital and technological progress and to reverse the damage we've done to the environment. Now it's time to reinvent the wheels.

Growth is perhaps the most important word on CEOs’ minds, small companies or large enterprises. Small firms want to get big and big firms want to get bigger.  Scale brings resources, market power, improving employees’ standard of living and it gives you currency to acquire.  Today, quality growth is hard to come by, and responsible growth is more difficult. Every company needs a grow strategy or you are waiting to die to be acquired or planning to exit. It is like swimming up stream a river, there is nothing call stay put. Either you swim to go upstream or washed down the river.

Philip Crosby, author of  The Eternally Successful Organization says that growth is unavoidable, "if for no other reason than to accommodate the increased expenses that develop over the years. Inflation also raises the cost of everything, and retaliatory price increases are not always possible. Salaries rise as employees gain seniority. The costs of benefits rises because of their very structure, and it is difficult to take any back. Therefore cost eliminations and profit improvement must be conducted on a continuing basis, and the revenues of the organization must continue to increase in order to broaden the base."  When a person ask you why do we need to grow? Ask him or her whether he or she is preparing not to have any promotion, personal development and increase in income and responsibility for the next 10 years.   If a company stop growing, there won’t be opportunities for everyone. Period.

The challenges are 1/ How to grow responsibility? 2/ How to grow purposefully? 3/ How to ensure your growth is sustainable? That’s where design thinking comes into play.  Design thinking can help create a compelling story of the future, anchored on the needs of customers (and societies) and bring a future orientation on strategy development and an empathetic manner to how company think about its customers. Through storytelling, we can unveil the aspirations and natural inclinations of an organization and we can get a sense of what feels right. The story of a company is what can truly determine its value, and the right story will always be more substantial than the right strategy. This is primarily because strategies are susceptible to the ingenuity of competitors, disruptive industry shifts and bad luck, while stories are impervious.  

Spreadsheets and power points don’t tell story. The Design Thinking approach believes that stories are fantastically useful in their ability to bring people onto the same page (unify attention), organize information and present it in an efficient and easy to access manner. Stories help organizational stakeholders access and understand the logic, reasons, motives and intent that surround a potential vision or context for growth. Stories can help reveal the choices presented to an organization, its possible behaviors, courses of action and their potential outcomes. Perhaps most importantly though, stories significantly improve cognition and comprehension. A well-crafted story or narrative can help make contexts and strategies for growth more accessible so they can be questioned, debated, shared and recounted.  

So what’s your growth story? Not only your company needs one. Amercia needs one. And every country needs one too. Design Thinking can help goverments and cities to rethink growth and development which mostly comes from productivity growth, which reflects multiple factors — but the biggest factor is technology.Yes tehcnology is the key driver of grwoth.

Indeed, the dominant role of technological development in economic growth has been well-documented ever since Nobel Laureate Robert Solow published his seminal paper in 1956, “The Economic Record,” which demonstrated that technological progress drove at least 80% of economic growth in the United States between 1909 to 1949. That's why I have faith in the US economy because the US is still the most technologically advanced country in the world. At least for now.

Design Thinking Has Inspired Multi-disciplinary, Interdisciplinary and Trans-disciplinary Approaches To Problem Solving. This Is Just The Beginning Of A New Discipline.

Prague is mystical with a mix of medieval, Renaissance, and Art Nouveau architecture and the design scene is slowly taking shape. You still see traces of history of what communism had done to the city even after these buildings are completely restored. It is where Renaissance meets neo-Gothic and the baroque structures from the 18th centuries.

You can see shadow of cubist touches, which thrived in Bohemia more so in the neighborhood near Vysehrad Park. The public housing or “rabbit huts” as they called it, cheap but highly functional (the Walmart of architecture), provides a stark contrast to the Bohemia style. It is the featureless nature but with modern plumbing and heating were once considered the politically correct way to live. Or at that time, politically sustainable living as I would have called it.

I stayed at the Hotel Josef, a nine-year-old modern boutique hotel that was one of the first in Prague and still the most popular one. It is centrally located in the old Jewish quarter and right next to the Parizka Street. I don’t like the word boutique hotel, as it doesn’t mean much other than small and not part of a big chain. I rather use the word design hotel.

I was really impressed with the design and how it holds up over the years – now that’s design at its finest. There was not a thing to make you feel that it is getting out of fashion, in fact, the hotel design concept is to provide guests with a break from the fascinating baroque architectural surrounding the hotel and give them space to step back and relax in a soothing, and luminous environment. I enjoyed the hours and hours I spent sitting in the lobby lounge doing work with my Macbook while occasionally looking out the windows.

When you’re in Prague, you can’t avoid talking architecture. I’m not trained as an architect but always fascinated about the design process as well as the visual artifacts architect employs. Architects are considered designers and probably fair to say that they required the most rigor training both in art and art history compare to other design discipline such as graphic, fashion or industrial. They probably attracted a very different type of design mind than those of other design disciplines. I wonder what would happen if first year MBA students were required to spend 3 to 6 months studying the history of architecture and design, at the same time learning some basic drawing skills. I think that would drastically widen their perspectives as well as picking up some drawing skills that they can use for life.

Today, most MBAs can’t even draw simple diagrams. The pre-MBA studies are mainly statistics and accounting. There is plenty of time for accounting later in the program. The abilities to communicate using simple diagrams are extremely useful for business problem solving, strategic communications and visual sensemaking (strategic modeling and business model design). Architects use diagrams to explain their visions, elements and relationships between them. Business people can use abstract visuals to show business model options, new value chain design or customer interactions. Once business persons/design thinkers are supplied with visuals to making connections, they can see the relationships between different components better and in return easier to see something otherwise too complicated to express.

Visual sensemaking is quietly changing decision theory, it is also influencing design thinking and theories of design-oriented problem solving as a manifestation of pattern recognition. It is hard to say whether sensemaking is influencing design thinking or system thinking is influencing design thinking and in turn influencing sensemaking. It is a fact that design thinking has inspired multidisciplinary, interdisciplinary and trans-disciplinary approaches to problem solving. I will explore the application of this in my coming Design Thinking for Creativity and Business Innovation seminar organized by the Harvard Graduate School of Design in NYC this month. 25% discount for early registrations and affiliates of a list of design and business schools. Now hoping on a train to Wien.

Innovating Within Or Outside the Core? Let's Start With What Is The Core?

One interesting dilemma about strategy and innovation is how far we move away from our core and more importantly how do you define the core? What are the core competencies of Gap? Netflix? LVMH? BMW? Hermes? Canon? Nike? Marc Jacob? Blackberry? Samsung? HP? Target? Starbucks? Do they even have anything in common?

Do you see core capabilities as distinct capabilities or deeply embedded values? Or special access to buyers or assets? There are hard core competencies and soft core competencies and people need to understand the difference and that they are not mutual exclusive. Core competencies are double-edged sword. How do you define ‘core competence?’ It is currently seen as a unique capability/know-how that provides some type of competitive advantage for an organization and it is not easy for other to replicate. It is not one thing; it corresponds to organization design, and involves underlying skills, systems, technologies and knowledge in specific industries or markets.

A simple test to see if something is a core competence, ask yourself, "Does this 'thing' give the company a unique advantage over its competitors and create value through a differentiated offer or extreme cost advantage or both?"

When my staff comes to me for career advice, I always ask them about their core. Who are you and what are you really good at? I advise them to find out what they like to do and what they’re good at, and if you combine skill, passion and strength, you are going to excel. You need to understand and align all those three. Likewise, companies gravitate towards their core competencies, capability and values.

Successful organizations adopt a rigorous approach to identifying and defining their core competencies and then single-mindedly pursue them. When market shifts and suddenly their core competencies and strategic assets all become strategic liabilities. It happens fast these days. The most important thing is to put innovation at the core and use design thinking to drive continuous renewal and reinvention. There is only one game – new game.

Auto makers have for years restricting themselves to a few tasks they do best -- designing and assembling automobiles -- offloading all other value chain activities to others. A web of suppliers produces the components that go into the car and a web of dealers sell, deliver and service the cars bought by consumers. By limiting their focus, auto makers are able to perform the tasks they undertake extremely efficient using Six Sigma. Apple is doing just the opposite.

Luxury goods companies for years restricting themselves to a few tasks they do best – designing collections, fashion shows production and retail management – offloading other value chain activities to others. The question is what seems to be a very creative (won’t use the word innovative) industries are mostly very old fashion companies that have done very little to transform the category, the industry and the economics. There are a very few notable exceptions. The reality is innovation and design thinking rarely happens in the fashion and luxury goods world. They need to break out of their current creative mode and start innovating. The new affluent luxury goods consumers are less interested in traditional status symbols and more interested in ‘content-rich socially-validated self-identity creation experiences.’” It is more than the logo, price and exclusivity. Many will wake up to this shift and realize this is not the customers they used to know for many years.

Today, organizations must confront the dilemmas of how to manage their core competencies and capabilities. These are systems, assets and skills that need to be continuously monitor, evaluate and ensuring they are up-to-date aligning to the company’s innovation agenda. This has been becoming increasing complex especially with so many uncertainties. When you start thinking about putting ‘design thinking’ as your core competencies, suddenly the idea of core competencies give new meanings.

We are going beyond the narrow definition of core competencies and you can think of ‘design thinking’ as your cultural capital: an organizational wide appreciation and practice of design thinking skills that can be leverage across solving channel problems; produce development, marketing and operation challenges. It is time to rethink the core definition of ‘core competencies.’

When We Look Back After Ten Years From Now, We Will Call This A Facebook Decade For Sure.

Maria Jesus Galan, a nun who has spent 35 years with the Santo Domingo el Rea convent in Toledo, Spain has been spending a lot of time on Facebook and digitizing the Dominican convent's archives.

When the local government gave her a prize for her hard work and she has over 600 Facebook friends, but she is not making any friends in the convent. Some nuns reportedly claimed that Sister Maria's Facebook activity "made life impossible" for them. So she was therefore asked to leave the convent and now back to live with her mom. There are still so many who are afraid of technology, not just the crazy leaders of Iran or Libya.

Today the keyboard is mightier than the sword. It bought down Tunisia and then Egypt and not sure who is next? Libya? They wish there is a kill switch but even there is one there is still no use. There are always channel for information to leak and eventually you cannot shut down the world’s Internet and mobile networks.

The Egypt case has proved the power of social network. It sparked biggest challenge to the regimes that are not democratically elected but also to corporations and brands. Twitter played a less important role this time, but it is till part of the social networks that power up revolution.

Called it "Social Revolution Networks". Ideas flow back and forth in real time and momentum multiplying every second. No one can control or dictate these voices anymore, they echoed through Facebook and it is the ultimate freedom of speech. Facebook is probably the number media today, more powerful that TV for sure. But I still like my New York Times. And for Linkedin, I won’t sleep well if I am running the company. It is easy to tell your staff and investors that people want to keep their professional and personal profile separate; I think it is a false sense of security.

LinkedIn CEO Jeff Weiner thinks many of us prefer to keep their professional online personas and their personal personas distinct. Weiner argued that while LinkedIn, Facebook and Twitter are often lumped together in a broad social networking category, all three represent separate social platforms that serve different needs for people. Well, yes and no. I think linked in missed a lot of opportunities to go beyond what they do and the interface is pretty bad. They can use a lot of help.

Here is a big idea. The next big magazine should be entirely Facebook based. There will be a print version but online context is entirely available through a FB app. The stories gathered all the feedback and perspectives from the users and fully incorporated into the content.

I have one more killer feature to make this work……. but I will keep it to myself as I think I have a buyer for that idea. Think about it this way, FB reminds us that everything in this world is organized around people. Somehow people forget that. If we rethink our business and organize them around people, I think we can come up plenty of new ideas to leap forward. Businesses are transforming how they relate to people and operate. CMOs that can throw away their notion of mass media and start recognizing and embracing this shift will gain strategic advantage over competitors. I think this is the new theory of marketing, time to write a new book. But I don’t have time.

A man in Egypt wanted to express his gratitude about the victories the youth of 25th of January have achieved and chose to name his firstborn girl "Facebook" Jamal Ibrahim, The girl’s family and friends gathered around the new born to express their continuing support for the revolution that started on Facebook. Facebook hold a special place in Egyptians' hearts because of its role in the revolution. I don't know anyone named their sons or daughter Twitters or Linkedin or Skype. Do you?