innovation playground Idris Mootee

There Is A Difference Between Business Turnaround and Business Transformation. It Is Easy To Tell Which Is Harder.

All companies go through some kind of crisis at some point but what does it take to get out of it? There aren’t many successful turnarounds in large companies and the bigger the company and the longer the history, the more difficult it is for any turnaround and its success rate is lower. 

Harley Davidson in mid-life crisis when Richard Teerlink joined the company in 1981 as CFO, the company had US market share of 15% and reported a loss of $15m. The company was killed by its strong Japanese competitor led by Honda. In 1989, he took over as CEO and returned the company's focus to increasing quality, improving service and producing world-class heavyweight motorcycles. In the end it is the product that turned the company around. Harley Davidson recovered its U.S. market share to 50% and posted annual sales of more than $1.7 billion. Teerlink left his post as CEO in 1997, and served on Harley Davidson’s board of directors for another 5 years. He did a great job as a turnaround manager.

The story of IBM’s brush with bankruptcy is another greatest business comeback of all time. IBM’s problem was that it was quickly becoming irrelevant and experiencing zero growth. The company had also made some bets that didn’t work out. Lou Gerstner took control in 1993 and created more focus in the company. He did a great job as a transformation manager.

One lessons here is not mix up a turnaround with a transformation. It’s very important to distinguish between a transformation and a turnaround.  A turnaround involves a company that has fallen off the rails and has executed poorly and still competing in the same product/market space. It takes a tough driven executive to make it work.

A transformation is truly a lot more difficult and takes a lot more deep wisdom with execution playing a secondary role. The company must fundamentally change its mental and operating model. It is a reinvention and companies who are used to doing things their way find it difficult to start doing things differently. This is not a 3 or 6-month initiative. It’s very, very strategic, foresight driven and problematic.

For any successful transformation, it takes leadership rather than management. “I hire people brighter than me and I get out of their way” as Lee Iacocca puts it. I am not sure who said something like “Inventories and supply chain parts can be managed but people must be led.”

I’ve both architected and supported quite a few successful turnaround behind the scenes as strategic consultant in my career, my simple advice for transformation leaders is people don’t just care what you know unless they know that you care.  You need to earn that by caring and then knowing.  It takes inspirational motivation to motivate managers to commit to the vision of the organization no matter how hard it is to achieve the vision. It also takes intellectual stimulation to foster innovation and creativity to challene the groupthink or yesthink. It is as much an intellectual undertaking as much as an executional exercise.

The world is not ending. Winning for tomorrow requires a vision. Brilliant strategies don’t show up spontaneously particularly for complex and fast moving industries. It comes from strategic dialogues, strategic foresights, options, even failures and mistakes. The ability to see the problem as a whole and then integrate a variety of perspectives and not simple quick fix. There is no simple quick fix.

The “Internet of Useless Things” or IuT Is Everywhere. Not Every Player Has A Plan.

The CES is a good one this year. Everywhere is IoT. And honestly I am little tired of hearing IoT or “Internet of Things” which is estimated to become a $7 trillion industry where thermometers, clocks, garbage cans, toilets, washing machines, watches, smartphones, fridges, baby monitors, garage doors and coffee makers are all connected digitally, allowing seamless interactions and smart living for us. Sensors are cheap and can be deployed everywhere collecting data, unnoticed. Data on how you move around in your home or office, in the gymn, on bike around your community, in a car, in public transit etc. How much water and electricity you use, and when; how much garbage you produce and dispose. And these reams and reams of information will make everyone of us overloaded with big data.

The biggest opportunity is Data Spam Management (just invented an industry). These data streams will drive us crazy eventually if we don’t know how to use them. Might as well turn all of them off. For those who are afraid of cookies that track them on line, it is going to get worse and much worse. When it comes to monitoring individuals and collecting details about their lives, privacy is over. Many people are still uncomfortable and remain to having their data tracked and analyzed. It is hard to define what privacy means in the world of big data. Imagine how much one can find out about you by going through you trash, in this case, your digital trash from sensors and devices that surround you 24 hours.

The world of hyper-connectivity is creating man opportunities for us and also is close achieving the top of a hype cycle. Perhaps itself is a recycled product of formerly known as the Smart Home or Smart Appliances. 90% of new products are merely solutions looking for problems and there are no unmet needs. Nest is a lucky case and there are not that many lucky cases for people to hit the Jackpot. When people enter this industry, they first need to understand the emerging behavior as a result of big data and what does it mean to have them.  And how it can shape our behavior? And what is the behavioral economics at work? What industry will it power up and who will benefit from it? Who owns the data gateway? I can go on and on for a day.

I am not an early adopter but I buy all these tech junks for my friends to try. I am really not interested in the thermostat. I am not interested in an Internet enabled door lock and for this one, I am sure I will be the last adopter. To create devices that can connect is easy and anyone can enable any objects with some kind of connectivity be it Bluetooth or Wi-Fi. But it takes some strategy to make sure you have a real customer value proposition.

The business opportunities for IoT are undeniable, but most of the visions out there were either overly simplistic or flawed and ultimately unworkable. The number of connected devices is expected to grow 18% each year for the next seven years and people couldn’t wait to have their “things” get connected. Beyond the hype, most will question the value and will understand the total costs of ownership. Buying an old fashion clock, toilet or door lock is easy. We can be sure that they will not break (most of the time) and needs very little maintenance. But when these become electronics, it will be a very different game. There is a cost to maintain (making sure they remain connected and receive update etc.) and needs to be replaced in a shorter period as technology moves fast. Way faster than they redesign your toilet or old fashion thermostat. The true value comes from larger companies designing integrated architecture so the orchestration of these appliances large and small can create a new level of convenience and delight. The oppotunties are not for everyone. The rest are just playing in the IuT game.

The Come Back Of Hardware. Is Software Becoming A Commodity?

The world is suddenly obsessed with smart technologies and this time around it seems unstoppable. Our everyday electrical and mechanical industrial object will now be occupied and ran by software and connected to the cloud. It also means each object (as small as some smoke detectors and as large as automobiles) will now be equipped with tons of sensors and can be able to adapt to different environment and individual needs.

It is essential that the next wave of industrial revolution will make us more efficient and empowered (and more human I hope), and data will be at the heart of this revolution. That's another big conversation. All the Nest, GoPro and Beats received multi-billion-dollar valuations through private investments or acquisitions and everyone is wondering why these hardware companies suddenly in such high demand. Because hardware and software are going through different commodity lifecycles and now software is becoming a commodity. They used to be difficult and expensive to develop and even to deploy, that that is changing. It is hard for software company to get into hardware much as hardware companies struggle to get into software. Hardware cannot be done by a few geeks in the basement, and involves massive R&D and specialists including megatronics engineers, electrical engineers, industrial designers, wireless engineers and usually takes a longer time to develop.

Software you can fix it with a download, and hardware you can’t. They are massive supply chain challenges when it comes to logistics and component supplies. The value of firms who can marry software and hardware will have a competitive advantage over their competitors. Essentially everything we use today will be fitted with some sensors, processors perhaps, and may be a screen and will recarnate and become of Internet of Things. For the last three decades, software engineering has advanced to a state that sophisticated codes can be embedded into machines. And the availability of cheap sensors and super powerful processors is powering this cycle of data revolution. All of a sudden, software, hardware and communications infrastructure are advancing us into a new era. Old world manufacturing + low cost computer processing + ubligious computing + cloud = smart new world and many cool products.

It sounds like the Apple story all over again, does it? The hardware and software integration capability of Apple, the ecosystem, the brand and user experience are now not only inspiring consumer gadgets company, not it’s influence is beyond its own industry. I know this is an overused story, but he Apple influence is still here, and perhaps it will be here for a long time even when the company stop creating great stuff one day. Microsoft ex-CEO Ballmer saw that coming in 2012 in a letter to shareholders. "It's important to recognize a fundamental shift under way in our business, we see ourselves as a devices and services company." Microsoft had the strategy right but couldn’t execute it fully with the exception of X-Box. Microsoft’s future revenue will still be coming in from software and it isn't going to change anytime soon. The transformation from software to hardware is harder that you think.

The idea that hardware is now the new software is pretty real. There is a business model implication here. These hardwares are mostly priced between $100 to $250 and they a gateway and great way to sell software. We are seeing a revival of hardware and this time, it is hardware first and software and then date on the cloud, it will bring new technological advances in cloud-powered hardware that boosts productivity, efficiency and manifests as beautifully designed objects that fit into our hands and homes.

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.

Creativity In The Workplace. It's Is More Than Just Colorful Furnitures. Yes, The Space Matters But There Is More.

For all those cash-rich companies such as Apple, Google and Facebook, there is a race to hire celebrity architects to design their headquarters. Google headquarters consists of nine angled buildings connected by bridges. Reportedly, the idea was based on data collected from Google employees’ behavior which then translated into some kind of architectural algorithm that should produce “casual collisions” to make innovation happen more often. I am not buying this, well they are. I guess when you have too much money to play with. When 3D virtual conferencing technology comes to market, these companies will be the early adopters. Expect cool walk-in facilities outfitted with wall-sized screens that project 360-degree views of video conference participants from different offices or countries.
The last time business attempted to reinvent the workplace was during the dot.com days when many companies switched from cubicles to open offices in order to improve collaboration and encourage impromptu problem solving. Today, millennials demand more personal workspace flexibility (actually they demand many things too) – the ability to adapt a workstation or stand at their desks. Standing work is happening everywhere as much as working on a couch. In addition to personal storage and personal expression, companies need to accommodate for this preference. At Idea Couture, standing desk is becoming so popular (not sure I remember who in our office started that) and now I see people standing, jumping while typing (wearing their Fitbits) and talking on the phone.

I really can’t wait for the day when we start banning standard cubicles and those headache-inducing white fluorescent lights. Those light scan literally gives me migraine. I wish those standard cubicles would join the ranks of the fax machine and the time-punch clock. It just might happen, thanks to Google, Apple and Pixar and others who have started to embrace the idea of cool workspaces designed to stimulate creativity and inspire innovation. I don’t mean those that put up colorful wallpaper and a few beanbags; that's no better than a cubicle. Workspaces can be stressful environments and it is important to think about how we can design to reduce stress, not just create colorful eye-candy.

Most workspace stress can come from any physical conditions that you perceive as irritating, frustrating, uncomfortable or unpleasant. Common sources of workspace stress include poor lighting, noisy backgrounds, lack of fresh air and poor climate conditions. But the biggest potential stress is other people. Difficult people can cause so much stress, particularly with the demand for team collaboration. Can a cool office space solve this problem? Perhaps to a certain small degree.

Physical workspaces have a profound impact on increasing not just productivity but also team creativity and collaboration. That’s part of the reason why Google and Facebook designed their offices with people sitting side-by-side and no partitions between them. An open environment radiates a sense of community where creative spaces calm people down and remind them there is a creative solution to any problem. Cubicles remind you that the office is a machine and you must processes and procedures.If your company isn't thinking about how workspace design can improve collaboration, chances are you are stuck in the 80s. This is a good forum to debate on this subject on how creativity is endangered in New York Time.

These days everyone wants to collaborate with each other (those who can't are pretty much considered unemployable); the average employee actively participates in at least five different ad hoc teams simultaneously, and we can expect that number to rise. Creative workplace design that supports collaboration will be part of the new productivity index. And you don't necessarily have to spend a lot of money, perhaps let's start with a policy for pets ... creativity starts here.

Forget About Being A "Manager". You Need To Become An "Innopreneur". There Is A Huge Demand For Corporate Entrepreneurs / Innovators Everywhere.

The time for New Year resolutions is here again, not sure if we're all up for the challenge as we can expect more intensified competition, more uncertainty both in politics and economicsl and more disruptive re-organization for all big companies. It is the time for self-reflection and thinking about what do you really want to accomplish this year and what how to bring out the best in you.  If you’re an emerging manager or young leader you should read this.

Drop whatever idea you might have of "what is a manager" in your mind. You don't want to be a "manager". Manager is really not the right title although “managing” is part of the job but a smaller part of it. You are a manager, a knowledge worker, a leader and an entrepreneur. It is easy to learn the skills of being a manager, but very hard to be a great leader and an entrepreneur.

Let me clarify. An entrepreneur doesn’t mean you should be running your own business or start-up; what I am talking is a state of mind. Look around you, do you find a lot of “entrepreneurs” around you? Is your team comprised of people who take ownership of any project or task that comes across their desk or inbox and apply design thinking skills to accomplish them? Do they embrace complex challenges, team skills, and take personal responsibility – for successes and failures alike? Do they think about the good of the larger them than optimzign for their own career gain? Do they provide leadership even they do not have the formal authority?

Corporate entrepreneurs are basically innovators. These “innopreneurs” are hard to find and it is far more difficult to be a corporate entrepreneur than a start-up person. It is relatively easy to say let’s have your start-up and honestly most of them are no more than just an excuse or a way to escape. Entrepreneurship is not about proving a job for yourself, it is about aligning your passion with the right capability and resources that link that to a big idea that create economic value. And not afraid of the challenge of working with the elephant.

A corporate entrepreneur s someone who works in a large corporate setting and his/her job is to create new growth opportunities from coming with the big ideas to launching/managing a corporate venture that is distinct from the parent company either at an adjacency or something that could disrupt the corporate parent. He/she needs to be creative about how to leverage the parent’s assets, market position, core capabilities, brand, channel or other resources. I am estimating that less than 1% of corporate managers are corporate entrepreneurial material or has the quality to sustain as one.

“Corporate innopreneurship” requires the following attributes: (1) a leader that are comfortably to act without authority; (2) a design thinker that enjoy solving complex business challenges with limited information; (3) a manager who understands his everyday job is to resolve dilemmas and not just dreamers; (4) an explorer who can navigate even there are changes in scenarios; and (5) an organizer who can manage people and resources in an agile manner. Every company needs a few of these to achieve innovation-led growth.  Everyday I look around me and try to identify them. The difference may be not only the way they think and self-motivate, but they way they’re being nurtured.

If last year wasn't a great one for you, don't think back. No one can go back in time to change what has happened. So work on your present to make yourself a wonderful future. Happy New Year!

Apple Vs Samsung - The Verdict Is A Wake-Up Call And Shaping The Very Nature Of What Competitive Strategy Means.

Here I am the first day in our new office - the building is officially named Idea Couture Place and I took the opporunity to talk about who we are and what are really good at to our people. There are still a lot of people that don't quite understand what a strategic innovation firm does and why it is not just another industrial design, strategy firm or creative house.

Now the move is over but it will take abother 2 months before we are really settled as many furnitures and equipment are still shipping from Italty, Belgium and China. I can't wait to see the fully finished office. For now, everyone is really happy. The roof top patio will look like a boutique hotel.

What exactly does Apple’s victory means for many other companies? The overwhelming patent infringement victory over Samsung is shaping the strategies of many and everyone is getting a wake-up call and now they need to revisit how they approach strategic innovation.

Apple’s CEO Tim Cook told his employees about how Apple values originality and innovation and pour their lives into making the best products on earth. They do this to delight their customers, not for competitors to flagrantly copy.

The result of this court case actually shapes the playing field of competition and the very nature of competitive strategy. Samsung, Motorola (Google), HTC, RIM, HP, Nokia, RIM, Microsoft, Xerox, Sony, Amazon and IBM . All have quivers full of patents and armies of retained patent lawyers ready to go to court to protect their interests and raise the barriers of entry for new players.

If you look at any new or old product categories, product and user experiences will become more andmore similar over time. Look around you and you realize a lot of cars looks the same and drive the same way. And over time, most phones, laptops or tablets will have similar designs and behaviors, just like TVs, cameras and typewriters. Switches and buttons whether they have rounded or rectangular corners or whatever shaped icons and the overall look and feel aren't likely the key points of differentiation. It has always been part of the commoditization process and companies will continue try to innovate with new ideas.

Every great innovation attracts copycats and it is hard to say whether we are promoting innovation by offering protection or deterring innovation by raising the barriers. There is no easy answer to this one. What’s next? If you’re a small start-up you will have a hard time to make it big as once you gain some attention and market success, you will then discover that you may be infringing on patents even though you think you’re not.

Can anyone realistically come up with an idea that can past the patent test of Apple/Google(Motorola)/Cisco/Xeorx/RIM/Sony/Microsoft and Intellectual Ventures (the world's biggest patent troll) when everone is waiting to collect royalties for what you were pretty sure was an original idea or invention.

I can’t wait for a day when Apple is suing Google and Google is suing Nokia and HP is suing Apple and Samsung is suing HP and everyone is suing everyone – one hell of a party. In the end, it's more likely that these crazy entanglements will result in more cross-licensing agreements than to massive payouts – one big happy family and everyone is getting a check.

As for now, my phone hasn’t stop ringing as every company needs to “out-innovate” and wants Idea Couture to bring Design Thinking to them. Now no one is safe. Welcome to the crazy world.

It Is Time For China To Think Real About Innovation And What Policies And Practices Can Propel China Into The Next Century When Labor Cost Will Double In A Few Short Years And Intensified Talent Shortage..

It’s election time in the US and everyone is talking about China. China bashing happens before the election and after it’s over, people will be back to business as usual. The fact is US trade deficit is due to domestic factors and not Chinese policy and we need to address the very core of "structural competitiveness" rather than these nonsense talk. We should be focusing on innovation on a large scale and reinventing industries of tomorrow. US will always procure from low cost countries whether it is China or others.

China is an integrated part of the US (and the world) economy and no one really has any idea of the true implications of rising Chinese labor costs and what does it mean for China, the US and the world? I’m traveling across Western remote China (I was in India last week) this week and visited dozens of companies and trying to understand development even in the remote provinces, so it’s the perefct time to write this blog post about innovation in China.

Labor costs in Guangdong province (in the southern part of China which is sometimes called the factory of the world) have been rising at 13-15% a year and with rising costs for logistics will at some point make China less attractive. China has tremendous competitive advantage even with rising costs.

First, the extreme flexibility and scalability of workforce is unmatched by any other country in the world. For them, if they need to ramp up a factory in 2-3 days with an additional 1,000 workers that are prepared to work 14-16 hours a day to meet a production deadline, they can do it.

Second, it’s a tightly integrated supply chain eco-system, the main reason being that companies are not moving their factories inland to save costs is the speed-to-market. Consider that a strategic innovation in industry structure by design.

China are constantly “playing” with the idea of “process innovation” by incrementally improving the way they make things and adapt to market needs. It is a matter of time that they will start to think how to capture high value opportunities going up-stream in the value chain, which resides in the design and technology development. Currently designers, engineers and marketers are the ones who create and capture most of the value from innovative products. Policy makers in China understand this (no surprise) and are pouring massive dollars into research and development. The five-year plan calls for “indigenous innovation”, which the government thinks it can foster by subsidizing “strategic” industries and strong-arming foreign firms to transfer intellectual property to budding national champions.

And smaller companies are happy to copy and learn from whatever they can get their hands on by working with their customers. The question is can China truly develop its own innovation capability beyond absorbing know-how from international companies, which are under pressure to protect their IPs, and trying to bring in as many jobs home as possible? Can innovation be orchestrated by the state? And is the education system and workplace training support the needs? China does not understand innovation. It is just way too difficult for any Chinese innovative ideas to move from the lab to the marketplace, there is a lacking of complete view of market dynamics and infrastructure.

Policy makers in China is taking a very short-term view and they need to balance between research and development as well as lack of market orientation and design capability. And they have no clue how the system works in the Valley and government bureaucrats will not tolerate the complete free market system that works in the Valley. “Favorism” is still the dominant way of big investments for obvious reasons and antitrust and competition laws are clsoe to non-existan or not-enforceable.

So that alone creates big barriers for start-up challengers. I don’t think China has done enough on new product innovation alone, not to mention strategic innovation on a larger scale. Product innovation is often the most important driver of growth. In most cases over 50% of the growth of many categories from snacks to drinks and electronics came from just a single new product.

China is a far friendlier place for product innovation than the developed markets because the cost of going to market is not as large and consumers are more forgiving when innovation products are on constant beta. And when products fall into grey area of regulations, China is the best place on earth to launch products and don’t need to wait for permission, and they might never need to. Combine with a big domestic and uneducated markets, this creates the ideal environment for innovation.

Strategic Innovation And The Quest To Reinvent Management.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Creativity And Innovation In Small And Medium Size Firms

I am in Egypt this week and trying to finish three big Power Point decks, writing 6 documents and finished reading 63 documents with a slow Internet connection. And trying to finalize the editorial content for March 2012 issue of my magazine. It is not easy.

The December issue of M/I/S/C/ is the big "Creativity" issue. It will be out in 25 countries in the second or third week of Dec. This is thickest issue so far  and will also available on iPad. I like the idea of "Creativity" as a magazine theme but also wanted to make sure they are relevant to business and not just pure creativity.

People often ask what is creativity? How does it happen? How do we prepare ourselves for it? Or can you be prepared for it? Do you have to be a whole-brain thinker, or do you only need the right side of your brain? Does it require for other profession that are usually not associated with creativity too? There is no simple answer.

Creative individuals have a few features that distinguish them from their peers. First, they possess both a rich body of domain-relevant knowledge and with well-developed skills to express them through different medium. And second, they find their work intrinsically motivating and enjoy the creative process not only interested in the outcome.

Creative people also tend to have a “discovery” orientation, which leads them to view situations from different perspectives, to find problems, and to ask novel questions and to avoid group-think. Almost every entrepreneur/start-up person is a creative person at heart, because it requires a lot of creativity to start and manage a new business (with the exception of franchise business). It is harder to find creativity in large firms not because there are not enough creative people, but the organization design and business processes make it almost impossible to be creative. And for them, creativity means finding ways to work around the system but not creating new ways to meet customer needs.

For that reason, many believe that small firms are more creative and innovative than larger firms. Not only they are more creative, they are more agile and nimble. But what about mid-size firm? There are companies that are too small to be big and too big to be small?

Medium size companies tend to lack resources and expertise whereas larger firms tend to have more resources and knowledge (including hiring consultants) but more vulnerable to external shock and any radical change. People think the sheer availability of resources means larger firms should be able to innovate along product, channel, process, and paradigm more effectively. That's not true at all. Any large established businesses carry their own old mental models and operational legacies make them hard to adjust to any changes - in particularly new ideas that cannibalize their core businesses.


I am not saying it is easier for small firms to innovate, it is not for the lack of creativity. Small medium companies tend to suffer a lack of knowledge cross-pollination and carry a higher degrees of path dependency. There are basically three strategies for innovation for small and medium size firms:

1. Advancing creativity and technological competitiveness based on new processes to deliver better products
2. Advancing technological and design creativity to design innovative new products
3. Advancing creativity and design thinking to turn products into experiences

Generally these three distinct models identify three trajectories for innovation that are largely separate from one another, although some complementarities exists. Medium size firms often suffer due to a lack of strategy or expertise to develop a robust strategy.  Their innovation in processes are often the results of the need to search for greater flexibility and minimize resource requirement. The high performance small and medium enterprises are usually the results of access to strategic advice combined their speed and agility in execution.

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.

Idea Couture's Planned IPO Is Now Official.

Newswire - Idea Couture's planned $150 million initial public offering is being greeted favorably on Wall Street and could help buoy the stocks of other innovation consulting and services firms, according to industry watchers.

"Stock prices in this sector were up fairly dramatically today, and I think it's primarily related to the news of the Idea Couture filing," says an analyst with S.S.D.D., an investment advisory firm in San Francisco.

“As Idea Couture goes public, it will remind investors that this is still an early stage in the development of this type of firms within the consulting service industry and the firm has created a lot of value over the last four years,” he adds. "What this has done is reinvigorate interest in the sector."

The announcement had been widely anticipated, and there were rumours that Idea Couture will merge with Fahrenheit 212 before filing an IPO. Both firms were considered top players in the space and together becomes the market leader. An attempt to contact the CEO of Fahrenheit 212 but they did not return calls.

Insiders says the IPO will give Idea Couture stock currency with which to do deals and build up its innovation organization design business, making the innovation consulting firm more of a competitor to more traditional consulting firms such as Monitor or IBM (NYSE:IBM) Global Services.

The timing of Idea Couture's offering remains uncertain. The innovation firm could wait later in the year in hopes of riding an upturn in the market. The market is anticipating a successful offering that pave the way for further acquisition as the company continues its international expansion.

Happy April 1st. Now let’s get back to work. Stop dreaming.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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