Ten Rules for Strategic Innovators

HSM Global recently hosted a webinar with Dr. Vijay Govindarajan of the Tuck School of Business at Dartmouth in the run up to the World Innovation Forum, and has been kind enough to post it online. Here it is:



One of the main points of the webinar is that managers need to consciously look at how they allocate time between:

Box 1 - Managing the Present
Box 2 - Selectively Forgetting the Past
Box 3 - Creating the Future

When Dr. Govindarajan speaks of the future, he is speaking about planning ten years out.

He asked webinar attendees how they allocate their time between the boxes, and the unscientific results were that 92% of the participants spend up to 90% of their time in Box 1.

According to Dr. Govindarajan, the rule of thumb for a world class company is to spend 50% in Box 1 and 50% in Box 2/Box 3. Even in a recession the ratio should still be no more than 70-80% in Box 1 and 20-30% in Box 2/Box 3.

His research shows that the economic expansions following recessions usually last about three times as long as the recession, and that the best time to prepare for expansion is during the recession. The competitive landscape usually fundamentally changes after recessions.

Here is one way to look at the three boxes and strategic balance:

Box 1 is about:
-- Closing the Performance Gap
-- Restructuring

Box 2 & 3 are about:
-- Closing the Opportunity Gap (projects for 2020)
-- Renewal

At the end of his presentation there was a Q&A session including one from yours truly. :-)

What do you think?

You can see Dr. Govindarajan in person at the World Innovation Forum 2009 and still save up to $610 on registration if you register by May 1, 2009 using the discount code - INNOVATE.

@innovate

Sources of Innovation - Invention versus Discovery

One theory of why there is more innovation in a downturn comes from Professor Dominic Houlder of London Business School. It goes like this:

There are two main sources of innovation - invention and discovery.

Discovery as it relates to innovation is analyzing where customers are being over-served and where they are being under-served. Discovery is teasing out what needs customers have surpressed during the boom times for a myriad of reasons, and identifying ways to better serve customers. The firms that get this right during the downturn are the firms that are likely to emerge strongest out of the downturn.

For more detail check out the video:



So, now that you are less busy filling customer orders. Are you using that time to innovate through discovery or only through invention?

Where will your next innovation come from?

@innovate

Twitter invented in 1935?

Twitter gets a lot of attention these days for being an innovation that is changing the way people communicate with and relate to each other. But is Twitter really a new idea?

Yesterday on the radio I heard about a British invention implemented in 1935 that did basically what Twitter does, except without all of the technology behind it. I found this picture on the DJ's blog:


This person back in 1935 had this great idea, this great invention, but it was not an innovation. While the idea was firmly grounded in a latent human need, the technology and the consumer readiness did not exist to fully realize its potential. Otherwise we would all still be going to the train station to use the Robot Messenger.

This creates two questions in my mind:

1. What other innovations do we give credit to people in the present for coming up with that were really great inventions from the past?


2. When we are attempting to create the future as innovators and we get stuck, should we look to the past more for inspiration than we currently do?

Timing is often one of the key differentiators between invention and innovation. So, when seeking to innovate, we must ask ourselves:

Is my idea too early or too late to be an innovation?

If the brutally honest answer to this question is no (ideally after doing consumer research), well you better grab hold with both hands and go for it.

@innovate

Washington Innovation Summit Roundup

I was fortunate enough to be invited to attend the Washington Innovation Summit by the event organizers. It was a great event that attracted over 400 attendees interested in technology and innovation to Bellevue, WA on April 9, 2009.

The event was headlined by Senator Maria Cantwell and Gifford Pinchot, followed by other area technology and innovation dignitaries. (event schedule)

Predictably, there was a lot of attention given to what government is doing to provide an economic environment that encourages innovation, and of course to technology innovations under way in the region.

There were four technology breakout tracks:

• Sustainable Energy


• Innovative Materials & Manufacturing


• Urban Sustainability


• Healthy Ecosystems

Despite the name change from Washington Technology Conference to Washington Innovation Summit, the focus of the event was still more on technology than innovation. I attended one breakout session from the Innovative Materials & Manufacturing track that focused on nano-structure and micro-structure applications and one from the Sustainable Energy track focusing on energy generation from waste.

Most of the sessions I attended were very interesting, but because there was more of a focus on technology than on innovation, there are less learning to be extracted and applied by attendees back in their own organizations, and for me to share with you here.

The key takeaways for me from the event were the following:

• There are a lot of opportunities for our economy and the environment to generate energy from waste - while also improving the lives of those who live near it



• Nanophotonics is a technology area that will help extend the lifespan of Moore's Law while also helping to reduce the energy footprint of the Internet


• The forestry industry is exploring nanotechnlogy alternatives to growing and cutting trees, but at the same time sustainable forestry may provide a better solution than alternative building materials


• Researchers are doing some very interesting things with micro-scale and nano-scale structures


• PACCAR and McKinstry are two companies that are doing very interesting things that others may be able to learn from

What do you think? - Say it with a comment!

@innovate

Business Innovation Factory 5 (BiF-5) - Discount Code

Registration for Business Innovation Factory 5 (BiF-5) is now open. It will take place October 7-8, 2009 in Providence, RI.

I attended BiF-4 last year and it was an outstanding event - both for the quality of the event and the attendee interactions. My blog posts and session videos from the event can be found here.

The event sold out last year and despite the economy, the limited number of spots this year will go quickly.

As a special bonus for my loyal readers I've negotiated a special $50 discount when you enter "BK110" in the payment code field on the payment options page during registration - this will get you in for $1,150. Groups of five or more can get extra discounts.

New storytellers are added each week, but so far they include:

• Richard Saul Wurman, Founder of TED conferences


• Jeff Jarvis, "What Would Google Do?", buzzmachine.com


• Bill Buxton, Microsoft Research, "Sketching User Experiences"


• Grant Harrison, VP of Consumer Innovation, Humana


• John Maeda, President, Rhode Island School of Design


• Jonah Lehrer, "How We Decide"


• Don Tapscott, "Wikinomics"


• Keith Wilmot, Global Director Insights, Ideas & Creativity, Coca Cola

Here is a video from Marc Ecko's talk last year to give you a flavor of the storytelling format:




Who's going to go?


Braden Kelley (@innovate on Twitter)

Let's Start an Innovation Revolution to Remove Obstructions to Innovation

For decades, innovation in the mobile industry was obstructed by the mobile carriers. Walled gardens seeking to maximize airtime revenue ruled the day and delivering value to customers a distant concern. Carriers had ultimate power to determine what innovations customers would have access to and their contract terms and limitations discouraged application development. Then along came a man with a sledgehammer....

The man was Steve Jobs of Apple, and the sledgehammer was of course the iPhone. The iPhone was a revolutionary handset at the time, and for several of its best features to work, a carrier would need to cede some of its control. Apple took the iPhone first to American mobile service market leader Verizon and was shown the door. Control was retained and the walls of the garden did not come down!

So, Steve Jobs did what any good entrepreneur would do, he didn't take no for an answer and went on to the next carrier on Apple's list. AT&T didn't say no, after all this was their golden opportunity to try and catch Verizon, but they were no pushover in negotiations with Apple either. In order for AT&T to do a deal with Apple and cede some of their control, AT&T got Apple to sign a five year exclusive contract, but Apple did manage to start taking a sledgehammer to the walled garden. As a result RIM, Nokia, and others have managed to widen the crack further.

Now instead of the mobile carriers obstructing innovation by controlling which applications make it onto their network and taking nearly all of the revenue from their sale, handset makers are now controlling which applications make it onto their phones. Where mobile carriers were incented to limit the available applications, handset makers are incented to make as many applications available as possible. There is even a Skype client for the iPhone. This is something I never thought I would live to see.

Now, Nokia is looking to leverage their strategic acquisitions to push mobile innovation into whole new directions.

So now that many of the obstructions to innovation in the mobile industry have been torn down, what other industries currently are obstructing innovation?

Some say that commercialization of innovations in electric, hybrid, and water-powered vehicles has been obstructed by the automobile manufacturers, petroleum companies and the government (at the bidding of the first two). Whether that is a conspiracy theory or reality, I will leave for your comments to decide.

Conspiracy theorists will be disappointed as we're not going to talk about water-powered cars, because water is an even more precious resource than oil, making a water-powered vehicle fleet unsustainable.

This leaves electric and hybrid vehicles. Is innovation being obstructed here?

In the United States, the evidence would indicate that the answer has been at least partially yes....

Despite the Toyota Prius being on sale since 1997 in Japan and since 2000 in the United States and Europe, there is still not a plug-in version available from Toyota (although one is slated for late 2009). But, through third-party providers like Advanced Vehicle Research Center and CalCars you can covert a standard Toyota Prius into a plug-in hybrid capable of getting 100mpg.

But at the same time you have researchers inside the United States at MIT recently discovering a way to potentially create lithium ion batteries that can be re-charged must faster. This could have implications for the portable device market for sure, but potentially also for the electric and hybrid electric vehicle market.

Outside the United States, innovation introductions to the marketplace are proceeding at a faster rate.

In December 2008, BYD, a Chinese company began selling a plug-in hybrid in China for about $22,000 (about half of the likely Chevy Volt price tag). The specs are compelling - 100mph top speed and 62-mile range on the battery (making it nearly fuel-free). If it passes U.S. safety tests, BYD's vehicle may hit the market before the Chevy Volt or Toyota's official plug-in Prius. Warren Buffett and Berkshire Hathaway are investors in BYD.

When you look around the hybrid electric innovation-sphere, what you see is a collection of independent foundational technology projects with little coordination or systems thinking. As we look to shift to fully or partially electric cars, we need designers to look at the power system as a true "system" and look to optimize the efficiency of every component of the system - including positive use of non-core and waste assets. We will need to come up with an objective measure of system efficiency similar to mpg and emissions measurements for internal combustion driven vehicles.

One non-core asset example people are already discussing is integrating solar panels into a car's exo-skeleton. Here are a few links if you would like to find out more about on-board solar power:

• http://features.csmonitor.com/innovation/2008/07/14/solar-panels-for-your-car/


• http://auto.howstuffworks.com/solar-cars.htm


• http://www.technologyreview.com/Energy/21073/?nlid=1205

One waste asset example would be using the turbulence and airflow over the car's exo-skeleton to power mini-turbines and/or embedding a wind turbine that could re-charge the battery when the vehicle was at rest. Here are a few links if you would like to explore this further:

• http://www.whynot.net/ideas/720


• http://knol.google.com/k/gaby-de-wilde/the-wind-powered-car-project/1yrf1mzjtxzk5/8#

Internal combustion systems are well-understood and composed of nearly universal components, with innovations and competitive differentiations occurring primarily at the system component level. Because of this, maybe hybrid electric vehicle system design should become an open-source project to drive standardization of system component types and supply chain efficiencies.

This would allow component suppliers to focus primarily on creating component innovations, while still being able to contribute potential system improvement ideas to the open source research project. Automobile manufacturers could also focus on optimizing for efficiencies in the design and production of entire vehicle fleets, but still retain the ability to contribute system improvement ideas.

Could we collectively do more to spark an innovation revolution here?

What do you think?

@innovate

Live from the Washington Innovation Summit - Miracle Materials

Here are my notes from the Miracle Materials breakout session:

Dr. Jim Dangerfield
EVP of FPInnovations

We found way to break apart cellulose and create nanocrystalline cellulose - 20nm long and 10nm wide. We have built a pilot plant with the ability to make one ton of nanocrystalline cellulose per day.

We've used nanocrystalline cellulose to make paper. As you create nanocrystalline cellulose you can tune the color by getting the substance from different plant beginnings.

We have looked at blending nanocrystalline cellulose with plastics and found that it increases strength 3000x times.

It costs $100,000 per ton to produce nanocrystalline cellulose.

Renewable wood construction may increase over the coming years as the energy invested into materials is counted in the overall cost structure of competing materials.

We've advised on the construction of a 10-story wood building in Europe, we expect two demonstrations in Canada in the next 18mos., and we would expect there to be one in the United States maybe in the next 5 years.

85% of residential construction is done using wood.


Dr. Michael Hochberg
University of Washington Nanophotonics Lab

I am here to speak about Silicon Integrated Photonics.

A standard firewire cable might transmit 500mb/sec over up to 2 meters, while an optical Luxtera cable is capable of transmitting 40gb/sec over 2 kilometers.

In a data center, the fastest switches now have to be located in the same location and cables are huge antennas.

The University of Washington is the world leader in Silicon Photonics. These technologies will allow for lower power communications and all optical logic is even a possibility with optical transistors.

In regards to bio-sensors, we can detect anything you can detect with an SPR. We might be better with pathogens. In an SPR system you have a piece of glass and a thin layer of metal and then you bounce light off of it. Optical bio-sensors can use all of the same kinds of biochemistry and with light you can measure phase changes. We can put an awful lot of complexity into a chip for the same money that someone might spend on an SPR device.

If you look at data centers and computing, the compute cycles are not used very efficiently (probably only used at 20,30, or 40% computing efficiency). There is a huge overhead from moving data.

• If you do some very basic things with optics, you can probably increase efficiency 2-3x


• Doing clever things that take advantage of moving data around quickly and cheaply you could do even better


• Multi-core processors don't take advantage of communication between cores very efficiently


• There would probably be lower heat disappation from optical connections as well (lower HVAC costs)

Commercial tools for building solar cells and other applications still have significant limitations.


Dr. Vipin Kumar
University of Washington Microcellular Consortium Director

Microcellular polymers are 10 micrometers wide. A human hair is 100 micrometers wide.

Manufacturers are very interested in reducing the materials that go into production and packaging.

We can make nanoforms in bulk (recent innovations)

• PEI Nanofoam


• PEI Microfoam


• Microcellular Recycled PET


• Microcellular PLA thin film

We have a grant to investigate continuous creation of recycled PET and corn-based PLA. With recycled PET it is possible to make six or seven 12oz. cups from a 2-liter bottle. The enabling technology has been licensed to MicroGREEN Inc.

Does anyone have any idea how much plastic is used in toys?
- If we can reduce that and increase impact strength, just imagine what is possible

One of our technology licenses is a diffuser sheet in LCD televisions. At the end of 2008 our Japanese sub-licensee using our technology passed the 6-millionth television sold.

Question: Are there improvements in insulation properties from these nano-materials?
Answer: You do have the air voids and the insulation properties of these and of the material itself.

Live from the Washington Innovation Summit - Gifford Pinchot

Gifford Pinchot is the co-founder of Bainbridge Graduate Institute and is credited with creating the term "intrapreneur" and today brought up the term "ecopreneur", and he is also an angel investor.

Here are my notes from the session:

He spoke about several social topics including Grameem Telecom, access to safe water, and the disappearing frontier forests (old growth).

It's no coincidence that the Naval War College's predictions of where wars will be fought overlaps with those countries without access to safe drinking water.

Defintion of Sustainability

• "Sustainability is meeting the needs of the current generation without compromising the ability of future generations to meet their needs." - Brundtland Commision -- 1987

Rate of innovation in depressions is about six times that of the rate during boom times.

Is it possible to do enough to avoid disaster?

Jim Gosling saw microchips in hotel doors and got inspired to create. He proposed creating a gui-based remote control and he was rejected. Then someone wanted to use his OS for a set-top box but Silicon Graphics got the contract and so things were killed again. Then he had the opportunity to meet with Bill Joy thanks to someone in human resources and JAVA was born after these two previous failures.

I'd rather have a class A entrepreneur with a class B idea than a Class A idea with a Class B entrepreneur. This distinction in the source of a venture is why VC's outperform the corporate venturing arms.

Ecopreneurs, intrapreneurs, and entrepreneurs - "Dreamers who do"

Entrepreneurs sometimes have the reputation for doing the following, but it is actually Promoters who are:

• Driven by greed


• High risk takers


• Intuitive thinkers


• Dishonest

Challenging people with the first potential cash-flow killing problem and gauging their response is important for distinguishing between entrepreneurs and promoters

• Entrepreneurs will be able to respond to challenges


• Promoters will re-focus your attention on the pot of gold at the end of the rainbow

Entrepreneurs:

• Driven by vision


• Moderate risk takers


• Intuitive and analytic


• Honest rule breakers


• Persistent

The stimulus money is going to shovel-ready projects and it has been very difficult for us to create proposals fast enough to qualify given how quickly the government wants to spend the money. This approach is not sustainable and the stimulation of our economy will return to something much more driven by innovation.

Economic development is so often focused on bringing in big organizations and giving them big tax breaks. An investment in green infrastructure in small and medium enterprises will help to lead us out of this economic crisis and we need to be teaching entrepreneurship everywhere.

Live from Washington Innovation Summit - Senator Maria Cantwell

The senator spoke about smart grid technology and how it is top of mind for Obama and even appearing in Super Bowl ads. What does smart grid really mean for us?

Here are my notes and key insights gathered from the Senator's talk:

Right now people turn on a switch or turn it off and the lack of intelligent power management places an increasing strain on the power system to manage demands. The power meters in our homes were invented before television.

Power outages from shortages cost the country over $100 billion. The demand for power is projected to grow 40% in the next 20 years. Luckily Washington receives 70% of its power from hydropower, but this is projected to decline over time.

We are fortunate to have smart grid related companies like Schweitzer Engineering Laboratories and iTron in Washington state, and utilities like Avista and Puget Sound Energy have been working on smart grid case studies.

Gonzaga and its transmission and distribution energy program is one of only 15 power engineering programs in the country.

One of the best smart grid studies was done by Pacific Northwest Labs. It found that a 10% reduction in power usage was possible without inconveniencing customers. If its approach was applied nationwide, we could spend $70 billion less on electrical transmission and distribution over the next 20 years. Smart grid usage can improve efficiency by up to 30% and enable real-time pricing.

Implementing off-the-shelf energy efficiencies nationwide could offset the incremental demand over the next 20 years by 85%.

Congress has provided $30 Billion of funding for smart grid and advanced battery technology and $20 billion for renewables and efficiencies.

We will be getting a regional demonstration project to help quantify savings, to help prove out smart grid business models, to prove that smart grid technology works, and that it is a smart investment.

A smart grid is an innovation by itself but serves as a bedrock for many future innovations.

The Internet was a $1 trillion opportunity, but Energy possibilities represent a $6 trillion opportunity.

It is important that the Pacific Northwest put forth strong proposals for federal and private funding to take advantage of this opportunity.

What do you think?

@innovate

Apple iPhone OS 3.0 to Enable New Innovations

Apple's next iPhone might contain both video input as well as a magnetometer (digital compass). This opens up some interesting possibilities for iPhone application developers to innovate.

Here is an example of a virtual pet application being developed that would use the video input capabilities:



And here is an example of an application showing what might be possible with magnetometer capabilities:



What do you think?

@innovate

Live from the Washington Innovation Summit

I'll be live on Twitter, blogging, and interviewing attendees and speakers at Washington's Innovation Summit April 9, 2009 in Bellevue, WA. The Washington Innovation Summit presents a wide variety of business, research and government leaders clustered together in a full schedule.

This event used to be known as the Washington State Technology Summit, but broadened its agenda this year to include topics such as energy, materials & manufacturing, urban sustainability, and ecosystem preservation.

Senator Maria Cantwell and Congressman Adam Smith will be there, along with many of the state's innovation and technology luminaries. It should be an interesting day.

If you'll be at this event and would be willing to speak on camera about your innovation perspectives, please contact me.

@innovate

Health and Safety and Innovation

Coming up with your next disruptive innovation can be a dangerous job. So to help keep you all safe in your strategic innovation pursuits I wanted to share this health and safety video with you on this special day.


Health & Safety and YOU from Brandon James on Vimeo.

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Oh yes, and a Happy April Fools Day to you too!

Thank you to Stopgap for sharing this video!

All the best,

@innovate