Enter to Win a Free Ticket to The Economist's March Event

Want a chance to win a free ticket ($1,500 value) to The Economist's event - "Innovation Fresh Thinking For the Ideas Economy" at the Haas School of Business at the University of California, Berkeley on March 23-24, 2010?

It's easy, here is all you need to do is fill in the blank on our LinkedIn or Facebook discussion:

1. When it comes to innovation, I wish somebody would write about ______________.


• Fill in the blank in our Continuous Innovation group on LinkedIn.
  
• Fill in the blank in our brand new Facebook page (and become a fan)

Enter by midnight GMT on March 2, 2010. Winner will be announced March 3, 2010.

If you don't want to enter the contest but would like to save $150 off event registration, see the discount code at the bottom of this article.


There will be a lot of great, top-flight speakers at this event, including:

• Clayton Christensen and Michael Porter (by Video Link)
  
• Arianna Huffington - Editor in Chief, Huffington Post
  
• Tim Brown - CEO, IDEO
  
• David Kelley - Head, Stanford Design School
  
• Judy Estrin - Author, "Closing the Innovation Gap"
  
• Scott Berkun - Author, "Myths of Innovation"
  
• Roger Martin - Dean, Rotman School of Business
  
• Paul Saffo - Visiting Scholar, Stanford Media X Network
  
• Matt Mullenweg - Founder, Wordpress
  
• John Kao - Author, "Innovation Nation"

As an added value for our loyal Blogging Innovation readers, we have negotiated a $150 discount when you register using our discount code - "BLINN" - register now.

We hope to see you there!


EDITOR'S NOTE: Winner is still responsible for all travel costs and the ticket is granted at The Economist's discretion not ours. There is only ONE (1) ticket up for grabs in this contest and it will be awarded to ONE (1) winner.


Don't miss an article - signup for our rss feed or our Continous Innovation group today!

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Economist - "Fresh Thinking For The Ideas Economy"

Blogging Innovation will be covering The Economist's event - "Innovation Fresh Thinking For the Ideas Economy" (see discount code below) at the Haas School of Business at the University of California, Berkeley on March 23-24, 2010.

There will be a lot of great, top-flight speakers at this event, including:

• Clayton Christensen and Michael Porter (by Video Link)
  
• Arianna Huffington - Editor in Chief, Huffington Post
  
• Tim Brown - CEO, IDEO
  
• David Kelley - Head, Stanford Design School
  
• Judy Estrin - Author, "Closing the Innovation Gap"
  
• Scott Berkun - Author, "Myths of Innovation"
  
• Roger Martin - Dean, Rotman School of Business
  
• Paul Saffo - Visiting Scholar, Stanford Media X Network
  
• Matt Mullenweg - Founder, Wordpress
  
• John Kao - Author, "Innovation Nation"

As an added value for our loyal Blogging Innovation readers, we have negotiated a $150 discount when you register using our discount code - "BLINN" - register now.

We hope to see you there!

Don't miss an article - signup for our rss feed or our Continous Innovation group today!

---

Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Innovation - Elite Unit or Crowdsource?

by Hutch Carpenter

A classic dilemma for companies is determining the best way to foster innovation. There are many good books with different approaches. Clayton Christensen's "Innovator's Dilemma" has influenced a generation's thinking about innovation. He focuses management and entrepreneurs' attention on the Big I: 'disruptive innovation'.

One outcome of the popularity of Christensen's book is the awareness people have that entrenched business practices can inhibit companies' ability to recognize and address discontinuous innovations from new market entrants. Motorola, for example, is often held up as an example of this. The company continued to develop only analog cell phones even as the digital phones were getting traction. In clinging to analog, which it dominated, it fell far behind in the mobile phone market.

A key practice espoused by Christensen is for companies to tackle discontinuous innovations by creating separate divisions. These divisions have an R&D profile, meaning they are funded without requiring a financial return. They do not have to prove themselves to sales or other parts of the organization. This gives them the room they need to figure out how to approach the impending market shift.

The issue with the popularization of this framework is that it sets up a binary approach to innovation. You're either addressing disruptive or discontinuous innovations, or you're executing on yesterday's business. It's this dichotomy that obscures the value of innovations that move organizations forward, competing to increase market share and profits.

To that end, let's examine two ways companies create work structures for innovation.

Integrated or Separate Innovation

The graphic below highlight two very different ways to approach innovation. And that's a good thing.


Separate Division

• As advised by Clayton Christensen, this approach is best for companies that need to address disruptive innovations. And all companies need to address disruptive innovations.These days, it's not a matter of if, but when. For fundamental market shifts, too much is invested in the current operations for companies to address changes. Freeing a group of people from these constraints is critical, if the corporate culture is not open to big-bet innovations.

A couple examples of interest here. First, let's go back to Motorola. Yes, the company muffed it badly on the transition from analog to digital. But there was something that it did right years before. Motorola researcher Jim Mikulski could see in the 1960s that existing cellular technology was insufficient for the emerging uses of the mobile technology. He had a new technology to replace it, and asked the head of Motorola's communications division, John Mitchell to fund its development. Mitchell said "no,"


Arguing that 400MHz technology offered sufficient capacity and met consumer needs. The Communications Division current product line was the market leader, and a new product, which would likely cannibalize the current system, was deemed to be both unnecessary and potentially harmful to this business line.


So Mikulski found refuge in Motorola's Corporate Research Laboratory. He worked on the new technology there, receiving funding for its development. When his view of the coming changes proved to be true, Motorola was ready with its new technology.

In other words, he addressed innovation that affected the communications division in a completely separate division.

Microsoft, on the other had, has programmatically set up a separate division for innovation. The Microsoft Research group works on ideas that may never have commercial appeal. But some of their work has resulted in product features and direction for its new Natal gaming system, its Bing search engine, and an upcoming release of Outlook email.

They have a separate division, but the innovations arguably are of the sustaining variety, not disruptive.


Integrated into Daily Work

• In this work structure, everyone is involved in innovation. The company sets expectations, and encourages employees' to share ideas. Done right, this is in-the-flow stuff. Employees are encountering issues to be addressed daily, and they're hearing new customer feedback all the time. They are well-positioned to come up with innovative solutions and products, if senior management makes that a priority.

Whirlpool is a good example of this. In 1999, then-CEO David R. Whitwam made the determination that Whirlpool needed to stop competing on price, and make innovation its central strategy. Fast forward to today, and the results have been stellar. Whirlpool has escaped competing as a commodity vendor, with $4 billion in revenue (21% of total sales) generated from its innovation efforts. Are they satisfied? No. CEO Jeff Fettig stated that while participation in innovation from 5,000 employees is good, he's looking to increase it to 15,000.

That's integrating innovation into employees' daily work for sustaining innovation. In this case, sustaining innovation has been the source of growth and profits.

Another company where innovation is part of everyday work is 3M. The company is legendary for its innovation. And clearly, the encouragement of all employees to be part of innovation has taken hold. For instance, there was this story recently in Fast Company:


3M told a great innovation story at the ARF annual conference about a new product that started with a complaint call into customer care. The representative did his own research online, came up with a solution, filmed a video that he put on YouTube and re-contacted the customer to see if that is what he was looking for.


The sheer volume of ideas that employees have to improve companies' existing businesses puts a premium on crowdsourcing ideas. And inevitably, some of that culture and the ideas emerging from sustaining innovation will relate to discontinuous or disruptive innovations.

Why Not Do Both?

Google is a good example of a company that does both. Its 20% time for employees to devote to innovation is the stuff of business legend. And according to the company, half of its new products result from this employee time.

But then look at Google Wave. This project was done beyond 20% time. It was actually a completely separate project developed by a 5-person 'startup' team in Australia, far from the company's Mountain View, CA headquarters. Google Wave is transformative, and will likely usher new design principles into a host of software applications.

Google is a good example of an innovation-led company. They mix the elite unit approach to innovation with the everyday encouragement for employees to innovate.

There's not this dichotomy of "all disruptive/discontinuous innovation, or you're just falling behind." Rather, it's a smart blend of the strategies.

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Hutch Carpenter is the Director of Marketing at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

Is Tide Basic an Innovation?

by Hutch Carpenter

Adam Hartung, Managing Partner of Spark Partners, a strategy and transformation consultancy, asked this question on LinkedIn:

"Do you think "Tide Basic," a less-good formulation, is an innovation? Isn't innovation about making things better and cheaper, not just cheaper?"

The genesis of the question is a story in the Wall Street Journal describing why P&G recently rolled out Tide Basic. Tide Basic "lacks some of the cleaning capabilities of the iconic brand - and costs about 20% less." As the article notes, Tide's historic posture is to improve the laundry detergent continuously. It gets better every year. And the price does go up as well. The decision to go down-market didn't come easily.

Much of this is reminiscent of Clayton Christensen's analysis of the steel industry. In that story, low-cost mini mills ultimately led to the demise of the big, integrated steel mills.

Reflecting on that, here's how I answered Adam's question on LinkedIn:

"Conceptually, going simpler on something *could* be an innovation. Clayton Christensen's mini steel mills were the catalyst for disrupting the steel industry in the 1970s and 80s. The innovation was decoupling the low cost, simple steel from the integrated high end. It enabled quality customers wanted at much lower prices.

A lower cost, less featured Tide sounds similar, doesn't it? A difference here is that there's nothing new in the manufacturing process for Tide Basic. Remove the more expensive ingredients, change packaging, sell for less. Nothing wrong with that either. It addresses the needs of a segment of the market. I consider it smart business.

A key difference between Tide Basic and the mini steel mills is that the mini mills recast the economics of the industry. At the low-end initially, then upmarket as well. Tide Basic doesn't recast the economics of the industry. There's still a linear relationship between the ingredients put in the detergent, and the price and performance of the detergent. The mini mills caused a fundamental shift in the pricing of steel.

That was their innovation."


How about you? What do you think?


Image Credit: Wall Street Journal

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Hutch Carpenter is the Director of Marketing at Spigit. Spigit integrates social collaboration tools into a SaaS enterprise idea management platform used by global Fortune 2000 firms to drive innovation.

World Innovation Forum Posts (updated)

I recently updated some of my World Innovation Forum (May 5-6, 2009) posts to add slides for some of the presentations.

You can also download the World Innovation Forum Executive Summary from our site - lovingly assembled by business analysts from ExecuNet.

The conference lineup included - Paul Saffo, CK Prahalad, Vijay Govindarajan, Clayton Christensen, Fred Krupp, and Dan Ariely

Here is a list of all of the posts from my World Innovation Forum trip with the posts that have been updated with slides at the top:

• Paul Saffo (updated)


• Vijay Govindarajan (updated)


• Clayton Christensen (1st Session) (updated)


• Dan Ariely (updated)


• ?WhatIf! Innovation Field Trip (Apple Store and OZOlab)


• Interview with CEO Alexander Tsiaras of TheVisualMD


• Brightidea visit with Co-founder Vincent Carbone


• CK Prahalad


• Clayton Christensen (2nd Session)


• Fredd Krupp

A thank you goes out to HSM Americas and the presenters for the slides.


Braden Kelley (@innovate on Twitter)

Bonus - Top 10 Clayton Christensen Insights - World Innovation Forum

Taking a slightly different approach than other World Innovation Forum bloggers, I've distilled the second 90 minutes with Clayton Christensen down into these Top 10 Insights (primarily about health care and education):

1. Disruption drives things towards convenience and accessibility


2. Clayton Christensen believes that the key to healthcare is pushing care farther from the center towards nurses and users and local devices


3. There is a tension between people's different learning styles and the need for standardization


4. When Clayton Christensen writes a book, he draws a diagram. Then he writes a chapter to describe the diagram. That's how his brain works.


5. Clayton Christensen believes that over time teachers will become tutors and all instruction will eventually go online


6. Schools struggle to keep kids engaged because the kids are looking to feel successful and to have fun with their friends


7. Instead of telling Andy Grove of Intel what to think, Clayton Christensen told him how to think - and then Andy Grove could draw his own conclusion


8. We tend to frame problems incorrectly, often lack a common language to discuss the problem, and usually don't take time for re-education before proceeding to try and solve it


9. The tyranny of delivering the numbers tends to make great innovation ideas homeless


10. We should build cheap, limited electric cars aimed at teenagers - parents don't want teens going far or fast

Finally, I'd like to end with a quote I heard recently from an unknown origin:

"Minds on the margin are not marginal minds"


What do you think?


Braden Kelley (@innovate on Twitter)

Top 10 Clayton Christensen Insights - World Innovation Forum

Taking a slightly different approach than other World Innovation Forum bloggers, I've distilled the first 90 minutes with Clayton Christensen down into these Top 10 Insights:

1. Largest markets don't represent the biggest growth opportunity - non-existent markets are key


2. Sustaining innovation improves product past what people need - disruptive innovations often win by being inferior but closer to customer needs


3. Low cost strategy only works when you are fighting against a high cost competitor - prices fall if only low cost competitors exist


4. A good disruptive strategy creates an incentive for leaders to exit the contested area and focus on higher margin businesses


5. Biggest opporunity in China isn't low cost labor, it's the untapped market of non-consumers


6. Clayton Christensen believes that green energy opportunities are not in high tech solutions but in low tech developing world instead


7. Be careful about outsourcing too much of your operations - you can end up creating competitors (Compaq/Flextronics example)


8. Good companies survive by setting up separate businesses with an unfettered charter to kill the mother company


9. Clayton Christensen doesn't seem to believe that listening to customers is key to innovation


10. Listening to customers doesn't necessarily tip off leaders to possibilities of disruptive innovation

Finally, I'd just like to say that if you've never seen Clayton Christensen in person, he is a gentle giant with a calm demeanor, and surprisingly funny.


Update May 24, 2009 - Here are the slides from Clayton Christensen's presentation at the World Innovation Forum:

Clayton Christensen - World Innovation Forum

View more Microsoft Word documents from Braden Kelley.

What do you think?


Braden Kelley (@innovate on Twitter)

Announcing the Innovation Community

I am pleased to announce the launch of the new multi-author Innovation Community at http://innovationcommunity.ning.com

The Innovation Community provides:

1. A forum for people interested in driving business results and discussing innovation topics


2. Centralized access to the writings and videos of several visionaries:
   - Gary Hamel, Clayton Christensen, Geoffrey Moore, Michael Raynor, Braden Kelley, David Sable, Stephen Shapiro, and the minds of Ideo


3. Access to content from London Business School's Management Innovation Lab


4. A way for you to connect with other people interested in innovation


5. A place for you to share innovation content that others might enjoy

I encourage you to check it out and help make it your own.

Join the conversation at http://innovationcommunity.ning.com.