Helping Others Go Vertical

Innovation in Entrepreneurship - A Case Study on Keen Mobility

by Meri Gruber

Keen Mobility is a story of innovation, invention and entrepreneurship. Innovation is often focused on inventions and new products, but innovation is also a new way of thinking about conventional wisdom. Jeffrey Phillips wrote an insightful post "Innovation, Invention and Entrepreneurs", defining innovation as "a new idea that is put into valuable or profitable action." What is so wonderful about the Keen Mobility story is how Vail Blackwell Horton and Jerry Carleton combined innovation, invention and entrepreneurship to deliver value for a large, underserved population and create a profitable, growing business.

Keen Mobility was founded by Vail Blackwell Horton and Jerry Carleton. Vail and Jerry were college roommates at the University of Portland (UP). Vail, born without legs, had been using artificial legs to walk but the crutches he needed to use with the artificial legs were destroying his shoulders. He wanted to find a better way to keep walking - for him, and for others. Vail went in search of a way to fulfill this mission.

Vail brought an idea for a new type of crutch - one with shock absorbing technology - to a group of engineering students at UP. He suggested the engineers try to build a working prototype for their senior project. They agreed, and the student engineers went to work. The concept worked! The engineering students successfully built a working prototype, and Vail and Jerry realized their concept could fly. They set off to start a company to build a product that would help Vail stay vertically mobile, and help others do so as well.

Full of enthusiasm, Jerry and Vail looked at each other across the table of their rented student digs in North Portland, asking what all entrepreneurs ask at this point, "What now?" They had zero idea how to launch a company and needed expertise and funding. Financing is tough at the best of times, but this was in 2001, in the midst of the dot com and telecom bust.

Jerry and Vail called the UP Center for Entrepreneurship. They also set up every meeting, coffee and lunch they could with people they could learn from. By approaching people for mentorship, not funding, they built relationships for the long haul. The company wasn’t bankable at this time, but many of these early contacts later became investors.

The UP Center for Entrepreneurship encouraged the team to enter UP's Entrepreneurs Challenge and other business competitions. By April 2002 they had won the $10,000 first prize in the UP competition and third place in Portland Business Journal's business plan competition, winning $35,000 in cash and services. UP sent them to more competitions around the U.S. where they consistently finished in the top three.

The team also looked for other sources of funding. They wrote a successful proposal to UP to fund their trade show booth and travel costs. They contacted the National Collegiate Inventors and Innovators Alliance (NCIIA). With support from the Lemelson Foundation, NCIIA awards approximately two million dollars in grants annually to college students or recent graduates of member institutions. Keen was awarded a $10,000 NCIIA grant funding prototype development and provisional patent filing costs.

A great partnership, Vail focused on creating the product and the vision for company while Jerry continued fundraising efforts. The VC environment continued to be difficult. Jerry "took every meeting he could get." Innovation continued. They partnered with universities where student engineering teams would apply to NCIIA to prototype Keen's new product ideas. Frugality reigned supreme. In one example, now part of the company's lore, Jerry opened the company bank account at US Bank because of their "Five Star Service Guarantee" that said if you waited in line for more than five minutes, they credited $5 to your account. Jerry made sure to pick the longest line in the bank every time.

The business plan competitions were great for press, as was their compelling mission to keep Vail and others vertically mobile. Jerry recalls, "We were never in crisis capital mode, we had options." When they went out to raise their first preferred round, they "couldn't stomach" the VC terms, so they turned to angel investors. Jerry was on the road, once meeting in six different states in 48 hours. Jerry had the mindset, "every person was a potential investor, or knew a potential investor." Jerry hit the mark - the company's first preferred round was oversubscribed.

Innovation also comes from understanding your market. One of Keen Mobility's best selling products lines today, Tru-ReliefTM foam, started as an important addition to their shock absorbing crutch. When looking for a solution for shock absorbing underarm foam, they discovered a superb foam that could also relieve pressure points. Pressure sores can cause severe discomfort to wheelchair users and can be life threatening.

A crutch with shock absorbing technology was the company inspiration but ultimately represented only a small market. The team realized they needed a full suite of "world-class products focused on safety, mobility, and comfort for the disabled, elderly and injured." They now focused their efforts on building out their product line.

The team went on to close their Series B preferred, again oversubscribed, with about half coming from Series A investors, and half new investors. In 2005, Keen added their first intuitional investor, Crobern Management Partnership, after the Series B close. Jerry describes Crobern as "a venture firm with an angel attitude." Crobern's focus in health care, and their ability to provide value beyond the dollars, has been a great fit with Keen. Jerry points to their early years as an important training ground. "The training we received in the lean years gave us such a respect for the money we raised." Needing only half of the first tranche, the company gained credibility with their new investor when they bought CD's with the extra money.

Keen Mobility today has "over $2.5 million in annual sales, 25 different product lines, more than $1.7 million in capital, and 12 employees. Keen Mobility has also been recognized by the Oregon Entrepreneurs Forum as one of the three most successful growth-stage companies in the state, ranked number 30 on the 100 Fastest Growing Private Companies List, and was placed on the Governor's Honor Role for Employers of People with Disabilities."

Keen Mobility has been named in 2008 and in 2009 to Inc.'s annual ranking of the fastest-growing private companies in America and to the Portland Business Journal's Oregon 100 Fastest Growing Private Companies list three consecutive years. Vail and Jerry were both named to the "Top Forty Under Forty" list by the Portland Business Journal.

Vail holds numerous honors, including his appointment to the Secretary of State Advisory Committee for Worldwide Disability Policy and was named an "Oregon Healthcare Hero" by Senator Gordon Smith on the floor of the US Senate. Vail is also founder and chairman of Incight Foundation, dedicated to empowering people with disabilities through education, employment, networking and independence.

Jerry, who from year two was amazingly attending law school at night, was admitted to the Oregon Bar in 2007 and joined Bullivant Houser Bailey PC. "Having a real life case study to immediately apply my classroom lessons was an incredible opportunity." Jerry's hard won lessons in founding and growing Keen Mobility inspired him to "pay that forward, taking companies into and through the trenches." He continues to be part of Keen Mobility as a Director and Officer of the company.

Vail and Jerry's story, the story of Keen Mobility, is a story of innovation, invention and entrepreneurship. From Vail's initial inspiration and invention, they used creativity, ingenuity, dedication and hard work to grow their company. What Vail and Jerry show us is that innovation is a mindset, that when confronted with challenges, new ideas can change the game.


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Meri Gruber is a leading expert on business execution. She blogs on the intersection of innovation and business execution at www.competingonexecution.com

Innovation, Invention and Entrepreneurs

by Jeffrey Phillips

After all I read on the blogs and on Twitter, and all the new innovation programs and initiatives in state and local governments, I feel the need to revisit the definitions of these key words. While innovation, invention and entrepreneurs are important and somewhat interconnected, they aren't synonyms and they have different needs, intents and purposes. Whether accidently or on purpose, we can't allow them to mean the same things.

First, the definitions:

An entrepreneur is a person who starts a new business. That's not necessarily innovative, but it can create new jobs and new wealth, so it is valuable. Sometimes, entrepreneurs create new businesses based on new ideas, either inventions or new innovations. However, a person running a McDonald's is also an entrepreneur, but not necessarily innovative.

An inventor is someone who creates a new to the world product or solution. Inventions become interesting when they create value for the inventor or consumers or the world at large. Inventors are often innovative, but innovative solutions don't have to be inventions. Many innovations are new business models, new services or new experiences that aren't necessarily "inventions".

An innovation is a new idea that is put into valuable or profitable action. An innovation can be created by an inventor who then licenses her invention to others to commercialize, or commercializes the concept herself as a small business person - in this case as an entrepreneur. An innovation can (and often is) created by a large organization to disrupt an existing market space or create an entirely new market (the iPod or Flip Video recorder are two good examples). Innovation can happen in any organization, of any size. Additionally, there's innovation in governments, in academic institutions, and in not-for-profits. We typically don't think of these organizations as entrepreneurial or as inventing new things, yet they can be innovative. Further, innovations can be new products, but can also be new service models, new business models and new customer experiences.

The reasons the distinctions are important are hopefully obvious. There are a number of state governments, as well as the federal government talking about innovation policy. Read the fine print and they are really talking about funding and sponsoring entrepreneurs and technology transfer from institutions and universities. This may have some aspect of innovation, but doesn't really consider organizations outside the start-up realm. A vast majority of disruptive and incremental innovations come from larger, commercial organizations, and these organizations can become more innovative as governments adjust tax policies, intellectual property rights and a number of other components of regulation and legislation. Yet most of the state and federal initiatives are really targeted at starting and funding new entrepreneurs and small businesses.

Interestingly, if you stop to consider the most "innovative" locations in the US (Boston, Research Triangle Park, Austin, Silicon Valley as a few) you'll note that they have all three things in common - government, education and technology are closely linked and vital to all of these cities. Innovation thrives in an interlinked, internetworked community. The same isn't necessarily true of inventions or entrepreneurs.

The overwhelming focus as well is on product innovation, yet we see consistently that business model innovation and customer experience innovation are much more compelling. After all, the icon of innovation, the iPod, is simply another MP-3 player unless iTunes is attached. It was the radical change in the business model and customer experience that made the iPod a true disrupter. Yet we don't find too much focus or government initiatives in these areas. And almost no policy or funding for the organizations that need innovation the most - governments and educational institutions and bureaucracies.

Another thing - having been a founder in a start-up, most entrepreneurs don't need or want a lot of help from an "innovation" perspective. They are betting the farm on their one great idea. For them, its all a matter of execution to bring that one idea to life, and then successfully scaling that idea. In contrast, larger organizations which have lost the passion and initiative of the entrepreneurs need a great deal of help and encouragement to innovate, since they have much to lose if a new product or service fails. In larger firms there is almost never a shortage of ideas, but a shortage of risk-taking, passion and resources to develop the new idea. Interesting that the problem the small firms have (scaling) is one the larger firms can offer, and the challenge the larger firms have (risk-taking, passion) is one the smaller firms can offer.

We need all three of these concepts work well to succeed. We need inventors to create new products and new processes, and we need entrepreneurs to disrupt existing markets and bring these new products and services to the market. We also need innovation from large existing firms, because without innovation they stagnate and die. When we talk about innovation, invention and entrepreneurs, and when we put policies in place to encourage certain types of activities or investments, we need to understand the implications and ramifications of those words and actions.


"While closely related, invention, innovation and entrepreneurs are not the same things, and should not be treated in the same fashion."

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

Rules of the HP Garage

[The garage where Hewlett and Packard started HP, 1939 photo]

by Paul Williams

Founders Bill Hewlett and David Packard had the right idea when they first built their company. They believed if you had passion for what you did - and did it with quality - the money will follow.

This was a pretty radial idea back in the 1940s, 50s and 60s. Their approach to business became known as the "HP Way." And later the title of the book David Packard wrote about building HP. (The HP Way).

They started their business in a one-car garage in Palo Alto, California. (That garage has been dubbed the birthplace of Silicon Valley).

In 1999, HP CEO Carly Fiorina, summarized the spirit of that HP Way with her Rules of the Garage:

• Believe you can change the world.
  
• Work quickly, keep the tools unlocked, work whenever.
  
• Know when to work alone and when to work together.
  
• Share tools, ideas. Trust your colleagues.
  
• No politics. No bureaucracy. (These are ridiculous in a garage).
  
• The customer defines a job well done.
  
• Radical ideas are not bad ideas.
  
• Invent different ways of working.
  
• Make a contribution every day. If it doesn't contribute, it doesn't leave the garage.
  
• Believe that together we can do anything.
  
• Invent.

While HP has had ups and downs in the past years, you can't take away from the original spirit, values, and soul of the garage.

Did you know their first substantial sale was to Walt Disney. They sold him eight audio oscillators.

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Paul Williams is a professional problem solver at Idea Sandbox. He can help you create remarkable ideas to grow your business. You may read more at his website and find him Twittering as @IdeaSandbox.

Five Minute Rule helps get intimidating projects done

by Matt Heinz

We all have big, intimidating projects on our plates that, frankly, are a little scary. They either feel like a lot of work, or you're not exactly sure how to tackle them. So, we hem and haw and avoid them.

I've found that a fairly simple trick can help me get more of those projects done. It takes just five minutes.

When I'm facing a big project or task, I tell myself I'm going to spend five minutes getting it started, and that's it. I'm either going to just do five minutes worth of that task, or just spend five minutes planning how to tackle it.

The secret of the Five Minute Rule is that I almost always keep going, blow past the five minutes, and get the task done in far less time than if I would have kept procrastinating.

It's those five minutes that demonstrate how relatively quickly & easily the task can actually get done. If you get five minutes of momentum, sometimes that's all you need to keep going to the finish. If you use the five minutes to brainstorm, it makes the task far less intimidating and easier to get done right away.

Find something on your list right now and give it five minutes. Let me know what happens next.

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

People With Passion Drive Innovation Success

by Jeffrey Phillips

I love those truisms that people use to describe a situation. Strangely they are usually based on obvious failures, but perhaps it's simply easier to teach people based on failure than success. Some relatively well-known truisms include:

You can lead a horse to water but you can't make him drink
You can't push a string uphill
Time waits for no man

I'd like to add one about innovation. While we like to say that everyone can innovate, its probably also safe to say that

You can't force a disinterested person to innovate

Now, to me, a person who loves change and new ideas, I can't imagine why anyone wouldn't leap at the chance to participate in innovation. Sign me up! But I've discovered that while "everyone" can be innovative, many people usually aren't, and there are several good reasons for that. Understanding the reasons, and identifying the people who can or will overcome the barriers, will make your innovation effort more successful.

The first reason some people can't or won't innovate is that they don't understand what innovation has to do with them. They simply can't imagine doing their work any differently, and if they did innovate, they might have to learn a new way of doing things. They either can't, or won't imagine the possibility of doing things in a new or different way. These folks aren't resistant to innovation per se, they are resistant to CHANGE.

The second reason some people can't or won't innovate is that they don't believe they'll have the opportunity, or permission, or time. They are willing to project a new future and to try to change, but believe that nothing will change, or that if they have good ideas they'll just be shot down. These folks have good imaginations and are willing to exercise them. They aren't resistant to innovation, they are RESIGNED to the current state or believe it can't be changed.

The third reason some people can't or won't innovate is that they don't want the extra work involved. They are perfectly comfortable punching a clock for eight hours and going home on time. They can see the opportunities for change and innovation, but don't want to have to do anything extra. They aren't resistant to innovation, they simply expect to PUNCH THE CLOCK and don't want any extra work.

The fourth reason some people can't or won't innovate is that they have been infected with a negative perspective or bias. They can recognize the possibilities for innovation but believe that their firm "won't listen" or shoot down their own ideas or the ideas of others too quickly. Just like a the barrel of crabs pulls down any crab that tries to escape, these folks use their negative mojo to shut down any innovation effort. They aren't necessarily resistant to innovation, they are simply NEGATIVE about anything new or different.

OK, so if you weed out these individuals from your organization, then hopefully what's left are the open-minded, the engaged, the change agents and the naive, and that's the perfect blend for innovation. Innovation is going to require change, since it will introduce new products, services or business models. It will require open minded people who can and will think differently. It will require the naive who don't yet know what "can't" be done. And it will require the people who are most engaged who will be willing to make the changes and do the extra work required to make innovation succeed.

This is why we try to staff all innovation efforts with volunteers. People who will volunteer for a difficult project that requires change see the opportunities and want to accomplish them, regardless of the obstacles and barriers, and are willing to do the extra work. Conversely, people who have been conscripted to innovation work are likely to doubt it can happen and abandon the effort at the first sign of resistance, or simply wait for permission.

Perhaps the easiest way to kill an innovation project is to staff it with people who don't believe it will be successful, aren't willing to effect change and who are content to wait passively for permission to proceed.

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Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams, processes and capabilities. Jeffrey is the author of "Make us more Innovative", and innovateonpurpose.blogspot.com.

CEO, Entrepreneur, or Both?

by Mike Myatt

Entrepreneur, CEO or Both? Which hat, or hats do you wear? CEO...that title sounds good doesn't it? Okay, so you founded the company, but does that mean you should also be the chief executive? Did you bestow the title upon yourself simply because you had the authority to do so, or are you the right person for the job? Perhaps you were the right person for the job initially, but has the company outgrown your management ability? As the founder, can you, or should you, attempt to grow with the company? What does a CEO really do anyway? In today's blog post I'll assess what it takes to be an effective CEO and you can decide for yourself if you have what it takes to get the job done.

Sure, it's your business, your idea, your net worth at risk and certainly nobody else will work as hard as you will, but is this really the right way to evaluate who should be the chief executive? The answer is no it's not...however this is often times exactly how the decision is made. While entrepreneurs are clearly talented innovators and visionaries, most first time entrepreneurs don't have prior experience as a CEO.

Over the years I have come across many self-appointed CEOs that struggle to read a balance sheet, don't understand capital formation or financial engineering, have poor communication skills, have never built a sales force, authored a business plan, or lack any number of other requisite operational abilities. I'm not suggesting that all entrepreneurs are incapable of being chief executives, but I am suggesting that you stop and make an honest assessment of whether you are doing the job because you’re the most qualified, or just because you don't know what you don't know...

Before I start breaking this down, let me disclaim that a post of this nature works off generalizations and stereotypes, and that there are clearly exceptions to every rule. I have known many entrepreneurs that are exceptional CEO's, but I have known many more that don't measure-up and shouldn't be fulfilling the role of CEO. I'm not making any judgments or pointing any fingers, but readers of this post will know which camp they fall into.

It is the nature of the beast that most entrepreneurs are a disruptive force within a company. A VC friend of mine refers to most entrepreneurs as practicing "seagull management" in that they fly in, flap their wings, crap all over everything and fly back out again...Many entrepreneurs desire to have input on everything, yet don't want anything to do with the details. They often don't possess the skill sets to add value to the initiatives they want to control. This type of behavior is proof certain that the entrepreneur is not being effective at leading, team building, delegation, leveraging process and a variety of other highest and best use activities for CEOs.

Let's begin by determining what it is that a CEO does...First and foremost it is the CEO's job to provide leadership based upon a clearly articulated vision and a well defined strategy. Priority number two is team building and talent management. One of the main keys to generating organizational leverage is for chief executives to know when, where and why to deploy (or redeploy) talent and resources. It has been my experience that it is much easier to recruit talent or acquire resources than it is to properly deploy talent and allocate resources.

Jack Welch the former head of GE built a reputation as one of the great chief executives of this era. When asked how he transformed a lack-luster, institutional, global corporate giant into a dynamic culture focused on innovation and growth, Welch responded by saying; "My job is to put the best people on the biggest opportunities and the best allocation of dollars in the right places. That's about it. Transfer ideas and allocate resources and get out of the way." Welch clearly not only understood the concept of organizational leverage through proper deployment of talent and resources He mastered it.

I've heard it said that the role of a leader is to create and manage good followers. While there is an element of truth in that statement if this is what you aspire to as a leader it constitutes a complete underutilization of leadership responsibility. I believe great leaders will mentor and coach subordinates for the purpose of identifying and developing other great leaders.

To achieve maximum success I believe it is incumbent upon an entrepreneur to take an honest inventory of his/her skill sets and competencies, and contrast them with the needs of the enterprise as it relates to what is best needed to efficiently and effectively lead the company forward. If your skill sets are best suited for business development, product development, branding, finance or other areas you may want to consider playing to your strengths by taking a senior position in the area of your subject matter expertise and hiring the best chief executive you can find to lead the company.

Surrendering the chief executive role doesn't mean that you must give-up financial control or lose the ability to have input on decisioning, but it does mean that you’ll have to trust in, collaborate with, and delegate to someone who has the necessary domain expertise to get the job done.

Please forgive the forthcoming pitch, but it really is sound counsel...for those not willing to bring in professional executive talent, I would strongly advise that you at hire a CEO coach to help develop your executive skills and advise you in areas beyond that of your core competency. At the end of the day, the choice of who occupies the chief executive role is yours to make...choose wisely.

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Mike Myatt, is a Top CEO Coach, author of "Leadership Matters...The CEO Survival Manual", and Managing Director of N2Growth.

Optimizing Innovation - Dr. Guido Petit of Alcatel-Lucent

by Braden Kelley

We are happy to bring you some of the key points and insights from Dr. Guido Petit's talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Dr. Guido Petit, Director of the Alcatel-Lucent Technical Academy spoke about Optimizing Innovation through Entrepreneurial Boot Camps. The program had its genesis back in 2002 after massive layoffs at the company. At that point in time, the CEO decided to focus on making innovation the job of everyone. They started in Belgium with an idea generation site that they built. They received maybe ten idea submissions per month in Belgium after launching it.

But, then they decided to put a car on the parking lot and offer it as a prize. Submisions tripled to thirty per month. So, they got 150 ideas in the 5 months of the car contest. Eleven people were selected to pitch their ideas to senior leadership out of the 150 ideas. But this car prize promotion was a mistake. In the end we made one person happy and 149 people unhappy. This is not sustainable.

As a funny side note, the person who won the car, was someone who rode his bike to work every day, and he sold the car after one week. And after contest the volume of idea submissions dropped back to 10 per month, and none of the eleven selected ideas made it into a product (including the winner).

But, the guy with the second place idea proposed starting a program to help people learn how to develop their ideas. This evolved into our entrepreneurial boot camp.


"Let people pursue their passion."


The Entrepreneurial Boot Camp takes place over three weekends (Friday + Saturday) - with the Friday being donated by the company and the Saturday being donated by the employee, and then a dry run, and finally a Super Friday for people to pitch their ideas (all together this takes place over about three months - spaced 2 weeks apart).

For the program, we set expectations that idea subissions must be for a new business that will be worth 50-100 Million Euros in 3-5 years:

• Otherwise we just get a lot of process improvement ideas or suggestions on improving the food in the cafeteria

We partner with the Flanders Business School on the program and typically have five teams of five people with a senior manager as part of the team as a coach (for a total of six people). We generally have five or six teams per boot camp.

Super Friday consists of 15 minutes per team, with 12 slides each to target all 12 points including vision, competition, solution, etc.

• 30 minutes for Q&A


• Participants don't want to lose because this is a great exposure opportunity


• CEO, CTO and CFO of Alcatel-Lucent Belgium and venture capitalists make up the panel


• Now VCs are knocking on our doors to participate


• Only 1 of the 5 ideas will go into the incubation phase where market validation, fast prototyping, and a lead customer must be sourced


• Sometimes ideas are transfered immediately to business units if they are close to core

One thing that we have found is that people don't always want to post their idea on an innovation web site, so we have these 'dating events'. Idea owners can pitch their ideas to anyone in the company at a dating event to attract supporters. This also serves as an opportunity to connect people. We encourage people to merge research, mktg, finance, engineering, and sales into diverse teams.


"Talented people are everywhere but... they are not connected."


We have found that in our organization the smokers are the connectors, and so we have made it more comfortable for people to smoke. This is not to say that we encourage smoking.

• There are no salary levels when people smoke together


• Our smokers tend to be very social


• hey call people to go smoke


• They also like coffee and beer

We do our best to promote success stories from the boot camps. The boot camps are 80% coaching and 20% theory. Boot camps are done on top of daily duties.

We encourage risk-taking and entrepreneurship with our boot camps:

• A way to change the innovation mindset


• They provide an opportunity to scout entrepreneurial talent (finding people that have skills that are not otherwise shown and to possibly redeploy talent)


• HR doesn't know where the entrepreneurs are


• 80% of the ideas coming through the boot camps address new markets - the other 20% are new technologies for existing markets


• We include VC's and business school professors because they often have insights into new markets - either new or existing technology

The results of our boot camps so far?

• 2 internal ventures


• 3 projects in incubation


• 5 proposals were transferred to existing business units

Setting expectations is important to get the good ideas. Managing expectations is important because all of the teams believe they will win even though only one can win. For those teams that lose, they will get feedback from VC's and our executive leadership in the room.

Successful teams don't always move onto the incubation or venture teams. Some have had nobody transfer into the venture team and others have seen 4 of 5 carry forward onto the venture team. GM's for venture teams can be hired from outside.

We started two ventures in 2008. It is still to early to tell if they will be successful. We can tell you though that the business plans of ventures were different at the end of incubation and the at the end of the venture period than they were going in.

We are on Boot Camp 8 and we have now put 200 out of our 1,800 people through our boot camps and the number of ideas and the quality of ideas are inevitably and expectedly trending down. So now we are opening our boot camps to Alcatel-Lucent employees outside of Belgium, and we are sharing the methodology with other companies like Exxon, Agfa, Philips, J&J, Picanol, etc. We are also going to experiment with joint teams from more than one company.

One nice outcome has been that the alumni still supply new ideas and are interested in being coaches the next time around. Surprisingly, only about 10 of the 200 people in the program have left the company.

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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.

Can entrepreneurs lead us out of this crisis?

by Matthew E May

I agree with Tom Hayes and Michael Malone in their belief that "Entrepreneurs Can Lead Us Out of the Crisis." Why? Because entrepreneurs have the agility, flexibility, and grit to make change happen. Innovation is the chief tool of the entrepreneur. Hayes and Malone outline about a half dozen ways the new administration can help them. And those ways are by and large subtractive, a key element of elegance.


1. Kill Sarbanes-Oxley. It's massive, expensive, and sucks needed capital.

2. Remove the shackles on tax-free retirement money, or remove taxes on accounts intended to fund new ventures. (like a 529)

3. Eliminate payroll taxes. It's a burden, and stops the creation of new jobs.

4. Lower capital gains taxes on venture capital investments in early stage startups.

5. Help big business think small to return to an entrepreneurial mindset by providing an incentive to take risk and create new jobs. There's none of that in the stimulus package for large companies.

6. Seduce entrepreneurs. How? A presidential summit like Reagan's in 1982. Obama holds sway...he needs to aim it at small business.

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Matthew E. May is the author of "IN PURSUIT OF ELEGANCE: Why the Best Ideas Have Something Missing." He is constantly searching for creative ideas and innovative solutions that are 'elegant' - a unique and elusive combination of unusual simplicity and surprising power.

Start-ups Don't Starve, They Drown

by Matt Heinz

A former colleague who worked with me at a couple different start-ups had this quote at the top of his white board at all times:


"Start-ups don't starve, they drown."


The point is simple - very few of our organizations have a lack of opportunity, or things to do. One of our most important jobs is to choose the right things to do on a daily basis, and ensure our priorities are well thought-out and are kept in perspective, despite the daily fire drills and interruptions that fight for our time.

Author Om Malik recently wrote about the downsizing of Joost, and offered a similar, thoughtful perspective:


"Joost hired too many people, too quickly. It never behaved like a start-up but instead felt like a grown-up company with too many bureaucratic layers."


Remember what your mom used to say when you took too big of a bite? If you're not careful, you're going to choke. Start-ups are just like that. Unless you focus, you're going to choke."

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Challenging from the Edge of the World

by Kevin Roberts

I wrote yesterday about the recent YMCA Raise Up N' Represent in Auckland. In my speech I referenced a startup by three twenty-something guys in Dunedin, a city near the southern tip of New Zealand's south island. If New Zealand is the Edge of the world, Dunedin is at the Edge of the Edge. And as I've written before, the Edge is not a liability. It's premium territory, and co-founders Jason Leong, Francois Bondiguel, and James Wigglesworth demonstrate that.

Together they developed a personal budgeting program called PocketSmith. There are many services that track your expenses and show your performance meeting budgets and the like. However PocketSmith doesn't linger in the rearview mirror, it looks forward to forecast your financial future. They already have 6,500 customers from 70 countries and partnership deals that will give them massive reach into the US consumer base. For New Zealand, the old way of thinking was that you have to leave the country to make any difference in the world. Not any more.

Three young guys recognized an opportunity and had the guts to take on Silicon Valley. Instead of operating in the typical stealth-mode of early stage startups, they were open about their idea and developed a community around it in a matter of weeks.

As I told the youth at the YMCA event:

"Your idea can light up the world. No matter who you are, no matter where you're from, whether you're brainy, sporty, nerdy, crazy, some or all of the above."

The road to success is built on ideas. Just ask these three guys from Dunedin.

PS: My other favorite things about Dunedin are Carisbrook, Otago mountains, The Chills, and Sam Neill's Two Paddock Pinot Noir (ok, that's Central Otago).


Image source: NBR.co.nz

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Kevin Roberts is the CEO worldwide of The Lovemarks Company, Saatchi & Saatchi. For more information on Kevin, please go to www.saatchikevin.com. To see this blog at its original source, please go to www.krconnect.blogspot.com.

People First, Processes Next, Then Ideas

by Stefan Lindegaard

The chief thing you as an innovation leader must realize is that when it comes to making innovation happen, people matter more than ideas.

Take a moment to think about that. Many innovation initiatives fail miserably because their leaders don't understand this simple fact. In fact, it is actually more important to have A-grade people than it is to have a slew of A-grade ideas because A-grade people can take a B-grade idea - or perhaps even a C-grade idea - and turn it into a successful reality. B-grade people, on the other hand, will struggle with even truly great ideas.

So before you get all fired up about generating a ton of ideas, first figure out how you're going to match those ideas to people who can make things happen.

As you start this work, here's another key point to remember: the skills needed to lead and manage a project within the existing core business - where innovation is likely to be incremental and resources plentiful - are significantly different from the skills needed to overcome the challenges and obstacles that greet almost any new business project - where resources may be hard to come by and the innovation involved may be significant or even radical. You need to staff new business projects with people having a mindset and toolbox that match this different challenge.

I recently coached teams working to create new business ideas with a big potential. The managers more or less thought this was business development as usual - as they usually do with core projects - and they did not understand the dynamics of such new business development or innovation projects. Their biggest mistake was that they attached people without passion for the specific challenge to the idea - you need people who have their heart and skin in the game when it comes to developing innovation projects, especially if it has some kind of radical or breakthrough potential.

You also need different people for the different phases of the innovation process. Just as some entrepreneurs are better at running a company at its very early stage and others are better at helping the business scale once the product is launched, so too are there intrapreneurs who are better suited both in terms of mindset and skills to various phases of the innovation process.

Where to Look

Once you accept the importance of finding not only the right ideas but also the right people - your company's potential intrapreneurs - how do you identify these folks? A few possibilities - from the simple to the more complex - include:

1. Look around you

• One simple way to find the people you need is to look for people who persistently follow up on ideas they have previously put forth. You have scores of employees who submit ideas and expect others to deliver on this. Nothing happens in such cases. But if you can find one person who keeps showing passion and persistence about their one idea, you'll be farther ahead than if you have 600 people who each submitted an idea but who don't really have an interest in doing the hard work required to make their idea real. With one persistent and qualified contributor - and a good idea - things can happen fast.


• Look for people who are persistent about their ideas, people who work on their ideas on their own and who perhaps even gather other people to help work on it. If the idea is good and you have this kind of person to drive it, you have something to build on.

2. Internal business plan competition

• A much more formalized way to identify potential intrapreneurs is through internal business plan competitions similar to those held by leading universities. A well-designed competition accomplishes many things. It helps you identify intrapreneurs, moves ideas with real potential forward, helps participants upgrade their intrapreneurial skills and provides a method for matching these A-grade people with good ideas in the future.

3. Intrapreneur-in-residence program

• Why not adopt the entrepreneur-in-residence (EIR) practice that venture capital firms use and create your own intrapreneur-in-residence program? The role of an EIR varies, but typically it involves an individual who wants to start a company. Sometimes the entrepreneur has already spent a great deal of time on an idea that the venture company might invest in upon further development or the EIR acts as a 'partner' and helps the venture capitalist evaluate potential deals where the entrepreneur has a particular expertise.


• An EIR might also spend some time with an existing portfolio company to provide his or her functional expertise. In this scenario, the EIR will sometimes enter the company as a full time executive (typically CEO or some 'C' level role) if the company and the executive feel there is a good fit.

Why not use this model to establish an intrapreneur-in-residence program within your company? This could be an adjunct to a business plan competition. Having identified people with intrapreneurial potential in the competition, you can assign them to the role of intrapreneur-in-residence for a set period of time. The key here is to define what role this individual would have; this should be based on what outcomes you'd like to achieve with such a program.

The approach is especially useful when companies work to develop a new platform of business activities that in the early beginning still consists of many small, early stage projects. You wait to see how this specifically talented intrapreneur should be brought into action and until you decide on a full-time executive role in one of the projects the intrapreneur consults on the many projects.

I hope you share my belief that people matter more than ideas. As a follow-up post to this, I will soon look into idea harvesting and filtering strategies and other techniques to make sure the ideas you generate are on target.

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Stefan Lindegaard is a speaker, network facilitator and strategic advisor who focus on the topics of open innovation, intrapreneurship and how to identify and develop the people who drive innovation.

Five Key Characteristics of an Entrepreneur

by Matt Heinz

I briefly followed a Twitter conversation yesterday afternoon that attempted to define what a real entrepreneur is. It stemmed from one individual's frustration that some small company employees considered themselves entrepreneurs, even though they did not own or start the company.

I wonder if it matters. Furthermore, I love the idea of employees - at big companies and small - thinking of themselves like entrepreneurs.

Forget about the technical requirements of an entrepreneur for a minute. What constitutes a set of entrepreneurial attributes that employees could emulate?

1. Customer-Centric Thinking

• Successful entrepreneurs are obsessed with their customers - what they want, how they want it, and their reaction/feedback to everything big and small. Successful entrepreneurs talk to customers every day to get feedback, build relationships, and help the customers themselves help evolve and grow the business.

2. No Unnecessary Spending

• Entrepreneurial employees treat every dime as if it were their own. Do we really need those extra printouts for the trade show? Is that marketing channel really working? Is it generating not just leads but sales?

3. Creative Problem-Solving

• For entrepreneurs, there is no box, and nothing is off the table. Entrepreneurs are attempting to do something no one has done before, which requires a new way of thinking and doing. It also requires bucking the norm, the creative "control", and often going against what is known and understood. That takes guts and discipline to do day in and day out.

4. Tolerance (or Immunity) To Fear

• Fear, as I've said before, gets in the way of growth and innovation. Successful entrepreneurs know little to no fear, and certainly don't allow any element of fear to cloud their judgment, creativity or courage to achieve what they know is right.

5. Acceptance of Constructive Failure

• Smart people actually fail a LOT, in part because they try a lot of things that aren't yet proven. Not only do they try and fail often, they learn from that failure and get better - and never let that failure keep them from focusing on the ultimate goal.

If I had a company full of people who acted like this, they can call themselves entrepreneurs all day long.

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Matt Heinz is principal at Heinz Marketing, a sales & marketing consulting firm helping businesses increase customers and revenue. Contact Matt at matt@heinzmarketing.com or visit www.heinzmarketing.com.

Is Innovation Dead in Consumer Packaged Goods?

I was having an interesting discussion this morning with a couple of innovation colleagues of mine. One is an entrepreneur with an outsourced "skunk works" business. The other is a creator and inventor who led disruptive innovation efforts at a major office products company. We came to a sad conclusion, at least for us innovation-oriented types.

Innovation is dead in Consumer Packaged Goods (CPG) Corporate America.

Well, maybe dead is too strong a word. Morbidly thin, perhaps. To be sure, there are some notable exceptions. But as we looked around in today's economy, we concluded that in spite of corporate leaders' recognition of the importance of innovation, the focus tends to remain on incremental, "safe" projects. Failure is not tolerated (let alone encouraged), and employees are rewarded equally for changing the color of an existing product or changing the dynamics of the marketplace.

Is this gloomy assessment accurate? If so, what should be done about it? Is this just the result of trying to weather the economic storm, or is this an ongoing trend?

Fortunately, innovators are not going extinct. Their habitat, though, seems to be changing. Would Thomas Edison survive an annual performance appraisal in a typical 21st century CPG company?

Manager: Tom, you know, I'm not seeing a great deal of progress on this "Project Lightbulb." You've failed to make anything we could possibly sell, and the fiscal year ends next week.

Edison: I haven't failed. I've just found 10,000 ways that don't work.

Manager: We're paying you to find ways that do work, not ways that don't. I think it's about time we gave up on this.

Edison: Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.

Manager: Sorry, Tom, but our stockholders think our greatest weakness lies in not launching this product in time for the Walmart shelf reset. All I see in your lab is a pile of junk.

Edison: To invent, you need a good imagination and a pile of junk.

Manager: No, what you need is to get some revenues out of all this money we're spending on you. Your research is like a black hole! Money goes in, but never comes out. You've spent a fortune, with no sign of a fortune coming back

Edison: Good fortune is what happens when opportunity meets with planning.

Manager: Well, I think you ought to start planning on updating your resume.

Companies that really want to innovate, and not just pay lip service to innovation, need to do a few things:

1. Encourage good failure


• As Jeffrey Meshel said in his book One Phone Call Away, "Good judgment comes from experience. Experience comes from bad judgment." Good failure comes from trying to achieve, not quite getting there, and learning something in the process that will lead to future success. When failure is punished, risk acceptance and employee effort are stymied. Find ways to reward "good failures," and provide public recognition for such things, so people know that trying, failing, and getting up to try again is not only acceptable, but encouraged. The Apollo 13 mantra, "Failure is not an option," is a great motivator, but I am certain that the engineers who famously modified the CO2 filter with plastic bags, cardboard, and duct tape had several failures on the way to their eventual solution. Not tolerating failure leads to Homer Simpson management: "You tried your best and failed miserably. The lesson is: never try."


2. Change accounting practices


• I know that there are Generally Accepted Accounting Principles established, but at least one of those principles is wrong (at least in the US). Forcing all R&D expenditures to be expensed distorts the value of R&D spending. R&D is like any investment - you spend money now in the hopes of excess future returns. In fact, some project evaluation models are now based on options valuation theory. Many, if not most, R&D expenditures should be capitalized. Studies in countries outside the US have shown the value of this treatment (e.g. The Canadian Academic Accounting Association study). Economic Value Added accounting does this, with the result that investment in innovation is recognized for its true worth, and is encouraged accordingly.


3. Implement innovative compensation systems


• Metrics for innovation are always tricky, but this is a problem that firms must tackle if they are to genuinely encourage innovation. The rewards for incremental innovation and breakthrough innovation should not be the same. Measures such as percent of revenue from new products or number of new product launches can be gamed – what constitutes a "new" product? Venture capitalists are rewarded for finding the diamonds in the rough. Innovative employees should be as well. An internal royalty system is one intriguing possibility.


4. Manage for cash flow rather than short-term profitability


• Sometimes, the pressure to meet short-term profitability targets cause companies to look for spending to hack away. All too often, this spending comes from what should be seen as investment in the future. Evaluate your present and future cash flow, and keep the company healthy from that perspective, even if it means missing profits now. Maintain sound R&D investment, and the present value of the future rewards will compensate for the current profit shortfall. Warren Buffet avoided the dot com bubble burst by sticking to a long term investment strategy that skillfully avoided the rush to find someone, anyone, in the dot com world to invest in. Short term pressures can lead to suboptimal business decisions. When possible, remember to think long-term.

All of this, of course, is not to say that deadlines are unimportant, spending should be unrestricted, or managers should not drive for achievement. Going back to the Apollo 13 engineers, they had absolute deadlines and minimal resources with extremely serious consequences that could not be ignored. Their success came from combining that urgency with a willingness to do what it took to get the job done. Corporate business practices should also encourage such willingness, and will find greater innovation and financial success by doing so.

So, what are your perspectives on the state of innovation in the CPG world?

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Brad Barbera is the founder of KAB Business Research, a consultancy focusing on Innovation Training, Ideation Facilitation and Management, and Business Intelligence.

incentive2innovate - Reid Hoffman of LinkedIn

Day two at the incentive2innovate conference at the United Nations featured a keynote by Reid Hoffman, CEO of LinkedIn.

Reid Hoffman took the stage and began by speaking about how individiduals are now small businesses, before moving on to discuss how the venture capital industry started in Boston but has been eclipsed by Silicon Valley. Proliferation of open networks in the valley are the reason. Collaboration has driven the success of Silicon Valley, not just physical proximity - other locales have been more controlling of information.

Reid talked about how often entrepreneurs don't want to tell anyone about their idea. If you are an aspiring entrepreneur with a great idea, then identify the right people to talk with about your "secret" idea and spill the beans. You will get lots of useful feedback more often than competition. Fail fast!

On the topic of social networks, Reid Hoffman talked about how 2/3 of his network thought he was crazy when he pitched LinkedIn, but he persisted anyways. Reid doesn't think that LinkedIn and Facebook compete today, and that Twitter and Facebook aren't directly competitive either - Twitter does universal sharing and Facebook does limited sharing. One of the best quotes of the talk was:

"MySpace is the bar. Facebook is the backyard BBQ. LinkedIn is the office."


Reid Hoffman's final major point was that we still penalize people for failure when we need to let people say - "No I learned and now I'm ready to play again."


What do you think?


Braden Kelley (@innovate on Twitter)

Charlie Rose Interviews Evan Williams of Twitter

Charlie Rose interviews Evan Williams, CEO of Twitter about the service and its effect on Internet usage, and the future of the company.

The most interesting point he makes is about how strong the developer community is, with at least 2,000 applications and growing, and how they plan to develop the service from a usefulness perspective.



Will Twitter survive as an independent company?

What do you think?

@innovate

Charlie Rose Interviews Reid Hoffman of LinkedIn

Charlie Rose interviews Reid Hoffman, CEO of LinkedIn about the future of technology and social networking, and discusses with him the differences between LinkedIn, Facebook, and MySpace.

The most interesting point he makes is that while tolerance for risk and the ability to manage it are key skills for entrepreneurs, we are all entrepreneurs now. By that he means that each of us is now responsible for managing our careers and keeping an eye towards finding that next job opportunity to further develop our career.



What do you think?

@innovate