Harsh Reality of Innovation

by Hutch Carpenter

Nothing like putting your heart and soul into innovation, and then getting this:


Man, tough audience. But very much in keeping with some the best advice on innovation. Which is, you can't have innovation without some failure along the way. It's inevitable.

That advice is both true, and glib. Innovation consultant Jeffrey Phillips catches the right spirit when he says:


"Another thing about 'failure' is that we try to kid ourselves that failure is a 'good thing' a learning opportunity. Well, not in most cultures.


This is the reality of innovation. It's tough. The more disruptive an innovation, the tougher it gets. And we're in the middle of seeing how it plays right now with Apple iPad and Google Buzz.

Let me ask you this: Do you personally think either the iPad or Buzz will be guaranteed successes for their respective companies? Be honest now.

My guess is you're like most of us: I don't know.

Well, truth be known, neither do Apple and Google. But they've got a history you'd bet on.


Apple and Google: Big Time Failures, Big Time Innovations

Both Apple and Google have had their share of duds in the market:


Obviously, these companies do not have a perfect record of successful innovations.

But they do have a record of pressing through failures and continuing to roll out innovations. In fact, they're consistently ranked the best in the world:


It pays to stick-to-it in trying out innovations. But can everyone?


Does Your Company Really Want Radical Innovation?

In Psychology Today, a professor at the University of Michigan gets to the issue:


From vaccines to Velcro, many inventions were spawned from accidents, seeming failures. But when Fiona Lee, psychology and business professor at the University of Michigan, explored which conditions help people experiment with novel ideas, she uncovered an interesting phenomenon: "Managers talk a lot about innovation and being on the cutting edge, but on an individual level, many people are not willing to try new things."


What's holding us back? A fear of failure.

Think about your own reaction to the question of whether the iPad and Google Buzz will be successful. It's easy enough to be uncertain as an observer. But imagine if you have to put shareholder capital in to it, affect your brand in the market and risk some career trajectories?

I will often read of the importance of taking risks and accepting some level of failure for companies to be innovative. This is very true. But it can be glib to summarily dismiss companies for not 'getting it'. When they're made up of people like you and me who possess ordinary... well, human characteristics.

Because how do you know when you're iterating toward a true high-value innovation, or you're just spinning your wheels? I'll turn again to Jeffrey Phillips:


"As Edison and countless others have demonstrated, you rarely get it right the first time, and if you are stymied by early failure, then you'll never find and implement the best ideas. Innovation, as has been pointed out by individuals with far more to say about it than me, will create some failures. Your job isn't to avoid the failures, since you can't predict them in advance, but to reduce the cost and impact of the inevitable failures. In other words, keep moving."


As I said before, I can't know for sure whether the Apple iPad or Google Buzz will be successful. But kudos to those companies for rolling out innovations that might fail. And in case you're wondering whether allowing employees some latitude to fail is worth it, check out the 5-year stock performance of Apple and Google versus the S&P 500:



Let's take this one out with the great speech from Teddy Roosevelt:

"It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat."

Indeed.


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

Innovation Perspectives - Leader's Role in Trend Spotting

This is the first of several 'Innovation Perspectives' articles we will publish this week from multiple authors to get different perspectives on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?'. So to kick it off, here is Jim Estill's perspective:

by Jim Estill

I believe that it is the leader's role to be active in spotting trends in both the market and within the company. Of course in order to do this, they need to get the assistance and input from all of their people.

A leader who believes in Trend Spotting and believes in capitalizing on emerging trends and technologies can set the example for staff to create an openness that new ideas and trends are brought forward.

I found when I was leader of a 2 billion dollar organization that the bulk of the emerging trends were presented to me filtered through a number of different eyes of people who worked for me, people in the industry, people in the press, etc. and the trends tended to be a synthesis of ideas.

The following are my seven rules of Trend Spotting:

1. If trends aren't going the way you want them to go, then create change. One of the best ways to have a trend and for everyone to think you're genius for knowing the trend is to nudge it along or create it. As a leader of an organization, you often have lots of resources like sales, marketing, R&D, etc. that you can put towards creating a trend.


2. Different trends are worthwhile for different companies at different ages and stages and resource capacity. I'm a business optimist and believe that there are right-sized business opportunities for every company at every size and that successful companies are the ones that choose the right-sized opportunity for them. Just because something is a trend, does not mean a company is positioned to take advantage of it or that they can make money on it.


3. Existing companies are often hampered by their own paradigm. What got you here won't get you there. It's difficult, particularly for companies that are doing reasonably well to consider going into new markets and looking at new trends since they've profited by the old patterns. It takes a great leader to be willing to give up a proven company method and to risk some on emerging trends.


4. Leaders are meant to lead and to be visionary, managers are meant to implement and be tactical. If you're the leader of an organization, recognize that your greatest value is in being visionary (even though implementation still counts). That would mean Trend Spotting...


5. A leader needs to set the example by being open to new ideas. They also need to free up resources where required in order to allow their company to take advantage of trends.


6. I have been wrongly credited with being a genius at spotting trends. The reason why I say "wrongly credited" is I often placed multiple bets on multiple horses within a technology race at the same time. So I was right when I joined the board of RIM. Blackberry did become huge (and I still sit on that board today). I was right when we signed Apple as a product line in 1992 when everyone said they were going bankrupt. At the same time, I did these "genius moves" I also invested in a number of companies which are no longer here today and I sold a number of product lines from companies you've never heard of because they've also gone away.


7. One of my favorite mantras is "Fail Often. Fail Fast. Fail Cheap." So although I have my foot planted firmly in multiple camps, I don't risk so much that failure in one area creates a failure.

It's the leader's responsibility to spot trends but clearly this is not done in a vacuum, it's their role to inspire everyone to give them input.


You can check out all of the 'Innovation Perspectives' articles from the different contributing authors on 'Who should be responsible (if anyone) for trend-spotting and putting emerging behaviors and needs into context for a business?' by clicking the link in this sentence.

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Jim Estill is a venture capitalist, author and business consultant. He sits on the board of RIM. He is a blogger at www.jimestill.com or follow him on twitter @jimestill.

Reverse Innovation a Popular Trend

The Rise of Simplicity - The Reason Behind the Success of Reverse Innovation

by Yann Cramer

Thanks to a number of spectacular successes obtained by blue-chip companies in recent years, Reverse Innovation is becoming a popular trend. Examples include GE's portable ultra-sound equipment designed in China and sold worldwide, LG's low cost air conditioner designed in India and sold worldwide, Renault's Logan low-cost model designed for Eastern European markets and now selling on Western Europe, etc.

In an enlightening article, Vijay Govindarajan outlines a historical perspective from globalisation to reverse innovation, and highlights the key driver behind this evolution: the revenue gap between developed and emerging markets. But there are other drivers that may be less visible but no less powerful.


The Road to Reverse Innovation

In his article What is Reverse Innovation, Vijay Govindarajan outlines the following historical phases:

1. Globalisation: companies designing and manufacturing in developed markets products that are "de-featured" for export to emerging markets that can't afford the fully featured original product.


2. Glocalisation: companies still de-featuring products from developed markets but now localising production in emerging markets to take advantage of lower labour costs.


3. Local innovation: companies now designing in emerging markets products that are directly suited to the local needs. (Manufacturing continues to take place locally for costs reasons.)


4. Reverse innovation: companies designing and manufacturing in emerging markets for local use AND export to the developed markets (with or without some level of scaling-up).

It is obvious that the evolution up to phase 3 is driven by the revenue gap between developed and emerging markets, hence the need to scale-down the product features and leverage lower labour costs in order to reach the emerging market affordability threshold. But something almost invisible, just below the waterline, happens during the shift from phase 2 to 3: that is the realisation that there is only so much you can achieved by scaling down.


Simplifying Does Not Necessarily Make it Simple

When the beast is too complicated - some would rather present it more positively as 'sophisticated' - getting to something that is simple enough, may require to start from scratch rather than incrementally shave off features from the beast. This is an experience we all make every so often: the need to start afresh from a clean sheet of paper. When shifting to phase 3, companies realise that the incremental cost reductions achieved by scaling down products are reaching a plateau, and they take the radical step of starting from scratch and designing afresh in emerging markets for emerging markets.


We Do Not Need All This C**p

The driver that leads from local innovation to reverse innovation is even less visible - almost taboo. It is the realisation that customers in developed markets have been stuffed with increasingly complex product features that they actually do not need! The policy has enabled companies to maintain healthy unit margins in the face of intense competition, but an increasingly powerful undercurrent in developed markets pushes simplicity to emerge as something that is not just cheaper but also more reliable, more effective, more authentic, more beautiful, in short: desirable.

This trend is now making companies who have banked their success on high cost/high margin products vulnerable to potential new entrants that would disrupt the established cost structure paradigm. The success of low cost cars in developed markets - Renault's Logan today and Tata's Nano tomorrow - is there to demonstrate that radical simplicity appeals to a significant and likely growing market segment.


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Yann Cramer is an innovation learner, practitioner, sharer, teacher. He's lived in France, Belgium and the UK, he's travelled six continents to create development opportunities with customers or suppliers, and run workshops on R&D and Marketing. He writes on www.innovToday.com and on twitter @innovToday.

Innovating Without Ignoring Today's Revenue

by Matt Heinz

Scott Cook, legendary founder of Intuit, discussed in a recent issue of Inc Magazine how today's entrepreneurs can continue to incubate new ideas while successfully focusing on today's day-to-day revenue generation. His answer can be broken down into four keys to achieving both innovation and execution today:

1. Make sure employees know which output metric they are responsible for and how it is measured. Focus on the metrics that matter most to growing the business (new customers, margin, top-line growth). These measures will ensure proper focus on today's business, and will also give employees a foundation from which to brainstorm and incubate new ideas focused on the same end-goal.


2. Enable all of your employees - not just a small group - to invest business ideas or product features. Don't predetermine which employees - based on rank or tenure or paycheck - will have your business's next great innovation. Oftentimes, it's the frontline employees who speak with your customers all day, every day who are first to see trends and identify new opportunities.


3. Run cheap, quick tests to make sure you are on the right track. The first step could be running the idea back by a few customers to gauge their feedback. But don't overthink these tests. Get enough feedback to hone the idea and mitigate risk/exposure of taking it to the next step.


4. Think big! For innovations to succeed, they must solve a large enough problem for the customer. This doesn't mean that every innovation is a new product, or new division, or fundamental shift in your business. It just means, to succeed, innovations need to make a profound impact on the customer. That impact can still be created by relatively small changes in policy, features, supply chain and more.

How does your company focus on innovation without ignoring today's revenue?

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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.

Killer Small Business Social CRM

by Hutch Carpenter

Parker Smith wrote a piece that got me thinking. In Foursquare: Democratizing the Loyalty Program, he posits that Foursquare could be the loyalty program provider to small businesses. I think he's right.

Then I noticed these identical product benefits touted by the companies themselves, Foursquare and Jack Dorsey's Square:


"For example, foursquare can tell you how many times a customer has been to your venue or the frequency of their visits. Many venues are now using this data to reward their most loyal customers with freebies or discounts." - Foursquare

"If you frequent a place that accepts Square, we'll let them know you're a repeat customer. That 10th cappuccino may be on the house, no paper coffee card required." - Square


Would you look at that? Are these guys going to end up competing with one another?

A few years back, I was the personalized marketing product manager at Pay By Touch, which offered the ability to pay for items with biometrics (i.e. your finger). Once you could identify the customer and her spending, interesting loyalty program solutions became available.

Which brings me to what Foursquare and Square are doing. Square is still in beta mode, so it's hard to predict fully its uptake in the market. But let's assume Twitter co-founder Jack Dorsey and his backer, Khosla Ventures, are on top of this opportunity. And Foursquare is growing quickly.

Each provides pieces of what would be needed for a small business CRM. The companies are independent, but I can see new value created if they were to work together.


There is no CRM for offline small businesses

At least, not for businesses that operate in the physical world. Dry cleaners, restaurateurs, retailers and other small businesses. They may have loyalty punch cards, but generally don't have any programmatic way to track and engage customers.

But they could use CRM as much as a large business does. I like this customer lifecycle framework by Gary Hawkins in Customer Intelligence:



It shows the stages of a business's customers: new, existing, declining, lapsing. And the ability to tier active customers also is valuable. Each tier has its own dynamics. There is much more to CRM than a simple frequency loyalty program. It's a deeper level understanding of the customer base. Understanding the statuses of customers from this point of view is powerful marketing information.

Modern CRM is more than the analytics and outbound campaigns. The social CRM movement is gaining strength, and it's incorporating many social network principles into the customer engagement process.

And it's not readily available for small businesses that operate primarily in the "offline" world. Unlike the digital platforms of e-commerce, offline transactions are not measured. At least not beyond the credit card transaction for consumer transactions.

This is an area of enormous opportunity. The company that solves the CRM issue for the 4.3 million small businesses in the U.S. has an enormous opportunity in front of it.


Complementary CRM strengths of Foursquare and Square

The two services each bring unique strengths to a small business CRM solution. Take a look:


Start with the commonality Diagram. Foursquare and Square both provide:

• Customer identity = who are your customers?


• Visit frequency = Foursquare check-ins, or Square credit card swipes

When you see them both tout free products for repeat customers, this is how they’d do it. Identity + frequency = loyalty punch card.

But what about the services' other features?


Foursquare provides the social fuel:

• Social incentives: It's fun to build up points relative to your friends, show off your Foursquare badges. And who doesn't want to be Mayor of some local business?


• Social interactions: People use Foursquare to to broadcast their location. This lets other meet up with them. Or in the case of crowded venues, find someone else there.


• Game dynamics: This reporting in on your locations is an addictive game for many. It's cool to get your first check-in daily bonus, to unlock a new location (hooray!) and oust someone as the Mayor of a place.


• Social media word of mouth: By following people on Foursquare or Twitter, you can see where your network hangs out. This raise awareness for businesses, an incredibly important benefit.

Here's an example on that last point. Socialtext CEO Eugene Lee often tweets this:


"I'm at Coupa Cafe (538 Ramona St, at University Ave, Palo Alto). http://4sq.com/IITeJ"


I don't spend much time in Palo Alto, and I'd never heard of Coupa Cafe. But you know what? If I find myself in Palo Alto needing lunch or a coffee, guess which place I'd specifically look for?

Square provides the transaction processing power:

• Dollar spend: Incredibly valuable information to track. Does someone come in a couple times a week, but spend heavily on food? Or do they frequent the cafe more often, but only buy coffee? Dollars spent is an important complement to simple visit frequency.


• In-the-flow process: Square captures its information in-the-flow. That is, you don't have to do anything extra. You're have to pay, it's part of the normal process. Foursquare requires a check-in, which is outside-the-flow of regular small business-customer interactions.


• Transaction handling: By owning the transaction handling, Square can implement low-maintenance marketing programs. Businesses can create promotions tied to specific accounts, and execute them at the point-of-sale via Square.


• Merchant account process: The process of getting businesses signed up for these programs isn't trivial. It is standardized, but there's a lot to tackle to provide good service. Some early reports indicate that Square has a superior merchant account set-up process, which may be its best innovation.

The in-the-flow nature of Square should not be underestimated. Getting adoption for any service is tough, and removing whatever friction to participation that exists is a critical element. This commenter on a post about Foursquare makes a good point:


"The sort of people who will stop and record their restaurant visits and who have friends who also stop and record their restaurant visits and then write reviews of same. And while that's a prime demographic, I'm thinking it's not nearly as large as you'd hope. Most people just don't have the time or inclination to 'play' FourSquare."


This is why putting the process of playing Foursquare in-the-flow would be valuable.


Making it happen

The challenge is in connecting a credit card transaction to a person's Foursquare account. Then I realized Square's intentions are much bigger than a simple transaction swipe. The company lets people set up their personal accounts on Square. I assume you will enter your credit card number online, and when that number comes through in a transaction, it's associated to your Square account. Thus Square can manage loyalty punch card programs.

Well, why not associate your Foursquare account to your Square account? When you swipe your credit card at the local business, Square processes the transaction the way it normally does. But it also does something else. It prompts an update to your Foursquare account.

I'm not talking a Blippy-style broadcast of your credit card purchase amount. Rather, your location status is updated automatically on Foursquare. Just as if you'd updated from your iPhone.

The small business then gets the social part of the CRM program.

What do you think? Two great tastes that taste great together? Small business could use the combined elements of Foursquare and Square.

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

Watch Out Nintendo

Apple Is Pushing The Limits Of "Interactivity" And Going 3D

by Idris Mootee

Apple is going to push the limits of "interactivity" and planning to go 3D. Using a camera to detect a user's position and overlay it onto an any on-screen object, giving the impression of a "reflection" and creating a more immerse experience. Apple's latest technology would address that through the use of a camera or appropriate "sensing mechanism."

Apple is filing a patent on this innovation. The technology is capable of defining the visual properties of different types of surfaces and decide on how well it would reflect light. Using this, images of the user and their environment could be recreated on the screen with effects added. "Using the detected position of the user, the electronic device may use any suitable approach to transform the perspective of three-dimensional objects displayed on the display," the application reads. "For example, the electronic device may use a parallax transform by which three-dimensional objects displayed on the screen may be modified to give the user the impression of viewing the object from a different perspective."

"To further enhance the user's experience, the detected environment may be reflected differently along curved surfaces of a displayed object (e.g. as if the user were actually moving around the displayed object and seeing his reflection based on his position and the portion of the object reflecting the image." It's a kind of a virtual reality, crossing over the real world with a digitally created one, but giving the visual perception that an object is real.

This provide game developers new ways to use their imagination to come up with new games that cross the two worlds. It is a direct challenge to Wii. Nintendo has a lot to worry about. Gaming will go 3D very soon. The Blu-ray Disc Association released its finalized 3D specifications. 3D playback will be "display agnostic," meaning that the format will be compatible across "any compatible 3D display." What exactly a "compatible 3D display" is still an unknown, but I believe we need to get a new TV to watch 3D. PS3 is probably ahead in the game.


Editor's note: Will Apple incorporate this kind of technology into the rumored Apple tablet?

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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Open Innovation Summit - Day Two

by Braden Kelley

The first edition of the conference was held in Orlando, Florida at the Crowne Plaza Orlando Universal. The second annual Open Innovation Summit will be held August 11-13, 2010 in Chicago, IL.

The second day of the conference kicked off with Robert Brands. Here are some of the key takeaways from Robert and the other speakers on the second day:

Robert Brands (InnovationCoach) - Creativity x Risk Taking - There is a multiplier effect if you have the courage. Internal innovation projects need a champion to overcome corporate antibodies and those champions need to be part of other teams. Too often we forget to train our people on the basics of doing proper project management, meeting management, new product development (NPD) next practices, etc. Innovation accountability is critical. Robert Brands is right, many companies don't effectively manage projects or meetings - lots of lost $$$ and time as a result. A survey of 100 firms found the most challenging practices in innovation to be risk-taking, accountability, and inspiration.

Stephen Shapiro (Innocentive) - The worst thing we do for innovation in organizations is hire for competency and chemistry. We need diversity in teams. Organizations have personalities too and these dictate how people work with each other in the organization. Organizational personalities tend to be action/planning focused and idea people tend to get squeezed out - hurting innovation.

Ed Rinker (Clorox) - Clorox has embedded Open Innovation teams that pursue business unit opportunities and a centralized Open Innovation team to pursue breakthru ideas. We use a lot of data and our stage gate process to better evaluate which projects to fund and which to continue. Clorox focuses open innovation efforts on Tech Brokerage, Growth Networks, and Global Stewardship. Growth Networks looks for the holes in our growth plans and focuses on external networks to try and fill the holes. Clorox cross-functional innovation teams include tech brokers, external networkers, designers, sales/mktg, market/consumer research. We make up for our disadvantage in patents to P&G and others by leveraging the IP of external partners who have more IP than P&G.

James Todhunter (Invention Machine) - People think that Open Innovation is about creating new pathways for getting ideas from outside into the organization - not so. Open Innovation is about integrating our external relationships into our internal processes and capabilities. People who are focusing on Open Innovation as idea generation are finding that the signal to noise ratio is quite high. In Open Innovation, partner relationships are often unstable and pose risks to brand equity if not managed well. Companies run into problems with innovation because they are focused on idea and don't have good processes to support innovation. Alignment, authority, and actualization are needed for successful Open Innovation.

James Todhunter (Invention Machine) - In Open Innovation you have to be careful about a partner going and working with a competitor instead - Have you considered this risk? People need to really think about whether their innovation is coming from an idea-first approach or a needs-first approach. In a needs-first innovation approach, you can do directed-ideation. To address alignment issues, you need to engage constituencies in a needs-first innovation dialog. Open Innovation will not work without bi-directional value. Focusing Open Innovation on extracting value is doomed to failure.

James Todhunter (Invention Machine) - People that submit ideas don't always have all of the insights and knowledge to create fully-formed, valuable ideas. Don't ignore the power of secondary research and bring the information you have together in a cohesive way to drive innovation. Use knowledge-enabled innovation processes, research universe of knowledge, and bring in experts to help break through inertia. Don't forget to do anticipatory failure analysis as part of your innovation process. From Ideation to Product Innovation = Ideation -> Capture -> Research -> Rank/Qualify ->Validate/Refine -> Productize.


"3 F's of Innovation - Fit, Feasibility, Finance" - James Todhunter (Invention Machine)

"Leverage power of Innovation Intelligence Ecosystem" - James Todhunter


BONUS: Here is my video interview with James Todhunter - CTO of Invention Machine - recorded live at the Open Innovation Summit





Greg Fox (Cisco) - The back of every Cisco badge has the principles of Cisco's culture on it. Cisco is looking at new ways to partner - both growing ecosystems and compartnering (comfortable with competing and partnering). Every market adjacency we are seeking to address requires a partner ecosystem. We will compete aggressively with orgs like Microsoft, but at same time we will collaborate with them for good of the customer. Cisco alliance approach = Evaluate -> Form -> Incubate -> Operate -> Transition -> Retire.

Greg Fox (Cisco) - Cisco is trying to move from a culture of competition to a culture of shared goals. Every organization in Cisco (including councils) has a Vision-> Strategy -> Execution captured and communicated. Out of 1,000 potential acquisitions identified, Cisco contacts about 100, does due diligence on about 30, and closes about 9 deals. Cisco has a well-defined acquisition strategy - focus on similar core values, people, technology, and where effective integration is possible. Cisco has alliance extranets to link with partners and share joint business and marketing plans.

On the second Intellectual Property (IP) panel, they spoke about how there is no standardization amongst university tech transfer offices - Some have to get governor approval. Another big problem companies have in working with universities is that they act as if they have an innovation, but no, they usually only have an invention, and they tend to price an invention as if it were an innovation. Many universities make crazy demands in selling IP - sometimes even IP that hasn't issued a single patent yet.

Most university tech transfer offices want to sell the next Gatorade - they need to focus on hitting singles and doubles instead. University tech transfer offices often don't take into account all of the work it will take to commercialize an invention's IP. People who are interested in tech transfer office rankings should check out "Innovation U" - you can Bing it. University of Wisconsin-Madison is an innovator in tech transfer. Eugene Buff made an audience comment that most university tech transfer offices are more focused on faculty retention than on revenue. Carrington Smith says Air Products focuses on university professors in starting their IP licensing process - not on tech transfer offices.


"When world is flat, you don't have to emigrate to innovate" - John Tao (Weyerhauser)


John Tao (Weyerhauser) - Drew a distinction between baseline, trending, control, diagnostic and planning measures vs. results & in-process metrics. Weyerhaeuser also has innovation metrics on leadership & culture. Their metrics for Open Innovation include the percentage of revenue derived from alliances.

Linda Beltz (Weyerhauser) - Measurements are only as good as your measurement capability, and measurement needs change over time. Early in Open Innovation maturity, the cultural measures are most important. Later the financial measures are more important.


"Open innovation is not about outsourcing." - John Tao (Weyerhauser)


Stephen Hoover (Xerox) - It took a decade for Xerox to further develop Chester Carlson and Battelle's IP into the successful product that gained traction. Innovation and Open Innovation are leaky funnels and that's okay because you can't do everything. Open Innovation efforts should start with suppliers, partners and customers, but of course don't ignore other innovation sources. Xerox focuses on dreaming with our customers - "What if you could print on magnets?" - Now we sell paper shaped magnets for fridges.

Stephen Hoover (Xerox) - We look at customer empathy (latent needs), trend analysis, market surveys, focus groups and non-customer analysis for innovation. Xerox created a CTO-led Open Innovation Council with P&G. We're finding value with P&G that we didn't initially anticipate in the original agreement. He showed partner example with XMPie and Multi-Media personalized Imaging - very cool stuff. Next step is to take personalized imaging to digital - personalized web page linked on a DM piece - 5-10x response improvement.

Stephen Hoover (Xerox) - Too many organizations don't instument to test (or to educate or to market) in the online environment - Don't forget this! Open Innovation helps to share the risk - We only invest in 1 in 10 reasonable ideas. Nothing wrong with collaborating with competitors on foundational research at universities - shared risk - government pays attention. When we go to the state and universities with our competitors saying that a research area is important - we get their attention. Faculty members will get the rest of the system to follow along with what they want to do so.

Stephen Hoover (Xerox) - Xerox is really pushing services innovation research because services is the fastest growing part of the economy. Almost every company has outsourcing partners - UPS or FEDX are your shipping department if nothing else. Sharing the risk by balancing financial investment versus skills investment by partnering with others. How do we respond to competitive copying? - We focus on trying to make it easier to partner with us - It's a race to be faster!

Stephen Hoover (Xerox) - We have done our best to keep projects alive in the downturn with our partners so that we have projects in 12-24 months.

Overall it was a great conference, and it reinforced how important senior leadership support is to successful innovation, along with other things like good processes, cross-silo communications. I look forward to the August Open Innovation Summit in Chicago.


Check out the Open Innovation Summit - Day One wrapup here.

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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.

Open Innovation Summit - Day One

by Braden Kelley

Earlier this month I led a workshop at the Open Innovation Summit on identifying and removing barriers to innovation with special guests: Greg Fox (Cisco Systems), Helene F. Rutledge (GSK Consumer Healthcare), and Hutch Carpenter (Spigit).

The first edition of the conference was held in Orlando, Florida at the Crowne Plaza Orlando Universal. The second annual Open Innovation Summit will be held August 11-13, 2010 in Chicago, IL.

After the workshop I covered the rest of the Open Innovation Summit on Twitter as @innovate - check out the #OIS09 transcript courtesy of @renee_innosight.


"Press has done a good job of turning innovation into the buzzword of the decade." - Philip McKinney (HP)


The conference kicked off with Phil McKinney of HP, and he was followed by innovation leaders from companies such as CSC, Shell, P&G, Whirlpool, Clorox, Xerox, and more. I don't think there was a single company speaking at the conference with an open innovation effort that didn't also have an internal innovation effort as well. Personally, I believe that it is imperative to launch an internal innovation effort first in order to work the kinks out and build up your capabilities internally before opening yourself up to the outside.

Some of the key things that came out of Phil McKinney's talk included the idea that companies and countries will have to choose whether they will be focused on creating ideas or on implementing ideas. Also, as knowledge becomes a commodity and work is off-shored and verified on-shore, creativity is becoming the key to creating value. At the same time, there is often an innovation gap as many ideas submitted are not well thought-out, but at the same time the stupid ideas are often the only ones radical enough to generate big returns.

Never forget that creativity is not a gift, it is a skill that can be developed and strengthened. Ask "killer questions" to force people to look beyond the obvious, and try to prevent people from stopping after they hear the first reasonable solution. Companies do a variety of things with the people who submit selected ideas, HP plucks teams that submit successful ideas out of the business and puts them into innovation project teams focused on creating a successful launch. Change is hard for middle managers. Don't tell them what you are going to do, tell them what you did. Final point - ideas are becoming the oil, the gold - the highly valued - So, does this mean that ideas are becoming a commodity then?


"Ideas without execution are a hobby" - Philip McKinney (HP)

"Innovation results from the creative application of intellectual capital in a disciplined manner to a problem." - Lem Lasher (CSC)


Other conference highlights:

Lem Lasher (CSC) - How do you define innovation when employees have different first languages? - Answer: Use lots of visuals

Lem Lasher (CSC) - Innovation is difficult because most innovations will fail. But obstacles are put up because our mindset is to 'not fail'. "We kill innovation by trying to eliminate risk."

Lem Lasher (CSC) - "While management is focused on the seeds of innovation, they get rid of the water, they get rid of the sunlight, the oxygen, etc." - Great management understands innovation tension and focus on improving the quality of the supporting ecosystem. Great innovation leaders create an innovation agenda that is just provocative enough to enable change without stimulating corporate antibodies. CSC focuses on incremental and adjacent innovations, consciously avoiding breakthrough or radical innovation.

Lem Lasher (CSC) - Revolutionaries hate change so much that they seek to create their change with violent efficiency (so they don't have to change). Who is putting their career on the line for improving innovation process and culture in your organization?


"None of us went to school to learn how to fail. The more we try to succeed by innovating, the more we are destined to fail." - Lem Lasher (CSC)


Raj Aggarwal (Rockwell Collins) - Open Innovation for Rockwell Collins is the augmentation of internal R&D efforts with innovation from outside the company. "Internal R&D is a development process, while open innovation is a discovery process." Open Innovation is critical but requires changes in processes - companies that try to force Open Innovation into existing processes will fail.


"75% of firms expect 40% of innovation to come from external sources by 2012." - Raj Aggarwal (Rockwell Collins)


Russ Conser (Shell) - Shell talks about revolutionary versus evolutionary innovation. Revolutionary innovation looks less attractive in the beginning. Innovations follow an S-curve - don't look good early, but in hindsight their value is clear. GameChanger works to try and use different people, process, criteria, etc. to get different outcomes than core business. It's not about the idea, it's about the people and helping them make their idea real.

Russ Conser (Shell) - Shell invests not all at once, but in tranches, and evaluates submissions against six criteria - Potential Value? Could it work? Novelty? Why Shell? Sustainability? Doable Plan? The crazy ideas more likely to get funding. At the same time, your innovation program should be both transparent and below-the-radar. Too much attention, and the corporate antibodies come out.

Ed Harrington and Adam Hansen (Ideas to Go) - Everyone can be trained to be creative, but find the ones who are better at it and train those people instead. Accelerate ideation by bringing in metaphorical thinkers. Insightful people are generally self-revealing. They are happy to share their ideas. Innovators are not always the ones who come up with ideas, but they have a talent for knowing what's valuable.

Ed Harrington and Adam Hansen (Ideas to Go) - With Open Innovation, some people submit, some people have trouble expressing idea, others have no ideas but want to participate. Open Innovation is not a perpetual motion machine... We advocate an episodic approach as opposed to an always open approach when it comes to Open Innovation. Duplicate submissions are one of the key problems to solve for when you go to wide-open innovation. When it comes to duplicates in open innovation submissions - "Let the best expression win."


"I as a business person want to know what my competitors want to own." - Jackie Hutter (Hutter Group)


Jackie Hutter (Hutter Group) - If you are not communicating to General Counsel and IP lawyers what you expect from your IP portfolio, then you're leaving money on table. Some companies prevent people in business from doing patent searches, they fear that somehow it will taint things (create risk). You should be tracking competitive patents because they tell you where competitors are making technology investments. When it comes to patent searching you must frame the question properly so that it yields a narrow & relevant result set. Patent searching can also help you identify ideas that are 'half-baked' (in a good way) that you can acquire and finish off.

Carrington Smith (Air Products) - Keep in mind that by the time it shows up in a patent search tool, host organization has been working on technology for a while. I'm surprised that more companies don't integrate the out-licensing of IP and insourcing of IP and Open Innovation into one team. Many organizations don't look sufficiently at what value their patent portfolio actually has.

Pramod Reddy (P&G) - P&G has 9,000+ people in R&D but there are 2,000,000 researchers working in science areas of interest to P&G. Anything outside the inner circle of project teams is considered part of P&G's Connect + Develop program. The second deal with the same partner takes half as long and is worth twice as much as the first. The speed of review is very important to Open Innovation success, as is communicating to people "no thank you" instead of no response. P&G has done joint ventures with competitors. Why are others so afraid to do the same?

Pramod Reddy (P&G) - P&G is now undertaking proactive approach to Open Innovation through developed networks of potential providers. P&G is now trying to make it so that Connect + Develop (C+D) is the way we work, not a separate program with success stories. Team of 70+ technology scouts around world and must have broad technology understanding and good social skills for networking.

Moises Norena (Whirlpool) - Check out this article for presentation details


"Innovation is all about Enablement" - Robert Zivin (J&J)

"Innovation is Polytheistic" - Robert Zivin (J&J)


Robert Zivin (J&J) - When choosing to pursue innovation, you are choosing internal disruption - we have to be in the business of disrupting ourselves. We have to manage the disruption of ourselves. We have pharma, medical devices, and over the counter stuff too. The more it costs to manufacture a product, the easier it is to do Open Innovation. Capital costs are a hurdle to IP theft. We train a co-operative of people to help respond to the external Open Innovation submissions and help triage. We have a 30-day SLA on our Open Innovation web site - We've got to get back to people (even with a "no") rather than say nothing. The John Hopkins/J&J/Entrepreneur/Philanthropy partnership they've created, could serve as an alternative to the typical University tech transfer process


"In early stage innovation, relationship trumps ownership" - Youseph Yazdi (Johns Hopkins)


Helene Rutledge (GSK) - GSK looked at Samsung, Apple, Roche, P&G, and others in building their approach to Open Innovation. The GSK Open Innovation Model is Want -> Find -> Get -> Manage. The GSK Consumer Innovation Team workspace - The Hub - has people sit in different desks every day in an open plan flexible workspace. GSK's Open Innovation Model requires idea to have scientific proof, solid business case, be unique & have competitive advantage.

Helene Rutledge (GSK) - Aquafresh Isoactive was an Open Innovation example that involved partnering with four different external partners, and idea came from adjacent industry (shaving gel). 'What's In It For Me?' applies to open innovation as well. Hiring for open innovation at GSK involves finding people with a balance of technical licensing and product development experience.

Cheryl Perkins (InnovationEdge) - The soft things are often the hardest when it comes to innovation culture change. Iceberg of Organizational Culture - below water you have norms, unwritten rules, shared assumptions, values, and shared beliefs.


"The future of innovation strategy is all about optimizing relationships." - Cheryl Perkins (InnovationEdge)


Overall it was a great conference, and it reinforced how important senior leadership support is to successful innovation, along with other things like good processes, cross-silo communications. I look forward to the August Open Innovation Summit in Chicago.


Check out the Open Innovation Summit - Day Two wrapup here.

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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.

Creating New Innovations with Customer Insights

by Jeffrey Phillips

I guess my kids are just too old for crayons anymore, so I missed the Crayon Maker when it was first released, but I'd like to use it as an example of understanding customer needs and identifying lead users, and how an innovation can open up an entirely new market space and revenue opportunity.

For years kids have had broken crayons and their parents have melted them down and formed new crayons, often by mixing the broken pieces. My wife did this for our kids just a few years ago using a muffin tin in the oven. I'm going to guess that Crayola was aware of this activity, neither encouraging or discouraging the activity, until 2003, when it released the Crayon Maker, a machine that allows kids to melt down their crayons and create new ones. Now, crayons have been with us quite a while, and parents have been melting down the broken pieces for quite a while. What took Crayola so long to respond to these lead users who were creating their own crayons?

But let's push through the existing Crayon Maker and think about the opportunities for new innovation. Right now Crayola is only positioning the Crayon Maker to melt down old, broken Crayons. Why not offer Crayon Shavings or Crayon Bits, built specifically for melting down? These would probably be cheaper to produce, and Crayola could probably charge more for them, giving kids two activities - making crayons and using the crayons. Next, why not let kids make Crayons in different shapes? Right now the Crayon Maker makes Crayons in the same shape as they come out of the box. Creating forms or molds in different shapes wouldn't be difficult and could be more fun for kids.

Next, why not sell dies or additives that let kids make their own crayon colors? You could turn the creation of crayons into a science experiment, allowing kids to create their own colors, textures and perhaps even scented crayons. Simply by creating a machine that allows kids to create new crayons we can open up a lot of other product and service offerings. What's taking you so long, Crayola?

Or how about a mold that allows you to make your own Legos? A firm such as Lego could easily create and sell molds that allowed children and parents to make their own Legos out of Play-Dough or bread dough or a host of other viscous material. Then the kids could create, and play with, their own Legos, perhaps creating Legos of different colors and textures. When they were done playing with them, they could easily dispose of them (or in the case of Bread Legos, perhaps eat them!)

These examples are simply thought exercises that indicate how innovation should work. A customer need or lead user is identified, a new product or services is delivered and it opens up an entirely new market opportunity. What customer insights are hiding in plain sight in your business? What lead users are creating products and services to simplify their lives based on your products or information?

Think this doesn't happen in the "real world" of adults? Check out Mint.com, which is taking the financial world by storm. Mint simply helps individuals consolidate a view of their financial lives online. What we've been doing in spreadsheets is now done automatically for us by Mint. Why didn't the banks see this opportunity? What new products and services could a Mint create by offering a consolidated view of your financials?

It's important to interact with your customers and understand what they are doing and creating to improve your products. Sometimes you may discover customers who have created entirely new products or solutions based on your existing products. These lead users often point the way for new product or service development. Once that new product or service is developed, it can open an entirely new market for your firm.

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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.

Apple, Nintendo, Innovation, and the CEO

by Braden Kelley

I came across this quote from Satoru Iwata, the president of Nintendo:


"My job is to find the potential in something that others can not see, to secretly pour our resources into them and turn them into hits before anyone else catches on,"


The quote was too long to fit in Twitter, so I thought I would share it here because I love the insight. This is the key to successful innovation captured in a single sentence. This quote also highlights one of the most important jobs of a CEO - to lead innovation:

1. To invest in the insights research and exploration necessary to identify the next innovations


2. To fund projects built on these insights (even though they may be risky)


3. To shield the exploration efforts of the company from its ongoing exploitation of current products, services, and markets


4. To build a balanced innovation portfolio


5. To build a tolerance for risk taking and individual project failure within the portfolio


6. To encourage collaboration and to serve as a bridge across silos


7. To be a champion for innovation both inside the company and externally amongst suppliers, partners, and even customers

The quote came from a Wall Street Journal article where the author implies that Mr. Iwata thinks that Nintendo and Apple aren't competitors. In my view, Mr. Iwata is either posturing so that the press doesn't hype the rivalry, or he is a bit blind because Apple most definitely views Nintendo as a competitor.

The real question though is who will dominate mobile gaming five years from now?

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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.

Amazon Gets an 'A' for Innovation

by Steve McKee

Retail sales are projected to decline this holiday season for the second year in a row, an occurrence unprecedented in the entire history of the federal government keeping statistics on such things. Online retailers will continue to face stiff pricing pressure, as they have for more than a year. Free shipping has become almost the ante in such a competitive environment.

That's why Amazon's shipping program, Amazon Prime, is so impressive. For a company that ships 100 percent of its products, finding a way to neutralize pressure on shipping costs is no small thing--especially when it's competing with Walmart, which offers its online customers 97 cent shipping on many products, or the option to pick up their orders at a nearby store for free.

Two million people have become members of Amazon Prime, paying $79 for automatic two-day shipping on all of their purchases. Not surprisingly, they tend to be Amazon's most frequent customers, which means they're still getting a pretty good deal. But the program helps ensure they'll turn to Amazon first when they have a new purchase occasion, and the numbers indicate they increase their spending with the company some 20 percent after signing up.

Just goes to show you that innovation isn't the exclusive purview of the R&D department. While many online retailers have thrown in the towel on shipping charges, Amazon found a way offset them while increasing order flow. The company took one of its biggest lemons and turned it into a refreshing beverage.

Makes me wonder about the bitter aspects of my industry and how how my company might do something to sweeten them up. What about yours?

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Steve McKee is a BusinessWeek.com columnist, marketing consultant, and author of "When Growth Stalls: How it Happens, Why You're Stuck, and What To Do About It." Learn more about him at www.WhenGrowthStalls.com and at http://twitter.com/whengrowthstall.

150,000 Good Ideas

by Kevin Roberts

Ideas are the currency of the future and can come from anywhere, and Google probably knows this more than anyone right now! To help celebrate their 10th birthday, Google invited people to submit their ideas to help make the world a better place for everyone with their special "Project 10 to the 100th."

150,000 ideas were sent in from people living in 172 countries, speaking 25 different languages. There were eight different categories that ideas: community, energy, environment through to health, education, shelter and opportunity, and not to forget the 'everything else' basket. The same people who submitted ideas were then invited to vote on the best ones that should receive the $10 million that Google are going to invest and which should be announced soon.

You can see the full range of ideas here. Some of the finalist ideas were:

• Support efforts to increase young Africans' access to quality education by creating "cyber schools"


• Create a fund to support social entrepreneurship by providing targeted capital and business training to help young entrepreneurs build viable businesses and sustained community change

Coordinate a rapid-response tool for natural disasters; introduce an ecological VAT instead of income tax

• Create an advanced health monitoring system


• Encourage positive media depictions of engineers and scientists


• Create a transportation system that enables electric cars to run on a rail-type system

When so many ideas struggle just to see the light of day, it's wonderful how the project has given people the opportunity to spread their ideas. The project has just finished voting and winners should be announced shortly, when the ideas go to work they will surely help transform the way people live.


Image source: http://www.project10tothe100.com/ideas.html

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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.

Social Innovation as Smart Business Strategy

Businesses Can Be Good Stewards Of Our Societies

by Idris Mootee

Innovation takes many forms, but social innovation is the least understood form, and today there are pressing needs and urge for the creation, adoption and diffusion of innovations. Innovation's several forms include: technological, organizational, product, service, business model, etc. The term 'social innovation' has come into common parlance in recent years. Some may consider social innovation no more than a passing fad, but many entrepreneurs and social scientists see significant value in the concept of social innovation because it identifies a critical type of innovation.



Social innovations will probably be the most significant innovation type in the next decades. Some distinguish social innovation from business innovation, and identify a subset of social innovations that requires government support, which I totally disagree with. Business innovation should have a socal innovation component when we think about sustainability.

A good business strategy needs to be more than about just maximizing value creation. It is important to make lots of money, but more important to ensure the business is sustainable. Our future is in the hands of a couple thousand top Fortune 500 executives who are already very occupied with the daily crisis, and whom make decisions that impact our future. They need to understand the long-range implications and impacts of their immediate, everyday, urgent actions and decisions in relation to the far-reaching social innovations now taking place (which are management's new and most significant dimension). This is a critical junction of modern management.



Last month, my friend Mehmood Khan (photo above), London based ex-Unilever's global leader of innovation process development, took a public oath in his home village of Nai Nangla in India that he would dedicate the rest of his life to making the world a better place. He is starting from his home village in India. I wish more executives whould do that. Imagine the possibilities if all the smart minds in large corporations started taking a little time off to do this?

He left his job at Unilever to return India to focus on innovation of a different kind. Khan's job is to forge connections between the village of Mewat and big corporations to create employment. A year ago, Aviva, the UK's biggest insurer, was looking to build its rural presence in India. Khan's trust connected the company with 60 local young people and 12 were ultimately recruited. "It's a cycle that generates money... Aviva hired some people whose income went up... This creates a market economy," Khan told Forbes magazine. He has set up a computer center in Nai Nangla. He has also facilitated ICICI Bank to recruit 16 of the 30 villagers trained in the first intake. Khan also engaged charities and NGOs to administer literacy programs. He is full of creative ideas on how corporations can participate in helping.



The question is should companies' role in meeting basic needs be kept distinct from their desire to create more profits? For Khan, the two can work together. I totally believe that is possible and even necessary. The lines between business strategy and social innovation have blurred and converged as the business world attempts to respond to the modern culture's demand that businesses be good stewards of our societies. Hats off to Mehmood and Aviva.

Aviva is a bold and innovative player in the insurance industry (full disclosure: they are a client of ours and this is one of our innovation projects). Most people feel that insurance is just a black box and,you'll never interact with them. For many it becomes very difficult to see the value in insurance. As an expansion to their successful "Change Insurance" communications platform, Aviva has launched "In Your Shoes" which is a site dedicated to viewing the opinions and thoughts of customers about insurance. We started playing with the idea a few months back based on the notion of using storytelling to create customer engagement.

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Idris Mootee is the CEO of idea couture, a strategic innovation and experience design firm. He is the author of four books, tens of published articles, and a frequent speaker at business conferences and executive retreats.

Beyond Product Innovation

One of the problems with innovation is that, in any given industry, it can get harder and harder over time to come up with the kind of ideas that totally reinvent things in a fundamental and significant way.

Take any vector of innovation and you get to some point where you may have just exhausted the possibilities. Look at today's automobile. It's essentially based on the same architecture we've been using for a hundred years - a wheel at each corner, a steering wheel on one side, an engine at the front or back, a gearbox, and so forth. So innovation in the automobile industry has got to the point where the car is a little bit better here, a little bit better there, but it's the kind of stuff you hardly even notice. Apart, maybe, from the new hybrid motors which have been quite a breakthrough. But, again, if you look at the car as whole, the change is quite cosmetic.

The same has happened in mobile phones. Back in the nineties, companies like Nokia were producing some very distinctive phones. At the time, they were the most stylish, the easiest to use and so on. But over time, with so many companies joining the fray, and so much being outsourced to the same suppliers, almost every mobile phone you pick up is just a variation on the same theme.

So, in any given industry, you may get to a stage where you have to think about shifting the basis of differentiation away from the physical. That's why Lexus puts so much effort into innovating around the dealer experience. A lot of people couldn't honestly tell a Lexus from a Mercedes, so the company has decided to made the dealer a huge part of the differentiation. Because, when everything else is the same, you have to innovate around whatever you have left.

Take Rexam, the world's leader supplier of beverage cans. They've spent years looking at tin cans and trying to figure out where they can be innovative.

And, of course, there are still one or two possibilities to do interesting things (i.e. resealable cans, different formats and sizes etc.), and every company needs to avoid getting blinded by its own orthodoxies. But, essentially, the beverage can hasn't changed its basic form for decades. So rather than it being the physical can itself, Rexam's basis for differentiation tends to come from all the stuff around the can - the parts of their business model that give them their unique advantage, particularly in terms of their global capability and the depth of their customer relationships.

Instead of thinking about innovation merely in terms of what you provide (i.e. your products and services), you should be looking at ways to innovate across the entire business model in an effort to meet important customer needs in unconventional ways.

For example, think about customer groups that you and your competitors may have been ignoring. Think about delivering what you provide in ways that would reinvent the customer experience - i.e. by making it easier or more enjoyable. Think about how you might break the dominant pricing paradigm in your industry. Ask yourself whether there any dimensions of differentiation which you and your competitors have not yet explored.

In other words, think about how you might be able to design your whole business model from the customer backward, looking at each and every component as an opportunity for innovation and competitive advantage. When you start to unpack your business model in this way, you will invariably discover lots of ways to dramatically redesign what you do - and how you do it - in order to create new value for the customer.

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Rowan Gibson is a global business strategist, a bestselling author and an expert on radical innovation.

Trickle-Up Innovation

Trickle-Up Innovation is a topic you will hear more and more about.

Innovations currently tend to be commercialized in the developed countries and then distributed in the developing world. Trickle-Up Innovation turns that model on its head by commercializing products or services in developing countries and then adapting them for the developed world.



Trickle-Up Innovation does not displace the traditional dissemination patern, but instead provides another option for innovators to consider when looking at commercializing their ideas.

One reason that Trickle-Up Innovation will find increasing adoption is the fact that innovative products and services tend to initially be adopted by those with the greatest pain.

Another reason that companies will expand their innovation strategies to include Trickle-Up Innovation is the fact that often the breakthroughs that drive innovation come from working with extreme users.

Extreme users and those with the greatest need for an innovation are equally likely to be found in the developing world as in the developed world - opening the door for Trickle-Up Innovation.

Where will you find innovation?

@innovate

For more information, see Fast Company's article or BusinessWeek's article on Trickle-Up Innovation.

UTEK Webinar Synopsis: Q&A Session

I had the good fortune to attend a three-part UTEK webinar yesterday featuring Gary Hamel "Innovation in Rough Times", Tim Jones "Future Catalysts of Innovation", and Regina Lewis "Adopting an Innovation Strategy", and will now share some of the notes, quotes, and key insights I was able to capture.

Gary Hamel has been called the world's most influential business thinker by the Wall Street Journal, and his latest book, The Future of Management, was published by the Harvard Business School Press in October 2007 and was selected by Amazon.com as the best business book of the year. Gary Hamel was a founder of Strategos, which was acquired by UTEK in 2008.

Tim Jones, Ph.D., author of Innovating at the Edge, (published by Butterworth Heinemann) and Managing Director of Innovaro, a division of UTEK, will discuss the future catalysts of innovation.

Regina Lewis, Ph.D., Vice President of Consumer Insights for InterContinental Hotels Group, will wrap up this informative webinar with her discussion on the impact of adopting an innovation strategy and its benefits to InterContinental Hotels.

Please NOTE: Because these are notes, they may be a little rough, but I've done my best to clean them up.

Here are some of the key takeaways from the Q&A session:

(Gary Hamel)
Advice for small companies - Innovation is going to need to be radical in a startup in order to force your way into the marketplace

(Gary Hamel)
There is an optimal time to put resources beyond an idea (Hotmail-few months versus HDTV-20yrs) - Key questions to ask yourself

• Does infrastructure need to be built?


• Is there built-in consumer resistance?


• You can't push an idea faster with more money and you will have a hard time catching up if you get there too late by spending a lot of money

(Gary Hamel)
It's no longer first movers versus fast followers, it's smart movers versus dumb movers:

• Dumb movers don't learn from early experimentation


• You must learn faster per unit of input than your competition

(Tim Jones)
Every industry has its own natural clock speed

• Different industries move at different speeds (FMCG 18-24 mos, Energy 3+ yrs, etc.)


• OTC pharmaceuticals were one of the drug companies' strengths and now you will find more FMCG getting into the OTC pharmaceuticals space and these companies have faster clock speeds than drug companies


• Nokia is shifting from product company to a service company and if they use their 6-month cycle in the service sector this will give them a 3,4,5 times the speed advantage over their competition

(Regina Lewis)
It is important for us to innovate in more than a me-too fashion

• We have to look to leapfrog our competition


• How can we lead again?


• There are always going to be un-met consumer needs


• Anxiety and loss of control in traveling is one key focus area

(Tim Jones)
A lot of airports are trying to expand their capacity (Heathrow, Frankfurt, Schiphol)

• One limiting factor is the ability of the airport to process people through security


• One way to overcome this limitation has come from looking not at other airports, but from looking at Disney


• Queues for experienced people versus families versus novice people


• Disney focuses very heavily on queue management and getting people spending more money, etc.

(Gary Hamel)
The tendency over time is for a company to become more incremental because they start talking to the same consultants and measuring themselves against each other

• Ask your employees to tell you about their fundamental customer experiences in different parts of your production chain


• What are the companies that are making the most dramatic changes in customer expectations?


• The key is to look outside your own industry - What has changed your employees lives as consumers and investigate that

I hope these notes have given you a good idea of some of what was discussed in the Q&A session at the UTEK webinar and what the key takeaways were. Please also see my blog articles on Gary Hamel's and Tim Jones' and Regina Lewis' portions of the webinar.

Happy innovating!

@innovate

UTEK Webinar Synopsis: Tim Jones - Future Catalysts of Innovation

I had the good fortune to attend Tim's webinar today on "Future Catalysts of Innovation", and will now share some of the notes, quotes, and key insights I was able to capture.

Please NOTE: Because these are notes, they may be a little rough, but I've done my best to clean them up.

Tim Jones, Ph.D., author of Innovating at the Edge, (published by Butterworth Heinemann) and Managing Director of Innovaro, a division of UTEK, will discuss the future catalysts of innovation.

Here are some of Tim Jones' thoughts:

Where are organizations now starting to place their bets?

• In this economic environment, people tend to switch back to short-term thinking and focus on making a quick buck

How do we overcome the uncertainty?

• Many of our clients focus on differentiating between what is possibly going to happen versus what is probably going to happen.




• It is important for people to not only look from the Market Now to the Market Future, but to take a more holistic look at how the World Now and the World Future will influence the Market Future


• Catalysts for Innovation (cut across many sectors)


• Short-term (already in play - carbon, web 2.0, biofuels, wellness, etc.)


• Should have already been looking at these for the last five years


• If you haven't been, then you probably have missed the boat


• Medium-term (Water, authenticity, embedded energy, tracking)


• Water is becoming more scarce


• Wikipedia and amazon reviews versus experts from your company


• How can you inject authenticity into your approach?


• Embedded energy


• How much energy does it take to make our products?

Water

• It takes 140 litres of water to make a single Starbucks cappuccino


• It takes 400,000 litres of water to build a car


• Although it is being investigated how to bring this down to 300,000 litres


• People are beginning to take notice of the water and embedded energy topic, and companies like SAB Miller are beginning to take efforts

People are being tracked by their mobile phone, even when it is off

• Japan - Doing away with train tickets


• You get charged when your mobile phone gets on and off the train


• Florida - A Healthcare Pilot


• When diabetics walk into one of twenty restaurant chains they can get text messages about what they should or shouldn't eat on the menu

It is no longer taken for granted that growth or innovation for companies will come from the first world:

• Kenya is the biggest growth market for Vodafone

What can we do right now using these catalysts to accelerate innovation?

• Which ones do we think are going to impact our sector?


• How do we take advantage of them?


• Where in the world should we launch them (tech, infrastructure, social impact, etc.)?

I hope these notes have given you a good idea of some of what was discussed in Tim Jones' presentation of "Future Catalysts of Innovation" and what the key takeaways were. Please also see my blog articles on Gary Hamel's and Regina Lewis' portions of the webinar.

Happy innovating!

@innovate

Special Event Coverage Tomorrow - "Innovation in Tough Times"

Hello all,

Tomorrow I have been invited to attend the $199 UTEK webinar on "Innovation in Tough Times" and I will bring you the key insights from Gary Hamel, Tim Jones, Regina Lewis following the event.

"Renowned business strategist Professor Gary Hamel will present the inaugural topic, "Innovation in Tough Times," on Tuesday, February 17th, at 1:00 PM EST. Gary Hamel has been called the world's most influential business thinker by the Wall Street Journal, and his latest book, The Future of Management, was published by the Harvard Business School Press in October 2007 and was selected by Amazon.com as the best business book of the year. Gary Hamel was a founder of Strategos, which was acquired by UTEK in 2008.

Tim Jones, Ph.D., author of Innovating at the Edge, (published by Butterworth Heinemann) and Managing Director of Innovaro, a division of UTEK, will discuss the future catalysts of innovation.

Regina Lewis, Ph.D., Vice President of Consumer Insights for InterContinental Hotels Group, will wrap up this informative webinar with her discussion on the impact of adopting an innovation strategy and its benefits to InterContinental Hotels."

There is still time to register for the event here.

Anything in particular you are curious about should I have the opportunity to ask questions?

@innovate