Creating Innovation in the PARC

Interview - Mark Bernstein of PARC

I had the opportunity recently to interview Mark Bernstein, Chief Executive Officer of PARC.

Mark Bernstein has been the head of PARC (Palo Alto Research Center) since 2001, when he led the firm in its transition from a research division of Xerox to an independent business. PARC is among the world's best-respected centers of research and innovation, and its relationships include client services for industry leaders in consumer electronics, information and decision systems, networking and communications, and renewable energy. Among the firm's current projects is Content-Centric Networking, a new approach to networking that addresses massive amounts of internet content to achieve better security, scalability and performance.

Here is the text of the interview:

1. Please briefly tell people about what PARC is today (versus its history)

Today, PARC is a center for commercial innovation - for other clients besides Xerox. (Historically, Xerox PARC was a captive/internal R&D center). PARC is driven by the desire to see its research results impact the world in important ways and across multiple industries. The vision for transformational impact is still alive, but now the understanding of what that takes also comes from our commercial partners, embedded business development, and/or market experts like EIRs.


2. When it comes to innovation, what is the biggest challenge that you see organizations facing?

They are limited by the problems they see directly in front of them and the capacity of the resources they have in hand to address them. These constraints are stifling when unfamiliar complexities become visible and breakthroughs are required.


3. What are the keys to successfully partnering with PARC or other organizations like yours?

From our experience, an open and genuine interest in alternative perspectives is an enormous asset for any organization facing challenges to their entrenched expertise or assumptions. And then an essential trait for adaptability is being capable of internalizing the consequence of discovery or responding to radical shifts. Look at the media and automobile industries! Organizations must anticipate the need for change, not be in denial of it or pursue ad hoc solutions...


4. What are the secrets to successfully completing a research project?

Deep understanding of the scientific principles that constrain what's possible, clear thinking and teamwork about the experiments that will lead to a new state of knowledge, robust engineering to demonstrate that development through an industrial-strength technology prototype. (This last feature is where PARC scientists really differ from university researchers, because they have to think about the manufacturing and other constraints to make the technologies scalable). But another important "secret" to successfully completing a research project at PARC is involving our social scientists/ethnographers early and throughout the development pipeline. Some would argue that's an ingredient of our secret sauce.


5. From your experience, what are some of the keys to increasing variability to help get the best ideas?

Increasing variability is NOT necessarily the primary ingredient for producing the best ideas! Integrating a diversity of perspectives from multiple disciplines has been successful at PARC for addressing a number of big, complex problems.


6. What are some of the biggest barriers to innovation that you've seen in organizations?

Rigid internalized realities, incremental thinking, disabled innovation investment models.


7. What skills do you believe that managers need to acquire to succeed in an innovation-led organization?

Exercising flexible perspective, projecting a positive attitude for change, encouraging "what if" thinking to define possibilities - and constraints.


8. If you were to change one thing about our educational system to better prepare students to contribute in the innovation workforce of tomorrow, what would it be?

Focused, distributed, and collaborative projects in the math, science, and humanities - using various media to fuse information and capture knowledge. Collective learning is a fundamental experience for what's possible and problematic for global understanding.


Editor's Note: Mark Bernstein will be speaking at The Economist's "Innovation - Fresh Thinking for the Ideas Economy" conference and Blogging Innovation will be covering this SOLD OUT event for our readers on March 23-24, 2010 here on our blog and as @innovate on Twitter.


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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.

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.

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.

Building an Innovation Nation

Why do some nations and geographic regions seem to be hotbeds of creative entrepreneurship and economic growth, while others remain innovation laggards? In his book The Wealth and Poverty of Nations, Harvard professor David Landis writes, "If we learn anything from the history of economic development, it is that culture makes almost all the difference." National governments the world over are waking up to this truth as they struggle to improve their countries' global competitiveness and economic prosperity.

They now recognize, as The Economist puts it, that innovation is "the single most important ingredient in any modern economy." But how exactly can a country create the cultural and constitutional conditions for innovation to flourish? In short, how do you build an "innovation nation?"

In my travels around the world, I've been asked this question many times, in places as diametrically opposite as Sweden and Saudi Arabia, or Moscow and Madrid. Some nations and regions, of course, are already blessed with a culture that is predisposed to innovation. What we usually find in these countries is a historical openness to ideas from all around the world, a lot of cultural diversity, a high degree of connection and conversation, a deep-seated belief that one can build a better future for oneself and one's family - and ultimately one's community and country - through education and hard work and by seeking entrepreneurial opportunities, and a tendency to encourage or at least tolerate free thinking and contrarian views.

On the other hand, there are national cultures that seem to find innovation much more difficult. I would argue that these tend to be in countries or regions that have an "inward focus", where there is little interest in ideas that come from outside. Generally, they are also cultures that discourage free, independent thinking; where kids are taught at school to "know their place" and not to question anything. What these countries seem to lack is a culture of entrepreneurship, opportunism and innovation at the grass-roots level.

Obviously, culture is something that builds up over a very long time and is incredibly difficult to change. You can't turn just flip a switch and turn a country like Angola - currently occupying last place on INSEAD's Global Innovation Index - into an innovation powerhouse like America (still rather unsurprisingly ranked first). But there are definitely some practical steps governments can take to foster innovation at a national level. John Kao, author of the book Innovation Nation notes that Singapore's transformation over the last four decades, from what he calls "a developing country fishing village" to Asia's poster child of innovation and economic growth, has unquestionably been driven by the city-state's visionary government. Other countries of the world would do well to take a page from Singapore's playbook as they seek to define their own national innovation agendas.

One word of caution, though. There's a tendency in government to think that innovation is almost exclusively synonymous with big science. So if you take any company's ten-year innovation strategy, you invariably read about ambitious plans to build national prowess in certain key technologies. These initiatives are all well and good, but I believe they are somewhat misguided - for two reasons.

First, every industrial economy on earth today is pursuing a dominant position in the same set of brainpower industries - nanotech, biotech, pharmaceuticals and so forth. Some countries have an incredible head start in these fields, which means they are already several technology generations ahead, and they may also be lucky enough to have one or more regional industry clusters right on their doorstep, which gives them easy access to skills and other resources. How can other nations hope to compete when they don't have these kinds of advantages? Not by running the same broad, technological race as everybody else - which I believe will ultimately be a loser's game - but by narrowly focusing on a few niches (technological or otherwise) where the country can lead the world.

Second, the idea that innovation is solely about big science and big R&D budgets is an outdated paradigm. The fact is that many of today's most successful innovations are business model innovations, not technological innovations - they are ways of doing business that break from industry norms by serving unmet or unsatisfied customer groups, providing new or different benefits, or delivering value in an unconventional fashion. These kinds of innovations can potentially come from any entrepreneurial individual in any country on earth.

Take Jim Penman in Adelaide, Australia, who turned a part-time grasscutting job into a global business with 2,600 franchisees. The company, called Jim's Group, does everything from grass cutting and dog walking to car washing, home repairs and pool care - basically all the drudge work you don't want to do, or simply don't have time to do. It's precisely courageous entrepreneurs like Jim Penman who prove that successful innovation can come from the bottom up – and not just top-down through massive government investment programs.

One of the questions governments should therefore be asking is "Are we creating an environment that is truly supportive to grass-roots entrepreneurs? Or does our bureaucracy continually get in the way?" For example, how difficult is it for someone with an interesting business idea to get the funding for a start-up? How difficult is it for the average citizen to register a company? Are we giving potential entrepreneurs financial incentives and making their lives easier, or do they still have to fight their way through miles of red-tape and legislation? And, to my previous point, do we only take innovators seriously if they work in science labs, or are we open to innovators whose big idea is simply an unconventional new business model?



In short, when it comes to bottom-up innovation from entrepreneurs, are we slowing things down or speeding things up?

Let's remember that Silicon Valley grew to be great, not because some politicians in Washington woke up one day and decided that the country's future was hinged on building a scientific industry cluster in California. No, the real fathers of Silicon Valley were tinkerers, risk-takers and opportunists like Hewlett and Packard, Noyce and Moore, Jobs and Wozniak - a legacy that is continued today by heroes like Larry Page and Sergey Brin of Google. The phenomenon we now call Silicon Valley could only happen because the United States is so nurturing - so supportive - to grass-roots entrepreneurs. This is a critical and often overlooked factor in building an innovation nation.

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

My Experience with Cisco TelePresence

I had the opportunity to experience a conference today using Cisco's TelePresence to connect four locations (New York, New Jersey, Seattle, and Silicon Valley) and Cisco's WebEx to connect scores more people on the internet. It was supposed to be five physical locations, but London got ten inches of snow overnight and so they did not join.

The conference ran for five hours and I must say that the high definition video ran flawlessly, and there were only minor glitches in getting people's computers synched up with the projector. The system seamlessly switched amongst the four locations on our three flat panels, based on who was talking, and the sound was crystal clear.

Not bad for $300,000 (for the 3-screen Cisco TelePresence 3000). I'm sure it will get cheaper over time, but I can only imagine that there must be renewed interest with the reduced travel budgets at most companies today.

It is hard to fully explain the experience, but life-size imagery and high-definition with directional audio is a leap ahead of any video conferencing system I've experienced (including Microsoft Office Roundtable). The additional benefits of Microsoft Outlook integration, screen sharing and easy operation would make it a very intriguing purchase for any company with distributed teams.

Additional Links:
On-stage experience
Promotional Video (more details)

What do you think?

@innovate

Tomorrow - Bright Idea Birds of a Feather 2.0 - Innovation Conference

Tomorrow I will be lucky enough to attend an international innovation conference via Cisco's TelePresence solution. Brightidea, the software provider behind the successful Cisco I-Prize, is sponsoring the conference with Cisco tomorrow, February 2, 2009.

This Innovation Birds of a Feather conference will bring together innovation leaders both online and via Cisco TelePresence locations in Seattle, London, Silicon Valley, New York, and New Jersey.

The Brightidea Innovation Leaders "Birds of a Feather" Conference is a peer to peer discussion on innovation management among innovation executives and managers at top global corporations. It promises to provide a forum to exchange ideas and best practices on implementing innovation in large organizations.

Companies represented will include: American Express, Astra Zeneca, Safeway, Unilever, Travelers, Merrill Lynch, and more.

The conference will also feature three authors including:

- Mike Kanazawa - "Big Ideas to Big Results"
- Gregg Fraley - "Jack's Notebook"
- Joe Wheeler - "The Ownership Quotient"

I'll try and report on some high level takeaways after the event.

Braden Kelley
@innovate
Blogging Innovation

The War for Talent Escalating

Here is an interesting video on how China has started advertising on Silicon Valley billboards to attract tech talent from Silicon Valley back to China.

America used to be the top magnet for tech talent in the world, but now risks losing that mantle as other countries develop. Will American companies be able to find a way to stop the brain drain back to immigrants' home countries?

Check it out:



What do you think?

@innovate

Hot Spots of the Valley

Curious where some of the big deals have gotten done in Silicon Valley?

For a bit of Friday fun, check out this video:



Of course you won't get a deal by just hanging out in these places, but if you slip your one-pager into the menus, who knows. ;-)