TII Innovation Journal

Greenhouse gas plastics

Carbon dioxide is mostly talked about in the context of global warming. Carbon dioxide can however also be used as a raw material for biodegradeable plastics called aliphatic polycarbonates.The idea itself is not new, having first been developed in 1969, but it has taken nearly four decades to make the product viable for commercial use. Now, according to the MIT Technology Review, the product is reaching the levels of maturity required for making something good of it.

According to the latest web issue of TR, "The Cornell University spinoff's technology centers on a catalyst that converts carbon dioxide into a polymer that could be used to make everyday items such as packaging, cups, and forks. The plastic, which was originally created by Cornell chemist Geoffrey Coates, is also safe and strong enough to be used in medical implants and devices."

A company called Novomer has just received  a relatively big (USD 6.6 million) venture capital injection to scale up its manufacturing capacity utilizing epoxites, carbon dioxide, and a new type of metallic catalyst developed by Coates that allows the process to run in room temperatures and low pressure, conditions that are required for economic manufacturing. The new zinc-based catalyst is said to be efficient enough to make production of this new type of plastics an economically viable business.

Earlier this year (April) TR also reported that the chemists at University of California San Diego and Queen's University in Ontario have shown that it is, with the right catalyst, also at least theoretically possible to turn carbon dioxide into gasoline. The environmental benefits of either innovation would probably emerge only from very large-scale operations, but are worth studying further.

The Business Leadership Forum: A Variety of Innovation Styles

Irving Wladawsky-Berger of IBM reports from the IBM Rome Business Leadership Forum in April 2006

The Business Leadership Forum: A Variety of Innovation Styles: "

Earlier in April I participated in IBM's 2006 Business Leadership Forum (BLF).  The forum included several hundred leaders of industry, government and academia from over 50 countries who gathered in Rome for two days of discussions about the challenges and opportunities facing business in the 21st century.  This is the fourth such forum we have held and the first global one.  In 2003, our first BLF in San Francisco began a dialogue on the proper business strategies to pursue in the wake of the dot-com implosion.  In 2004 and 2005, we held regional forums in Paris and Shanghai respectively.  Having learned from these earlier forums that business issues in each region are not dramatically different, we decided that for 2006 the BLF would include participants from around the world. 

I found the presentations and panels over the two days of the Rome BLF fascinating.  It was not just the content; it was also the different leadership styles and approaches to innovation represented by the speakers.  Let me talk about a few of them.

Sam Palmisano

IBM Chairman and CEO Sam Palmisano opened the forum by observing that innovation is an imperative for anyone wanting to differentiate their companies and avoid competing solely on costs in a crowded, commoditized marketplace.  He talked about some of the powerful forces driving innovation in business.  First, he told the audience that one unavoidable fact of which all should be aware is that globalization is inevitable and that the world as a result is becoming more integrated.  He then linked globalization to economic expansion and, in particular, to the growing percentage of worldwide GDP coming from emerging markets -- especially China and India where a young, vibrant, talented set of professionals is eagerly entering the global economy. 

Sam then talked about the unpredictable environment we have been living in for the past few years, and the difficulty in planning due to the rate and pace of change inspired by geopolitical and security issues,  economic fluctuations, market bubbles and what have you.  As a result, business models are being furiously challenged by world events beyond their control and occurring anywhere, which in today's integrated environment will have a rippling effect across the globe. 

In such an environment, Sam went on to say, a business has only a couple of choices.  It can hunker down and try to ride out the changes, hoping things will return to the more stable world of the past; or it can create a strategy and a set of business models that allow the business to thrive and be successful in the face of the realities of this emerging world -- in other words, embrace innovation across the business. 

John Browne

BP Group Chief Executive John Browne spoke next.  (By the way, for the last few years I have been a member of BP's Technology Advisory Council.)  Lord Browne said that innovation was all about organizing the business in ways that allow people to explore possibilities and take risks confidently.  Innovation, in his opinion, is part of the process of anticipating and responding to changing needs and, since human needs are constantly evolving, innovation is the key to the long-term competitive success of any business.  He went on to talk about innovation in the energy business, summarizing its key challenges as enhancing energy security by finding reliable supplies of energy, and addressing climate change concerns by reducing the environmental impact of energy production and use.

Lord Browne then talked about some of BP's efforts in these areas.  For example, the amount of oil typically recovered from a field is a bit over 50 percent, up from around 25 - 30 percent when he first joined the industry forty years ago.  He believes oil recovery can be driven beyond sixty percent through advanced simulations that convey a better idea of where the oil is, and advanced technologies like horizontal drilling to get at it.  He talked about some very exciting pilot projects BP has under way in Scotland and California to produce clean, carbon-free electricity through a technology called carbon sequestration which extracts carbon from hydrocarbons and buries it in an existing oil or gas field.  Finally, he briefly mentioned some of the newer, riskier projects in search of greener and renewable energy sources, such as crops that produce plentiful, clean energy.

Lord Browne made several comments about the issues surrounding climate change that I found particularly compelling.  He acknowledged that there are multiple points of view in this area:  ‘The science of climate change is still provisional.  But then, all science is provisional,’ and then added ‘What seems clear is that we can't ignore the mounting evidence.  And no business whose purpose is to supply energy sustainably can turn away from the challenge or pretend it's someone else's problem.’  Later on in his talk he said ‘. . . innovation can help provide answers and help us to escape from the sense of fatalism which starts from a belief that climate change is such a huge global problem that there's nothing that can be done about it.  That is wrong.  There are lots of things that can be done.’

Sunil Mittal

BP and IBM are very good examples of well established, multi-national companies looking to transform themselves through innovation.  A very different innovation story is that of Bharti Enterprises, India's leading telecom conglomerate.  Sunil Mittal, Bharti's Chairman and Group Managing Director talked about the major challenges Bharti has faced over the last few years as India navigates some turbulent waters.  He explained that, with India's annual per capita income only a bit over $600, cellular phone service has to be provided for the Indian market at a very low price, around 2 cents a minute or less.  The only way to provide telecom services so inexpensively and run a profitable business is to take advantage of India’s large population and economic growth, scaling up the business rapidly by adding many new customers every month.   

To do this, Sunil Mittal had to develop a radically innovative business model:  focus only on the customers and outsource just about everything else.  In other words, put all the energy of the business into attracting, supporting and retaining customers and accept the fact that pretty much everything else has been commoditized and should be outsourced, including managing all the IT equipment and the network.  He said there was a lot of resistance to this strategy.  People were calling him from around the world saying that IT and the network were the heart of a telecom company.  ‘You cannot give your heart away and then run a business’, they said to him. 

Mittal begged to differ, saying the customer, not the technology, was at the heart of his business and then proceeded to implement the strategy.  He further confounded everyone by not picking Indian companies as his outsourcing partners, choosing instead IBM to run IT and Nokia and Ericsson to run the network, because he wanted highly experienced, international companies that could keep up with the torrid pace of Bharti’s growth. Today, Bharti is one of the top five companies in India, and Mittal’s vision for it is to be India’s most admired brand by 2010.   

Linus Torvalds

Linus Torvalds represents a totally different innovation leadership style.  At the BLF I introduced him by reminding the audience that a community of the best and brightest programmers around the world is developing Linux, and that in my opinion the Linux community works so well and has been so productive because of Linus' creativity certainly, but also his leadership qualities. 

Linus told the audience that he was primarily an engineer, not at all a visionary leader, and that he spent all his energies focusing on the problems right in front of him.  He talked about how Linux is organized and explained that it has no central authority at all - a phenomenon he attributed to his inability to be a great leader.  Instead, Linux has a distributed decision-making process in which different people decide which ideas they will accept from contributors all around the world.  He answered a question as to how the different people who make decisions in the Linux community are picked, and replied that it was all based on trust and connections.  There is a built-in mechanism that allows good people automatically to strengthen their own connections to everyone else through a combination of good technical and communication skills. 

Linus also explained why people would spend so much of their time on a volunteer project like Linux with no immediate financial gain.  As an engineer, he said, there is no better feeling than solving a problem that has bedeviled you for days.  Suddenly a light goes on, and you get the rush of having finally solved it.  In the end, he said, a lot of technical people find solving such technical problems very satisfying, and that is why they do it.

I stand by the words I used to introduce Linus Torvalds – he is indeed a very good and innovative leader, with his own unique style that has proved tremendously effective in leading one of the most powerful forces in IT today. 

Tom Friedman

Let me close with an observation made by Tom Friedman, best-selling author of ‘The World is Flat’.  He addressed the Rome Business Leadership Forum on tape and succinctly captured the necessity of everyone’s paying close attention to innovation.

'When the world is flat, whatever can be done will be done.  Pay attention to that.  Whatever the technology empowers and enables, whatever can be done will be done.

There's only one question left: will it be done by you or to you?  And that is really the challenge for every company.  You've got to understand and identify what the tools out there will enable you or your competitors to do, and you've got to do it before your competitors.

And that takes an innovative flare.'

So, what did I learn from the various talks and panels at the Business Leadership Forum.  One lesson is that no one approach to innovation and innovation leadership is best; rather, different approaches will work best in different situations and for different individuals. 

Another is that the era of competing to be the best is no longer enough; we are entering an era where we are competing to be unique.  And while in principle being the best is a zero sum game, different people and companies can each be unique in their own innovation style.   

"

(Via Irving Wladawsky-Berger.)

The World's Most Innovative Companies according to BUSINESS WEEK

READ this interesting article. There is a summary in Podcast format as well.

The World’s Most Innovative Companies: "To discover which companies innovate best — and why — BusinessWeek joined with The Boston Consulting Group to produce their second annual ranking of the 25 most innovative companies. More than 1,000 senior managers responded to the global survey, making it their deepest management survey to date on this critical issue. Today, innovation is about much more than new products. It is about reinventing business processes and building entirely new markets that meet untapped customer needs. Most important, as the Internet and globalization widen the pool of new ideas, it’s about selecting and executing the right ideas and bringing them to market in record time. The new ranking has companies evoking all types of innovation. There are technology innovators, such as BlackBerry maker and newcomer Research In Motion Ltd., which makes its debut on the list at No. 24. There are business model innovators, such as No. 11 Virgin Group Ltd., which applies its hip lifestyle brand to ho-hum operations such as airlines, financial services, and even health insurance. Process innovators are there, too: Rounding out the ranking is Southwest Airlines Co. at No. 25, a whiz at wielding operational improvements to outfly its competitors. At the top of the list are the masters of many genres of innovation. Take Apple Computer Inc., once again the creative king. To launch the iPod, says innovation consultant Larry Keeley of Doblin Inc., Apple used no fewer than seven types of innovation. They included networking (a novel agreement among music companies to sell their songs online), business model (songs sold for a buck each online), and branding (how cool are those white ear buds and wires?). Consumers love the ease and feel of the iPod, but it is the simplicity of the iTunes software platform that turned a great MP3 player into a revenue-gushing phenomenon. Charts: Laurel Daunis-Allen/BW The BusinessWeek-BCG survey is more than just a Who’s Who list of innovators. It also focuses on the major obstacles to innovation that executives face today. While 72% of the senior executives in the survey named innovation as one of their top three priorities, almost half said they were dissatisfied with the returns on their investments in that area."

(Via URENIO Portal: Innovation, Environments of Innovation, Intelligent Cities and Regions.)

Blue Ocean Strategy Drives LG Profits, Long-Term Strategic Direction

Blue Ocean Strategy Drives LG Profits, Long-Term Strategic Direction: "

In a recent Trade Arabia article president of LG's MEA operations, K. W. Kim, credited it's 8% increase in revenue in 2005 to it's implementation of Blue Ocean Strategy.

'[In 2006] We will be guided by LG’s global ‘Blue Ocean Strategy’, which aims to create genuine differentiation for the brand.’

Kim elaborated that LG ambitiously plans to double worldwide sales by 2010. In order to achieve that target LG's Blue Ocean strategy will focus on products offering maximum growth potential so that Blue Ocean products will generate around 30 per cent of sales and 50 per cent of profits by 2010.

Over the past few years LG has positioned itself as one of the top-selling manufacturers of consumer electronic products. It achieves its Blue Ocean Strategy via product innovations which are aimed at localized markets. A few of LG's top-selling innovations include the Qiblah phone, the world’s first mobile handset with Qiblah indicator which points in the direction of Mecca; the TV refrigerator; the Swarovski Crystal refrigerator; and the bag-less range of vacuum cleaners.

Is your company in the consumer electronics business? If so, share with us your BOS story.

"

(Via Creating Blue Oceans.)

Blue Ocean Strategy Makes Waves In The Baltics

Blue Ocean Strategy Makes Waves In The Baltics: "

Trumpeting the continued success around the world of the best selling book Blue Ocean Strategy, and it's recent translation into Lithuanian, top business executives gathered in Vilnius, Lithuania, for more insight on the theory as well as its practical application (see agenda).

During the whole-day event, featured speaker Gabor George Burt, Senior Strategist for the Blue Ocean Strategy Global Network and creatingblueoceans.com, was invited to give the keynote presentation before an audience of 200 top executives from the Baltic states. Additionally, Gabor conducted an interactive mini-workshop enabling program participants to get an immediate flavour for the practical application of Blue Ocean Strategy.

As the success of Blue Ocean Strategy continues, further speaking engagements across North America, Europe and Asia will follow. Blue Ocean Strategy is now available in nearly thirty languages, including Lithuanian, Finnish and Estonian . To share your event experience, or to request Gabor for your speaking engagement, get in touch with us at the email address above.

"

(Via Creating Blue Oceans.)

Correlations between design maturity, leadership maturity, and innovation

Correlations between design maturity, leadership maturity, and innovation: "

Jess McMullin's design maturity continuum, reminded me of 'The seven transformations of leadership', David Rooke and William Torbert's article about leadership maturity in the April 2005 Harvard Business Review.

Similarities appear between how thinking evolves as someone explores either design (systems communication) or management (systems organization). I prefer more maturity than less, but one level isn't necessarily better, just different.

Lately, I'm using the Management Innovation Group's innovation trailmarker as a kind of personal mandala, so, of course, as I finished the original diagram, I had to integrate their Products > Process > Culture mantra.

So here's a graphic representation of two things:

1. Correlations between design thinking maturity and leadership maturity.
2. A map of where innovation 'lives'?

(Available as farm fresh, 91kb, PDF)

How to read the madness

Horizontally, from right to left, I've mapped maturity on a linear scale from less mature on the right to more mature on the left. Because in the western world, the most important items go in the top left where you see them first.

Jess's design maturity continuum stretches across the top from Framing to No Conscious Design. The steps on the continuum describe how people think at each stage of their 'maturity'. Steve Jobs frames. My brother no-conscious-designs.

Rooke and Torbert's leadership maturity continuum stretches across the bottom from Alchemist to Opportunist. They call these Action Logics and refer to the logic one uses when choosing your actions. The leadership continuum describes how managers and executives think at each level of their leadership maturity. Steve Jobs is an Alchemist. My brother is an Opportunist.

The grey strip in the middle pretends to statistical mumbo-jumbo.

The green bar suggests the more mature your design or leadership thinking is, the more equity your thinking generates for your organization. I have no numbers, but this is truth:

The red bar likewise suggests the initial investment required to generate this equity becomes less the more mature your design or management thinking. Again, no numbers, but this is truth:

(As a side note, Ziya's latest signature posits that design does for a dime what anyone can do for a dollar.)

The bluish bar graphs real, actual numbers from Rooke and Torbert's article. Based on their surveys, they calculated percentages of the management and executive population that resided in each Action Logic group:

Vertically, I've tried lining up the various stages where they tend to match. The leadership maturity continuum has two more levels than the design maturity continuum, which is why Framing covers both Alchemist and Strategist. (The stages don't match up exactly, but in several places it's perfect.)

The grey swath at the top is the Management Innovation Group's innovation trailmarker (not referenced in the way they describe it on their website):

Understanding the Innovation Trailmarker

(This is my understanding of the trailmarker, based on no actual conversations with anyone from MIG.)

For the Management Innovation Group, the trailmarker maps how innovation can move from one Product, influence the Process of other organization members, and create a Culture of innovation. They illustrate this process using three concentric circles. The first circle, Product, is encased in the Process circle, which is in turn encompassed by the Culture circle.

It's easiest to think of the trailmarker as a pond. Pick up a pebble. This is your Product. Toss in the pebble and the impact ripples throughout the entire pond. In any Cultural pond, a good Product (which can be any product of an organization, whether this is a physical product or a service), will have more impact than a bad one. Other humans see your success and copy what you did.

They copy your Process. MIG contends good Products organically, from the bottom up, spread good Process until it permeates every level of an organization's Culture. One good, innovative product can transform the Culture of an entire organization into a culture of innovation. (Innovation is both the imperative and entirely relative.)

(Caveat: This all depends on how a given culture frames success. If you've framed other ethnic groups as bad, then killing scads of them is a success.)

What's hidden, however, is how the trailmarker actually details how to inject foreign culture to change, co-opt, and (optimistically) assimilate a host culture. Viruses, memes, blah, blah. MIG's design Culture frames their design Process which allows them to create certain kinds of Products.

Inside a different organization, their Product exemplifies a Process people in that organization can copy. The trailmarker illustrates how Culture is transferred from one body to another, and this body can be a multi-national, conglomerated enterprise, or it can be two people, so it's no surprise the Culture > Process > Product mantra mirrors the structure of mental models and the architecture of experience.

So, how does this relate to either the Design or Leadership maturity continuums? It shows where the various levels 'live'. Framers, Alchemists, and Strategists operate on Culture.

(Visit the MIG website for a description of the trailmarker, and Victor Lombardi explains how improvements in products, process, and culture can reinforce each other over time on his blog, Noise Between Stations.)

This isn't perfect

Jess's stages don't match exactly with Rooke and Torbert's stages, but what interested me is how they're close. Likewise, the innovation trailmarker doesn't match up exactly, but it's close. The closeness interests me. It details similarities that bridge previouly separated conversations, and the differences better illuminate the shape of each separate conversation.

"

(Via Thinking and Making.)

Can Your Business Communicate Under Water?

ANOTHER ARTICLE FROM THE BLUEOCEANSTRATEGY WEBLOG

Can Your Business Communicate Under Water?: "

A key utensil in the Blue Ocean Strategy toolset is the Six Path Framework, which allows for the exploration of business strategy from six distinct perspectives, leading to the discovery of blue ocean market space. One of the perspectives, ‘Strategic Groups’ tells us that in most industries, all the fundamental strategic differences among customers are captured by a small number of clusters called ‘strategic groups.’ Blue oceans can be created by challenging these delineations or by establishing new strategic groups. 

Consider the example of scuba diving. Scuba divers make use of hand signals to communicate basic information under water, such as ‘I am low on air’, ‘Stay together’, or ‘Look over there’. But the extent of underwater communication is greatly limited, which may deter more social, talkative adventure seekers from taking the plunge.

Suppose a dive shop wanted to reach out to the previously overlooked strategic group of customers: Chatty divers. They could attempt to accomplish this by significantly expanding the underwater hand signal repertoire with an array of new expressions such as ‘You look great in those flippers’, or ‘That grouper reminds me of my mother-in-law’, etc.

"

(Via Creating Blue Oceans.)

Regional Innovation on the Internet

Regional Innovation on the Internet: "

Regional innovation on the Internet is a district of websites dealing with this theme. The representation is based on the MapStan Search (http://search.mapstan.net/).

Regional innovation websites are organized around an axis linking: (1) the IRE network, (2) the VERITE network, (3) URENIO Research Unit, (4) the ERIK network, (5) the RINNO database, (6) Cordis on regional innovation policy, the US Council of Competitiveness, UNIDO and OECD activities. 

MapStan is a search engine and cartography discovery tool. It uses the ‘Web Positioning System’ technology to give a map of Internet search.

MapStan Search first runs a ‘standard’ search engine. By analyzing this result and the closest previous ones, it establishes your search map. MapStan Search stores the results of tens of thousands of searches to give you a visual representation based on the habits of Internet users.

The map design is based on a district map, made up of squares and streets. Squares represent sites and are linked by streets that indicate their similarity. When several sites are always linked in the same searches, they are grouped within a single square. In this way, you get a visual synthesis of the proximity between pages.

Streets represent the relationship between the sites that it joins. By moving over it, you identify the searches that explain the presence of that street.  The wider the street, the greater number of results that include the sites in the two squares. The shorter the street, the smaller the proportion of results that include sites in the first square but not sites in the second square, and vice versa.

Source: http://search.mapstan.net (search : regional innovation)

"

(Via URENIO Portal: Innovation, Environments of Innovation, Intelligent Cities and Regions.)

Managing Innovation: the Irwing Wladawski-Berger Perspective (IBM)

Irwing Wladawski-Berger ("Vice President of Technical Strategy and Innovation, I am responsible for identifying emerging technologies and marketplace developments that are critical to the future of the IT industry, and then organizing activities in and outside IBM in order to capitalize on them") has started a new Blog on Intellectual Property. Interesting stuff.

Managing Innovation: "

I recently read a provocative article, Money isn't Everything (free access, registration required), in Strategy + Business, a magazine published by Booz Allen Hamilton, the consulting firm.  The authors studied the top 1000 publicly held companies that spent the most in R&D in 2004 and concluded that 'There is no relationship between R&D spending and the primary measures of economic or corporate success, such as growth, enterprise profitability, and shareholder return.'  Instead, they suggest that 'Superior results, in most cases, seem to be a function of the quality of an organization’s innovation process — the bets it makes and how it pursues them — rather than the magnitude of its innovation spending.'    

The article goes on to explain the results of their study.  To summarize, in the authors' own words:

'The myth that higher R&D spend translates into competitive advantage has been around for decades, but it appears to be particularly strong now.  [. . .]  Perhaps this belief is a holdover from the past. When products were simpler, industrial processes less mature, and competition less fierce, companies could make new products and be reasonably certain that their customers would buy them. The R&D, manufacturing, marketing, and sales silos could do their jobs independently with little imperative to manage across departmental boundaries.'

'We no longer live in that world. Shorter product life cycles have led to an ever-faster flow of new offerings. Customer demands for special features have generated enormous complexity. In turn, these factors have increased the competitive value of a fast and effective innovation engine. Yet of all the core functions of most companies, innovation may be managed with the least consistency and discipline.'

For the major part of my career, I have been involved in technology transfer programs to get innovations from the labs to the marketplace.  Let me offer some observations based on my personal experience over the years.   

I totally agree with the authors that inventions, patents and R&D spending are not by themselves sufficient for a business or a nation to be an innovation leader and achieve competitive advantage in the marketplace.  They never have been.  Examples abound of companies that failed to commercialize the inventions produced in their labs, most notably Xerox PARC.  In the 1980s, IBM was often cited for the major inventions from our research labs that were first brought to market by competitors, who proceeded to build successful businesses around them -- such as RISC microprocessors, relational data bases and high-speed Internet routers.  In that same period, people kept wondering how the US could boast the world's best research universities and laboratories and receive the lion's share of Nobel Prizes, while Japan was reaping the economic benefits of all that US-sponsored research. 

But while not sufficient by themselves, inventions, patents and strong R&D support do provide, I believe, a necessary base for marketplace innovation and economic development. For example, there is considerable evidence that, at a national level, investment in R&D pays off. As is well known, the US government's investments in the Internet over the years since the 1960s started to pay economic dividends when the Internet became a commercial success in the 1990s (dotcom bubble notwithstanding), and will continue to do so for many years to come.  Recent studies on the subject, such as those from the National Academies and the National Innovation Initiative have strongly recommended that the US Federal government should increase its support of long-term basic research, to insure that there is a strong foundation for innovation well into the future. 

As we have learned over the years and as the Money isn't Everything study confirms, basic research is not enough and must be complemented by strong programs to advance education (especially for science and engineering careers) and to create an innovation infrastructure and climate that support commercializing the results of the research.  This kind of balance is very much the intent of the National Innovation Act of 2005, legislation recently introduced in the US Senate by Joe Lieberman of Connecticut and John Ensign of Nevada.

But even for individual companies, I can personally attest to the fact that a strong foundation in R&D -- including a deep roster of the technical talent involved in such work -- can not only help a company succeed in times of rapid technological change but, perhaps even more importantly, can enable it to survive. 

In the late 1970s, in IBM’s research labs, we started to investigate the future of large systems as part of a new thrust to establish technology transfer programs between our Research Division and our product units.   Years later, in the early 1990s, there was a major transition in the technologies and architecture of large systems, as CMOS microprocessors became powerful enough to use in mainframes and supercomputers at a much lower price than the previous bipolar technologies.  The transition almost killed IBM's mainframe business and IBM itself.  However, as a result of the R&D that had been going on in our labs, our technical community had anticipated this transition and had been designing and prototyping the architectures for future mainframes.  While the transition was still very painful, we survived it while many of our competitors have not survived similar technology transitions.  Not only do we still have a healthy mainframe business, but we have also emerged as the leaders in supercomputing.

What is clear is that the nature of innovation in the 21st century is changing.  Innovation needs to be much more open and collaborative, involving not only all the units in the organization, from sales to marketing to R&D, but the world at large.  No company, regardless of its success or wealth, can do the bulk of its own R&D and ignore the powerful forces at work out there in the larger community.    

Moreover, as technologies have become increasingly powerful, standardized and affordable, we are able to tackle new kinds of problems found outside the labs, in the 'real world,' in the marketplace.  Thus we are seeing innovation 'going up the stack', becoming much more market-facing and multi-disciplinary than in previous times, and increasingly focused on services, which abounds in opportunities for breakthrough ideas given the dominant role of services in the global economy.

The proper management of innovation in our times is one of the most important tasks facing every business.  As the Money isn’t Everything study properly concludes, 'There is no easy way to achieve sustained innovation success — you can’t spend your way to prosperity. If you’re a corporate leader, it’s time to roll up your sleeves, open the innovation black box, and start retooling the works. The future viability of your enterprise depends on it.'

"

(Via Irving Wladawsky-Berger.)

Does Six Sigma hold back innovation?

What do you think? Do you have any experiences in relation to this interesting discussion?

Does Six Sigma hold back innovation?: "

According to Mary Brenner, Management professor at the Wharton School (University of Pennsylvania), a total commitment to processes such as Six Sigma and quality management hinders the urge to innovate and explore new programs.

According to the paper titled 'TQM, ISO 9000, Six Sigma: Do Process Management Programmes Discourage Innovation?' it is important to apply processes scrupulously and with discrimination, and avoid the percolation of their application in one area into other areas. It is advisable to apply processes where they are needed, and avoid them in business arenas that require innovation. Domain-B.com reports:

Professor Benner urges organisations to become 'ambidextrous', managing process management and innovation simultaneously. Innovation can happen in both the research and development department, where companies generate new ideas or create new products, and in marketing, where companies search for new markets and new customers.

"

(Via Six Sigma Blog.)

Kodak innovates its way out of a strategic hole

Kodak innovates its way out of a strategic hole: "

The conventional wisdom is that Kodak might just become irrelevant if it fails to adapt to the rapid changes occurring in the digital photography market. Well, according to Jack Cheng in a blog post called A Place Called Kodak, we are now witnessing a revitalized Kodak with a lethal innovative first-strike capability:

'There’s been a lot of talk about Kodak’s rebranding in the past few months. The reaction to Kodak Gallery campaign has generally been positive, and recently, news about the company doing away with the yellow/red letter K box (which stayed consistent for 70 years and is THE icon for the era of 35mm film) and replacing it with a more modern (and debatably more generic) version made the rounds on the Web. I love the direction Kodak is taking... but not for the reasons above. It’s where the company is going with its products that makes me buy into the idea that they’re serious about innovation, design, and digital...'

Jack Cheng points to a USA Today article that describes Kodak's new embrace of design and innovation and, later in the blog post, describes a number of innovative product offerings from Kodak, such as the EasyShare One (the first consumer digital camera with built in Wi-Fi) and the EasyShare V570 Dual Lens camera. Kodak has also announced a deal with Skype to let people voice-chat with friends and family as they share the pics in their photo albums online through the Easy Share Gallery.

Kodak appears to have innovated its way out of a deep, dark strategic hole:

'The bottom line is that the company is building a new lineup of camera products that are like nothing else out there. Where everyone else is merely getting higher-resolution and more compact, Kodak is going beyond that- exploring blue oceans and coming up with new categories of products and services. How long it takes for the other manufacturers to start copying these things is anybody’s guess.'

Technorati tags: Kodak, innovation

"

(Via Business Innovation 2005.)

Ford Motor Company and Blue Ocean Strategy

Ford Motor Company and Blue Ocean Strategy: "

After watching a 10-year decline in its share of the U.S. auto market, Ford announces a dramatic restructuring project. Based on Blue Ocean Strategy, the goal of the secret Piquette Project is to stop Ford's sales decline and truly differentiate future Ford cars and trucks from a crowded field of fierce competitors.

Ford's announcement was the top business news story in the nation for January 23, 2006. In an excerpt from the Detroit Free Press, columnist Tom Walsh writes:

The Piquette Project now has a brainstorming room on the second floor of Ford world headquarters in Dearborn and an eclectic team of people that includes Camilo Pardo, designer of the Ford GT; renowned architect Bill McDonough, and retired Ford manufacturing executive Jay Richardson. Tim O'Brien, a Ford vice president who previously headed the company's real estate and environmental units, is the team leader.

Like Starbucks did by creating new spaces in coffee -- an example cited in 'Blue Ocean Strategy' -- Ford aims to create and dominate a new segment of transportation product.

What will it be?

Follow this link to read the entire Detroit Free Press article or download it in Word format here .

"

(Via Creating Blue Oceans.)

How Can French Fries Save The World And Lead Us To Blue Oceans?

How Can French Fries Save The World And Lead Us To Blue Oceans?: "

What would you say, if you were a leading fast-food company, at the prospect of having the combination of powerful sensory branding, a massive environmentally friendly image boost and the ability to turn waste into a complementary offering, all in one? Does this seem too good to be a viable blue ocean? Well, it may not be as far fetched as you may think.

Vegetable oil is a viable (though not yet practical) source of automobile fuel. A man named Joshua Tickell gained visibility for its use in 1997, when he drove his Veggie Van across the U.S. using leftover vegetable oil from Kentucky Fried Chicken and other fast food chains. Vegetable oil can be used in converted diesel engines.

In America alone, there are 18 billion liters (approx. 4.5 billion gallons) of waste vegetable oil generated every year by restaurants. So here is the opportunity: Instead of removing or recycling this waste, why not offer an eco-friendly fuel source via add-on gas stations at fast food outlets? The retail infrastructure is already in place, and this way motorists and cars can both tank up together. And here is the kicker: Exhaust from a car burning vegetable oil gives off a pleasant French fry smell! Thus the blue ocean scenario is complete.

"

(Via Creating Blue Oceans.)

Fortune Innovation 2005: Blue Ocean Strategy Podcast

Fortune Innovation 2005: Blue Ocean Strategy Podcast: "

In case you weren't able to attend the Fortune Innovation Forum 2005 you can now access a series of podcast interviews with various speakers from the Forum via the Business Innovation 2005 website. The highlight of these interviews is with W. Chan Kim, professor of strategy and management at INSEAD and author of Blue Ocean Strategy.

Site editor Dominic Basulto explains that during the course of the five-minute interview W. Chan Kim:

(1) Provides examples of companies leveraging blue ocean strategies, such as Cirque du Soleil and Southwest Airlines.

(2) Explains a four-step framework for moving from a 'red' ocean of cutthroat competition to a vast, untapped 'blue' ocean where the competition is irrelevant.

(3) Provides insights into how MBA-level strategy courses are taught at INSEAD, Harvard and Wharton.

Download the podcast here.

"

(Via Creating Blue Oceans.)

Creating Blue Oceans: How Simple Can You Get?

Creating Blue Oceans: How Simple Can You Get?: "

Ah simplicity, the spice of life.  But how so?  Simplicity is at the core of Blue Ocean Strategy.  First, in an increasingly complex and turbulent business environment Blue Ocean Strategy distills the strategic challenge into a handful of essential questions, followed by a series of simple, logical steps and a visual platform for expressing strategic intent.  Such simplicity of focus is often a breakthrough eye-opener for executives, who usually see a much more convoluted and blurry picture.

Second, daring to strip away non-essential features and making simplicity itself a primary component of your offering also leads you toward blue ocean market space.  The following article from the November issue of Fast Company entitled ‘The Beauty Of Simplicity’ illustrates this point through specific examples, most notably that of Google’s search engine and Apple’s iPod.

I'm snuggled under the covers with Jon Stewart and the remote. The 'Evolution/Schmevolution' skit is funny, but it's been a long day, and I'm fading fast. The promise of technology is that I'm one click away from slumberland. I hit the power button. The picture disappears, but the TV is still glowing a creepy blue that will haunt my dreams if I don't make it go away. I try the tv button. Nothing. The cable button. Nothing. What the %$*&?? I kick off the blankets and trudge over to turn off the miserable box at the source. I can't help but wonder, as I lie there, now wide awake, how it is that all the things that were supposed to make our lives so easy instead made them more complex. Why is so much technology still so hard?

It is innovation's biggest paradox: We demand more and more from the stuff in our lives--more features, more function, more power--and yet we also increasingly demand that it be easy to use. And, in an Escher-like twist, the technology that's simplest to use is also, often, the most difficult to create.

Continue reading 'The Beauty of Simplicity' here.

"

(Via Creating Blue Oceans.)

Chan Kim interview: Podcast #1

Chan Kim interview: Podcast #1: "

During the FORTUNE Innovation Forum, we had the unique opportunity to go backstage for live interviews with some of the speakers. In this five-minute podcast, W. Chan Kim, a professor of strategy and management at INSEAD and the author of Blue Ocean Strategy (#25 on Amazon's business bestseller list):

(1) Provides examples of companies leveraging blue ocean strategies, such as Cirque du Soleil and Southwest Airlines;

(2) Explains a four-step framework for moving from a 'red' ocean of cutthroat competition to a vast, untapped 'blue' ocean where the competition is irrelevant; and

(3) Provides insights into how MBA-level strategy courses are taught at INSEAD, Harvard and Wharton.

MP3 audio file available for download

EDITOR's NOTE: Check back later today for a downloadable version of the MP3 audio file. (We should have the problem solved by the afternoon - I've already played the MP3 file using RealPlayer on my PC. The total show time is 5:39)

"

(Via Business Innovation 2005.)

One Minute Summaries: 1970 - Up the Organization - Townsend

One Minute Summaries: 1970 - Up the Organization - Townsend: "

• How to stop the corporation from stifling people and strangling profits

• The list of 'no-no's' includes:

• Reserved parking spaces
• Special quality stationery for the chief executive
• Bells and buzzers
• Company shrinks
• Outside directorships and trusteeships
• The company plane

As you view these concepts, share your thoughts with Gabor George Burt, leading expert on Blue Ocean Strategy and Value Innovation, via the email address above. 

1. Which of the concepts do you see reflected in Blue Ocean Strategy, and in what way?
2. Which of the concepts have you applied in your company and with what results?
3. Submit your own One Minute Summary. Our list is by no means definitive.  What concepts do you NOT see on our Best Of list, which do you think deserve a place, and why?

"

(Via Creating Blue Oceans.)

Blue Ocean Strategy and Avant-Guide

Blue Ocean Strategy and Avant-Guide: "

Avant-Guide is a pioneering travel-lifestyle media company whose strategic development is being shaped by Blue Ocean Strategy, under the direct guidance of Gabor George Burt. The latest example of Avant-Guide’s trailblazing, lifestyle-driving products is the recently launched Avant-Guide Communiqué. The Communiqué  is a twice-monthly summary of avant news bits and insider intelligence delivered electronically to top tastemakers around the world. Click here to see a sample, or click here to subscribe.

"

(Via Creating Blue Oceans.)

Being Reasonable: The Blog > Prof. Chan Kim and LAPD Chief William Bratton on Making the Competition Irrelevant

THIS IS A FEED FROM FORTUNE'S ONGOING CONFERENCE ON INNOVATION (1 DEC 2005)

Being Reasonable: The Blog > Prof. Chan Kim and LAPD Chief William Bratton on Making the Competition Irrelevant: "         Wednesday, November 30, 2005 Prof. Chan Kim and LAPD Chief William Bratton on Making the Competition Irrelevant W. Chan Kim, co-author, Blue Ocean Strategy and William J. Bratton, Chief of Police, LAPD at the Fortune Innovation Forum Kim: Don’t think you know better than anyone because of your personal expertise. Made an assumption that, as a professor, I know better. Ever since I wrote the book, I got feedback from readers - they told me what they think is right or wrong. The correspondence gave me pieces of wisdom I had missed. Because I didn’t know better. Blue Ocean Strategy: Red Ocean about competing head-on, win/lose strategy. Blue Ocean about untouched, vast, swimming alone. Most companies practice Red Ocean strategy: beating the competition, exploiting existing demand. Blue Ocean Strategy creates uncontested market space, makes the competition irrelevant, creates and captures new demand. It’s about differentiation and low cost. It’s about value innovation. Cirq"

(Via .)

Business Innovation 2005: The Fortune Innovation Forum is cleared for take-off

Business Innovation 2005: The Fortune Innovation Forum is cleared for take-off: " « The future of the R&D tax credit | Main November 29, 2005 The Fortune Innovation Forum is cleared for take-off Currently, there's less than 24 hours to go before the kick-off of the Fortune Innovation Forum in New York. Should be an exciting event filled with a long lineup of A-list speakers - as well as a stellar list of equally-distinguished participants, some of whom have already contributed original content to this blog. Thanks to the blogosphere, I've already had a unique chance to interface with these individuals and to hear their ideas about innovation in Corporate America. Anyway, I'll be live-blogging the event from New York City's Time Warner Center over the next two days, so if you have photos, blog entries or commentaries that you'd like to send my way, please feel free to contact me during the event. There's already a team of veteran bloggers assembled, ready to post commentary about the event in real-time: as these blog postings enter the blogosphere, I'll try to"

(Via .)