Archive for voice of the innovator
The Quest for Profit: The Mother of Invention, or Its Kidnapper?
Posted by: | CommentsAs we discuss in Conquering Innovation Fatigue, the profit motive can be important for inventors but is often not the real incentive behind the quest to invent. Steps that eliminate the opportunity to profit from invention, though, can be serious barriers to a nation’s innovation potential. The profit motive can be important for prospective innovators. However, a focus on profits can be utterly destructive to innovation within a corporation, where the incentives to those who lead other would-be innovators can create new barriers that kill the innovation future of the company. Ironically, what can be a helpful incentive for innovation to an individual can easily become a disincentive once distorted by the internal workings of a corporation. This is illustrated in recent analysis from Clayton Christensen. See an overview in the article “Clayton Christensen: How Pursuit of Profits Kills Innovation and the U.S. Economy” at Forbes.com. Christensen argues that ratio-based metrics for profitability distort corporate thinking and reward behavior that ultimately destroys the future of the corporation by creating short-term benefits in apparent profitability. We illustrate a related problem in the book with the Apple Tree Analogy, in which metrics for short-term profitability for an apple harvester get a dramatic boost when the apple trees are toppled, making it much faster to harvest the fruit. The future, though, becomes barren.
Corporations need to carefully consider the metrics they use for profitability, as Christensen teaches, and unlearn some of the sacred concepts they were given in business schools. They should also go one step further an consider the impact of their metrics on not just the long-term growth of the company as a whole, but also the individual innovator and the innovation culture within the company. Listening to the voice of the innovator inside the corporation should be an important exercise for its top leaders.
The Tsunami of External Fatigue
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Innovators and business leaders doing their best to achieve commercial success need to understand the set of innovation fatigue factors that they face. These include personal factors due to the bad behavior of individuals; corporate or organizational fatigue factors reflecting inadequate systems, culture, or flawed judgment; and external fatigue factors due to the burdens of legislation, taxation, and challenges in the patent system, for example. The first two categories are factors where innovators and corporate leaders are in charge. The external category is the most difficult one because the challenges come from outside our sphere of influence, where the best efforts on our part can still face seemingly insurmountable challenges beyond our control.
One of the effects of uncertainty regarding the regulatory climate that business faces is a dangerous reduction in venture capital that is often needed for start-ups to succeed. Consider this ominous news story from Yahoo! about the drop in venture capital funding recently:
Venture capitalists poured less money into U.S. startups in the third quarter and split this among more companies, signaling that investors are trying to be more economical with their funds.
According to a study set to be released Friday, startup investments declined 7 percent to $4.8 billion in the July-September period, compared with $5.2 billion invested during the same three-month period in 2009. A total of 780 startups received funding during the quarter — 9 percent more than the 716 companies that took slices of the investment pie last year.
The study, which was conducted by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters, said that much of the decline stemmed from a drop in large investments in clean technology. Funding in clean-tech startups, which include alternative energy, recycling, conservation and power supply companies, has been mercurial lately. It fell every quarter last year compared with the previous year, but has been climbing this year — until the third quarter.
This is a genuine red flag, consistent with many red flags that we are seeing. The co-founder of Home Depot, for example, recently criticized the federal government in an open letter to President Obama in the Wall Street Journal (Oct. 15, 2010), explaining that Home Depot, founded during a past recession and now providing over 300,000 jobs to Americans, could never have been successfully founded in today’s climate where government, in his opinion, seems set on vilifying and punishing business rather than helping it to succeed.
We opened the front door in 1979, also a time of severe economic slowdown. Yet today, Home Depot is staffed by more than 325,000 dedicated, well-trained, and highly motivated people offering outstanding service and knowledge to millions of consumers.
If we tried to start Home Depot today, under the kind of onerous regulatory controls that you have advocated, it’s a stone cold certainty that our business would never get off the ground, much less thrive. Rules against providing stock options would have prevented us from incentivizing worthy employees in the start-up phase—never mind the incredibly high cost of regulatory compliance overall and mandatory health insurance. Still worse are the ever-rapacious trial lawyers.
Meantime, you seem obsessed with repealing tax cuts for “millionaires and billionaires.” . . . The wealth that was created by my investments wasn’t put into a giant swimming pool as so many elected demagogues seem to imagine. Instead it benefitted our employees, their families and our community at large.
Business leaders and innovators face many new burdens and uncertainties that can crush delicate start-ups and even thriving businesses. Increasing the burdens right now, whether through more regulations, higher taxes, or other measures with unintended anti-business consequences, seems likely to only increase innovation fatigue at this critical time in our nation’s history. I urge our leaders to carefully consider how small companies and start-ups are being affected, and how venture capital will be affected, by the changes that are being proposed and by the actions they’ve already taken.
It’s time for government to listen to the voice of the innovator.
In May 2010 I was invited to speak at a conference of WTA (the Wisconsin Telecommunications Association) about innovation lessons for the telecommunications industry from our recently published book, Conquering Innovation Fatigue (John Wiley & Sons, 2009). Here is a condensed version of the presentation. I’ll do another Pixetell soon with some additional content.
Can’t help mentioning this: I had a technical problem with the above Pixetell and sent an email to their tech support team. I had a response within minutes. In fact, I had a phone call – the kind that takes real people using real time – and the quickly helped me troubleshoot the problem and get this post working. Wow! Miracles still happen–or at least great customer service. Love Pixetell. Great way to turn PowerPoints or whatever you have on a computer plus your voice into a recorded presentation that you can share with a URL, embed into a blog, or save as a movie. Pixetell is a product of Ontier, Inc.
In late 2009, I was invited to speak at Singapore’s Innovation and Enterprise Week 2009, an event held at Biopolis and sponsored by A*STAR, the world-class research organization of the Singaporean government, in collaboration with Exploit Technologies, the tech transfer arm of A*STAR. While I enjoyed the opportunity to discuss our book, the important thing to me was the opportunity to learn more about that amazing country and their bold approach to promoting innovation and technology. In my presentation for the large crowd at Innovation and Enterprise Week, I discussed the fascinating parallels between the Singapore experiment and the evolving experiment in innovation in my state of Wisconsin, where the Wisconsin Institutes for Discovery represent a brilliant approach to combining the best of public and private innovation.
Below are three video segments from my presentation. A couple of friends in Singapore took the video. There are a few gaps in sound and so forth, but I hope you can understand it. Don’t miss my lame magic trick in segment 3. They seemed to like it–proof again of the great courtesy that one finds in Singapore. In all seriousness, I think there are important lessons about innovation that can be gleaned by inspecting both the Singaporean system and the Wisconsin Institutes for Discovery, which include the Morgridge Institute for private sector research and the public Wisconsin Institute for Discovery. Madison and Singapore are on opposite sides of the world, but on the same side of the innovation spectrum, at the leading edge.
Update: On April 24, I posted a newly recorded and shortened Pixetell presentation covering the basic information I shared in Singapore, without the magic or other excursions.
I am deeply grateful to the many people who kindly shared their time to help me prepare for the presentation, including Sangtae Kim, John Wiley, Charles Hoslett, Carl Gulbrandsen and Janet Kelly from the Wisconsin side (Wisconsin Institutes for Discovery and WARF), plus Boon Swan Foo, Seito Wei Peng, and Sze Tiam Lin at Exploit Technologies in Singapore.
Part 1:
Part 2:
Part 3:
The Forest Bioproducts and Paper Industries: The Need to Conquer Innovation Fatigue
Posted by: | CommentsThe North American paper industry suffers from a largely undeserved image problem. Many view it as an antiquated smokestack industry, when it has been a leader in exciting areas in technology and business practice. Fans of biofuels and green energy, for example, should know about the pioneeing efforts from the forest bioproducts industries, including many paper companies. “Green energy” from forest biomass has been the basis for economic success in pulp production for decades. A kraft mill burning black liquor is a stellar example of recovering useful energy from the byproducts of a renewable resource, coupled with smart recycling and regeneration of chemicals.
The industry has also been an important part of advances in practical aspects of RFID technology, in supply chain management, in green labeling and packaging, and in many other area. In nanotechnology, papermakers have actually been dealing with nanoparticles and complex colloids for decades, producing increasingly useful and practical products built with nanotechnology employed at a massive scale. In plant genetics, crop management, and stewardship over bio-resources, the forest products industry have demonstrated world-class capabilities and results. Industry stewardship has led to more trees and forest lands in the United States than we had a century ago. Advances in plant management have led to almost miraculous results such as the ability of carefully managed plantations of eucalyptus trees in Brazil to yield trees that can be harvested after just five years – and perhaps even less in the near future.
But with the proud history of innovation and leadership that I see in the forest products industry, it pains me to see how little recognition it received, and how little sense of that tradition seems to be alive in the industry today. On too many counts, the industry appears to be seized with innovation fatigue.
In the new book from John Wiley and Sons, Conquering Innovation Fatigue by Jeff Lindsay, Cheryl Perkins, and Mukund Karanjikar, we identify sources of innovation fatigue factors in three primary areas: the behavior of individuals including innovators themselves and the people around them (“people fatigue”), organizational-level flaws such as flaws in vision and decision making (“organizational fatigue”), and external factors such as challenges in IP law, burdensome regulations, tax policies, and trade policies. It is easy to point fingers at management and criticize their lack of courage or willingness to invest, but we must recognize that the forest products industry have faced unusually painful burdens due to external factors which have only strengthened systematic incentives to cut back on innovation and focus on cost-cutting.
There is a need for policy makers to consider the “voice of the innovator” and the unintended harmful impact that some laws and policies can have on long-term innovation. Policies are needed that put manufacturing industry on a more equal footing relative to global competitors who are generally free of the numerous burdens North American industry faces. Policies are needed that reduce the many disincentives corporations may face to be innovative and more visionary here on North American soil.
Meanwhile, there are other things that North American industry can do. Innovation, whether in business models, products, or processes, must be viewed not as an expense to avoid, but as a necessity to survive. The key may not be to conduct detailed research related to the commodities now being produced, but to boldly explore adjacencies and new product spaces as MeadWestvaco did. We see some of this in the biofuels area, such as creative approaches to integrated biorefineries using technologies suited for local biomass and other local resources and markets. We see this in many of the packaging innovations created by innovators in paper-related companies. We see this in the example of companies like Kimberly-Clark that transformed themselves from commodity makers to producers of world-class high-value consumer products rich with innovation and intellectual property.
The most exciting innovations of the future will come at the intersection of disciplines. Building the right relationships and networks across companies, innovators, and institutions will be needed to be aware of the possibilities and to seize them. The technologies we are using today and the know-how we have developed in the forest products industries may be the foundation for rich innovations in nanotechnology, health care, electronics, and various emerging fields, if only we have the courage to explore wisely, with talented minds empowered and motivated to find the paths forward, unhindered by the chains of innovation fatigue.
This post is related to a longer article written for Tappi360 magazine, Dec. 2009.
Death Panels for Innovation: How Are Your Corporate IP Review Boards Doing?
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Is Your Company on the Cutting Edge of Innovation? Your IP Review Board May Be.
Death panels have been a hot topic for speculation from some folks worried about health care reform, but in the world of innovation, genuine death panels have long been in place in corporations. Innovation death panels, disguised as intellectual property review committees or IP review boards, have been sending great inventions and great business concepts to an early death for decades. Further, the ways these panels operate can kill innovation at a broader level by discouraging inventors, keeping them out of the loop, and ensuring that whatever is left of their drive is unlikely to bear fruit.
Rationing has to be a reality when it comes to IP because only a small fraction of potentially valuable concepts justify the expense of filing a patent. But failure to pursue a patent need not be an innovation killing event. It can, in fact, be a valuable opportunity. When operated properly, the IP review board can provide a tremendous opportunity to educate, motivate, guide, and inspire corporate inventors, even when the current invention they have brought forward is not right for patenting.
One key is treating the inventors with respect and giving them a chance to be heard, as well as a chance to hear and learn from the review board. Many inventions are not properly understood before a decision is made, and inventors facing that can become cynical. Many inventors in corporations also don’t fully grasp how decisions are made and what the review board is looking for. Use the review process as a way to help the inventor understand the process and the criteria for decision making. ideally, you have a written strategy statement that provides guidelines and specifies where innovation is needed, helping the inventors know what to invent. You can also use the review board experience to recognize the contributions of inventors, treat them with respect, and help them feel motivated and connected, even if their first few tries don’t go anywhere.
The culture engendered by your IP review board or committee can be a matter of life or death for innovation in your company. Don’t let it become a death panel. Watch the process through the eyes of the inventors–listen to the voice of the innovator–and make sure you have a healthy and wholesome system that strengthens innovation, not decapitates it.
In Conquering Innovation Fatigue, we discuss the importance of understanding innovation from the perspective of innovators, and make recommendations for managing and motivating prospective innovators in the corporation, including suggestions for running IP review boards and guidelines on building trust, aligning innovation efforts with corporate needs, and creating cultures of innovation. Sections on corporate innovation are written for both employees seeking to develop innovations and for leaders seeking to encourage it. You must understand and conquer or work around the many innovation fatigue factors that impede innovation in so many corporations.
Global Entrepreneurship Week Starts Today
Posted by: | CommentsGlobal Entrepreneurship Week starts today. This event was started by the Kauffman Foundation, leading champions of entrepreneurship and education, and Make Your Mark, a British group reaching out to young people to inspire innovation. The goal of this global initiative to inspire young people to embrace innovation, imagination and creativity. They want millions to join a growing movement of entrepreneurial people, to generate new ideas and to seek better ways of doing things. Events are taking place around the world this week.
During my recent visits to Singapore and Mexico, I’ve been inspired by the culture of innovation that I’ve encountered. Singapore excels in advanced technology and a powerful approaches to advancing and funding R&D that will create leadership in targeted areas such as biotech and data mining. Mexico has an amazing university system with some wonderful centers for R&D, but what impressed me most is the culture of innovation at the personal level, where individuals are ready to go the extra mile to create success and find better ways of doing things. If this mindset can be fortified and amplified with governmental support and vision, Mexico could become a real leader in global innovation. Innovation can come from anywhere across the globe, but each nation has its own limitations and challenges in terms of regulations, taxation, educational support, infrastructure, capital, markets, and talent. Each nation should have a high-level commission exploring the challenges of innovation at the personal level (one of the key issues we explore in Conquering Innovation Fatigue) to ensure that the voice of the innovator is heard and unintended consequences of government policy are not choking innovation success.
Avoid the Corporate Chilling Effect on Innovation
Posted by: | CommentsA heavy-handed or micromanaging approach to handling a community of innovators in a corporation often has an unintended chilling effect that can put the freeze on innovation. Avoid this innovation fatigue factor by respecting your innovators, listening to them, and giving them the freedom to apply their talents within the constraints required for the project.
As we emphasize in our book, innovation takes place in the minds of individuals. Bonds of trust and mutual respect are essential to maintain the tenuous “will to share” that leads members of your innovation community to share their best thinking and their creative energy for the good of the corporation. Treating them with disrespect, as mere handymen or even children, in some cases, or imposing capricious or unfair changes upon them, or attempting to micromanage them, can break those bonds and leave them unengaged. If you don’t have their hearts, you don’t have their minds.
To increase your success with your innovation community, it’s time for you to tune in to the “Voice of the Innovator” and understand their issues, their thinking, and their needs. Success often begins with listening and healthy two-way communication. But just reaching in to stir things up and squeeze them with high-pressure tactics might create an ice-block in your innovation pipeline.
From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “Avoid the Corporate Chilling Effect on Innovation,” August 17, 2009. Recorded in Appleton, Wisconsin. All rights reserved.
In this 4-minute video clip, I illustrate some of the principles from our book, Conquering Innovation Fatigue, using one of my favorite magic tricks, a version of the cut and restored paper trick. It speaks to the need for the innovation community in a corporation and other elements to be aligned with the true objectives and goals of the corporation. I performed this effect for the audience of the CoDev conference on open innovation in 2009, where I came up with this line: “If you’re not aligned, you’re skewed.” See if it fits.
From YouTube.com/magicinnovation (the Magic Innovation channel): “Analogy of the Cut and Restored Paper Strip: Alignment and Connectivity for Innovation Success,” August 13, 2009. Recorded in Appleton, Wisconsin. All rights reserved.