Archive for October, 2009


Keep Intrinsic Incentives in Mind to Stimulate Creativity

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Thanks to Roni Horowitz in Israel for calling my attention to this excellent presentation from Daniel Pink, a leading career analyst who spoke at a TED Conference in 2009. He discusses research showing that traditional “if then” financial incentives are great for encouraging people to rapidly complete simple, straightforward tasks, but when it comes to creative problem solving and similar complex tasks, such incentives can actually decrease performance. For innovation, intrinsic rewards may be especially important. An environment where people feel that their work is relevant and makes a difference can do more to enhance innovation than financial perks. Watch the video and then consider exploring what kind of innovation culture you have. Do you really understand what motivates innovation in your environment?

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I just returned from an adventure in innovation and culture in one of the world’s most delightful and innovative nations, Singapore, where I spoke about innovation during Innovation and Enterprise Week 2009 sponsored by A*STAR, the government’s large program for the advancement of scientific technology and research. What remarkable vision is at play in this effort!

Singapore is an example of what can be achieved in a nation with a bold vision of economic progress and long-term growth. One consistently gets the impression that officials there, whether university leaders, team leaders, or high-ranking politicians, have a strong desire to advance the welfare of the nation and its people by giving people the resources and opportunities to work hard and succeed through innovation and entrepreneurial activity. There is a culture of cooperation and vision that seems to permeate the activities of leaders and influencers far more than you might see in other parts of the world. The nation is not without its problems, and no individual is without human flaws, but what I saw impressed and surprised me.

The nation decided years ago that it wanted to be a place for world-class research and development. They boldly recruited leading talent and ramped up education for its own citizens. They crafted beautiful complexes for interdisciplinary research to pursue targeted areas. This resulted in a large science park, and then the One North complex with Biopolis, a collection of large buildings for R&D in the life sciences, and Fusionopolis, a massive edifice intended to bring together numerous disciplines in other areas. They invested huge amounts of money to support R&D. While other companies and nations are cutting back, they are increasing their R&D spending from what was about 2.5% of the GDP recently to 3% in 2010. Many billions of dollars are being committed to achieve their vision.

One cannot explore Singapore without realizing that its leaders are serious about making Singapore an attractive place for business, for research, and for innovation. They understand the importance of location and co-location. They have worked hard to make Singapore a center for business for many multinational corporations. Currently over 7,000 MNCs have a presence in Singapore. They have worked to bring many disciplines together for targeted purposes by co-locating disciplines in research at One North, which is also near to the National University of Singapore, the Ministry of Education, and other key facilities, not to mention integrating industrial centers such as the Lilly Center for Drug Discovery on the Biopolis campus. Bringing people and institutions together physically creates opportunities for synergy and cross-fertilization that can’t be matched by remote online interactions.

The synergy between business and state-funded R&D is further strengthened by sending researchers into industry for internships or limited engagements to provide firsthand experience into the realities of a start-up or other business.

The planning behind A*STAR has resulted in many fruits. There have been nearly 30 spin-off companies from these recent efforts. A patent estate of over 3,000 applications and patents exists (this number from A*STAR apparently includes filings in multiple nations, so the number of patent families is considerably less, but still healthy). Significant growth in licensing revenues is coming through the efforts of Exploit Technologies, the licensing and commercialization arm of A*STAR. International recognition is being earned for the accomplishments of A*STAR.

How a small nation of four million people has transformed itself into a powerhouse of R&D and excellence in science and business shows what can be done with strong leadership and a commitment to the future. Of course, you can’t overlook one of their secret weapons that help attract and retain so much great talent: some of the best food in the world. Check out the food courts at Biopolis and across this island nation. This is a land that understands the importance of great food. After all, isn’t food ultimately the fuel behind human innovation?

Here is a gallery with a few photos I took while in Singapore. Click on a thumbnail to see more of the respective photo. The first photo shows the famous mascot of Singapore, the mythical Merlion. The building in the 2nd and 3rd photos is Fusionopolis, showing two different views (north and south sides). Then there are some downtown shots and a Buddha in Chinatown.


The Upcoming Innovation Crisis: Talent Management

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David Semb’s outstanding essay, “The Upcoming Crisis in Talent Management” for Chief Learning Officer magazine, points to a tsunami of trouble ahead for US corporations in terms of retaining the know-how and experience that makes business run. The demographics point to a huge loss of experience and knowledge in the next few years. While innovation is not his focus, the threats he describes may be especially severe for innovation talent, including R&D staff.

Consider these alarming statistics: 40 percent of the U.S. labor force is currently made up of baby boomers (born between 1946 and 1964)…. However, by 2010, there will be a 52 percent increase in workers in the 55-to-64 age bracket compared with 2005, and 40 percent of the U.S. workforce will be considering retirement…. The first wave of executive retirements will begin in the next four years….

While current leaders may work a few extra years before retirement due to the financial crisis, this will not significantly lessen the impact of the near-term surge in leadership vacancies at U.S. companies.

Retirees will take with them millions of years of on-the-job experience. Yet there are far too few emerging leaders to replace them.

The U.S. Bureau of Labor Statistics projects a shortfall of 10 million qualified employees beginning in 2010, with a gulf likely to increase in following years.

According to Deloitte Consulting LLP, by 2012, the U.S. labor force will be short 6 million college graduates to fill new jobs and to replace retired workers. By then, according to The Conference Board, workers from ages 35 to 44 — the subset of the workforce that fills the majority of senior management ranks — will decline by 19 percent.

Seventy-four percent of U.S. business executives surveyed agreed the U.S. will experience a shortage of skilled workers over the next decade, according to BusinessWeek Research Services for AARP.

David Semb is worried about the loss of executive leadership. I’m also worried about the loss of seasoned innovators and the experienced leaders and connectors who facilitate innovation. Much innovation is fueled by or enabled by experienced people with vast, healthy networks that can bring multiple disciplines together or can reach across a value chain or value network to get things done. Suddenly replace such people with brilliant, talented new hires out of college and the almost-invisible ecosystem that gave life to business growth and innovation can wither or even collapse. Likewise, if a majority of your experienced innovators who know how the company works and how to get things done are suddenly retiring, innovation can come to a standstill. Great care is needed to plan for and prepare for these transitions, to help transfer skill and knowledge effectively and to build new nodes in the ecosystem that can keep it healthy and self-sustaining. This does not happen by accident. This does not happen by laying off your older workers and hiring cheaper replacements.

Semb offers some advice for coping with the tsunami of change. Here are a couple of his suggestions:

  • Closely align talent management and succession planning with business strategy. Development must tie to strategy, yet a 2006 McKinsey & Co. study showed that more than half of their senior management interviewees felt that talent management strategies did not align with business strategies.
  • Train like the future depends on it. Invest in high-impact leadership and business skills training, including strategic thinking, financial acumen and leadership skills….
  • Become an employer of choice. Transform the organization into an employer of choice by establishing compensation plans, training programs, remote work arrangements and the scope of job responsibilities so that emerging talent is inspired and motivated.

Many large American companies are responding to the current economic downturn by laying off employees, slashing benefits, imposing hiring freezes, and taking other steps that will create lasting impressions on the rising generation of employees. The wiser companies are finding ways to continue hiring the best talent and look attractive as a potential employer, even though they may be forced to hire less than normal. The wiser companies are willing to take on pain for the next few years in order to rise triumphant for decades to come as they maintain the talent they will need for the future. The talent management crisis, both for business leadership and innovation, is one that cannot be neglected. Focusing on short term fixes now may cost you your future.

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Turn What You Know Upside Down: Innovation Tip

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A Building with a Ship for a Roof?  (Manti Temple in Manti, Utah)

A Building with a Ship for a Roof? (Manti Temple in Manti, Utah)

Today I heard a story about Norwegian carpenters who literally turned what they knew upside down to solve a difficult problem through innovation. This occurred in the nineteenth century in the wild Western frontier, where a team of Norwegian carpenters were helping to build a large and complex structure in Manti, Utah. These men were in charge of building the roof. They had built plenty of ships in Norway, but never a roof, and puzzled over what to do. Rather than become discouraged, they decided to draw upon what they knew of shipmaking to build a strong, robust structure like the hull of a ship – and then turn it upside down to make a roof.

In innovation, there are often complex problems to be solved and barriers to be overcome that seem beyond your experience and capabilities. Sometimes, the solution is to draw upon what you already know, but turn it upside down, applying it in a totally new way. The inventions and innovations that change the world often come from the intersections between disciplines, where solid knowledge in one area is applied creatively in a new area. So innovators, take what you know and be ready to turn it upside down or inside out.

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