Archive for management
Nussbaum on Design (BusinessWeek) has a though-provoking column that mentions several innovation principles from designer Diego Rodriquez. One of these is “Killing good ideas is a good idea.” That’s the kind of counter-intuitive blasphemy that merits reflection. Of course, developing good ideas is essential, but without the killing phase, good ideas can lead to “idea cancer.” Ideas from late-stage idea cancer strangle many organizations and many minds–when ideas grow without control, unregulated and unchecked by proper objectives and reality. Ideas can metastasize and choke the arteries of business, cloud the mind, and weaken all life support systems in the end, unless they are regulated and killed at the appropriate time. So many great failures begin with good ideas, and lots of them.
Innovation is often more about execution and planning than idea generation. A weak idea, implemented ITERATIVELY with the right talent, can be adjusted based on feedback from the system (e.g., the market) and become successful. Even mediocre ideas can beat good ideas if there are great skills, good leaders, and good execution. But add an occasional great idea to the mix and the success can be remarkable, if the dream isn’t cluttered with lots of distracting good ideas along the way.
Innovation requires discipline. One has to focus and learn iteratively in the process, and not let unrestrained good ideas shut down your innovation engines with “idea cancer.”
It’s that way in the business world. too. Companies can create tidy org charts and draft neat process maps to describe how they work, but the unseen reality outside the visible systems may be what really dominates operations. Increasingly, experts in knowledge management are learning that easily overlooked and often invisible intangibles can dominate corporate value and performance. Numerous intangible transactions may be essential to the success of a company, including casual information sharing between trusted friends, helpful exchanges of tips and best practices between employees or between external partners and internal employees, or loyalty that is gained when people are included in decision making. The invisible linkages and hard-to-observe exchanges in a company’s internal an external ecosystems may be the real engines of value creation, regardless of what is on a process map or workstream. By not understanding the value of such intangibles, corporations can easily break key linkages and crush subtle engines of value creation.
Many companies focus on their “value chains” – a term popularized by Michael Porter in his seminal 1985 work, Competitive Advantage. The value chain describes the linear chain of events as materials and products move from sourcing through manufacturing and out to the market. It is a highly useful paradigm for manufacturing and was highly applicable to much of the economy in the era when Porter was doing his research. But since that time, the explosion of the knowledge economy has changed the way we work and create value. One of my favorite authors, Verna Allee, a revolutionary expert in knowledge management, has detailed the move from the value chain to modern ecosystems and Value Networks in her book, The Future of Knowledge: Increasing Prosperity through Value Networks (Burlington, MA: Elsevier Science, 2003). Verna Allee and Associates have introduced a clever, methodical tool called Value Network Analysis for analyzing and visualizing the transactions of intangibles and tangibles that affect a business.
After my training in Value Network Analysis by Verna and her associate, Oliver Schwabe, an exciting new perspective on business and human behavior opened up. I have been highly impressed with the power of Value Network Analysis and the insights that it can rapidly deliver for a company. The Value Network Analysis work that Innovationedge has done as part of larger projects for some of our clients has been a very exciting part of my work since joining Cheryl Perkins’ exciting company. We value the tool enough that we had Verna Allee speak at the 2008 CoDev conference to introduce other business leaders to the basic concepts behind Value Network Analysis. I’m very pleased to see a community emerging of people using Value Network Analysis and developing exciting tools for it.
Here are some resources that you may find helpful in further exploring this area:
- Hosted Value Network Tools
- A Value Network Approach (PDF) – 2002 Whitepaper by Verna Allee
- ValueNet Works™ Analysis for Boeing (PDF)
Part of the initial output in Value Network Analysis are maps, called “holomaps,” showing human entities as nodes and transactions of tangible or intangible items between them. There is much that can be learned from such holomaps – a topic for later discussion. For now I’ll show you two sample holomaps I created to illustrate simple ecosystems. One shows several external nodes around a manufacturer and the other shows some structure within part of a corporation. For simplicity, the maps lack all the labels explaining the transactions.
One interesting approach is to use the “holomaps” you get in Value Network Analysis as tools for “what if” scenarios to explore what new partners might do for your business model, or what new business models might do for your ecosystem. Using holomaps to explore innovation ecosystems is a particularly fruitful approach for those doing open innovation and wondering who should be in their external ecosystem.
We have further information on this topic that we’d be happy to share with you. It’s certainly something you should look at to understand how business really works.
Last year I discussed the bold technology transfer and commercialization work of Exploit Technologies in Singapore under the leadership of Executive Director Boon Swan Foo. Their goal is an important one for the economy of Singapore. They are working with a booming portfolio of patents from the intense research being funded by the government of Singapore, seeking to license the patents and promote full commercialization. Mr. Boon has recently retired, turning the keys over to the new CEO, Mr. Philip Lim. I had the privilege of meeting Philip when I was at Singapore last year to speak at Innovation and Enterprise Week 2009, a remarkable event held at Biopolis. Philip Lim shares some of his thoughts in Part 1 and Part 2 of a blog post at Exploit Technologies. I’d like to share and comment upon a few of his thoughts from Part 2, as reported by Alfred Siew:
What are the biggest technologies to focus on?
With some 800 to 1,000 patents within A*Star to tap on, new Exploit Technologies CEO Philip Lim would be hard-pressed to name a few.
Still, gamely, he does point out a couple, during an interview.
One area is nano-imprinting lithography (NIL), a manufacturing process that is set to bring many benefits to making electronics that control, say, the liquid from an inkjet printer, or even for biomolecular sorting devices in the emerging bio-sciences equipment market.
Another area is ultrawideband (UWB) technology, a radio technology that promises to transfer audio and video over the air with speeds that are more common on wired connections.
With it, hi-fi equipment would one day do away with messy cables used to connect them together.
Taking over from long-time A*Star stalwart Boon Swan Foo, Philip says his main task is to group together complimentary expertise in the hottest fields, so as to come up with more products that can go to market fast.
He also intends to incentivise people to play as a team. By combining knowledge of market requirements, as well as the expertise that A*Star has, Exploit can help map out emerging and potentially viable areas which Singapore can focus on, he says.
For example, with UWB, the expertise of two A*Star institutes – the Institute for Infocomm Research (I²R) for its UWB design, and the Institute of Microelectronics (IME) for its expertise in manufacturing electronics – can easily be combined.
He notes: “One has the hardware (IME), the other has the software (I²R); put them together and you got UWB!”
“We want to be more outcome-focused and customer-focused in the way we do things,” he says, referring to a more streamlined approach to getting technologies out from the lab bench to retail shelves.
But he is not a number-cruncher, he explains. “We see ourselves as facilitators… KPIs, while tangible, have their limits.”
The dollar value of licenses made possible with Exploit, he notes, does not count the multiplier effect of the entire value chain of a technology. For example, technology behind a simple, low-cost keypad can be used in a much more expensive handphone, and has more value than its mere licensing fee.
“If we can generate ‘economic outcomes’, like sustainable innovation and more jobs for Singapore, then we’ve done our jobs,” says Philip, of Exploit.
He adds: “If we do more here, companies will like being based here. Instead of moving to cheaper manufacturing bases, they will want to stay in Singapore to keep in touch with the latest technologies.”
“For $1 in licensing, we may be creating thousands of dollars in economic value if jobs are kept here.”
Economic outcomes are what it’s all about. Philip wisely recognizes that successful tech transfer of government-funded R&D can result in long-term economic value for Singapore. They are focused on a long-term plan that will bring more companies and more jobs to Singapore to take advantage of the talent, the technology, and the culture of success that is being crafted.
One of the challenges for commercialization success in the Singaporean model will be continually crafting a portfolio of not just patents, but know-how and other intellectual assets that create synergy with the marketing story that fits the technology and business opportunities being developed. The marketing perspective needs to be brought into the technology plans and the IP strategy to create portfolios that encompass winning business models and can quickly give a partner a competitive advantage. The world beyond 2010 increasingly will rely on ecosystems of partnerships for success, united by the energy of clever business models in which marketing savvy and IP prowess go hand-in-hand. A*STAR and Exploit Technologies have the vision, and they are continuing to build the discipline and partnerships to make it happen. I look forward to watching this story unfold in the coming years.
Congratulations to Philip Lim and Exploit Technologies, and best wishes in your path forward to innovation success!
Recently I spoke to a group of engineers, scientists and managers about the challenges of innovation fatigue within corporate R&D. I condensed that presentation down to just 14 minutes and have made it available using Pixetell.com, a nice system for recording a presentation.A short URL for the presentation is http://tinyurl.com/jlpres1.
Engineers and scientists are often puzzled by the decision-making processes in corporations, and sometimes get frustrated over the apparent blindness of others to see the potential of an invention or new product or process. Others, however, may see the opportunity through the “Lens of Risk” and find compelling reasons to be concerned. Understanding those other perspectives is one of the topics of this presentation.
Those managing R&D also need to understand the personal aspects of innovation and appreciate the tenuous “will to share” that keeps employees tied to the objectives of the corporation. When the will to share is broken, innovation can dry up quickly and silently, in spite of large budgets and enthusiastic efforts.
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.
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.
In dealing with many innovators and companies in our work at Innovationedge, we sometimes hear complaints about leaders who seem to be anti-innovation. You know, the kind who supposedly “wouldn’t touch innovation with a 10-foot pole.” Sometimes these leaders aren’t really anti-innovation, but anti-waste and especially pro-results. That’s not a bad thing!
Maybe their past experience with innovation showed little return and little direction. Maybe they were once talked into supporting misguided innovation adventures without the right strategy, controls and metrics. Maybe innovation waste came out of their pocket. These leaders sometimes can be reached and shown a better way such as the “Horn of Innovation” paradigm described in Conquering Innovation Fatigue for more productive, targeted innovation.
Once they understand what innovation can do when guided by the right strategy once they see what metrics make sense to gauge progress, they can become more comfortable with meaningful, targeted innovation. In fact, they can become some of the best champions of real innovation. Don’t give up on them. Reach out with our “ten-foot pole of innovation” and help them become converts to innovation that matters.
From YouTube.com/magicinnovation (Jeff Lindsay’s Magic Innovation channel): “Reaching Executives Who Wouldn’t Touch Innovation with a Ten-Foot Pole.” Recorded in Appleton, Wisconsin. All rights reserved.
This is video #5 in my series of “magic innovation” video lectures. OK, they’re a bit lame, and it’s not secret that I’m an amateur, but I hope you’ll learn something useful from some of them. Or have a bit of fun. And don’t forget, of course, to buy the book.
A 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.