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February 24, 2007

New design competition called Premio Vico Magistretti

vico-magistretti

Designboom is announcing a new international design competition called Premio Vico Magistretti in collaboration with the Italian furniture producer DePadova.

On April 1st Designboom opens the call for entries for Premio Vico Magistretti to commemorate the Italian architect and designer and contribute to the spread of his design philosophy.

Thanks to Dezain.net.

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User-centered design and vision-driven design

In a UXMAtters article called “Designing Breakthrough Products: Going Where No User Has Gone Before“, George Olsen explains how user-centered design (UCD) is of interest to new-product projects but often failed when designing breakthrough products. Some excerpts about this topic I found relevant:

When it comes to matters of aesthetics and fashion, UCD techniques offer little assistance. They can’t tell you how people will respond to products they’ve never seen before, products people have difficulty imagining [examples quoted: the internet, many examples of Web sites] (…) These were cases where the power of the designers’ vision created the demand, showing vision-driven design is sometimes the right approach. In such cases, the role of UCD is to help better the odds that a particular idea will resonate with a product’s target market and screen out those ideas that won’t.
(…)
UCD techniques have focused more on how to approach projects for which the problem space is fairly well understood—both by UX designers and by users. UCD techniques are best at helping us determine how to solve such problems—which is not to downplay the challenges of those sorts of projects. However, the situation is different for breakthrough products, where potential users often have difficulty imagining a solution to a problem. UCD techniques have some role to play, but often these sorts of projects require UX designers to make decisions more on the basis of their conceptual modeling skills and design experience than on direct user feedback.

And the continues by giving some meaningful advices to use UCD:

Show users something that’s technologically cool, and they’re likely to say they’d use it, even if they really wouldn’t. So, rather than asking users whether they’d use a product, it’s far better to ask them how they’d use it in their everyday lives. (…) When users can’t provide what seem to be realistic answers when asked how they might use a product, that’s a serious red flag. (…) During usability tests, it’s useful to ask people to describe your product “as if they were telling a friend about it”—not only to see whether they understand the product concept, but also to learn about bridging concepts that you can use to get people interested in using the product, even if they don’t fully grasp its potential.
(…)
as you’re gathering user feedback about a digital product, be sensitive to ways in which people might misunderstand or “misuse” what you’re building (…) While user-centered design normally warns us
against designing for early adopters and power users, these are exactly the people whose needs you want to meet when developing a breakthrough product

Why do I blog this? because it gives some pertinent ideas that I could use in various projects regarding projects I have. Besides, the debate between UCD and vision-driven design is a recurrent discussion I have with colleagues, and I am trying to figure out where should I use UCD and when not…

Futurists and the word “yet”

In the last issue of Strategy Business, there is a long in-depth interview of Alvin Toffler about his the book he wrote with his wife “Revolutionary Wealth”. While the whole interview is a must-read for people interested in foresight, innovation, prosumer revolution and stuff like that, I was bemused by this excerpt:

S+B: When I looked at Future Shock recently, I was surprised at your stridence. You wrote of the acceleration of the pace of change as an illness, “a cancer in history.” With 35 years of hindsight, would you still describe our situation that way?

TOFFLER: Well, I might tone down some of the language. I was 35 years younger. But I think the basic argument of the book stands. We’re always asked what we got wrong, and we did get a few things wrong. That’s inevitable when you’re looking 30 or so years ahead. The hardest thing to forecast is timing — when certain events would happen. We said, back then in 1970, that humanity would clone animals, and that has happened; we said that we would also clone humans, and I still think that’s likely. But we were wrong in the timing. We said that these would happen by 1985. We didn’t make that date up. We got it from one of the world’s leading Nobel Prize–winning biologists, who happened to be rather more optimistic than he should have been.

There’s another passage in the book where we talk about throwaway products, that someday we may be wearing paper clothing. And we aren’t. Yet.

I always get a laugh from an audience when I say, of course, we futurists have a magic button; we follow every statement about a failed forecast with “yet.”

Why do I blog this? the power of words always strikes me.

The billboard that knows who you are

Mini%20Cooper%20Billboard.jpg

Is it just me, or is marketing getting a bit too personal these days? As the New York Times points out, marketers are now delivering custom messages to consumers via digital billboards that are controlled by RFID technology:

"Each day, it seems, marketers go further in their quest to deliver messages so engaging and personalized that one cannot help feeling special. The latest step will be seen today in four cities when Mini USA begins delivering custom messages to Mini Cooper owners on digital signs the company calls “talking” billboards.
The boards, which usually carry typical advertising, are programmed to identify approaching Mini drivers through a coded signal from a radio chip embedded in their key fob. The messages are personal, based on questionnaires that owners filled out: “Mary, moving at the speed of justice,” if Mary is a lawyer, or “Mike, the special of the day is speed,” if Mike is a chef."

Apparently, Mini users are looking forward to these billboard messages, viewing them as fun, playful and whimsical. Likewise, marketers love the idea, since it will reinforce the "tribal feeling" that the brand creates. As the head of North American operations for Mini Cooper suggests, "People buy Minis because they really want to have more fun in their days. We want everything about our marketing to fit that."

[image: Mini-Cooper Billboard]

China's Economy Grew at Fastest Pace in 11 Years

The gross domestic product (GDP) of China grew at the fastest rate in 11 years and inflation moved below 2 percent. The GDP grew by 10.7 percent to reach 20.94 trillion Yuan ($2.68 trillion) according to the Chinese National Bureau of Statistics. The consumer price index only increased a mild 1.5 percent. Fixed asset investment expanded by 24 percent, down two percentage points from in 2005. Exports grew 27.2 percent in 2006 while imports expanded by 20 percent, resulting in a surplus of $177.5 billion, compared to $100 billion the previous year. The huge trade surplus is putting pressure on the RMB Yuan to appreciate. While it has appreciated gradually against the U.S. dollar there has been little effect on trade patterns. The fast expansion could not change the fact that per capita GDP was just one fifth of the world average. The average income of Chinese rural residents stood at 3,587 Yuan (460 U.S. dollars) in 2006, indicating 900 million farmers on average live on ten Yuan (1.2 dollars) one day. In 2006, the economy was in good condition, NBS Director Xie Fuzhan told a press conference organized by the State Council Information Office. The economy, which overtook Britain in 2005 to become the world's fourth biggest, is moving closer to that of Germany, which is estimated to have grown by 2.2 percent last year to $2.86 trillion. Egils Milbergs, president of Center for Accelerating Innovation commented: “China's impressive growth rate and low inflation suggests the nation is likely to become the third biggest economic power in 2008.” Related readings: Investment cools slightly in 2006More job opportunities created, but still much to be doneTrade surplus hits record after 74 percent growthFarmers' pockets grew fatter last yearGuangdong GDP amounts to 2.59 trillion yuan, up 14%China's GDP grows 10.7% in 2006GDP growth in 2006Calculation for GDP to be unifiedGreen GDP will be expanded to entire mainlandDon't just measure GDP in urban developmentCirculation industry will take up 12% of GDP...

Innovation and Talent in the Indian IT Industry

NASSCOM, the Indian trade association for its rapidly growing IT enabled services industry, recently concluded its annual Leadership Forum, bringing together the leaders of this industry.  Although there was no official overarching theme defining the conference, it was clear that the big issue shaping most of the discussions involved the intersection of innovation and a growing scarcity of talent. In the process, though, I fear that the industry leaders are under-emphasizing some important opportunities.

I was privileged to be able to attend this conference and participate in a number of the panels and discussions. It was truly an energizing and inspiring experience, impressive in terms of the scope of the program, with over 100 speakers addressing a broad range of topics.

The Indian IT outsourcing industry has achieved substantial scale and very impressive growth. NASSCOM estimates that, for the financial year ending in March, the industry will grow to $31 billion in revenue, 32% over last year’s revenue.  The industry now employs 1.6 million people, driving much broader prosperity within India. According to Julio Quinteros, an analyst from Goldman Sachs, Indian IT services companies have rapidly grown shareholder value in sharp contrast to the more disappointing performance of established American IT services companies.

The most impressive thing about the conference was that, in spite of this enormous success, there was little if any complacency.  Instead, the leaders of the Indian IT services industry continued to show the same sense of urgency that has driven their success so far.

The competition for talent

Many of the discussions focused on the intensifying competition for talent within the IT services industry.  Continued growth of the industry hinges on the ability to access and develop talent.  Turnover rates are generally rising, especially in the business process outsourcing industry, further increasing the challenge of sustaining profitable growth. Wage rates are also rising as companies compete more aggressively to attract and retain the available talent. In the meantime, other countries such as the Philippines, Vietnam, China and the Eastern European countries are competing more effectively for IT outsourcing work.

Indian IT services firms are responding to these challenges on a number of fronts.  They continue to invest heavily in scaling their recruiting and training efforts, increasingly branching out and establishing facilities in second and third tier cities in India to reach a broader pool of talent.  In many cases, they are establishing development and operations centers in other low labor cost countries.

Indian firms are also investing in developing more value added services to generate more revenue per employee.  One of the hottest growth sectors for the Indian outsourcing industry is so-called “knowledge process outsourcing”, focusing on providing such high value services as financial research, clinical research and engineering services for product development programs.

More generally, these Indian firms are also focusing on tightening their operational performance to enhance profitability per employee and to become more responsive to increasing customer expectations.  McKinsey & Co. discussed a major report on “Operational Excellence: The Next Frontier in Offshoring” (executive summary available here) at the conference.  The report offered a framework for benchmarking operational performance and found a high dispersion of performance across Indian offshoring service companies. Offshoring service companies could do a much better job of absorbing increasing wage rates if they focus more aggressively on enhancing the productivity of their operations. One of the interesting sidelights in the report was the finding that third-party service providers generally outperform captive offshore facilities.

Innovation blowback opportunities

Another key theme emerging from the discussions at the conference involved the increasing need for innovation in the offshoring business.  Unfortunately, there did not appear to be any consistent definition of innovation so, at times, it was unclear what the exact nature of the opportunity is.  NASSCOM has announced a joint research effort with BCG on “Developing an Innovation Ecosystem for the Indian IT Industry”.  This effort in particular seems to be focused on identifying opportunities for the Indian IT industry to collaborate with other stakeholders in the Indian economy to address challenges in providing more cost-effective products and services to the Indian population.

This is a huge opportunity and has generally been under-emphasized by the IT services industry which historically has focused on overseas markets rather than the domestic market.  There are some notable exceptions to this.  Infosys, for example, has developed a strong partnership with ICICI Bank, one of the most innovative and successful banks in India.  ICICI Bank used the Finacle application software suite from Infosys to develop an extremely cost-effective and scalable operational platform.  This collaboration has helped ICICI Bank to grow rapidly, increasing its transaction volume by five-fold over a five year period.

This opportunity is particularly intriguing because it extends far beyond the domestic market, even though that is certainly attractive in its own right.  As JSB and I have written, there is an opportunity to pursue “innovation blowback” strategies, using the Indian market as a catalyst for breakthrough innovation in products and services that can then be used to support global attacker strategies designed to challenge incumbents in the more developed Western economies. In recent years, ICICI Bank has started to expand internationally, leveraging its innovative operational platforms to deliver more cost-effective services to customers in countries like the UK, Canada, Singapore and China. The Indian IT services industry could fuel enormous growth for the Indian economy by more aggressively supporting these innovation blowback strategies.

Fostering talent networks

But the biggest opportunity of all requires a different form of innovation.  It also requires a very different mindset for the leadership of the Indian IT service companies.

Rather than continuing to focus on attracting and retaining talent within their own companies, these firms could create enormous value by developing the management techniques required to mobilize and leverage specialized talent wherever it resides. This would require building scalable talent networks encompassing a broad range of smaller, more specialized companies. 

The Indian IT services companies have been very effective in building relationships with technology product companies on a global scale.  But when it comes to expanding their own IT services, they immediately focus inward.  If they don’t have the capability already in place, they may go out and acquire a smaller, more specialized company, but their instinct is to bring the capability in house.

As an alternative, these companies could take their emerging skills in partnering with technology product companies and apply them to building talent networks to mobilize and leverage large numbers of more specialized service providers.  The real power would be to master the techniques required to accelerate the development of talent across such a distributed network of partners, thus creating stronger incentives for partners to join the network.  Focusing on this challenge would create an opportunity to innovate in “Learning 2.0” capabilities, moving from traditional training programs to more distributed learning platforms and ecologies.

Ultimately, the opportunity would be to become leaders in the formation and orchestration of creation networks. This would require mastering open innovation management techniques to attract and mobilize talent, focus the innovation initiatives across multiple participants and accelerate commercialization and learning from these initiatives.

Even broader innovation opportunities

These efforts in turn would expose the Indian IT service companies to the challenges of coordinating activities across large networks of partners given existing IT architectures. By gaining firsthand experience in the limitations of these architectures, Indian IT service companies would be well-positioned to drive another wave of innovation in IT architectures.  In my talk on Web 2.0 at NASSCOM, I suggested that Indian IT service companies are natural candidates to define and deploy fundamentally new IT architectures that work from the “outside-in”. 

In contrast to traditional IT architectures that emerged in the center of the firm and imperfectly extend their reach beyond the boundaries of individual enterprises, we are in desperate need of IT architectures that start with the assumption that the task is to coordinate activities across hundreds, if not thousands of firms. By starting with this perspective, we would need to re-think the nature of transactions and define roles and governance processes accordingly. In fact, we would likely move from today’s transactional architectures to much more helpful relational architectures designed to support enduring and deepening relationships across individuals and institutions.

There’s no shortage of opportunities at both the product and process level to drive the growth of Indian IT services companies.  The sense of urgency that continues to pervade the leadership of these companies will serve them well in identifying and aggressively pursuing these opportunities.

Amazon and Business Model Innovation


Amazon.com’s recent forays into Internet services have puzzled many analysts and investors. There is great concern that the company is spending way too much time, effort, and money so far removed from – and potentially at the expense of – its core retail operations. Amazon spent a decade, and billions of dollars, building its e-commerce platform to the point where it reached massive success. So why, Wall Street wants to know, is Amazon so intent on moving beyond retail?

The answer, we believe, is that Jeff Bezos understands that the key to sustained success is business model innovation. Amazon has deftly moved into new categories and new markets with flexibility and creativity. They consistently look for ways to leverage core capabilities and monetize excess capacity to create potentially disruptive businesses. Undoubtedly, Amazon must be sure to keep its core retailing operation healthy and should not over-commit to new ventures before they prove profitable, but investors should take comfort in the fact that Bezos has an uncanny knack for this most elusive of innovation disciplines.

Consider Amazon’s corporate evolution: as soon as it established itself as a leading online book seller it began leveraging the platform and infrastructure it built to move into new categories, and in a matter of years became a full-fledged online department store and the web’s premiere retailer. Amazon has also leveraged its online real estate and customer base, establishing itself as a broker of transactions and leaser of web space to other retailers. These profitable initiatives have generated synergies that fortify Amazon’s core business – selling other merchants’ books, for example, vastly expands Amazon’s catalog, making the site ever more of a one-stop shop – while contributing to the overall growth of the business.

Now, Amazon is further unbundling its finely-honed core capabilities and leveraging its world-class core assets. A recent Business Week article describes their latest initiatives – a series of calculated moves intended to transform latent capacity and aptitude into profit centers that strengthen the overall business and plant seeds that might grow into disruptive blockbusters. Notice how each initiative solves an important Job to be Done, in comparison to market alternatives:

Elastic Compute Cloud: Amazon leases computing horsepower over the web; the equivalent of one server costs about 10 cents an hour. Computing-hungry startups can make expensive capital equipment investments by buying their own servers or can lease the processing power they need when they need it at a very low cost – leasing a full year of power equivalent to one server would cost just $876.

Simple Storage Service: Amazon leases digital storage at 15 cents per gigabyte per month. Buy backup drives or zap it over to Amazon for a buck eighty a gig a year.

Amazon Mechanical Turk: Amazon matches up online temp workers with companies that need menial tasks done. There are some menial, frustrating tasks that any bozo on the street can do easily but that computers just can’t do right; when these tasks present themselves companies can either hire interns, tie up their low-level employees with mindless work, or, in some cases, simply leave loose ends untied. Now they can have Amazon connect them with an online temp painlessly, rapidly and at a miniscule cost.

Fulfillment by Amazon: End-to-end e-commerce operations and logistics. Companies can operate their own e-commerce operations and frequent eBay sellers can buy new shelving units for their garage and wait in line at the post office everyday…or they can outsource part or all of the process to the world’s most efficient e-commerce logistician. Amazon warehouses merchandise and handles orders, payments, and shipping.

Will all – or any – of these new ventures grow into blockbuster businesses? That remains to be seen. At the very least Amazon is laying groundwork for a role in the digital future and casting its bets in the hopes of landing something substantial. This aggressively forward-thinking corporate mindset is exemplary, as it generates multiple revenue streams, unlocks new growth opportunities, and could lead to the transformation of markets; it may well transform earth’s biggest retailer into the premiere web services company.

See: "Jeff Bezos' Risky Bet," Business Week, November 13, 2006

Will laissez-faire aesthetics give rise to laissez-faire innovation?

Guggenheim%20motorcycle.jpg

In the current issue of The New Republic, art critic Jed Perl complains that too much money washing into the art world has swept away traditional benchmarks of aesthetic value. Instead, the art world is consumed with "laissez-faire aesthetics," defined by a belief that the value of a painting or other artwork is "simply what everybody or anybody says it is." (This isn't good, if that "everybody or anybody" is some recently-minted Russian petrodollar billionaire, or someone else who lacks a sufficient amount of art-world snobbery to appreciate a truly great work of art).

Anyway, the Wall Street Journal highlighted the article in its "Informed Reader" column of January 29, hinting that throwing money at art isn't really a good thing, since it tends to erase the distinction between high art and pop culture (think Harley Davidson exhibits at the Guggenheim, or Star Wars exhibits at the Brooklyn Museum of Art). Art is at risk of being turned into something along the lines of TV, as galleries and auction houses cater to the lowest common denominator. Instead of being an object of private contemplation and appreciation, art is at even greater risk of being turned into an object of personal conspicuous consumption. No longer able to make the distinction between "pop art" and "high art," we will be forced to use price as our only guide.

Anyway, I wonder if an analogous case can be made for the world of innovation. Is "laissez-faire innovation" sweeping away all notions of what separates "great" innovation from "good" innovation or "average" innovation. All innovation is good, as long as companies are willing to pay for it?

[image: The Art of the Motorcycle at the Guggenheim]

If You Don’t Slow Down and Think Now, You’ll Curse Yourself Later

This posting on Newsvine struck a chord with me. I have written several times about the way that people—especially many managers and executives—ignore the extent to which sheer chance influences the success of businesses and organizations. It’s as if we cannot accept that our “control” over our future is strictly limited. As the article states:
Human beings are genetically predisposed to find patterns and to assume that events are linked in time by cause and effect, and it’s quite easy to see why. If you assume that a rustling in the bushes means that a tiger is about to pounce, then being wrong nine times out of ten is probably better than failing to make that connection once. This contributes to a natural human inclination to simplify memory by constructing a single linear narrative.

History is taught to schoolchildren as if events were the consequence of a series of decisions and actions by leaders and heroes. “Napoleon lost the battle of Waterloo.” When this cannot be done causes may be located in physical or emotional pressures. “The Pilgrims set sail for the New World to escape religious persecution in their homeland.”
In businesses, rising sales are typically attributed to the brilliance of management strategies. Falling sales are blamed on external competition, lack of effort by staff, or changes in fashion. No one ever says “I don’t know why.” The pundits who comment on the stockmarkets of the world are perhaps the worst of all at attributing events to clear, simple causes when the reality is almost certainly so complex that it defies any kind of explanation.

This process may seem to be harmless enough: a case of the media once again over-simplifying events to get a good headline and keep the word count low. You may blame it on the rooted belief in many circles that you cannot possibly under-estimate the public’s intelligence and attention-span (See? I’m producing instant explanations now!). But whatever “cause” you choose, the harm remains the same. When people seize on an explanation for events, that explanation conditions how they will respond.

If you assume a reason, then look for it, you will almost certainly find it.
When people force events into some pattern that seems to make sense, that sense always matches their assumptions, beliefs and prejudices. If you assume a reason, then look for it, you will almost certainly find it. This is made infinitely worse by the well-documented tendency in people to link things causally simply because the happen closely together in time. You give someone a pay increase and notice that person produces a series of sales. Bingo! Salary incentives increase results from sales people. But maybe the sales would have happened anyway—simply by chance.

It’s dangerous to have an explanation for everything—or even to assume one exists. It blocks your mind from considering alternatives. It makes you blind to data that doesn’t fit your supposed explanation. It lowers creativity and increases the tendency to rush into action without adequate thought.

Speed, stress, pressure, and short-termism all inflame this tendency. That’s why Hamburger Management is such a curse. When people grab for quick, simple, and, above all, quick answers, they lay themselves wide open to the mistakes collectively called attribution error: this process of assuming links and patterns where none exist.

Slow down. Think. Reflect on other options. Skepticism is more useful in this life than belief: the skepticism that looks for actual evidence, then tests it rigorously before placing any reliance on what it seems to say. Even then, you should always by open to discovering that what you thought that you knew turns out to be wrong.

The speed that Hamburger Management offers is an illusion—and a dangerous one at that.
Of course, this will slow things down. But not as much as making a series of mistakes and ill-considered actions that you will have to put right later. The speed that Hamburger Management offers is an illusion—and a dangerous one at that.

Inbox Sand, Feb '07 - "Your Elevator Pitch"

The recent "Elevator Pitch" post has prompted great discussion over the past several weeks.

An elevator pitch is that 30-second blurb you should have in your back pocket... at the ready for networking or expressing yourself clearly to your company's senior leadership.

To continue the discussion, I've made this the topic of the February Sand for Your Inbox eNewsletter.

Read more for tips to create your own pitch.

If you would like to subscribe to "Sand for Your Inbox" (creativity and problem solving tips delivered to your inbox each month), click to subscribe!

Others riding the Elevator include...

  • David from Where's The Sausage asks what kind of movie would you create for your brand?
  • johnmoore at Brand Autopsy describes how the elevator pitch supports making a message sticky. Which leads us to...
  • Dan and Chip Heath hosting their "Made To Stick" blog agree that this type of story telling can engage your audience. (This site supports thier kick-ass book "Made to Stick").
  • Mark at Project Clarity comments that StartupNation hosted an elevator pitch contest.
  • Laura runs a company called 15Second Pitch. On her site she offers a pitch wizard, tips, and a place to post your pitch.
  • Tom at Director Tom's blog took the idea of the pitch to heart and immediately started crafting his own. Now he's helping to change the world...
  • Dave at Innovative Leadership suggests working on your pitch before your next networking event.
Thanks to the others who have found this post inspiring and have linked to Idea Sandbox...

Finally, I also found out there are a lot of closet A-Team fans out there...

February 23, 2007

Thinking about Toyota

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A must-read about Toyota: From 0 to 60 to World Domination

How does Toyota win?  By coming an evidence-based culture with an eye to the long view.  By investing in incremental innovations to build long-term brand equity, and investing the payback in revolutionary innovations like the Prius.  By paying attention to technical details and to the humans who design and build the cars and those who service and drive them.

It seems simple, right?  Realization and implementation are so tough.

RE:VISION is competitions for visionary thinkers

re-vision

RE:VISION is an organisation founded by Urban Revision that concentrates on competitions for visionary thinkers. Re:Vision was born out of the belief that each of us has a unique perspective along with a wealth of ideas, energy and resources. Within us lies boundless potential. These competitions are about inspiring innovation, tapping into existing ideas, and using them in new and amazing ways. It’s about seeing yourself differently…full of big ideas and new possibilities. RE:VOLT is the first of a series of competitions The challenge is: how would you intelligently and sustainably power a city block? Think big ideas. Think small environmental impact. Think about ways to make a difference in how we fuel the future.

The coming competition will be all about the following themes:

RE:ROUTE, new thinking on global transportation

RE:STORE, green innovation for a healthy urban economy

RE:CONNECT, urban planning for people and space

RE:VISION, architecture for sustainable urban community

I think that the big question from RE:VISION is really interesting: WHAT IF?

WHAT IF one person really holds the power to change the world? WHAT IF that person is you?

Thanks to Inhabitant.

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Carl Schramm of Kauffman Foundation to Chair Advisory Committee on Measuring Innovation

Commerce Department Secretary Carlos M. Gutierrez announced that one of America's leading thinkers on entrepreneurship, Carl J. Schramm Ph.D., has been named chairman of the advisory committee of business and academic leaders that will seek ways to measure the effects of innovation on the economy.

"Innovation has propelled America forward, raising our standard of living and improving people's lives with better products and services. We need to better understand innovation's role in the U.S. economy. This is why the Commerce Department has formed an advisory committee to see if we can develop ways to measure innovation," said Gutierrez. "Today, I'm pleased to announce that Carl Schramm will work with the Commerce Department to develop innovation metrics and capture its contribution to our rapidly changing economy."

The Measuring Innovation in the 21st Century Economy Advisory Committee is comprised of 10 CEOs and five academics. Schramm will assume chairmanship of the Advisory Committee at its first meeting on February 22 at 2:00 p.m. at the Wyndham Washington Hotel, 1400 M Street, N.W., Washington, D.C. The meeting will be open to the public and registration is available online at www.innovationmetrics.gov.

Schramm is president and chief executive officer of the Ewing Marion Kauffman Foundation, the largest foundation in the world to focus on advancing entrepreneurship. Regarded as one of the country's preeminent thinkers on America 's entrepreneurial economy, he is an economist, entrepreneur, lawyer and expert in health care finance, regulation and insurance. Schramm is the author of The Entrepreneurial Imperative (HarperCollins, October 2006) and coauthor of Good Capitalism, Bad Capitalism (Yale Press, May 2007).

Start Practicing “Conscious Incompetence”

If a thing is worth doing, it’s worth doing badly first. In the real world, doing something new almost always means doing it poorly the first few times. Improvising never produces a polished result, but it's nearly always the first step towards creating something new and worthwhile. To do something new, you have to make a conscious decision to let yourself try things that you know you can't do. That's practicing "Conscious Incompetence."


Sir Winston Churchill wrote:
Success is the ability to go from one failure to another with no loss of enthusiasm.
The way to get out from the herd and let adversity itself turn you into the next big success is to practice “Conscious Incompetence.”

Why do you need it? To make time and space for learning. What is it like when you do something you haven’t done before? You do a pretty poor job of it. You do it badly. There’s no other way to learn. If you’re only willing to do things well, you can’t improvise or do anything new. To develop your potential you must start to cultivate a new skill: the skill of “Conscious Incompetence.”

In the world of work, there is so much pressure for doing things correctly from the start that most people live in a constant state of anxiety. If you aren’t allowed a period of grace to learn by doing things badly, you’d better stick just to what you know you can do already. If you’re to “hit the ground running” in a business that has “no room for passengers,” you must either do everything competently from the start or risk being pushed aside. The result of such needless torment is that people draw back from new areas. They’ve survived to the point of doing something—anything—capably, so they don’t want to risk themselves by stepping outside this hard-won comfort zone.

“So what exactly is it?”

“Conscious Incompetence” is doing something that you know you can’t yet do, let alone do well, for the purpose of learning how to do it better. It’s allowing yourself to make a mess and get things wrong, because you’ll never know how to do better until you get past that point. And it’s the basis of all learning. If you can’t allow yourself to make mistakes and probably look silly doing it; if you can’t allow yourself to attempt what you know you won’t be able to do at first; if you can’t allow yourself to take the risk of screwing up; then you also can’t allow yourself to learn or develop. And if your boss or your organization demand near perfection from the first moment, they’re fools. The only result will be employees who never try anything new at all.

“Conscious Incompetence” should be required behavior in every organization. This is true for individuals, teams, and the whole corporation too. The world makes unavoidable and unexpected demands on us. Such demands force us along new paths, if we want to avoid the fate of the dinosaurs. Improvising and learning by doing are perfectly natural human activities. So are making a mess, failing the first few times, and getting in a muddle with new ideas, but only making them deliberate will allow us to use them effectively, whenever and wherever and however we want—without feeling so embarrassed or silly that we resolve not to risk either again.

“How do I start?”

By seeing what might work and trying it, even if you’re certain that you’ll do it badly at first. This requires four steps:

Step 1: Ask yourself, “Do I think this might be a useful idea or skill?”
If the answer is “yes,” consider how you can try it out. It’s very easy to be misled by appearances or the opinions of others. Those who advised major corporations to indulge in creative accounting were simply giving opinions. Were their opinions correct? Events have proven they were not. What appears to be new and useful maybe a delusion or a miracle. You won’t know until you try.

This sounds simple, but it’s amazing how often managers turn down most fresh options without even trying them, purely because they aren’t things they know they can already do well. If what you try doesn’t work, drop it. But at least you now know that it isn’t really an option, and—far more important—you know why.

Don’t accept conventional wisdom. Don’t make easy assumptions (to assume, it is said, is usually to make an ass out of U and me). Distinguish causes from their effects. Explore, poke, probe and question. Don’t worry what others think. What passes for thinking most of the time within organizations is merely the rearrangement of old habits and preset opinions. As the playwright George Bernard Shaw, who was neither troubled by modesty nor inhibited in his comments on others, once wrote:
Few people think more than two or three times a year. I have made an international reputation for myself by thinking once or twice a week.
Merely by trying things others ignore or turn down without question, you’ll build an enviable reputation as an outstanding creative thinker.

Step 2: Ask yourself, “What tells me that the conventional answer to this is true?”
You need to be clear about what is going on. If someone tells you, “we have a retention problem,” take the time to ask whether that is true; and if you think it may be, take the next step and explore what you can see, hear or experience that actually tells you that’s the problem that exists.

Confusion is the enemy of effective judgment. Perhaps a problem does exist, but if you’re confused about its nature and extent, there is little chance that you can take correct decisions on what to do about it.

The fear that is generated in harsh times makes us hurry to premature action. If we believe we need to do something immediately, we have little option except to reach for the conventional solution. Yet most of our requirement for immediate action comes from anxiety, not reality. Few things that occur in organizations demand instant responses. Even half an hour of focused thought can prevent disaster and a major loss of face.

Make a list of the “proofs” that demonstrate the problem. You will need this for the next step.

Step 3: Ask “why not?” repeatedly until exhausted all the options you can discover.
“Why?” and “Why not?” are the most useful questions in the universe. Perhaps that’s why toddlers use it so often. They haven’t yet had it knocked out of them by hostile authority figures. They also need to learn a whole lot in a hurry and know, instinctively, that asking “why?” and “why not?” all the time is the best way to do it. Most parents find their child’s persistence in asking “why not?” soon becomes maddening. Most bosses feel exactly the same way about their subordinates. Both groups are wrong. Asking “why not?” can be uncomfortable, but it is nearly always productive.

Step 4: Give yourself (and those who work for you) permission to improvise and try new approaches, even if you all get it wrong first time.
Suppose that Brad is afraid of anything that might suggest incompetence or threaten failure. Many high performers are. They’re typically extremely superstitious about risking even the possibility of failure, because they have never experienced it in their past.

Brad is faced with an important decision. He wants to shine—and he really, really doesn’t want to make a mistake, or take any risks that he can avoid. The best way to meet both these objectives looks to be to use his knowledge and memory to see how this kind of decision has been made before, then replicate it.

Brad looks for this information in the past. He remembers what he has done that turned out well; recalls what he learned at business school and corporate training events; searches out industry best practice. He finds many things that he already knows, and uses this knowledge to make a decision that has the best chances of being correct in terms of past knowledge. That’s why he will probably never develop more than a fraction of his potential.

Susan comes up against the same decision, but decides it’s a great chance for stealthily practicing “Conscious Incompetence.” (It’s usually best done in secret. The conventional parts of the world tend to misunderstand.)

Now she adds the magic ingredient that is going to transform her career. She takes time to review all the other options she can think up that don’t match industry best practice, and aren’t in line with how things have been done before. She knows that she isn’t likely to be good at them, but checks them out just the same. By doing this, she has started learning something new, not just learning more about what she already knows.

When Susan starts to implement her idea, she makes many mistakes — she knew she had little previous competence to help her — but each one teaches her more. She persists in the face of failure. By the end of the project, Susan has accessed more of her potential, the company has gained a new approach, and senior management has recognized a talent in the making. Brad is still polishing his existing knowledge and wonders why his career isn’t progressing.

“Conscious Incompetence” (and the deliberate testing, improvisation, and experiential learning that it produces) should be required behavior in every organization. It is the only way for organizations, and the people in them, to access untapped ideas and unused potential and put them to practical use.

“Now I get it!”

In today’s harsh, macho, grab-and-go business environment, the real risks come from repeating the past and believing that you already know all the answers. Sure, experimenting takes time. Sure, there will be many mistakes and stumbles along the way. Sure, people will have to persist in new activities to become good at doing them. So what? That’s how things work. The only new things you can do instantly, without time to practice or develop a skill, are so inconsequential that they’re hardly worth doing at all.

And, sure, you’ll look silly many times. But not half as silly as you’ll look when it becomes clear that the idea that you rejected without fully considering or trying turns into a killer advantage for a competitor.
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Bright sticks, a new innovation technology

Brightsticks Ideas arrive like kids to a disco.  When adult outfits and fake IDs fail them, they just rush the door, dislodge the bouncer, and come piling in.  The notion seems to be that if they all arrive at once no one can be held accountable or got rid of.  Party! 

So those of us who make our living in the idea biz are required to be quick about it.  Many of us resort to those 3x4 foot pads of "easel" paper for capture.  These are reverently arrayed around the room as if to say, [assume silky voice] "look, we treasure everyone's contribution."  And then of course we stick yellow post-its on the paper, sometimes then voting with those little colored dots.  Very soon, walls disappear.  The windows are covered.  The sun is blotted out, extinguishing any hope of, er, illumination.

Brain storms work because we almost never consult these sheets of paper,  yellow tabs, or colored dots.  The good ideas are few enough that they can keep them in mind and loosely there.  Paper fixes what should be kept fluid.  Paper gets in the way of the pattern recognition that leaps back and forth between the unconscious and the conscious mins of the individual and then round and round within the  group, as each and all of us press on with selecting, editing, combining, and generating ideas...until illumination does arrive.  A new idea always seems to shine or at least vibrate, or at least carry on like Soul Train dancer.  It is never papery.  It does not come with dots on. Stick em!  There's no stick em on em! 

If you are sick of the paper-based brain storm, too, I recommend bright sticks.  Mine arrived yesterday, and Pam came home to discover the windows glowing with florescence.  This is a better way of idea capture.  It is faster, more beautiful, and bigger picture.  The thing is you do have to have windows.  But most people have windows.  I mean, unless you've been living in a bomb shelter since 1957, and if that's the case, idea generation is probably not your most pressing need. 

My inspiration was an episode of House, and I think an episode of CSI: New York where glass panels, and not windows, serve as the medium. Certainly, it would be great to have "glassboards" but it looks as if this kind of thing would be expensive and space consuming (see Arount's white board below).  Mind you, if you were building an office space, glass would, in places, be as easy to install as dry wall.  It is possible to build or buy light boxes, and we have all seen restaurants use these to announce the specials of the day.  The writing glows.  I got my bright sticks from Amazon.  They get them from Office Depot. 

References

Arount's white board here.

 

The Lifehack whiteboard here.

Commercial light boxes here and here.

The Arstechnica openforum discussion (some overlap with Arount, very slow to load!) here.

Acknowledgments

J Wynia here for an exchange of email on the question.

Will Wright about trends in video games

POPsci features a very long and insightful interview of Will Wright (game designer of The Sims and working on his next project called Spore). IMO, the article is important because it describes the current trends in the gaming industry. Let’s see some of them below with quotes:

The first trend is certainly the interest towards user-generated content. Wright wants to turn players in “Pokemon designers, Neopet designers, or Pixar designers“:

I think Second Life is interesting because they have given the players such huge control over the environment (…) In Spore, the tools are more and more powerful than they were in The Sims, so the next step is, now, how do we take those things and use them to build a narrative
(…)
Every time the player makes something in the game – creature, building, vehicle, planet, whatever, it gets sent to our servers automatically, a compressed representation of it. As other players are playing the game we need to populate their game with other creatures around them in the evolution game, other cities around them in the civilization game, other planets and races and aliens in the space game, and those are actually coming from our server and were created by other players. So there’s an infinite variety of NPCs that I can encounter in the game that are continually being made by the other players as they play.
(…)
We’re going to have different feedback mechanisms. One of the things we’re going to be doing continually is rating the most popular content, so when you make a creature you’re going to be able to go to what we call the metaverse report and get a sense of what is your creature’s popularity ranking relative to other people’s creatures.

And he recognizes that an economy that emerges out of it is inevitable: as in Second Life, it will develop, go on eBay or other platforms and might lead to “some sort reward”.

Second, gaming foster an “augmented sociality” that is based on the content and is achieved not in the game itself but with other channels:

the asynchronous socializing through content, which we’re already seeing in The Sims web community. huge communities form with very well-known people based on the content they’ve made, other people taking that content and telling cool stories with it.

Third, the educational model of using games is now less about directly teaching content/facts but rather making people know processes. This has been a long discussion in psychology and educational sciences but there are still some people trying to design games to make kids learn irregular verbs or Napoleon’s battles. Actually, the thing is that video games are less good at declarative learning (content) and better for procedural learning and problem solving. And it’s good to see a game design such as Will Wright agreeing with that:

I think in a deep way yeah [answering the question “Do you see Spore, or the rest of your games for that matter, as being educational?”] – that’s kind of why I do them. But not in a curriculum-based, ‘I’I'm going to teach you facts’ kind of way. I think more in terms of deep lessons of things like problem-solving, or just creativity – creativity is a fundamental of education that’s not reallytaught so much. But giving people tools.

And finally, concerning the future of gaming, Wright addresses the articulation between interactions in the physical environment and digital interactions. In a sense, the question can be rephrased as how to turn data generated from real-world interactions and put them back in the game to enrich the playful experience:

One thing that really excites me, that we’re doing just a little bit of in Spore… I described how the computer is kind of looking at what you do and what you buy, and developing this model of the player. I think that’s going to be a fundamental differentiating factor between games and all other forms of media. The games can inherently observe you and build a more and more accurate model of the player on each individual machine, and then do a huge amount of things with that – actually customize the game, its difficulty, the content that it’s pulling down, the goal structures, the stories that are being played out relative to every player.

Why do I blog this? this is a quite good overview of the current game trends (and I left aside some other issues). Besides, it’s pretty refreshing to hear them from a game designer and not from observers/researchers who try to shake the game industry.

February 17, 2007

Technology Evangelist Study

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Frederic Lucas-Conwell conducted a study of Silicon Valley technical evangelists called “Technology Evangelists: A Leadership Survey.” Here is the abstract:

The purpose of this study was to gain a clearer understanding of the relatively new phenomenon known as the “technology evangelist.” By our exploration, we aim to help readers improve their management functions, and to understand how best to integrate “evangelists” within their organizations.

In order to do so, we analyzed the roles of those who hold this position and leadership styles. Our research included surveying and interviewing twenty-nine technical evangelists worldwide from a variety of cultures and organizations. Some general tendencies regarding the role did, indeed, emerge. However, we also discovered variable character, or personality, patterns among the participants. Therefore, we proceeded to examine the gap, between the role of the technology evangelist and the subject’s personal character.

We contrasted individual competencies with these character patterns, and created a grid to analyze their qualities of leadership. This paper includes our recommendations for recruiting, integrating, developing and managing the technology evangelists.

It provides good insights into what motivates evangelists and what makes them tick. If you want to learn about evangelists, check it out.

PARC’s research

Yesterday in the NYT, a pertinent article about PARC strategy. It basically describes PARC’s path to move from being a in-house research lab to a subsidiary form. The article shows on-going projects but more interestingly critiques the fact that PARC is a “lab of missed opportunities”:

Early in the decade, a struggling Xerox Corporation was trying to sell off a stake in its Palo Alto Research Center, which it could no longer afford to support. But with the technology bubble bursting, the price that investors were willing to pay for a piece of PARC, as the center is known, kept going down.

So in 2002, Xerox switched to Plan B: it spun off the center into an independent subsidiary and sought to prove that it could sustain itself by licensing technology and forming partnerships with outside companies. On Friday, PARC is announcing a deal that underscores that strategy. It is licensing a broad portfolio of patents and technology

“There’s no way anyone can top what they did in the past in terms of dramatic research developments,” said the futurist Paul Saffo, a fellow at the Institute for the Future. But Mr. Saffo praised PARC for finding a business model that has allowed it to survive at a time when many research groups at American corporations are being cut.

“This is an organization that has done well at keeping researchers, and spinning out a steady stream of little products,” Mr. Saffo said. “PARC has been a very quiet success.”

The Grand Engineering Challenges of the 21st Century

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The National Academy of Engineering is asking the public for help in determining the grand engineering challenges of the 21st century:

"America's big names in engineering, as well as millions of Internet users around the world, are being asked to weigh in with their picks for the greatest technological challenges of the next century — a nine-month process that could give birth to new research initiatives. The project, called the "Grand Challenges for Engineering" program, is aimed at gathering up all those ideas and distilling them into a list of 20 puzzles for engineers to solve — in fields ranging from energy to communications to aerospace to advanced materials. The National Academy of Engineering, an arm of the Washington-based National Academies, is supervising the project, armed with a $500,000 grant from the National Science Foundation."

Over the next few months, comments and suggestions will be sorted and ranked, then reviewed by an 18-member blue-ribbon committee headed by former U.S. Defense Secretary William Perry. Other members on the selection panel include Google co-founder Larry Page, genomics pioneer J. Craig Venter and millionaire inventors Dean Kamen and Ray Kurzweil. The academy will unveil the 20 top challenges in September.

[image: Grand Challenges of Engineering]

The importance of: product strategy

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In the news is a rumour that Toyota is about to build a new car factory in the US. It is a remarkable journey the Japanese car producer has made (on the US market) over the last decades. Today nobody is underestimating them any longer. Everything from the launch of the premium brand Lexus to the smart hybrid vehicle Prius has been made out from a smart tactics. At the same time the three major US car producers have made a lot of critical mistakes. Toyota went for smaller cars with low fuel consumption while the US companies like General Motors, Ford and Chevrolet developed even more and bigger pickups and SUVs.

By using a smart product strategy Toyota had a 12% growth in turnover last year and is today number three on the market soon to be number two. According to me it is just a matter of time until they will be number one, a reality that was unlikely just some ten years ago.

Good, attractive and diversified products (and services) are the heart of every strong brand. Then the marketing is like the blood circulation telling the world about your products. Attractive products tell a looser from a winner. And if you in a smart way will communicate directly from your products you have every chance (if you have attractive products that is…) to be an important part of the mind of the consumers. I have developed this theory and even developed an idea for a communication strategy in the latest issue of the David Report bulletin called Communication Through Products.

Some of you may have noticed that I have been writing quite a lot about the recent launch of the iPhone by Apple. That’s because I think it is really clever to develop a product that makes consumers (all over the world) yearn already six months before it will hit the stores. I will repeat the question from Tim Powers post here at the David Report blog the other day - why aren’t there more Apples?

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Fisher Price Innovation

I don’t know how we ended up on the mailing list for a Fisher Price catalog but we did and it’s fantastic. My son likes it because it’s like getting a Christmas Catalog every quarter. I like it because the catalog an innovative way for Fisher Price to get out from under the grip of the retailer. As a bonus, the catalog has some great new Fisher Price products.

For years Fisher Price has been at the mercy of retailers like Walmart and Toy-R-Us for product placement. Having to offer more and more discounts to the retailers for the privilege of getting on the shelf. The catalog allows Fisher Price to develop there own relationship with the customer, avoiding the retailer and keeping more margin. For those that still go to the store for product they now know to want Fisher Price products because of what they have already seen.

The catalog gambit only works because they are offering great new products. Take for example the ActiveGear Stroller. It carries an infant car seat, your groceries, another child, the neighbor’s dog. The stroller fixes my “the kids grow and I don’t have the right gear” problem and my “how do I carry all this stuff (other kid) and the baby too” problem.

Another good example of a great product is the Easter themed little people set. By creating themed characters they are increasing the probability that people will splurge to get a cute little toy that they haven’t seen elsewhere.


It will be neat to see where the catalog takes Fisher Price. Fueled by great products might Fisher Price break the retail shackle forever, or might the catalog end up being scrapped, simply another marketing sinkhole?

The innovation fad is over

I was reading Endless Innovation, the new blog by Dominic Basulto, who has also been instrumental at Business Innovation Insider. A post in his blog about the end of innovation caught my eye. Bruce Nussbaum at Business Week declares that there's a backlash against innovation. Well, that's sort of misquoting Nussbaum. This is just the continuation of a cycle we've seen before. This is also good news.

Every important management trend got started this way. I was working with customer relationship management software before people heard of Tom Siebel. At first, CRM was the complete ticket to solve your customer management woes - it would snap sales people into line, improve sales pipelines and "manage" customers more effectively. Except that CRM didn't really do those things out of the gate. It required a change in culture and in management thinking before the software and processes could make a big change. So, after a few years, Gartner was famous for a report that over 50% of all CRM implementations failed. In any management trend, once a leading firm has identified the end of the trend, you can assume good things will happen next, since the people who were along for the ride will get off, and the people who are in it for the long run will get started.

Remember Sarbanes-Oxley? SarbOx? Some Socks? A few years ago I knew a number of people racing to start new companies to take advantage of the new rules. Sarbox was going to change corporate accounting and there was constant media coverage. What have you heard or read about Sarbox lately? The media decided that Sarbox had run its course. Of course there are many firms actively complying and we hopefully have better financial reports as an outcome. Once the hoopla died down, the real work began.

I think this is true for innovation as well. As many writers have pointed out, Ford is not innovative because they adopt a tagline with the word "innovation" in it, and they are not innovative because the past CEO or the current CEO talk incessantly about innovation. Ford - or any other organization - becomes and remains innovative when the people who actually do the work in the organization are motivated, led and compensated to be innovative, and when the culture and processes enable and support innovation. Those things take time and happen after all the fanfare is over.

If you are reading about the end of the innovation fad, it means that the read work is just beginning.