Management by Not Having Any - A Key to Innovation?

I just attended a workshop co-hosted by Ralph Kerle of the Creative Leadership Forum and was struck by his discussion of Arup.

Who?

Well, if you spent a significant amount of time watching the Beijing Olympics this year you may have seen their work: The Water Cube- The National Aquatics Center where the swimming events were held. Other projects to their credit include The Sydney Opera House and the Millennium Bridge in London.

Arup is an engineering firm... of sorts. Actually it is an organization held in trust for its 9000 staff members including engineers, architects, designers and consultants in over 37 countries. There are no shareholders and no discernable management structure. Yet, they manage to work on over 10,000 at any one time and build some of the most memorable and innovative structures in the world today.

One might call them innovators.

As Ralph Kerle wrote in his article Creative Leadership and the Water Cube at the Beijing Olympics,

... innovation in the building industry is very difficult... Every building is a prototype that mustn't fail. In structural engineering, you just cannot fail or the building will fall down.

This might lead to the conclusion that engineering firms must remain risk adverse at all costs, but risk adverse doesn't mean and mustn't mean forgoing innovation, for one important reason.

The production of the basic building materials on which our civilization exists is depleting our natural resources. As the global population rushes towards 9 billion, our consumption is exceeding our resources. The destruction of the rainforests, the depletion of oil supplies, the failure to find reliable energy alternatives and food shortages offer compelling evidence of this occurring.

The lead in changing the risk-adverse paradigm in the building industry therefore falls to innovative firms like Arup. Founded by Ove Arup, a philosophy and mathematics major from Copenhagen, Arup is unique in its management approach and its business philosophy which might just be little different than what I claimed here was one of my favorite quotes:

"Opportunity is missed by most people because it is dressed in overalls and looks like work." Thomas Edison.

At Arup, new employees are introduced to the firm philosophy and encouraged to go and seek out projects that hold his or her interest. The new employee is expected to be innovative and creative and a full fledged partner in the project, as all team members are.

Ove Arup's philosophy is the guiding principle that enables the company to create such beautiful, innovative and practical structures.

Arup recognised individuals as being innately creative. He reasoned if you provided employees with the simple humanitarian conditions of self organisation and creative freedom, an employer gained loyalty, respect and integrity from the employee, these values became recognised and respected by stakeholders and as a consequence the organisation was seen as reasonable, reliable and ethical.

Is this philosophy transferable to other types of companies? Of course and it must be because we are all faced with a global crisis in the making, as our natural resources are depleted.

Is this philosophy and management structure the only way to create innovative products. Of course not, but providing employees with an environment where they are valued for their creativity; their input is solicited and where they work on projects they like is certainly one way that's worth trying.

Insights from Honeywell's IP Expert in India

We were delighted to recently become engaged in a dialogue with an engineer and intellectual property expert, Suddha Basu, from the Honeywell Technology Solution Labs in India. He is nothing short of an IP junkie, having responsibilities at HTSL that include: intellectual property research analytics, patent mapping, IP mining, technology clustering, IP licensing analysis, IP led business growth, planning and strategic innovation counseling.

Honeywell is a large and diverse manufacturing company that is primarily the 1999 merger product of US defense giant AlliedSignal and the well branded consumer products manufacturer that made products like home heating thermostats. Wikipedia describes the company as "a major American multinational conglomerate company that produces a variety of consumer products, engineering services, and aerospace systems for a wide variety of customers, from private consumers to major corporations."

Before joining HTSL last year, Suddha worked for Wipro, serving multiple Fortune 500 clients as an IT OEM specialist. He also hosted a radio show at Entertainment Network India which isn't something common to most engineers and IP experts.

Suddha was quite willing to share some things about himself, some trends to be mindful of, current examples of innovation successes in India, how to measure innovation success and avoid a common pitfall. Here are his responses to these questions.

Who were your early role models and what were the main things you learned from them?

When I was younger I thought that conceptualizing a scientific principle or manufacturing novel products with great lot of complex math behind them, are the most critical factors in determining the success or failure of that invention, little did I think about the usefulness of inventions which were never commercialized or inventions which never became an innovation, ( i.e. a new stuff which did not become popular to its end users en masse) In my high school days, my school teachers, various discovery channel science shows and the Indian IT boom of the 1990s, made me realize that consumer needs and /or wants when get satisfied in a product or service, creates an innovation. And that is not always necessarily related to difficult mathematical equations. As we all know great things are always simple in their concept.

What key trends do we need to be aware of?

When a highly experienced researcher or a veteran marketer who is an expert in his / her area or market, working for a big university or a multi billion dollar corporation, suddenly quits his/her job and creates or joins an obscure startup company; is an example when you should expect a trend to emerge in a small and niche technology / market gap. Mere patent numbers, financial or market research data don't give you any real trend. It's the people behind all those numbers who can show you the future of science, society and money!

What is an example of an innovative company in India that people have never heard of?

Till date human civilization has showed us a model with industrial production, human migration for economic prosperity and proprietary knowledge owned by the wealth creators.

However, in the coming years a more socially committed innovative business model (but also with great profits after tax!) might be showcased by India or any country with an emerging economy. I believe where there are more problems with fewer resources but with more creative heads to think about such problems, then innovation flourishes there. Nimbhkar Agricultual Research Institute (NARI) is a non profit research organization developing very low tech but promising bio-fuel technologies of the near future! http://nariphaltan.virtualave.net/

How do you measure innovation success?

This could be measured if we notice, high market share with high profits, growing and varied product line and very less engineering or technology input costs. For Example; Google and Coca Cola, these two companies have the lowest budget for their global intellectual property protection needs. And as I previously mentioned innovations are not always inventions and thus are not necessarily measured by patent strength, patent activity or trade mark portfolio.

What is a biggest pitfall that impedes successful innovation?

For a knowledge intensive business, to impede a successful innovation, a lack of either or both the factors of, Organizational culture and individual mindset of each and every of all the employees, (and not only the VPs and the chairman,) matter the most. In such a situation, everyone stops thinking as being the primary beneficiary from an innovative product or service launched into the market by their company. This employee isolation is not good for innovation. All R&D employees should think of themselves as a scientist and also as a marketer, all at the same time. A less rigid job role / hierarchy help in achieving this impediment.

What advantages does Honeywell gain from having a major global R&D lab now based in India?

Indian engineers, scientists and managers who had previously lived in foreign countries for their jobs or education are usually happy to work from the Indian soil, while still being associated with an R&D giant like Honeywell.

Thank you Suddha for sharing these insights with us.

Why Vancouver - The City's Surprising Rebirth as an Innovation Centre

Does Silicon Valley in California come to mind when I mention innovation? How about Boston or the Research Triangle in North Carolina?

How about Vancouver?

Traditionally a western outpost far from the major city centers of Toronto and Montreal, In Canada, Vancouver as often played second fiddle. Yes, it's a large metropolis but, compared to the large companies of Eastern Canada, Vancouver was a backwater devoted to mining and timber.

No Longer.

Increasingly fast growing high tech companies are locating major operations in Vancouver. Microsoft recently opened a new development center where software engineers and developers will work on over half of Microsoft's products. And of course, Vancouver is home to a thriving cleantech community.

Sure, Vancouver's proximity to high tech centers in Washington and California plays a part, but that's not the only reason. So, what makes Vancouver so special? The cost of living is high as compared to many Canadian and US cities. It's a long way from San Francisco and New York. It's not all that well known on the international scene, though that is changing.

Probably the better question is what makes any city good for innovation.

Jeffrey Chu, of Fast Company in a podcast discusses some of What Makes a City Fast. Chu cites a confluence of different factors including diversity and in migration. Both of which characterize Vancouver. He goes on, in a specific piece, Fast Cities - 2007 discussing Vancouver, that besides being named one of the world's most livable cities in a Mercer survey...

Its EcoDensity initiative aims to focus that growth by developing more crowded neighborhoods at the city center. The dual goal: to build sustainable neighborhoods with the scale to make green energy technologies affordable and to preserve surrounding forest and mountain ecosystems.

Our take is that Vancouver has much of what is needed to support thriving companies. Our diverse population brings an international flavor. Like many West Coast cities, proximity to the Far East and Far Eastern manufacturing centers has brought a highly educated foreign workforce to our shores. The relatively mild climate has made them stay, bringing diverse perspectives on life and on business, a key for successful innovation as we've mentioned in previous posts.

Vancouver's highly skilled workforce and established technology companies like Electronic Arts has attracted other and often younger workers to the city and created a cultural center with nightlife and activates that attract still more workers.

Vancouver's proximity to major tech centers in the US plays an important role as well as we've mentioned, but there's more. Canadian government support for development of newer, innovative industries and the spotlight that has turned to Vancouver, as host of the 2010 Olympic Games has encouraged companies to take another look at the city.

We believe that cities that are prepared to host innovation in the 21^st need to be diverse, green, creative and influential. Vancouver is certainly one of them.

10 Key Ingredients to Corporate Innovation

Yesterday in the midst of scanning a variety of articles on innovation, as I do on a regular basis, I came across this post on Now Europe listing the top eight, actually ten, attributes companies that successfully innovate share. I've summarized them below, but you can read the full article here.

1. Top management buy-in

If senior management do not buy into your innovation process, no one else will.

2. Budget

One of the most effective ways for senior management to buy into innovation is for them to allot budget for the initiative.

3. Communication

Once your initiative is ready to launch, it is critical that people know about it, what it is meant to accomplish and how they should participate.

4. Rewards

Complementing communications is a rewards scheme for participating in your innovation activities. Rewards should be relatively small and recognise participation rather than good ideas.

5. Dedicated Innovation People

Assign an individual, individuals or a team the mandate of managing your organisation's innovation strategy.

6. Collaborative Innovation Tools

Enterprises need collaborative tools. Each individual has her own tools and methods for creative thinking, but rather than demand the use of a particular personal creativity tool for all employees, firms should give employees the freedom to use the tools that work best for each person.

7. Effective Evaluation System

It is important that your evaluation process is not a purely critical one. It is easy for evaluators to find all the weak points in an idea. But this can result in very promising ideas being rejected. So, evaluators should be asked not merely to criticise ideas, but also to provide suggestions on overcoming the problems they have identified.

8. Willingness to Invest in Innovative Ideas

Surprisingly, many organisations invest in creativity and innovation tools, but then fail to implement the most innovative ideas they generate.This is usually the result of excessive risk aversion, large approval committees, too much internal bureaucracy or a combination of these. Whatever is the cause, the result is a creativity programme which generates ideas rather than an innovation strategy in which creative ideas are implemented.

9. Enthusiasm

.Enthusiasm encourages participation in the initiative, makes people feel good about their participation and tends to encourage more radical thinking. If employees know that their crazy ideas are enthusiastically welcomed, they are encouraged to push their creative thinking ever further.

10. Diversity

..., if your firm employees a wide range of people with different educational backgrounds, different kinds of experience and of different cultures, your firm will have the advantage of breadth of knowledge, experience and thinking. That results in a wider range of ideas and a higher level of creativity.

What I like about this list is that it covers a wide spectrum of necessary "ingredients" that will result in effective launches of great innovative products... over and over again. Too often companies manage to develop and launch an innovative new product in spite of their corporate culture rather than because of it.

Large companies often embark on an innovation campaign, throw a few creative people at it and railroad an idea through and, if they're lucky, the product is a success. But too often it IS luck that plays the largest role in the achievement, which makes the whole process... unrepeatable.

To create a true innovation machine a company needs to look closely at its culture and determine what changes need to be made to re-energize the business and direct it toward innovation. This isn't an overnight process, which may be why the most innovative companies tend to be those that are smaller, newer and have not yet developed the stagnant corporate culture that typifies large businesses on this side of the Atlantic... or perhaps everywhere.

Not to say that it isn't possible for a large company to become innovative. Many of the steps listed above are easy to implement and should be applied across the corporation. Others require wholesale change which may be a bit difficult in an established company. (Who wants to fire half the workforce and hire on new to meet point number 10, Diversity?)

Other changes may need to be made on a smaller scale in a separate operating unit, dedicated to innovation. Many organizations have found success this way. This strategy too will fail though if only lip service is paid to innovation in the larger corporation.

Every company needs to determine the best way to create an innovation strategy that works best with their particular challenges and within or at least compatible with their own corporate culture. We've helped clients from a variety of different segments to reach these goals by keeping this fact, and the 10 ingredients for innovation success, in mind.

Watching And Waiting For Early Adopters On Web 2.0

The credit for the explosion in Web 2.O companies goes to early adopters and Web 2.0 companies' ability to reach them. Unlike the Web 1.0 companies of the early part of the century which, diverse though they were, focused on one to one interaction with consumers, Web 2.0 companies focus on multi user platforms.

Web 1.0 companies were selling something; supplying something; providing something for individual users. Web 2.0 companies are providing platforms for users to create their own experience…with other users. Think Myspace, Facebook, Twitter, FriendsFeed, Flickr, blogs and wikis.

Early adopters, that is, the technologically savvy have played a big role in driving the popularity of these new companies. When you're a tech or Internet Company, your early adopters, the ones that eventually drive your business or sometimes are your whole business, are easy to find.

But there are ramifications of Web 2.0 and the companies it spawned for traditional companies, old line manufacturers, service providers and even offline retailers too. Web 2.0 companies have made it much, much easier for many traditional companies to find innovators and early adopters for their products and reach them with marketing messages...maybe.

While frequently early adopters are associated with technological products, the basis for the theory Everett Rogers developed that segments users across a bell curve based on how quickly they adopt innovations, is applicable to just about any category of product.

Two key challenges marketers face is finding and communicating with early adopters and crossing the chasm where momentum picks up and the product gains acceptance by the early majority. Web 2.0 solves both of these problems for many companies.

If you follow Lazarfeld and Katz' Two Step Flow Model, which goes something like this:

... mass media information is channeled to the "masses" through opinion leadership. The people with most access to media, and having a more literate understanding of media content, explain and diffuse the content to others.

You can see why the new way of communicating, creates a funnel which smart marketers can use to direct marketing messages to the wider market. Opinion leaders have always played a key role in the success or failure of new products. In the 21^st word of mouth marketing is becoming one of THE key strategies used to launch a product.

Seth Godin writes this week in The Myth of Launch PR (which by the way, I found when it popped up on Socialbrowse) about companies that passed on the big media spend usually associated with a new product launch: Starbucks, Apple, Nike, Harry Potter, Google, William Morris, The DaVinci Code, Wikipedia, Snapple, Geico, Linux, Firefox and yes, Microsoft. (All got plenty of PR, but after the launch, sometimes a lot later).

Many of those names you'll recognize because... someone told you how wonderful the product was. Today that's even easier and happens at a much faster speed through social networking sites, blogs and other Web2.0 companies.

Finding and exploiting that user or users that can spread the word about a new innovation, cheaply and quickly is the Holy Grail of marketers in the 21^st century. But, the quest is not without its challenges.

Social networks and book marking sites frequently rise and fall before anyone has a good grasp on the audience they serve. Unlike the mainstream media, potential reviewers are fickle. They agree then choose not to review a product. (OK, sometimes the mainstream media does this too, but less often.) They create a big presence and attract a large following ...then disappear because life gets in the way. They get lost in the shuffle overshadowed by tech savvy, early adopters of the Web 2.0 TECHNOLOGY.

Just as marketers scrambled to try to determine how most effectively use Web1.0 technology, we'll struggle with Web 2.0 in its nascent stage. We know that early adopters are much easier to find now…if we could only figure out how to locate them. :P

Burnaby Board of Trade's Know You Neighbours

1. Full name and position/title: Tatsuya Nakagawa, President and CEO

2. Company/Organization Name: Atomica Creative Group

3. Company website: www.atomicacreative.com

4. Education/Credentials:

University of San Francisco, University of British Columbia

5. Average meetings per month: 20

6. Name a skill or talent you possess that is not in your job description (i.e. marketing background; can speak 3 languages)

Tennis Coach and NCAA Division 1 Tennis Player

Brown Belt - Karate

7. What makes your job fun?

New and innovative products and technologies.

8. Personal Peeves?

Bad cell phone manners

9. Favourite quote?

"Opportunity is missed by most people because it is dressed in overalls and looks like work."

- Thomas Edison

10. Name one person of influence who is in your professional network

Steve Wozniak, co-founder of Apple.

11. Who inspires you? Any mentors or role models?

Thomas Edison. Tiger Woods.

12. Imagine you had a working lunch with three prominent (or fictional) people.

Richard Branson, Virgin Group

Russell Simmons, Rush Communications

A.G. Lafley, P&G

13. Your favourite website is:

LinkedIn.com

14. Name one thing you cannot live without:

Family

15. List committees, organizations, or boards you sit on or have been a part of.

Burnaby Board of Trade, Board of Director

Japan-Canada Chamber of Commerce, Former Director

BC Export Awards, Steering Committee

BC Supply Chain Career Network, Former Director

16. What are you currently reading? Any favourite books?

Tipping Point, Malcolm Gladwell

Innovators Dilemma, Clayton M Christensen

Unleashing the Idea Virus, Seth Godin

17. What would be the professional legacy you'd like to leave behind? (i.e. increase sales by 300%; make corporate social responsibility a natural business practice; introduce technology that changes our lives).

To help change the global corporate innovation success rate from 25% (currently) to over 50%.