Here’s a nice talk by Tom Peters on innovation. Some of the points that jumped out at me:

• He again emphasises the importance of process/business model innovation – we simply can’t get stuck on only thinking of new products as innovation.
• The idea that you should only buy from vendors that are in the top 10% of their industry in R&D expenditure is pretty interesting. Yes, R&D is spending is only a proxy for innovation, and not a great one – but his main point, that you need to work with the most innovative people and firms that you can find is well taken.
• Good ideas can come from anywhere – not just inside your firm. Yes!
• “The bottleneck is at the top of the bottle” – quoting Gary Hamel, Peters says that great innovation doesn’t come from corporate headquarters.
• Diversity of mental approaches is important – for more on this, read The Difference by Scott Page.
• “Who’s the most interesting person that you’ve met in the past 90 days?” – interesting question, and probably worth asking…
• Interesting point on incremental innovation – he cites studies that suggest that people/processes with higher levels of variation end up being more innovative than those with tightly controlled output. So maybe lean/six sigma aren’t compatible with innovating? I’d be interested in hearing thoughts on that…
• I like his idea that firms should be built to perform for 20 years, then move on to something new. That rings pretty true to me.

I know that Peters’ stuff isn’t necessarily overburdened with support from well-deisgned research studies, but I still find him to be consistently interesting, often inspirational, and most imprtantly to me, someone that talks about the world of business in a way that is very conssitent with the way that I’ve experienced it. So I don’t read him to find out the truth – I read him to get ideas. And he’s great for that.

Where you are is still important. Location has a huge impact on the resources available to you, the education of the people that you work with, the money available to try out radical ideas, and the cultural attitudes towards new things. Check out this from a Time Magazine article on California:

Ignore the California whinery. It’s still a dream state. In fact, the pioneering megastate that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency, health clubs, Google searches, Craigslist, iPhones and the Hollywood vision of success is still the cutting edge of the American future — economically, environmentally, demographically, culturally and maybe politically. It’s the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It’s also an unparalleled engine of innovation, the mecca of high tech, biotech and now clean tech. In 2008, California’s wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, the Gap and countless other companies that drive the way we live.

And here’s another interesting bit:

California scores poorly in most “business friendly” ratings, which tend to focus on tax rates and wage levels rather than on, say, worker productivity or creativity.

A lot of the measures of ‘business friendliness’ have absolutely nothing to do with the factors that support innovation. In fact, it is a robust research finding that things like increased regulation actually spur innovation and related economic growth. Why are the leading clean-tech energy innovations coming from California and Germany? In large part because of long-standing legislative requirements.

And then there’s this from Guido Jouret of Cisco:

California has a very welcoming attitude, but it’s a Darwinian society. Companies come and grow and die, and no one sheds a tear. And there’s a real sense that it isn’t worth doing if it won’t change the world.

When we talk about creative destruction we often focus more on the ‘creative’ part than the ‘destruction’ – but both are needed for innovation to occur. The big question is what resources are available for those that are negatively affected by change.

I keep hearing about the death of distance, but where you are still matters – especially if you’re trying to innovate. This doesn’t mean that people and firms can’t be innovative in environments that are less supportive of innovation – they can. It simply means that you need to consider the resources and constraints provided by your location when you develop a strategy for innovation.

(hat tip to Tom Peters – who highlighted the first quote too)

(the picture is from flickr/Port of San Diego under a creative commons licence)

Here is Nassim Nicholas Taleb talking about using nature as a model:

The whole talk is well worth watching – it’s one of the best I’ve seen from Taleb. He tends to focus on avoiding negative black swan events (extremely rare events with disproportional impacts), so almost always talks about mitigating risk. When we’re trying to innovate, on the other hand, we’re looking for a positive black swan event if we’re trying to come up with radical innovations. And there is one absolutely essential point for this in Taleb’s talk – to do this effectively, we need slack. We can’t come up with innovations if our organisation is 100% efficient. Some innovations won’t work. This might look like ‘waste’ to some people, but it’s not. It is an investment towards finding the things that will work. We can’t be innovative if we’re fully leveraged.

I was talking with my colleague Jay Weerawardena today about leadership. We agreed that an important aspect of leadership is inspiring people, but also putting people into a position to succeed. That idea fit in very well with Itay Talgam’s TED talk, which was posted:

There are many useful points made in this talk, but the one that resonated most strongly with me is the idea that leadership isn’t about telling people what to do – it is about taking everyone’s talents and creating something together. That proposition is self-evidently true in the orchestras that Talgam uses as examples in his talks, but I also think that this is true in firms. Innovation leadership is about creating things together – which means that management is at least as much about removing obstacles as it is about directing.