Archive for November, 2009

navigating innovation

Posted by Tim in business models, design, evolving economic entities on 9 November 2009

I got a new mobile phone this week, and I’ve spent a fair bit of the time since then playing around with different programs and applications that are available for it. The killer app in smart phones for me is gps tracking. Using google maps, getting turn-by-turn directions and geotagging photos and notes are all incredibly useful features to have. Furthermore, it is the gps feature that will drive the augmented reality apps that are going to be the really cool things to have on our smart phones in a couple of years.

All of this got me thinking about something – Magellan introduced the first consumer gps tracking unit in 1989. Why didn’t a gps manufacturer ever introduce an app store? Many of the things that we’re doing now on smart phones could have been done on a handheld gps unit. So why didn’t Magellan or Garmin or someone think about making an open platform that anyone could program for?

I thought of this question while visiting some friends this weekend and one of them, a very good programmer, said that maybe they didn’t think to do it because they didn’t think it was their core business. That’s probably correct. On the other hand, if one of them had thought of it, maybe now they wouldn’t be quite so worried that everyone is asking ‘why do I need a gps when I have a phone?’

So here’s a few more questions – what product right now is like a gps in 1989? What non-core part of your current industry has the potential to expand rapidly? Finally, can you adapt your business model to take advantage of the answers to these questions?

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Do strategy and innovation converge under uncertainty?

Posted by John in evolving economic entities, innovation, innovation strategy, variety on 6 November 2009

Last week I was a panelist on an event hosted by CEDA on the topic of strategy after the global financial crisis. One particular theme that came out of the discussions was a reduced reliance upon prediction and planning. This is significant becuase traditionally, this is what strategy is all about. There was some recognition of the value of scenario planning, but still, not as a tool for prediction, but as a tool for helping managers respond to unforseen changes.

Now its hard to tell if the economic shocks from the past 12 months will have a lasting effect on the way organisations approach strategy, but there was a definite level of disatisfaction with current strategy practices and a broad agreement that we need to stragegy in a different way, that is more compatible with being ‘nimble’ and ‘adaptable’. If we can’t predict the future of our business envrionments, then how do we stay ahead by being better at sensing opportunties, adapting to changes and experimenting with ideas?

Perhaps the broad framework for strategy in the 21st century is a process of managed evolution. In Eric Beinhocker’s excellent book “The Origin of Wealth” is a chapter on strategy called “Racing the Red Queen”. The title refers to the character from “Through the Looking Glass” who tells Alice that you have to do all the running you can to stand still. In other words, Beinhocker’s argument is firms that stop evolving become history.

So what does it mean to manage evolutionary strategy? Beinhocker’s advice is straightforward…
“The key to doing better is to ‘bring evolution inside’ and get the wheels of differentiation, selection, and ampification spinning within a company’s four walls. Rather than thinking of strategy as a single plan built on predictions of the future, we should think of strategy as a portfolio of experiments, a population of competing Business Plans that evolves over time”.

The thing about Beinhocker’s approach to evolutionary strategy is that it mirrors the processes around good innovation management, but at the level of business plans. If both strategy and innovation are processes that are deeply affected by uncertainty, then managing them both as an evolutionary process makes a lot of sense.

It’s about time we stopped pretending that we can predict the future and start feeling at home in a very uncertain world with both pitfalls and tremendous opportunties.

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Lo!

Posted by Tim in innovation on 5 November 2009

I love the story of the first message to cross the internet:

Forty years ago today, a team led by Leonard Kleinrock typed the “Lo” of “Login” into a Stanford computer, which promptly crashed before the command could be entered. But because Kleinrock’s team was sending this message from a UCLA machine, he had just taken part in one of the great milestones in communication history.

That’s in an article in Seed Magazine from last Thursday (via a pointer from Smart Mobs).

In light of some of our recent discussions about public sector innovation, I also think that it’s important to realise that the internet was a public sector project. Here’s how Bob Taylor got it launched:

What he needed, thought Taylor, was a way to use just one terminal and one log-in for all three of the computers to which he had access. In other words, he needed a way for them to talk to one another. A computer network. And not just one that linked computers of the same type, as had already been done experimentally, but of different designs. Once he had that, the computer scientists around the country working on ARPA-funded projects could have it, too. They’d then be able to share computer resources and double, triple, even quadruple their computing power. With a computer network through which any computer could communicate with any other computer on the network, research could make much more efficient use of the then-still-very-expensive computer resources—they could all get more time on more computers.

Taylor described his brainstorm later as “kind of an ‘aha’ idea.” Right then and there, he headed over to the Pentagon’s E-Ring, to the office of Charlie Herzfeld, ARPA’s then-director, and pitched the idea to him. Herzfeld listened, asked a few questions, and then, as Taylor described it later, “He pretty much instantly made budget changes within his agency and took a million dollars away from one of his other offices and gave it to me to get started.” Back at his own office in the D-Ring, Taylor looked at his watch and let out a breath. “Jesus Christ,” he said to himself. “That took only 20 minutes.”

If public institutions can come up with an innovation as big as the internet, then there’s not much excuse for not being able to get smaller projects off the ground, right?

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networks and innovation

Posted by Tim in networks on 5 November 2009

Roland Harwood has an interesting post today on the always worthwhile NESTA Connect blog in which he discusses eight issues that firms run into when trying to manage open innovation. While you should definitely read the whole post, one idea that jumped out at me is this:

Misunderstand the difference between hierarchies and informal networks – Hierarchies work primarily through ‘command and control’ whereas informal networks work through ‘trust’. Both are crucial but mixing the two can be fatal. Don’t do it. All complex innovation challenges now involve hierarchies – which are multiple hierarchies interwoven with multiple informal networks – and we need to understand them both. According to social network guru Karen Stephenson, at any point in time, informal networks trump hierarchy, however over time hierarchies trump informal networks. In other words informal networks have power but hierarchies preserve longevity.

I think that his distinction between hierarchies and informal networks is correct – it certainly rings true with regard to the observations that we are making in our research in this area. It is definitely correct to say that complex innovation challenges do inevitably involve both. My read on this would be that it is important to understand both the informal networks and the hierarchy involved in any particular innovation project. Most firms have a reasonable handle on their hierarchy but no clue about their networks. The methods of managing both differ, and as Harwood points out, they are good for different things.

We’re working hard right now trying to figure out how to effectively manage innovation networks in project-based firms. It’s a pretty interesting challenge as these firms often have a much stronger hierarchy than many of the organisations that have normally been looked at in network research. Manaing the interactions between the two forms of organising can be very difficult. Getting this right is one of the many challenges of managing innovation.

(network drawings from flickr/sevensixfive under a creative commons license)

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open education

Posted by Tim in aggregate, business models, connect, filter on 4 November 2009

Here are the slides + audio from a talk that I gave this morning as part of UQ Teaching and Learning Week. It was for a panel discussion on what it means to be open in the context of higher education. It runs for just over 13 minutes. Press the green button in the middle at the bottom of the slides to start the whole thing.

Open Education?

View more presentations from Tim Kastelle.

As usual, if I sound like Jabba the Hut, you need to update your flash player because slideshare doesn’t like old flash players.

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the future is in filtering

Posted by Tim in filter, innovation strategy on 4 November 2009

Yesterday we had evidence of the importance of connecting, and today we’ve got some for filtering. Dominic Basulto points to a great graphic commissioned by Wired magazine and made by Density Design on his terrific Endless Innovation blog. Here’s the small unreadable version:

map

And you can see the full version here.

The map is based on scenarios created by the Institute for the Future in Palo Alto. The thing that jumped out at me is that in the economics section, one of the trends that they predict to become more important is ‘filters as brands’. The examples in the drawing our Amazon and Google, and it just emphasises one of the points that I keep making: one of the best ways to make money in the digital economy is to be a good filter. Time to start thinking about how you can do that effectively in your industry.

Balance Network has broken the map down into sections – here is their version of the economics part:

One potentially alarming part there (for me at least!) is the ‘academic recognition/reward crisis’, which just happens to be the topic of a talk I’m giving later today…

Blog Note: Blogging Innovation reposted my post on Innovating with Constraints today.

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synthesis & connecting

Posted by Tim in connect, innovation on 3 November 2009

Jeffrey Phillips writes a really nice innovation blog called Innovate on Purpose. One of his recent posts concerns the importance of synthesis, where he says:

What should be obvious is that one of the most important skills from an innovation perspective is the act and insight of synthesis.

This is a real challenge, because most people are taught to break down problems into smaller, finite pieces and solve the smaller problems. We also work as specialists, with deep understanding of our core capabilities and knowledge, but often with little insights or knowledge beyond our education or jobs. So most people don’t use synthesis skills on a regular basis, and are probably prone to avoiding synthesis since synthesis requires introducing a number of new and possibly unknown factors which may simply make the problem larger and more difficult.

He then goes on to discuss areas in which synthesis is useful, including research at the start of an innovation project, and in doing customer research. Phillips also recommends looking for people with skills in synthesis if you are trying to identify innovators within your organisation.

This reinforces my idea about the importance of connecting. Synthesis is simply (well, actually, it’s complex) combining various observations and figuring out how they relate to each other. I’ve been saying all along that connecting is one of the key skills that is essential to innovation, so it’s nice to see that point supported elsewhere.

Blog News: Two interesting things happened with the blog yesterday. The first is that our traffic has now gotten high enough that google analytics classifies this is a medium sized website rather than a small one. The second is that I was one of the winners in a blogging contest at Blogging Innovation. In light of those two events, I thought it would be a good time to thank everyone that reads the blog, that tweets about it, that makes a comment or that recommends the blog to a friend or colleague. Thanks very much for your support!

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“the rules”

Posted by Tim in innovation strategy, time on 2 November 2009

Nancy and I were chatting with Phil Long over the weekend about some of the barriers to innovation that we run into at our university. We concluded that some of the biggest ones come from slavish adherence to the Handbook of University Policies & Procedures (the HUPP).

I’m not saying that organisations shouldn’t have rules. I guess. But if your organisation is in a turbulent environment that requires change, and the rules are getting in the way of innovation, choosing to follow the rules rather than to innovate is a very poor choice. Nancy makes a really good point about this – she always asks ‘who makes the rules?’

‘The Rules’ aren’t some naturally occurring thing that we uncover through scientific discovery. They are made by people, usually with the goal of making an organisation run better. Both parts of that construction are important. They’re made by people, so they can be changed by people – by us! And they’re designed to make the organisation run better – so if they impede progress, they must be changed.

Obviously there are significant issues of power and control wrapped up in changing the rules. But usually the people that can change the rules are the same people that say things like ‘Innovation is one of the core values of our organisation.’ Often, you can make great progress by pointing out the contradictions between the objectives of your group and the rules by which you’re supposed to be operating. The only other choice is to go out and discover a different set of rules…

(photo from flickr/Paul Grand under a creative commons license)

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the gap between invention and innovation

Posted by Tim in innovation on 1 November 2009

If you want more insight into the differences between invention and innovation, check out the Museum of Unworkable Devices! It includes many perpetual motion machines, along with other ideas that will never work. Best of all, it has very good explanations of why the designs are futile. Great stuff!