The Search for the Sources of Innovation

How does innovation happen? Most company’s struggle to understand how innovation works, often confusing creativity with innovation. In today’s tacit, knowledge-based creative economy, innovation and differentiation rarely come from one distinct source. Rather, innovation evolves from:

  • new ways of thinking,
  • new business models,
  • new processes,
  • new organizations (or new collaborative inside/outside team structures),
  • and new products (offerings including services)

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In his classic book – Innovation and Entrepreneurship, the late Peter Drucker found seven sources of innovation. The first four sources were internal, inside the enterprise, whereas the last three are external, outside of the company.
1. The Unexpected
2. Incongruities
3. Process Needs
4. Shifts In Industry And Market Structure
5. Demographic Changes
6. Changes In Perception
7. New Knowledge
A good description of the seven sources is here. Unfortunately, not everyone stumbles into innovation like the legendary 3M Post-It notes, or the unexpected discovery of Aspartame, but innovation can, and should be pursued in a systematic way.
Larry Keeley‘s Ten Types of Innovation: The Discipline of Building Breakthroughs gives us a glimpse into how that might be:
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Here is an added insight from Keeley and friends: the things we love in the world–the services and systems we value and use–are the ones that make it easy to do hard things.
What does all of this have to do with business results?
Clearly there is plenty of room for innovation when it comes to designing superior, differentiated experiences for customers.  Every interaction with your customer can be differentiated, integrated with the purpose of the customer.  Make it easy to do business with you, said Jakob Nielsen, the web usability expert, many years ago.
What about the power of ecosystems?  At the individual level, ecosystem thinking can help you create better ideas. it’s all about disorganization.
Ideas need to be sloshing around or crashing in to one another to produce breakthroughs:
  • Research shows that the volume of ideas bouncing about make large cities disproportionately more creative than smaller towns.
  • Having multiple hobbies allows your brain to subconsciously compare and contrast problems and solutions, forming new connections at the margins of each.
  • Similarly, reading multiple books at the same time vs serially lets your brain juxtapose new ideas and develop new connections.
  • Wandering minds are more creative.
  • Studying a field “too much” doesn’t limit creativity — it does the opposite. More ideas banging about just produces even more ideas.
  • The “accept everything” mantra of brainstorming doesn’t work. Debate is far more effective. Let those ideas fight.
  • ADD and bipolar disorder are both associated with greater creativity. When you’re drunk or exhausted your brain is poised for breakthroughs.
  • Even with teams, it’s better to mix up experience levels, familiarity with one another and other factors to keep things rough around the edges.
And at the organizational level, there’s ecosystem strategy.  That’s a post unto itself…
Ask:
– How do you make it easy for the customer to do business with you?
– What outcomes do you want to see?
– What is required to achieve those outcomes?
– What must be done? What needs to change?
– How do we make innovation a embedded process?

Design Your Life, Change the World

Michael Gordon‘s book, Design Your Life, Change the World: Your Path as a Social Entrepreneur [A GUIDE for CHANGEMAKERS] is for changemakers – the people and organizations that want to make a difference in the world. 

book

The book tries to answer two questions, says Professor Gordon:

1) How can organizations best address important societal problems such as poverty, inadequate health care, sub-par education, and an unhealthy planet?

2) What’s the best advice for students who want to address these issues and still live lives of relative comfort?

The reason I’m helping the professor is because now, more than ever, we need the brightest students to tackle the world’s biggest problems. And the oil-coal-nuclear lobby isn’t making things any easier…

Are you a changemaker?  Go find out >> 

P.S. – you can download the PDF version here >>

Richard Branson: Business As Unusual

I don’t watch TV much but I just caught a clip of Richard Branson promoting his book Screw Business As Usual. Looks like he’s on the same page as Stuart Hart – who has been essentially saying the same thing for twenty years.  They ought to compare notes!

What was funny was watching Branson sit there as the producers had him wait and wait for his three minute interview.  He was clearly in distress – the anguish of the entrepreneur who can’t bear to waste time – as he smiled and waved every time they turned the camera on him. 

The book is available later this month… have a Happy Green Christmas!

The $300 House: Seth Godin on the Marketing Challenge

Seth Godin posts a very insightful blog entry on the HBR site. He’s talking about the challenges of marketing at the bottom of the pyramid:

When someone in poverty buys a device that improves productivity, the
device pays for itself (if it didn’t, they wouldn’t buy it.) So a drip
irrigation system, for example, may pay off by creating two or three
harvests a year instead of one.

Read all about it >>

The $300 House: Bob Freling on the Energy Challenge

The Solar Electric Light Fund‘s Bob Freling has posted an entry in Harvard Business Review about his Solar Integrated Development (SID) Maturity Model and how it fits into our concept of the $300 House.

Here’s Bob waxing eloquent:

Together with potable water, nutritious food, accessible health care,
educational opportunity, and economic empowerment, the $300 House
completes this virtuous ecosystem in which individual households and
their communities can march hand in hand towards a bright and
sustainable future.

Read the whole post The $300 House: The Energy Challenge >>

Minding the Gap: A Failure in Intuitive Intelligence?

The Gap screws up with their logo redesign. A giant failure of imagination in the boardroom.

But Umair Haque asks the right questions:

  • Do designers have a seat in the boardroom — or just in the basement? How often does your CEO ever talk to a designer?
  • Are designers empowered to overrule beancounters — or vice versa?
  • Is the input of designers considered to be peripheral to “real” business decisions — or does it play a vital role in shaping them? Is design treated as a function or a competence?
  • Are designers seen just as mechanics of mere stuff — or as vital contributors to the art of igniting new industries, markets, and catgeories, sparking more enduring demand, building trust, providing empathy, and seeding tomorrow’s big ideas?
  • How much weight does senior management give to right-brained ideas, like delight, amazement, intuition, and joy? Just a little, a lot — or, as for most companies, almost none?

Seriously.

We all need to wake up. The Chamber of Commerce approach to design isn’t going to work anymore.

The $300 House-for-the-Poor

Ever since the Haiti earthquake, I’ve been thinking about why we don’t have a quick-build house made of sustainable materials at a price point that the poor can afford (with micro-credit if needed).

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The $300 House-for-the-Poor is an extension of the concept of “reverse innovation(inspired by my client and friend VG) in which innovations developed in poor countries are then brought back for use in developed countries and other parts of the world. Housing impacts health, energy, education, and security.

What if we could build sustainably designed houses for the world’s poor at an affordable cost? What if these same designs could provide relief to refugees and victims of natural disasters? The we I’m referring to is a collaborative of companies, governments, and NGOs.

This type of a structure will be engineered in the same way the TATA Nano was engineered – without the traditional assumptions.

Once built, the $300 house should be used across the globe – from Haiti, to Africa, India, and yes, even in this country, to help the homeless.

So what are we waiting for?  It’s time to get busy designing the $300 House!

Shine, Baby, Shine: Larry Hagman talks Solar


Go J.R.! Note he mentions my client – the Solar Electric Light Fund. Stay tuned for more news about them…
I like the SolarWorld ads Hagman does quite a bit. Here he’s talking to Sue Ellen (who seems to be blaming him for BP’s mess in the Gulf):

Shine, baby, shine! Well said, Larry Hagman!
The thing about Hagman is he put his money where his mouth is – years ago – by converting his estate to solar, before solar was cool.

Zero Currency: Fighting Corruption at the Point of Sale

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A nice story from the World Bank blog about a grass-roots organization‘s efforts to stop petty corruption in India and around the world:

the idea was first conceived by an Indian physics professor at the
University of Maryland, who, in his travels around India, realized how
widespread bribery was and wanted to do something about it. He came up
with the idea of printing zero-denomination notes and handing them out
to officials whenever he was asked for kickbacks as a way to show his
resistance. Anand took this idea further: to print them en masse,
widely publicize them, and give them out to the Indian people. He
thought these notes would be a way to get people to show their
disapproval of public service delivery dependent on bribes. The notes
did just that. The first batch of 25,000 notes were met with such
demand that 5th Pillar has ended up distributing one million zero-rupee
notes to date since it began this initiative. Along the way, the
organization has collected many stories from people using them to
successfully resist engaging in bribery.

I like it. Now let’s send some “zero dollars” to the Famous Five justices Supreme Court, the Blue-Dog Democrats, and the entire Republican party.

Bet You Can’t Eat Just One: Addiction as a Strategy

Listen to this:
Junk food elicits addictive behavior in rats similar to the behaviors of rats addicted to heroin, a new study finds. Pleasure centers in the brains of rats addicted to high-fat, high-calorie diets became less responsive as the binging wore on, making the rats consume more and more food. The results, presented October 20 at the Society for Neuroscience’s annual meeting, may help explain the changes in the brain that lead people to overeat.
So is this another example of addiction as a business strategy – similar to what the tobacco companies were doing earlier?
Maybe that’s why the IT geeks have such a hard time implementing Lean IT >>

Wild Phil Townsend: Where is GE’s Open Reverse Innovation?

Phil Townsend wonders why GE hasn’t opened up it’s Reverse Innovation model in his post: Opening up Reverse Innovation >>

Townsend makes a good point:

So why can’t a company like GE follow down this path with “open reverse innovation
– inviting small companies in India and China to submit their products,
services and ideas to be evaluated by GE for global distribution.  Of
course, the open model would require an environment of trust
but what better way to create goodwill in new markets than to be seen
as a development partner in the China, India, and resource-starved
Africa?  A.G. Lafley sits on GE’s board; surely he could help them get started.

Townsend also proposes the formation of innovation collaboratives funded by companies like GE to create a pipeline of new products for GE. 

Not a bad idea, if you consider that a recent
McKinsey survey found that 20% of companies have opened up their
innovation processes to employees and customers and they report a 20%
rise in the number of innovations
, on average.

Cloud Computing = Disruptive Innovation

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Mezeo’s Steve Lesem explains how Cloud Storage is a disruptive innovation:

The common assumption is that the traditional IT vendors will be disrupted by cloud computing offerings from Amazon and Google
The truth is, Amazon and Google may eventually impact this market, but
they will not be the first to disrupt traditional IT service
providers.Already we see hosting providers like Rackspace and SoftLayer provide their own suite of differentiated cloud offerings.

My thinking is that the entire cloud story is a paradigm shift for IT. See this article I just co-authored: Considerations for Migrating to the Cloud: How Cloud Computing is Changing the Enterprise »

See also
: Lesem’s Cloud Storage and The Innovator’s Dilemma »

Stay tuned for more on the cloud.