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?

Inclusivity: Will America Find Its Soul Again?

I know what some of you are thinking – “Well, did America have a soul to begin with?” I happen to think it did. For me the soul of America is “We, the people…”

Furthermore, I’m quite sure that people, as defined by our founders, did not mean corporations. (See what Charles Handy has to say >>)

But to get back to the topic of inclusivity, I’d like to make a shameless plug for our new book, co-authored with University of Michigan’s Professor Michael Gordon, called Inclusivity: Will America Find Its Soul Again?

inclusivity bookbuy now

BUY now >>

So what’s all the fuss about? The book is about asking questions:

  • How can companies take better care of their employees–and thrive?
  • Why don’t they see the opportunities in creating social value?
  • Do Americans think we have a fair distribution of wealth?
  • What are new means of putting our collective talents to work?
  • How can communities take the lead in creating opportunity?
  • How can public education prepare all students for the future?
  • How can better health care be made available without doctors?
  • How can communities do something about global warming?
  • How can you make a difference?
  • Why should you care?

Inclusivity: Will America Find Its Soul Again is a book of questions, hints, and suggestions about creating more opportunity for more people–starting with the USA, but looking at and learning from the rest of the world.

The very idea of the “United” States is based on the principles of inclusivity–all men and women are created equal under the law. But we seem to have lost our conviction that inclusivity is possible or even to be desired. The current divisive political climate, along with economic uncertainty, has fostered an atmosphere of fear and narrow-mindedness across the country.

What can we do in the face of this reality? The choice is not easy, but it is clear. Either we will decide to be more inclusive, or we will turn against each other – finding reasons to divide ourselves, not just from each other as citizens, but also from a shared future.

The USA, unless we decide otherwise, will become simply the SA.

This book is dedicated to an inclusive future for all our children, including my daughters M and K, and the idea that the United States is still the last best hope for democracy and inclusivity. We won’t have one without the other.

The book includes the following sections:

  • What Is INCLUSIVITY?
  • Inclusive World
  • Inclusive Entrepreneur
  • Inclusive Economy
  • Inclusive Cities
  • Inclusive Education
  • Inclusive Health
  • Inclusive Leadership
  • Inclusive Future

Let us know what you think!

P.S. – We don’t want this, do we?

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 Promise of Integrated Development

I first met Bob Freling at a board meeting of the Solar Electric Light Fund (SELF) in San Francisco several years ago.  At the time, I felt that here was an NGO doing innovative things but not getting enough visibility for their work. They were solar way before solar was cool. 

What struck me is how informal and close the board members were.  One of the board members – Larry Hagman (good ol’ J.R. Ewing) – did a brilliant set of solar commercials which I think says a lot about his character and wanting to make the world a better place (quite the opposite of his TV character!). But I digress.

The story here is that SELF pioneered the use of solar power to fight “energy poverty” across a spectrum of applications with their “solar integrated development model” – from clean water, to drip irrigation to improve food security, to electricity for health clinics, schools, and micro-enterprise.

In his blog post about the $300 House Energy Challenge, Bob explains:

“It’s simple really. First, solar
energy powers pumps and filters for clean water. This also enables drip
irrigation for critical crops. Once people have those necessities, the solar
energy is used to power health care facilities which can power equipment and
refrigerate vaccines, for example. This increasingly healthy population can
then open schools which are powered by solar to provide computer and
Internet-based learning. Finally, these well-fed, well-cared for, well-educated
villagers can begin community and entrepreneurial activities to grow their
economy.”

Bob’s optimism is tempered with reality. The Millennium Development Goals won’t be achieved without energy access, he explains in another blog post.  In case you forgot what the MDGs are (as I often do) they’re listed as:

1) eradicating extreme poverty and hunger;
2) achieving universal primary education;
3) promoting gender equality and empowering women;
4) reducing child mortality;
5) improving maternal health;
6) combating HIV/AIDS, malaria, and other diseases;
7) ensuring environmental sustainability; and
8) building a global partnership for development.

Note that they are interrelated, ecosystemic problems – and that from Bob’s perspective, energy is the key factor which makes all of them feasible.

With the $300 House project, my eyes have been opened to the fact that the approaches for dealing with the poor are often not very constructive, and sometimes end up doing more damage than good.  That’s what  $300 House adviser Stuart L. Hart is talking about when he says we need to create smaller problems. It is also a concern of our critics on the $300 House. When I spoke to Matias Echanove recently, he was concerned that mass produced housing could in fact disrupt the local economy – the small businesses that are based in informal slums around the country. I hear him. 

Our $300  House project is exploring ways to integrate services and jobs into the ecosystem as well, and we’re reaching out to talk to the leaders in the communities that are interested in this approach. In India, we’ve just completed a survey – with the help of THL – that covers 15 villages in three of the poorest states in India – Uttar Pradesh, Bihar, and Jharkhand.  I’ll go into more detail in a later post.

For me the question is quite simple – we see an explosion of interest in  developing integrated  townships for the middle class in India, but why is there nothing comparable for the poor? To borrow a phrase from the US, why can’t we build “master-planned communities” for the poor?

Is it too much to ask that governments, NGOs and development institutions, and businesses work together with the communities involved to build integrated solutions?  

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Unfortunately, there are far too few examples of collaborative development. This is something we all need to look at urgently.  There is also a problem of ownership.  The development community, NGOs, and most governments think they “own” the problem.  Unfortunately, without a business mindset to make solutions scale, their is so little real progress.

The poor remain poor. 

And that’s why the work Paul Polak is doing is so important.  He’s looking at making small changes at the bottom of the pyramid; small changes that make a big difference in the earnings of the poor. This is also the approach advocated by Esther Duflo and Abhijit Bannerjee in Poor Economics.

At a much larger scale, we see an example in the Gates Foundation‘s approach – which is all about examining the ecosystems of poverty.  A common criticism of the Gates Foundation goes along these lines: “How can people like Gates, living in a different universe, help people at the bottom of the pyramid?”  This is a false and damaging argument, but answered quite well by Sam Dryden:

“Some people may ask how my team and I–working at the world’s largest
foundation located in a prosperous corner of a rich nation–can relate to
a subsistence farming family in Ethiopia or Bangladesh. This is a very
reasonable question to ask. The farmer has a direct connection to the
land and we are considerably removed, both by distance and culture. We
begin by realizing these differences and humbly listening to farmers and
their families, learning and respecting their cultures, ways of living,
and knowledge of place and home. The solutions we seek are those
appropriate and welcomed in this context, not those imposed by distant
values or interests.”

And finally, perhaps there is an alternative to the giant top-down programs, and incremental bottom-up “Let the Poor Do It Themselves” approaches we’ve encountered. 

With the $300 House, we’re thinking micro-developmentis it possible to build integrated micro-solutions at the village level?  And in cities, at the neighborhood level? 

Why not?

The Ecosystems of Poverty

When I first started working on classifying online ecosystems, I had no idea that my thinking there would influence my thoughts on the $300 House. But now it seems like the systems approach to understanding wicked problems is pretty much the only way to go.  None of this is new, of course, but I’m still impressed at the power of ecosystem thinking.

Here’s how Nobel prize laureate Gunnar Myrdal was thinking about the problems of race and poverty:

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The “vicious circle” has not yet made its way into our political thinking though, if we judge the policy makers of today’s Congress. Heck, they can’t even bring themselves to accept the effects of global warming – in no small part thanks to our lobbyist friends.

The idea of poverty as the outcome of a dysfunctional ecosystem is explained here as well:

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Note that this applies to poverty in the US as well, not just the emerging world.

So, part of tackling the issue of affordable housing for the poor is to try to understand the interconnected nature of these problems.  I tried to draw causal arrows between the various problems, but gave up. In essence, we have a problem of insecurity, in which all of these factors must be addressed simultaneously if we are to change the vicious cycle of poverty, disease, and suffering.  Here’s what I ended up with:

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The poor live in an insecure, unbalanced universe. 

I’m calling it the “ecosystems of poverty.”

Next we’ll look at the idea of integrated development (another old idea) which fell out of favor, but must be re-evaluated in today’s light if we are serious about poverty alleviation.

The $300 House: Go, Go, Go!

The final Harvard Business Review post in the series, and hopefully the start of some real change at the bottom of the pyramid.

Our goal is to go social for social business. Can social co-creation help the poor?

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Keeping fingers crossed.  Thanks to Ingersoll-Rand for the sponsorship and to all the judges and advisers at 300House.com!  Thanks jovoto and COMMON. Thanks Shaun.

Thanks also to Scott Berinato at HBR and of course – VG, my partner in crime.

Rethink: Where to Look for Growth in an Uncertain World

This chart by the folks at the Eurasia Group, got me thinking. Something just doesn’t make sense:

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Then it hit me.  This is a rather conventional way to screen for global opportunities.  If we looked at other screens like “innovation potential,” “middle class expansion rate,” “Gini coefficient shrinkage,” or “corruption index,”you’d see a very different picture.

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.

Russia burns; will the US be next?

The global-warming deniers are quiet as the world’s forests burn.

Across Russia, the political drama adds to the horror as this, the hottest summer on record, takes its toll on the poorest Russians as they lose property, homes, and even lives:

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For those of you who are ready to say this is “God’s punishment,” I can tell you we’re probably going to be next. Maybe not this summer, because we’re getting far more rain in the West than usual, but perhaps the next.  The reason I can say this with near certainty is that our forests are already dead or dying. So my guess is that all these dead trees are going to burn across North America pretty soon.  The map looks like this (it’s an overlay of the extent of the pine-beetle plague):

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None of this is normal.

NASA watches as the carbon footprint grows.

Our politicians do nothing. Our Republican Senators have been owned by Big-Oil and Big-Coal forever.  And the poor Christians haven’t yet figured out that they’re being taken for a ride.  For them, I say – check your Revelations 11:18 – at some point you have to say “enough!” Why do you support these people who are destroying God’s Creation?

Sen. Jim Inhofe, this is on your head. Your grandchildren won’t forgive you, even if they think you’re just swell right now. This is not “global warming deception” as you call it in your Luntzian language of deceit. It’s g-l-o-b-a-l w-a-r-m-i-n-g, period.

Have you no shame, Senator?

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.