I was asked recently to contribute to the American Institute of Chemical Engineers Management Division newsletter and thought I would share a modified version of it with all of you.

A Recession is Coming, A Recession is Coming….

Is the sky falling or is it just a false alarm? Who knows right now, but it's amazing how a crisis focuses our minds. We all of a sudden do things we should have been doing all along and just put off. A few examples:

1. Planning. The Wall Street Journal has published a recent article on how good (and bad) various companies do this. But when you offer early retirement buyouts to a huge number of people, with the expectation and plan that a large number will accept, how is their function (note I did not say job!) going to be done? Is it really that the function was not necessary? Why have you been doing it this long? Shouldn't planning be done ahead of time and not in a crisis? Succession planning is a particular area of concern.

2. Customers. Do we treat them differently in an economic downturn? Why? Aren't they valuable all the time? Do we treat them special only when they tell us they are exploring "other alternatives"? Should we all of a sudden stop worrying about their long term needs and instead focus on the short term price reductions that the market forces upon us?

3. Innovation. Boy, have we turned the spigot on in the last 5 years after having drained the swamp totally in the previous ten, and having had the spigot on the previous 10 years. It's like a long term sinusoidal wave. Everyone's all excited. Now, things are getting tough. We can't afford innovation in a downturn, can we? Just cost cutting, downsizing (or is it "right sizing" nowadays), and focusing. Shut down those programs, stop asking customers what they want 5, 10 years from now. Stop asking what and who is going to replace your products and services. Get surprised at the answers you see elsewhere in a few years in exactly the same time frame.

3. Technology. Should we stop investing in new areas? New applications? It sure would save money, and in a few years we can see what others are doing and decide what we shlould have been doing. Then we play catch up...if it's possible.

4. People. They've been so hard to get lately. Hiring bonuses, retention bonuses. Things slow down and we think we don't need so many. Stop being nice. Stop those extra attention efforts. They won't notice because they're now insecure and you hold the upper hand (finally!). You're right, they won't notice until the next time… Aren't they the same people?

Let's think about our on and off switches and whether they should be variable dials instead. And let's also think about the response of those dial settings and maybe what their hooked to. This current situation reminds me of the reverse of the panel discussion I heard about 5 years ago at an IIR conference where someone said, "we're done with all the downsizing and restructuring, and it's now time for innovation". It was as if there was an assumption that the memory banks were suddenly wiped out by Cylon Borgs and people would have no memory of the massive layoffs and the "focusing" of activities, and we'd all be happy again and playfully march off into the new exciting world of innovation. If that's where you started a while back, think long and hard about your assumptions of peoples' perceptions and reactions.

Brownian motion is the random movement of particles suspended in a liquid or gas. This phenomenon was first observed by botanist Robert Brown in 1827 ("A brief account of microscopical observations made in the months of June, July and August, 1827, on the particles contained in the pollen of plants; and on the general existence of active molecules in organic and inorganic bodies.") and later introduced to the realm of physics by Albert Einstein in 1905 ("Über die von der molekularkinetischen Theorie der Wärme geforderte Bewegung von in ruhenden Flüssigkeiten suspendierten Teilchen.").

To illustrate the concept, consider a beach ball 30 feet in diameter. Imagine this beach ball in a sold out soccer stadium for a match between Manchester United and Arsenal. The ball is large enough to lie on top of many members of the crowd. The fans hit the ball at different times and in different directions with the motions being completely random. The ball is pushed in random directions, so it should not move on average. At other times, we might have 20 fans pushing right, and 21 other fans pushing left, where each fan is exerting equivalent amounts of force. In this case, the forces exerted from the left side and the right side are imbalanced in favor of the left side; the ball will move slightly to the left. This type of imbalance exists at all times, and it causes random motion. If we look at this situation from a helicopter above the stadium, so that we cannot see the fans, we see the large ball as a small object animated by erratic movement. Consider this animation to help illustrate the concept:

Click here to view animation.

Now let's use this concept to describe an organizational dynamic all too common. If you consider the intentions of the members of an organization being positive (excluding then any malicious misdirection) we can assume that all employees are acting in a manner they believe to be beneficial to the organization that they serve. However, with no concise set of daily operational actions that was generated to support organizational objectives, the employee moves from crisis to crisis creating as many solutions as possible given the time they have to spend on them. This is far from ideal. This is ignoring the future to focus on the present. Sometimes it seems like this is necessary, but in the long run this behavior will make sure there isn't a long run.

Let's consider our animation of Brownian motion. The large blue disk is the organizations location in the domain of organizational performance. With a known starting location (the organization's current state) and no organized employee support for a specific future state (goal), the actions of the employees (the red disks) will move the current state (blue disk) slightly depending on any local bias without organized or intentional movement of the organization towards any goal let alone the ideal goal. This is Organizational Brownian Motion. Many organizations experience this dynamic on a daily basis and it is counter-productive. Trial and error derived solutions with no characterized ideal resolution as a target allows problem solving in an organization to produce the same effect in the evolutionary map of a system. There is no intentional maturation of a system in relation to the strategic adoption of functionality but rather a haphazard amalgam of problems with sub-optimal resolutions. Every time we allow this to happen we create competitive opportunity. So ultimately, lack of organizational focus, at the macro-scale and the micro-scale, is all our competitors need to take market share from us. Studies have shown how difficult it is to create loyal customers and any erosion of their confidence yields more losses in that area. We need an organized strategic planning apparatus that decomposes organizational goals into actions for every person in an organization. We also need a systematic approach to problem solving that yields solutions that not only support the aforementioned strategies but also optimizes system evolution and minimizes the creation of any competitive opportunity.

It is always interesting to hear the insights of leading innovation practitioners. The article, "Instituting Innovation: Tell-all advice from 4 leading practitioners", posted on Core77 doesn't disappoint in this regard. Here Arkadi Kuhlmann, CEO of ING Direct Bank; Ken Koziol, Corporate Senior Vice President for the Restaurant Solutions Group at McDonalds Corporation; Matt Mayfield, Senior Director for Mobile Devices of Motorola; and David Lawrence, Senior Manager of the Bicycle Product Development and Marketing division of Shimano, contribute their thoughts on how to build an innovation program.

In each case, an approach to innovation has been taken that is aligned with the general character of the company. Factors such as culture, innovation readiness, and industry rate of change influenced the decisions of which direction to take. And while the four companies demonstrate examples of the incubator, diffused participation, and tactical project driven approaches, there are common threads that run though all of the examples.

There is recognition that innovation is a process, not an event. In this process, there are many different actors which contribute different skill sets along the way. When building your innovation process, it is important to think about the different stages of innovation as a product moves through early stage ideation, conceptual materialization, validation and delivery, and the various skills that you need to have represented in the innovation team to be successful.

All four of the practitioners agree that innovation needs to speak to the customer to deliver value and hence success. Listening to your clients and understanding what they are trying to tell you are critical elements in any successful innovation practice. Oddly, the author of the article, Brianna Sylver, distinguishes this from seeking innovation through technology advances. However, the two approaches need not be at odds, they can be very synergistic. High value technology innovation is always driven by a need. Understanding the repeating patterns of technology innovation can be of tremendous value in finding the market winning approach to answering a customer need.

Once an interesting concept is identified, working with the organizations culture is key to achieving productive support. Contrary to the just do it approach which is often advocated, these executives advise to not emulate Sisyphus with futile efforts working against the corporate terrain. Instead, learn how the change mechanisms in your organization are structured and which methods will engender the best response.

The topic of measuring innovation success is also discussed. However, proceed with caution when considering the comments here. The discourse highlights an example from Shimano of a new coasting bike that has not met financial expectation. This is used to bolster the argument that short term profit should not be the only metric of success. In general, this is a valid point. Success metrics should be well balanced and capture the whole view of the innovation program goals. However, we should fall into the trap of trying to redefine success in order to salvage a poor result. In is import to be coldly objective in evaluating outcomes. The criteria of success should be defined from the start, and in so doing we should heed Clayton Christiansen's advice to be patient on revenue, but impatient on profit.

Related to defining good success metrics is the notion that your innovation program should always be aligned with the company's business objectives. It should go without saying, yet this is where many organizations go astray. As they strive to think out of the box, they begin to think themselves out of business. Koziol says it very well, "You need to always be in sync with the company's strategic vision. You just can't afford to be off strategy."

All in all, this is some great advice from four practitioners who are accountable for innovation in their companies. While each has created a program to fit their environment, there are common lessons for us all. As you think about these lessons may mean to your own innovation program, keep in mind that while each of these companies has elected to focus on one model of innovation, many companies achieve great success with hybrid models that blend the best aspects of all three of the approaches represented by this group.

[Crossposted from www.InnovatingToWin.com]

In the last column, we reviewed and analyzed the benchmarking IBM study of corporate innovation. The aspects we discussed were the strategic look at innovation, the barriers, and the CEO's role in overcoming these and leading this ongoing effort. In addition, this study discussed the organizational aspects of innovation. Let's review and discuss these.

This study showed a positive impact at the bottom line of BOTH utilizing teams and recognizing individual contributions. This is really hard to do in practice, which is why so few organizations do it well. Google was specifically mentioned as an example of both communities of practice as well as the respect for individual input and contribution. There are few other companies that can match the growth in Google, its sales, its profits, and its stock price, so maybe there is something to this. The other closing observation was the frustration CEO's face in integrating technology and business. Those who had managed to do this successfully cited improved benefits in cost reduction, greater customer satisfaction, increased sales, and faster time to market. But how do you do these things?

I haven't talked to anyone at Google, but my own experiences at Dow, Cabot, Ansell Edmont, and the National Center for Manufacturing Sciences have taught me a few things. In 2001, I was responsible for leading a study for the Association of Managers of Innovation regarding failed corporate innovation programs. This study began without any pre-conceived notions of the results. The #1 key finding on the personnel side was that there was a huge gap between people styles of corporate management and innovation leaders, ultimately resulting in the loss of many talented innovators most of whom left and joined startups or became consultants and seemed to do just fine. I have continued this study informally and continued to make presentations on the updated information and find no exceptions to its findings. Everyone has their own favorite measurement tool and I don't want to get into a debate about this (use the ones you think are appropriate). We used the Myers Briggs and the Kirton KAI. There was a 90% correlation between Myers Briggs "N's" and a KAI profile above 125 with the innovation disconnect. This really shouldn't surprise us if we think about it for a minute. 80% of corporate managers are STJ's. An "N" is a disruptive person, asking all kings of "intuitive", open ended questions and willing to think and operate in a fuzzy zone. But they do ask questions (sometimes to a fault!) and see things not seen by others. A high KAI profile indicates someone who generates a lot of unfiltered ideas, is comfortable with lack of structure, and is not possessed by deadlines and schedules. Another major conflict with a typical CEO who is looking for closure, facts, and data. It is unlikely that either style is going to want to do the job of the other, so both extremes in styles need to understand each other and use each others' strengths. One of the scary things about the phrase that I despise the most in corporate America right now ("team player") is the implication that difference in ideas are not appreciated. We also like to clone ourselves in the hiring process. My days as a college recruiter also taught me how easy it is to hire someone just like yourself instead of hiring someone who might question, push back a little, and lead you in new directions

On the integration question, it is critical for CEO's to clearly define and understand what business they are in so the innovators have some kind of structure within which to innovate. Are you in the phone business or the communication business? Are you in the copy machine business or in the business of providing information storage? Are you in the car business or the transportation business? Are you in the food business or the nutrition business? Are you in the fabric business or the clothing business? No right or wrong about any of this, but if the business objectives are not matched with the technology work going on, a lot of time and money will be wasted, not to mentions peoples' frustrations. Innovators need to push this envelope they have a least a little to present to their CEO's possibilities. And they need to do this with facts and data since they are talking to STJ's. I don't have much sympathy for a high KAI, "N" Myers Briggs person who simply suggests to their management that they look at this "new thing" without having spent some time doing their homework and knowing something about markets, sales, competition, etc. This area of innovation/business management is the single biggest difference between innovation today and that of 15-20 years ago, and the innovators need to understand that. And CEO's need to listen and think a bit more about possibilities the way that Google, Skype, and Amazon have.

The IBM Innovation Study--What Does It Say?

The recent pioneering global study and interview of corporate CEOs regarding innovation and its importance provides many insights into not only the world of innvoation, but the competitive nature of it. If everyone but you believes that innovation is the number one focus of business right now and you don't, a serious pause for thinking is due. This study involved over 700 corporate leaders from arond the world. What does it say?

First, that innovation needs to be CORPORATE activity, not just an R&D activity. There are just as many opportunities in operations, finance, marketing, and services as there are in research and new product development. The business model used was cited as one of the most significant areas and had a payback twice that of innovation in operations. This raises the question again of deciding what business you're in. If you're supplying computer hardware, is your business building and selling computers or is it supplying a methodology for people to run calculations and store data? Is there a different business model? You bet! Consider the recent Forbes article (Feb 11, 2008, p37) entitled "The Death of Hardware". It describes the case of a major web business (Zillow) that provides up to date home pricing information to consumers. Doing this nationwide for 67 million homes takes up 4 TERABYTES of memory. Updating this for the recent housing price collapses in most parts of the country was going to cost a million dollars and take six months--unacceptable to its customers. Zillow ran the data over the internet using rented computer space from Amazon (are they in the book business or the information business you should be asking now) for $50,000 and it took 3 weeks. If you're the IBM or Dell salesperson calling on Zillow, how do you feel? Were you calling on the right customer? Who was?

65% of respondents to this survey indicated that organizational structural change was the most common business model innovation, followed by 50% indicating major strategic partnerships. Not new product development. What does this mean? That HOW we do business is just as important as coming up with the next whiz bang thing. Consider the example above. If you're Dell, is it time to rethink the focus on PC's? Why not rent programs and storage space that is accessible over the web with a very inexpensive home device? What's the impact on Microsoft of renting software vs. selling millions of copies of something that is used only once in a while? This is being done, but not by the major PC players. Computer data entry without keyboards is another intersting example. It will be interesting to see what happens long term. The study shows that business model innovation's impact on the bottom line is at least 5X that of innovation focus on products, services, or operations.

The most significant barriers to innovation cited by these global executives were government/legal restrictions and economic uncertainly (external) and unsupported innovation culture and limited funding (internal). This is truly an amazing response as we know so much about these issues (except the government!). The culture and funding are determined by the CEO's and their business managers themselves. If a CEO turns the innovation spigot on and off frequently and downsizes innovation at the first sign of uncertainty, this memory stays around a long time. We've been a part of and led studies on this and we keep reinventing the wheel and our knowledge. This key finding suggests that we have met the enemy and it is us. A leader can control funding and support. A CEO and the managers that report to him or her can question the hiring processes and the type of people hired. Are we cloning ourselves when we need to change ourselves? There are many psychological typing instruments that will accurately assist in assessing problem solving styles. Do we use them in team formation? Do we use them for career counseling?

The bottom line of all this is that business and people are the key concerns in the innovation area. You did know that, didn't you? And your business practices reflect that, don't they?

More on this study next time.

A look into string theory from the field of physics will give us an interesting analogy to leverage. String theory is a method of reconciling the fact that general relativity as a theory only works if we ignore the implications of quantum mechanics and perceive the world in a purely classical sense. String theory is an attempt to resolve this discrepancy. String theories come in two flavors (not to be confused with the flavors of quarks). Strings are either closed or open and include or do not include fermions (particle that makes up matter). Supersymmetry is the string theory version that allows fermions to enter the theory as long as each fermion is coupled with a boson (particle that transmits a force). So supersymmetry relates the particles that transmit forces to the particles that make up matter. So for every particle of matter there is a force partner. The same is true in the field of innovation.

I have written previously about four significant aspects of a deployment (Race Cars and Corporations):

• Culture
• Infrastructure
• Method and
• Proficiency

If we now consider that these four aspects are material components of a successful innovation deployment we can add the forces responsible for each, thereby comprising a sort of supersymmetry. So let us discuss the force partners for the material components.

Culture: Culture is the ability to shape innovative behavior and practices on a widespread scale. The force partner for the proper formation of a culture conducive to a successful innovation deployment is the CEO of the organization. The tactical and strategic implications of systematic innovation create a need that can only be shaped by the senior strategist in the organization and this is the CEO. You could argue that Preservationary activities could be led by the COO but it is clearly the prevue of the CEO to shape the future (Evolutionary activities). So the innovation supersymmetry pair here is:

CEO/COO »» Culture

Infrastructure: Infrastructure is the technology and management supports that are necessary to grow and reinforce innovation. The force partner for the proper establishment of the infrastructure necessary to support an innovation deployment is a larger team than that listed for the cultural formation. Infrastructure has many components. Some of the key components are:

1. Information Central for the Deployment (website etc)
2. Job descriptions for deployment roles
3. Integration with Strategy
4. Internal Training and Consulting team
5. Incentive Program
6. Training Schedules
7. Proficiency Requirements (and many others)

The formation of these items clearly necessitates the formation of a larger team. A senior executive reporting to the CEO would organize the effort and you could then probably assign this responsibility to a deployment manager (maybe a VP). Therefore, the establishment if infrastructure would be led by the VP of Innovation. So the innovation supersymmetry pair here is:

VP of Innovation »» Infrastructure

Method: Methodology is the standard roadmap for implementing innovation projects with a high probability of payoff. It is also the selection of tools and techniques that will be used to create a systematic approach to problem solving and concept generation. The VP of innovation will need to work with a team of internal and/or external experts to identify the composition of the method portfolio. The need to problem solve must be analyzed along with the need to create novel concepts. The methods selected must also integrate with existing methods like Six Sigma and/or Lean. So the innovation supersymmetry pair here is:

VP of Innovation/SMEs (internal and/or external) »» Method

Proficiency: Proficiency is the ability to ramp up world-class innovation capability in the shortest possible amount of time. Again, the leader of the deployment and the SMEs need to establish the criteria that will identify when the learning objectives have been met. A key criterion is being able to apply the methods to effect change and produce economic benefits. So the innovation supersymmetry pair here is:

VP of Innovation/SMEs (internal and/or external) »» Proficiency

Supersymmetry has more than one analog here. The application of systematic innovation as a deployment needs to focus on improving existing systems as well as producing new concepts for future revenue generation. This means that each aspect discussed above has two parts. This makes the activity more complex and amplifies the amount of planning needed prior to execution. It also reiterates the necessity of all the force transmitters identified above to work together in support of a common strategy that is set by the CEO.

It's the New Year. What's new? Innovation is still the "buzzword", but I go to many presentations at meetings where the talks are not about innovation, but about astute business choices (plant locations, etc.). I'm afraid that innovation is becoming a buzzword without focus, in part captured by conference organizers who know it will get people's attention. YOU need to decide what innovation is to you. Other than being something significantly different and a bit radical from what you are doing now, let's consider some of the options. Traditionally we tend to think of innovation in a product or business sense--how can we get into a new business? Sell a new product? This focus may take us in the direction of analyzing how our R&D budget is allocated, acquisitions to be able to deliver a new technology to the market, a review of our hiring process and who we hire, how we physically locate our new efforts, or how we manage the reporting structure of the new "business". How much innovation can you afford? Do you want? I've seen this latter question answered without thinking at all about the consequences to the existing core business. Not a good idea--lots of internal conflicts develop. Have you thought about the reaction and morale of the parts of your businesses that have a focus on "core" businesses? How do you keep their enthusiasm up while you're celebrating all the new stuff? Is your reward and compensation system going to be the same for the more risk taking folks? Have you promised that their jobs will be there if the new venture doesn't go? Are they potentially going to be rewarded with new venture ownership if the new venture goes? Can this risk be traded for compensation? Look at the Thermoelectron (recently acquired by Fisher Scientific) model.

Innovation isn't always about new products or businesses. It IS always about dramatic positive change. If you're a leader in a commodity materials business like paper or chlorine, and you want to maintain your position, there are lots of paths for innovation. The most obvious is cost reduction. A second is a fundamental new process, protected by a patent firewall that can generate significant royalty income. There is nothing that can't be done cheaper, better, and faster. What's the process you use to collect ideas for process improvements throughout the entire organization, including the midnight shift operators? You'd be amazed at how many really neat ideas people have, but they've never been asked! Make them feel important and recognized for their contributions and see what happens! What about your legal and accounting functions? We generally tend to tolerate these functions and just deal with them, but people like Fidelity and Schwab have made a fortune by optimizing the simple business of collecting money, providing customers and potential customers the information they need, and reselling other firms' products at no cost to the end customer. As was once said in the famous Watergate case, "follow the money" and see where some opportunities might be. What about distribution? If you could save a cent a pound on shipping a billion pounds of commodities, what's that worth? We talk about "open innovation" nowadays, another new buzzword. Use other people's brains. Have you talked to the shipping companies you use? The packaging and shipping functions? Are you supplying your customers an over engineered package that takes time and energy to disassemble and throw away? The possibilities are endless! The term "open innovation" has come to characterize our rediscovery that we don't know everything.

Parallel universes are some of my favorite topics. Who else, or who else's products, perform or produce the same FUNCTION that you do (NOT the same product or business area). For example, in a recent innovation session, the connection between air traffic control displays and software/hardware interfaces was discussed. How many computer display conferences do you think the ATC designers had been to? How many FAA conferences on ATC displays did the computer display people attend? You guessed it--ZERO! Think of your own parallel universes to stimulate your innovation this year.

Innovation takes many shapes. Don't let buzzwords and the most recent books warp your brain about what innovation is to you. Make sure it's semi-radical, don't downsize it because you're not sure how to do it at first, and get input from others. Make sure you've thought about innovation in the context of YOUR business and what you want it to be. Don't have blinders on when you do this thinking.

What about your people? If you've decided that an "innovation" effort is required, are you assuming that you can just send out an office memo? Remember that these may be the same people who have spent years streamlining and downsizing. What's their profile as measured accurately by tools such as Myers Briggs, Kirton KAI(TM), or some other tool that you may have used? Can you really expect Myers Briggs ESTJ's to think like N's? Not possible!! How are you going to change this culture? How are you going to convince your people that your new found interest in innovation won't disappear during the coming recession? How are you going to convince them that the effort will continue and only its focus may change? Memories die hard from your last downsizing. Have a plan as how you are going to build your credibility.

Have fun this year making innovation real and sustainable to you and your people.

Before a problem should be solved it is important that it be decomposed into sub-systems. That way each sub-system can be analyzed and the problem can be solved one part at a time. This is an important aspect of actual problem solving. Many problem solvers have been thwarted by attacking a complex system and then being overwhelmed by the complexity associated with that task. Problem decomposition solves many of these issues. The Heuristic Redefinition Process (HRP) is a powerful method for accomplishing the decomposition of a problem into its constituent elements. HRP is simple enough and the basic steps of the process can be described as follows:

1. Describe the system that contains the problem
2. Define the elements that comprise the system
3. Define the objective of the system
4. Describe how each element achieves the objective of the system
5. Convert each description into a question: "How can we ensure the ELEMENT provides the OBJECTIVE?"
6. Each question then becomes a problem solving or optimization opportunity for the system
7. The problem solver prioritizes these and then begins problem solving at this level (not the original system level)

HRP is a simple approach that can dramatically improve the results of the problem solver's activities. It should be part of every problem solving effort and is an important part of defining the problem.

A very insightful article appears in BusinessWeek online titled "The Long Nose of Innovation." Written by Bill Buxton of Microsoft, the article discuss the fact that great innovations don't just happen, but rather they are the consequence of many events leading up to the eventual introduction of the high-value manifestation of the concept.

Bill cites the examples of the mouse and RISC technology to show how the time between invention and successful delivery of an innovation maybe many years (thirty in the cases cited). These are good examples and of course they are far from unique. History teaches us that there are very discernable and predictable patterns of evolution that inventions follow as they mature. One doesn't have to look far to see the evidence of this in the many things we take for granted everyday such as electric light, digital photography, and so many other things.

Consider the lowly ballpoint pen… The John Laud patented designs for a ballpoint type pen in 1888. However, the state of ink making was not well enough advanced to allow his device to be practical. It wasn't until nearly 50 years later when the Brio brothers developed new designs and new ink formulations that the ballpoint pen took its next big step forward toward viability.

Invention is not enough. Innovation is the process of deriving value from invention. Where invention, application, and support systems intersect is where value, and hence innovation, is found. This is the clear message of history that is played out time and time again in the present.

Bill closes his article with a particularly interesting observation. He states, "To my mind, at least, those who can shorten the nose by 10% to 20% make at least as great a contribution as those who had the initial idea." Here, Bill has given some very good direction for innovators.

There is a predictable and visible future. The elements that make up this future exist today. The ability to see that predictable future and understand the path from immature technology to successful product is a high value component of sustainable innovation practice. This ability is something that the average innovation practitioner is capable of developing through a combination of the right technical infrastructure aggregate a view into the current state of a technology and the application of proven methodologies for analyzing the evolutionary tendencies of technologies.

The value of the opportunities you will miss if you don't integrate this skill into your innovation tool bag is huge. (See "The Tyranny of Either-Or" for one such example.) So now the question is, what are you doing to recognize and act upon opportunities to shorten the long nose of innovation?

[Crossposted from www.InnovatingToWin.com]

"Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat." - Sun Tzu -

A great idea is never enough. Excellent execution is not enough. In today's complex business environment, a confluence of expertise must be coordinated in order to assure anything close to victory. A bad idea can be implemented ideally and a great idea can be implemented poorly. Neither will help you win the race to long term survivability. You can also have a great idea that is implemented ideally and still miss the needs of the business. You need the right need identified, you need the right idea that will meet the need, you need the right execution, and on top of all of that, the timing needs to be right.

From this perspective, it is easy to admit that Six Sigma is not enough. There isn't any single method that is enough. Not yet anyway. Competitive Excellence should change the landscape by presenting a holistic approach for business success that can do all that is asked of it.

"Do not repeat the tactics that have gained you one victory, but let your methods be regulated by the infinite variety of circumstances." - Sun Tzu

A business must perform across many domains in order to move from concept to commercialization. The initiating event is the identification of a societal need (SN). A societal need is an unmet desire/need that exists in society. It is the prime mover for the development of an idea (product or service related). Identification of an unmet societal need is the critical step in the commercialization of anything. Society wanted to change the television channel without leaving its seat - the remote control was a response to that need. Society did not want to die from small pox - the small pox vaccination was the response. In order for a business to develop a product or service to meet an identified unmet societal need, the need must be converted to a set of customer requirements (CRs). This translation starts to move the business in the direction of an actionable set of criterion. Responding to an unmet societal need must decompose into action like strategy must decompose into work (Drucker). The customer requirements describe the attributes the product or service must possess in order to meet the societal need. The correlation between the SN and the relevant set of CRs describes the quality of the solution. When a product or service is released to the consumer and the CRs are not met, competition is invited into the space. The leverage that competition has is proportional to the number of unmet (or partially met) CRs. The set of CRs must be converted into a corresponding set of functional requirements (FRs). The identified functions identify a language that the product/service developers use to create a concept. The functions are those necessary to meet the CRs that in turn deliver the SN (SN--CRs--FRs). This decomposition decays the strategic need into a set of necessary functions that the system must provide in order to be a viable response to an unmet SN. The FRs are actionable as they are the drivers for concept generation. The identified concept(s) must provide the functions, that then meet the CRs, which satisfy the SN (SN--CRs--FRs--Concept).

While concept generation is not its own domain, it is the critical transition point from need to response. Once a concept has been generated, design parameters (DPs) must be identified that will deliver the functionality inherent in the concept. The DPs are the language necessary for the reduction of a concept to practice. The DPs must correspond to the FRs and this correspondence strength determines, in part, launch success (SN--CRs--FRs--Concept--DPs). The DPs identify the architecture a product or service must represent in order to provide the necessary functions. These functions meet the CRs, which satisfy the societal need. The DPs must be converted into the language of production in order to be manufactured and/or assembled. This is called the process variable domain (PV). The same correspondence should be preserved: SN--CRs--FRs--Concept--DPs--PVs.

Although there is much that takes place in the commercialization process, these five domains categorize the centers of activity appropriately. Therefore, a business needs competency across these domains. The plot continues to thicken though. Just being able to execute a good idea efficiently is no guarantee of continued success. The business needs to identify the ideal state it seeks to attain. It must also assess what its current state is and identify the gap between the two. The business must identify the appropriate path of action to bridge this gap. These larger strategic issues form the backdrop upon which concept commercialization is played. There is also a larger need for an infrastructure able to support multiple methodologies. All of this works together to create a complex need state for an organization. Also, the strategic alignment will provide a polarizing force that will allow the entire organizational resource pool to pull the organization towards the ideal state.

Without a polarizing force, the organization is in a state of Corporate Brownian Motion (CBM). Brownian Motion is (named after Scottish botanist Robert Brown) is the random movement of microscopic particles suspended in liquids or gases resulting from the impact of molecules of the surrounding medium. Corporate Brownian Motion is the phenomenon where members of a corporation do what they think is best for the organization and also react to each others activities. There is no concerted effort to achieve, just effort to do.

What Have You Done in the Past Year?

It's nearing the end of 2007 and it's been a turbulent year for many businesses and organizations. Everyone seems to recognize the critical role that innovation plays in the long term survival of an organization. It's time for an audit.

What did you do and accomplish in 2007? Did you encourage anyone in your organization to step outside their normal box and evaluate an opportunity that looks a little risky? What happened to them? Have you thought about what you are going to do to sustain your innovation effort when the inevitable recession occurs? Are you preparing outplacement plans or are you asking people right now how you could reduce your costs by 50%? That's no less an innovation challenge than a glamorous new product!

Do you know what your FUNCTIONAL core competencies are? What else can they be used for? Have you identified the biggest threat, not to you, but to your customer? What can you do to assist them? What materials do you use and buy that could be eliminated, but their function still performed? What scarce or unique raw materials are going to get caught up in the global surge for the same materials (rare metals is an example)? How are you going to react to a dramatic increase in price or non-availability? How will your business change?

Your business is focused to a major extent on helping a customer achieve a desired function, NOT to supply a product--a major mistake in focus we frequently make. How else could that function be achieved? If your product or service was suddenly unavailable to your customer, what would they do? If you don't know the answer to that question, you're in a lot of trouble long term.

Many of these questions, which should drive a major part of our innovation efforts, are independent of the world economy. China's need for platinum for catalytic converters for the millions of its cars that don't exist yet will have a dramatic impact on users of platinum for high volume, low volume commodity chemicals and plastics that we take for granted. I realize that this assumes this requirement will come, and I bet it will sooner or later. Innovation is about the future. Given this opportunity or threat, depending upon how you want to look at it, there's a huge incentive to develop an alternative way of eliminating exhaust emissions. A basic change in car design is one, and if you're a supplier of platinum, you have huge incentive to understand all of this. There's also a huge incentive to develop alternative chemical processes. Think about the parallels in your businesses.

Do your people now believe you and your organization are serious about innovation? The audits that I've been involved with frequently show a hug gap between senior management's views and those of the troops in the trenches. Regardless of what you plan, what do your people think you are going to do with the innovation efforts when business goes sour? Refocus it, or eliminate the "program"? It's time to sit back for a few minutes and reflect on the past year and ask if you have poured the foundation for innovation or just a sand pile that will collapse when the sea of change (in whatever form) comes.

"Avoid the crowd. Do your own thinking independently. Be the chess player, not the chess piece."
-- Ralph Charell

Crowdsourcing seems to be a popular topic these days. But, I can't help thinking that its popularity will be short lived. There doesn't seem to be any credible evidence to support this practice as being particularly productive.

Certainly no one can expect that the random crowd will demonstrate great insight and wisdom in helping to solve a problem. There are innumerable examples that show exactly the opposite to be true. Two well know examples of this are the 1630's Dutch tulip frenzy and the witch-mania that was common throughout the Renaissance and Reformation periods. History teaches us that the wisdom of the crown is a fiction and that the intelligence of the mob regresses to the mean.

While one can not rule out the possibility that a truly great concept may emerge from a lone voice within the crowd, this method of searching for great innovations can not be called efficient or repeatable. The crowd does not know or feel your pain; they know not what your goals are or what you value. This method is well likened to the search for the needle in the haystack--the larger the crowd, the larger and messier the haystack.

Some people suggest that crowdsourcing is a natural extension of team collaboration. But this is not so. The dynamics of the crowd are not related to those of the team. More of the same is not the same.

The best achievements in sustainable innovation are seen in those organizations that understand that the quest for innovation can not be divorced from internal expertise. This is not to say that external knowledge and contribution is not of value. In fact, the integration of external concept sources is vital to breaking free of natural inertial forces that develop within organizations. But this integration must be done in a rational manner guided by the in depth understanding of the enterprises capabilities, objectives, and the needs of the client.

What do you think about crowdsourcing?

[Crossposted from www.InnovatingToWin.com]

It seems every time I scan the recent blog postings on innovation, I see at least one or two posts declaring patents are stifling innovation. This certainly wasn't the intent of the patent system. To the contrary, the idea was that by providing the temporary monopoly granted by a patent, the cause of innovation would be advanced by publishing the latest state of the art so that other innovator could learn.

In a brightly lit room somewhere, the question is asked, "So, how does this patent busting method work?"

"It is really quite simple," comes the reply. "The Doctrine of Equivalents and its application in case law give us very good guidance as to how you can break through a competitive IP barrier. In short, if you follow a simple 3 step process you will rarely fail to find a new non-infringing way to accomplish the goal.

"One, Identify each of the independent claims of the patent in question.

"Two, Model each claim so that its design intent is unambiguously represented.

"Three, Refactor each modeled claim consistent with the principles of the Doctrine of Equivalents.

"Your newly refactored set of models now represent potentially distinct, non-infringing IP. Of course, there are a few subtleties to this method, and you should always run your new invention by your patent group to be doubly sure, but that is essentially the way it works."

Although this conversation might sound like a work of fiction, it isn't. I can't even count the number of time I have had this conversation over the years, nor can I count the number of time I have discussed the results people have had applying this and other similar methods.

Yes, it seems clear to me that patents are a springboard for innovation. If you have the right tools and understand the associated best practices, patents represent a rich source of ideas to spur innovation.

[Crossposted from www.InnovatingToWin.com]

The Battle of Poltava was a resounding victory for Peter the Great. He defeated Charles the XII and 14,000 Swedish cavalry with a superior force of 45,000 Russian soldiers. The battle lasted all day with the outnumbered Swedish soldiers making several valiant efforts against the superior Russian forces. Ultimately the Swedish soldiers had taken too many losses to effectively continue the battle and Charles retreated to Moldavia for five years before he could finally return to Sweden. The captured Swedish soldiers were taken to St. Petersburg and they helped to build the great city.

From October 1941 to January 1942 the Germans attempted the invasion of Moscow and then suffered a counter-attack after the city had been defended. Operation Barbarossa called for the Nazis to capture Moscow in four months but the brutal Russian winter and the lessons of Napoleon were ignored. The Battle of Smolensk slowed the Wehrmacht down and the tide was completely reversed at Moscow.

What are the implications these battles have for the modern corporation? Charles of Sweden underestimated the skills of the new Russian cavalry under the innovative leadership of Peter the Great. Hitler underestimated the Russian resolve and the Russian winter that decimated his blitzkrieg. Corporations also make similar mistakes in judgment. Leaders assume that prior supremacy will sustain the organization even when an upstart challenger enters their field of excellence. Charles assumed that the legacy of the powerful Swedish cavalry could not be matched by the new Russian horse soldiers. The skills of the entrepreneurial organization are not to be underestimated. Peter the Great made this point at Poltava. The power of a discontinuous innovation will propel the upstart to the market space and the mature market share will erode. Customers have proven to be disloyal unless they have become advocates of a particular product or service. Other organizations believe that their superior capital will protect them from any onslaught. They also believe that a swift response to competition will quench any threat. The next generation of an existing product or service remedies all challenges. Or at least they hope this is the case. The fickle and ever-changing competitive landscape can render these advantages useless as the money follows the features and benefits of the function being provided. The prevalent corporate force can find itself unprepared for the challenges ahead as the Third Reich experienced as it forayed into Russia.

If Charles had not underestimated his opponent he would not have brought 14, 000 soldiers to battle 45,000. If Hitler had not assumed that his previous victories would be replicated in Russia without consideration of the famous Russian resolve and the accompanying infamous Russian winter things would have been much different. So too, if the corporate leaders of today will prepare for the foe that is coming after their market share, they will not be defeated. Complacency will be their undoing. Leaders must embrace the science of innovation as they have the sciences of productivity and quality. This is the first step in dodging that exile that Charles found himself facing.

OK not really. However, I am going to describe an approach to innovation that does allow you to leverage the intellectual capabilities of OTHER problem solvers for the generation of solutions to YOUR problems. This can be achieved by utilizing previous problem solving output and adapting it to suit your purposes (what I call Adaptivation). Adaptivation may take place if you will transition your problem statement that is specific to the realm of the abstract. The realm of the abstract allows you to connect with a repository of problem solving information that is found in Contradiction Theory which is a Theory of Inventive Problem Solving (TRIZ) subset. Patents have been analyzed and each specific problem has been affinitized at the abstract level. The same process has been applied to each solution. Therefore, if you convert your problem to the abstract you can match it to an abstraction from Contradiction Theory. Then you will benefit from the resultant solution abstraction. This gives you the necessary kernel that may be used by analogy to create a solution that applies to your specific problem (Adaptivation). This method introduces you to the problem solving thought processes of others who needed a solution and have produced information to that effect. So in a sense, you are benefitting from their knowledge directly. This approach is both open (leverages knowledge you or your organization does not possess) and efficient (not creating a unique solution when an adaptation will work). You can increase your intellectual capacity by using some structured and effective techniques that allow you to benefit from other people's work.

You can read more about this concept in my recent Real Innovation article on Adaptivation titled: "Smart Innovation Adapts to any Problem or Situation."

Well, it's official. Yesterday, Kathleen Casey-Kirschling, the first baby-boomer, filed for Social Security benefits. She becomes the first of as many as 80 million individuals who will qualify for benefits in the coming years.

This should be a major wake up call for corporations. With many of their most experienced and capable workers moving ineluctably towards retirement, companies must consider what this means to their capacity to innovate. Don't fool yourself by thinking that these are stodgy old geezers who have passed their prime. These people are many of your most creative and valuable resources.

Have you thought of how you will capture their expertise and pass it on to the next generation of innovation workers? What does your enterprise know, and how can you mobilize that knowledge? Are your innovation systems capable of feeding the ideation engine in real time, or will your product pipelines run dry just when you need revenue stimulation most?

Are you addressing these questions? Or, are you getting ready to hit the beach and go fishing?

[Crossposted from www.InnovatingToWin.com]

TRIZ Journal and Real Innovation Commentators talk a lot about the methods of innovation, but we don't talk very often about the sense of mission and commitment that are frequently needed to keep an idea alive while all those methods are being used.

Dean Kamen is well-known in the invention community – his Segway is an icon of "out of the box" creativity, his stair-climbing wheelchair was featured at one of the first Altshuller Institute meetings, and his use of his personal fortune to sponsor invention workshops and contests for schools has gotten extensive press coverage.

Go ahead – watch the video. It takes 5 minutes, so I won't make the commentary any longer. Think about what Kamen and his people did in 13 months. http://www.ted.com/talks/view/id/82

TRIZ lesson: did you spot the use of trimming? He mentioned it twice.

We are accustomed to solving problems using a linear two-step process. This process is as simple as problem » solution. Our psychological bias is the foundation for our ability to solve problems using this simple process. We have an innate ability to solve problems rapidly that is derived from our automatic intellectual function. This function is a subjective analytic based on the intersection of our education, experiences, and other cultural and environmental bias found in our surroundings.

Psychologists have demonstrated that the automatic intellectual function is ideal for problem solving involving fight or flight scenarios and less than ideal for other problem solving types. We find that the majority of problems that we face are not fight or flight therefore we find ourselves using a problem solving algorithm that is not the ideal most of the time. This is much of the cause for finding ourselves surrounded by products and services that are awash in compromise and mediocrity. These two characteristics allow us to be susceptible to pressure from our competition and the markets we serve. We need to adopt a problem solving process that involves a higher level of intentionality and objective analysis.

Our ability to problem solve will be greatly increased if we incorporate abstraction and analogic thought into a non-linear multi-step problem solving process. This process in its simplest format would be specific problem à generic problem à generic solution à specific solution. We would leverage abstraction for the transition from the specific problem to the generic problem and we would leverage analogic thought to transition from the generic solution to the specific solution. This non-linear abstract and analogic problem solving model defeats the bias innate in the linear two-step model and allows the user to problem solve using the open and potentially adaptive innovative approach. The quality or solutions generated using this approach will be considerably higher. Also, compromise will be minimized thereby reducing competitive opportunities.

Much is to be gained by adopted non-linear processes for problem solving and we can see evidence of this by looking at the non-linear problem solving model found in Six Sigma. Six Sigma uses a model that is comprised of the following key steps: practical problem à statistical problem à statistical solution à practical solution. This model allows for the utilization of abstraction and analogy with a focus on statistics. Statistics allows for the inclusion of qualitative and objective (data based) decision making. We can include these same benefits in problem solving that does not involve optimizing a closed system. We would call this innovative problem solving. Innovative problem solving allows for the generation of solutions that are outside the system (open) as well as the opportunity to adapt someone else's solution to solve your problem. These are critical elements of the science of innovative problem solving and are leveraged when a non-linear problem solving method is adopted.

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