"Ever notice that 'what the hell' is always the right decision?"—unknown Hollywood script writer (courtesy The Borealis Press)

Some cynics amongst us might say that this is largely because the status quo does not cause a big problem for men! But things are starting to change. A German company (see Dasell.com) has just won an industry prize for offering the first aircraft urinal as a unique feature for their customers, the big airlines and plane manufacturers. These novel facilities are certainly more space- and weight-efficient, and attractive for the specifying aero-engineers on that basis alone. But it's likely to be the women passengers who turn out to be the biggest beneficiaries of this particular piece of German ingenuity. Having to share toilet facilities with us men on long flights can't be the best aspect of the air travel experience for women passengers. Installing urinals to take most of the male traffic opens up the attractive possibility of an airline's being able to designate some of the conventional toilet facilities as for "ladies only" without inconveniencing the male majority. This seems like a really good service innovation to me. But how could I possibly know or understand!

Does anyone know of similarly mundane innovations that had surprising benefits?

It is so easy to fall in love with any idea when it holds the promise of transforming your organization into a top performer. Truth be told, I make a fair share of my living selling these ideas. But I am often wary of overselling the ideas by promising results. That stance probably cost me some sales along the way, but I feel that when I offer ideas I am really only offering choices. I believe passionately about the choices I offer, and I do argue vigorously for their implementation. I believe, however, that those of us who have chosen the consulting and training profession have an obligation to help our clients understand the depth of the hard work that will be necessary to gain a return on our offerings.

Our clients want to believe a brilliant idea can magically make a difference. Need to fill your leadership pipeline? Hold leadership training classes. Not as efficient as you would like to be? Educate the organization in the Toyota Production System. Collaboration a problem? Maybe some teambuilding activities. These are all good ideas and good choices. They do not become actionable without the hard work required to unfreeze old behaviors, remove existing organizational barriers, build new reinforcement mechanisms into the system, provide the necessary funding for support activities, etc. The ideas will not become part of the way work is done in the organization unless they produce results that help the organization win customers, investors, and top talent. Yes, the work matters. And results matter. And hard work matters. Because without it, there are no results.

I certainly hear the cry for innovation often in my client work. Simple logic would argue that creation of an innovative culture cannot occur without first innovating current business practices. All too often the stories I hear of innovation revolve around the lone wolf who somehow beat the existing system. Innovation will not be widespread until the systems, practices, policies, and procedures are changed so that innovation becomes the path of least resistance. It may even be counterproductive to preach innovation and fire up the troops if they run smack into barriers that discourage it. Cynicism often occurs, followed by disengagement of talent when they wonder why they should bother.

In our model for analyzing and creating solutions (which you can explore by clicking here, or on the Future Shape of the Winner button in the left-hand column of this page), we recognize this architecture as being a key component of successful change. If innovation is the goal, perhaps the focus shouldn't be restricted to encouraging the players. Instead we should look seriously at the playing field. Some examples I am seeing include rigid organization structures, project teams being populated by those who are available rather than those who are necessary, resource allocation that doesn't value investment in innovation, and metrics that reward traditional practices over innovative approaches. There are, of course, many forces affecting innovation or the lack of it. But examining current architecture seems to me to be a good place to start.

What are you seeing? Examples? Challenges? Emotional outbursts?

In short, Schumpeter, in a long life devoted to one idea, squarely and contentiously placed the entrepreneur way ahead of the pack when it comes to the engine of economic growth: "Without innovation, no entrepreneurs; without entrepreneurial achievement, no capitalist returns and no capitalist propulsion. The atmosphere of industrial revolutions—of 'progress'—is the only one in which capitalism can survive." (Note the plural of revolution—i.e., "revolutions.")

This was radical stuff in 1911, when Schumpeter's Theory of Economic Development arrived—and remains so today. We can work like hell to get the money supply "right" and to salvage the Mercks and GMs, but make no mistake that our future depends on the occasional but consistent provision of Googles and Genentechs and a string of future Googles or Genentechs bubbling in Palo Alto or Cambridge or another of those precious couple of dozen zipcodes which drive our future economic—and thence political—power.

Schumpeter also believed in "my world" (and Peter Drucker's!!!)—which also set him way apart from economists past and present alike. As Solow says, "He was explicit that, while technological innovation was in the long run the most important function of the entrepreneur, organizational innovation in governance, finance and management was comparable in significance." Thus the advantage that accrued to, say, Dell's supply chain organizational-management approach (abetted, indeed, by new technology) is as decisive to progress (at the moment—which is the point!) as is Amgen's latest FDA-approved compound.

All hail the entrepreneur, in search of what Schumpeter in economist-ese calls "temporary monopoly profits," and the revolutions-creative destruction said entrepreneur repeatedly leaves in his wake ... until that moment when he in turn is relegated to the scrapheap.

The king is dead.
God save the king.

"With ISO 9000 you can still have terrible processes and products. You can certify a manufacturer that makes life jackets from concrete, as long as those jackets are made according to the documented procedures and the company provides next of kin with instructions on how to complain about defects. That's absurd."

What's particularly interesting about that, in addition to the amusing-but-deadly-serious content, is that the speaker is a Motorolan. Long before Welch at GE, Motorola was the poster child for wholesale adoption of Six Sigma quality processes. And, though the process worked wonders on quality in the short term, it apparently starved innovation, an under-tended priority for historically innovative Motorola—until the RAZR signified a return to corporate roots.

Searching Circle of Innovation for that vaguely remembered quote was in response to the June 11 BusinessWeek cover story, "3M's Innovation Crisis: How Six Sigma Almost Smothered Its Idea Culture." When Jim McNerney lost out to Jeff Immelt in the race to replace the retiring Welch, he immediately landed the CEO job at 3M. (He's subsequently moved on to Boeing.) As GE-ers tend to do almost mechanically, he instantly implanted GE's powerful systems—powerful in GE's odd culture, a point never to be forgotten. Six Sigma led the way, was of enormous value—and in the process more or less closed the lid on entrepreneurial behavior. Six Sigma = Tight Controls and rigid copying of "benchmark" entities within the firm.

The story is not unique—Motorola is a case in point, as mentioned. So was Florida Power & Light, which became, about 20 years ago, the first American company to win Japan's tip-top quality award, ironically the Deming Award. (After W. Edwards Deming, the Yank who brought quality fanaticism to Japan, having been dismissed as a nutter at home.) Upshot: FP&L de-installed most of its vaunted quality systems just a couple of years later because, apparently, they were choking the firm to death.

That was then, and the Welch Era is more or less now. Repeat: McNerney's fellow "loser," my pal Bob Nardelli, took the helm at Home Depot, discovered Gordian knots galore—and immediately (!!!) installed GE systems with the zeal that is his trademark, though not with Six Sigma in the pole position. You couldn't go two minutes at HD without hearing the word "metric." Again, the discipline was necessary and brought needed order to the monster firm. Nardelli is gone now, struggling to make do with his roughly $210 million "get out of town now" pay packet. And the reason in part was those damn systems, which strangled the previously energetic firm and whacked morale and retail customer service along the way.

Then there's Immelt's GE itself. Jeff inherited a 20 year operational excellence obsession from Welch, with Six Sigma at or near its heart. But what about the firm's vaunted Edisonian spirit of innovation? More or less M.I.A. (I was on Welch's shit list for a while, along with Michael Porter, for a quote in the Wall Street Journal asking, "What happened to Edison?" ) Immelt, like 3M's post-McNerny team, is trying to preserve the best of Six Sigma, etc., but clearly betting his legacy, and even his short-term hold on his job, on Big Bet Organic Innovation.

So from FP&L to Motorola to GE, 3M, and Home Depot we see the value of "system madness"—but also the devastation of an innovation "culture," à la 3M, that seems to accompany it. I, for one, have staked my own legacy on decentralization and innovation—and railed against ISO 9000, Six Sigma, Benchmarking, and Best Practices for 20 plus years. (Of course "learning" is essential—but rigid application of Best Practices in the spirit of "my way or the highway" is disastrous. So, too, benchmarking taken too far—as it usually is.)

"Balance" is as always the answer—and the real theme of the BW cover story. But an injunction to "do both" doesn't cut it for me—it's a first class cop-out as I see it. So, I am no fan of balance. And, in short, as I look at the pitiful (understatement!) performance of Giant Companies (think, of late, of our giant pharmaceutical firms), I say "Vote for—with purposeful imbalance—innovation and an ingrained entrepreneurial spirit."

Yet, this explosion of creativity was applied to a set of songs which (except for "A Day in the Life") John Lennon felt was unremarkable product at the time! Is there an innovation lesson for us here, 40 years later?

After a presentation yesterday—and a followup all day seminar today—I'm exhausted to the point of collapse.

But I am also happy to the bursting point. I've had the privilege of working and arguing and cajoling and laughing with a wonderful audience in Dubai from all over the Middle East. (And beyond.) Lots from amazing Dubai. (Stat: 24% of all, as in all, the world's quarto construction cranes are at work in this wee flyspeck of an Emirate.) (And, good God, Emirates Air just ordered another batch of A380s.) Plus: Saudis. Bahrainis. Egyptians. Kuwaitis. Omanis. Jordanians. And so on ... and on. A conversation with a Palestinian who is now a Saudi citizen is an education all by itself.

I am hardly expert, but I do today feel like a true internationalist—enjoying the company of and sharing the challenges facing an exceptionally thoughtful group of public and private sector executives.

Lucky me. Lucky, lucky me.

(You'll find my presentation attached. Developing talent to support an agenda of radical innovation was my chosen topic. Amid a set of speakers with more or less formulas for success, I made my contrarian case, what else, for the inherent and irreducible messiness of all innovation efforts—and the implications of that perpetually chaotic state for organizing and applying talent. To me, messiness is no cause of despair—but it does call for an approach that accepts and exploits the disorder per se.)

(On the foodie front—true Arabic mezzeh is a gift of the gods.)

Thus, years ago when I wrote a syndicated column, I put an address, not a company or individual or product on my annual Most Valuable Player list. In short, 3000 Sand Hill Road, just a few hundred yards from the border of the Stanford campus and in the heart of Silicon Valley (it is, arguably, the heart of Silicon Valley) was home to the greatest density per square meter of venture capitalists, including an unfair share of the best of the best.

I'm still the champion of the VCs, the good ones at least. But a recently released report reminds that there is indeed more to economic vitality than the private sector. The Monday (05.07) Financial Times reports on a study just released by Marks & Clerk, described as an "intellectual property firm." The topic is more or less the attributes of the engine of the jillion revs biotech industry-revolution.

And the answer is: It ain't (mostly) the VC-funded startups. It is, instead, primarily universities and institutes. Though there are many other important ingredients, the measure is the 5-year (2002–2006) history of industry patenting. And the result surprised even the authors, the FT reports.

The top three are the Japanese Science and Technology Agency, with 1,022 "biotech patent families," the University of California (543) and the U.S. government (443, mostly from the NIH). Private sector kingpin Genentech did indeed take the 4th spot at 421—it is a rare non-university entry in the top 25 ranking.

My point, mostly, is to remind myself, and you if you need it, that in such critical areas the government and the universities, have for decades played a, and often the, leading role. My ignorance is not infinite—I've often called for very aggressive gov't and university R&D support. And, alas, the government support of late hasn't matched the need, and certainly the magnitude of the opportunity.

Economically and in terms of overall power ranking, we and others such as Western Europe, Southeast Asia and Japan will rise—or fall—primarily on the basis of our R&D prowess. (And, of great import indeed, the private sector skills at translating research into products and their distribution.)

I, at least, need to acknowledge the decisive role of our Universities (I'm lucky enough to be a graduate of two of the world's best—and I love them both) and to become a far more vigorous and vocal advocate.

At any rate, very, very interesting ... eh?

We had some good discussion on this site about Taleb's Black Swans back in December around my post, "The Aflac Duck is a Black Swan," as I was eagerly awaiting the book's April publication. Black Swans are highly improbable events. Our problem is that we give undue importance to Black Swans that have already happened, assuming they (despite their unpredictability) will predict the future, and blind ourselves to those that might happen, because they don't fit our generalized narratives about how the world works. One of the comments from a reader on my December post was that "the (Aflac) duck shows us that hard work can pay off in advertising." A better assessment is that the unique success of the Aflac Duck, relative to the gazillions of clever ad campaigns that don't work, is that the Aflac Duck is a fluke that will more likely be duplicated through luck than hard work. Taleb would call these many failed ad campaigns "silent evidence."

Taleb first started putting his ideas together as a young person in Beirut as the Lebanese civil war began, making the assessment that "nobody knows what's going on." (Even his grandfather, the defense minister.) Taleb says we have gone from living in Mediocristan, where any one individual event doesn't affect the entire picture very much, to living in Extremistan, where individual events, such as 9/11, can change the dynamics of our entire situation. But our minds are still wired for living in Mediocristan, so we retrospectively generalize after Black Swan events, and infer patterns and narratives that we have no real reason to believe in.

This is a very interesting topic, and I'm eager to hear your comments. (And if you don't have a copy of this book, get one!)

But the "guru" is never far beneath the surface for me. "House" is the best explication I've ever seen of the Scientific Method. It is insanely sophisticated. Below you'll find a list I just stripped from a PPT Slide I created on "House":

Newtonian!!!!! (Experimental method is sacred!!!!!!!)
Acknowledge, even revel in what we don't know
Crystalline clarity of reasoning
Intuitive leaps (often wrong, but acknowledges that error is the key success driver—e.g., Brilliant Failed experiments)
Breathtaking speed! (Fast tries. "Fastest 'O.O.D.A. Loops' win"—John Boyd)
Action! Action! Action!
Test! Test! Test!
Failures acknowledged instantly (as important as success; next try starts immediately without fanfare)
Carefully controlled experimentation—Hypothesis tests (e.g., stop all drugs, add back one at a time)
Problem-centric, not patient-centric (Life = Puzzle-solving)
In a (life or death) rush, yet orderly about the scientific process
Aggressive risk taking (What's the alternative?) (Can appear reckless to others)
Exudes inspiring confidence (especially when the success odds are low)
Sky high staff standards
Doesn't suffer fools lightly (especially bosses)
Hates ... routine/paperwork/problems that don't enhance his medical understanding
Students as scientific peers (but demands loyalty)
Constant, impromptu mini-Brainstorm sessions (Thinking = Cool)
Calm though life and death at stake (no matter what, must view-measure results of experiments as cleanly as possible)
Egocentric (but allow data to sway—or reverse—opinion)
Impatient!
Tenacious! Relentless!
Curious!
Obsessed! (rotten at "work-life balance")

Fact is, I believe insanely in virtually all the above. "Try something!" has been my principal rallying cry ("strategy") for 4 decades! You'll find a wee Special Presentation on this attached.

Last week I spoke at the modestly titled World Innovation Forum in New York. My speech was pessimistic when it comes to hyper-planned innovation; you'll see that from the presentation slides or the immediately attached 2 summary presentations. But I did in the end offer some suggestions—which you'll also find; some are pretty obscure ("you had to be there"), but it is my near-term plan to write up-flesh out this List in some detail. [Innovation Summary PPT and Innovation List Only PPT.]