Best of the Cool Friends
Tom Kelley

One of Tom's favorite topics is innovation, and you'd have a hard time finding a more expert person on the subject than Tom Kelley, General Manager of IDEO. His business is innovation, and we spoke to him twice, following publication of his first and second books. By reading his two interviews (links below) at tompeters.com, you get a very good overview of an innovative organization, and perhaps some tips on making your own organization more so. Best quote: "So part of the message of my book and the message from people like Tom [Peters] is that it's okay to act differently."

Tom Kelley Interview No. 1, following his first book, The Art of Innovation.

Tom Kelley Interview No. 2, following his second book, The Ten Faces of Innovation. Feedback from readers of the first book prompted him to write the second.

If you would like to learn more, we also have an interview with Tom Kelley's brother David Kelley, CEO of IDEO, who describes some of the history of that very cool innovation factory.

Off the Cuff #3

Our Off the Cuff video series is a direct response from Tom to your questions. This is the third video in the series, which poses a question from Jack Webb-Heller, "Why don't big companies innovate, and who are the best that do?"

Anger and Innovation

Tom has written, "All (ALL) innovation comes from fury." Reading this in The Little BIG Things compelled the editor of Oxford American magazine to examine why he founded the magazine as well as what disturbs him about his competition. In this editorial, he rails against a competitor's simplistic portrayal of the American South. I've never laid eyes on either the Oxford American or its competitors, and being a deeply rooted Yankee, I have no authority to judge their authenticity or value. However, it's an opportunity to invite you to action.

This story is an example of allowing fury at "how things are done" to spur you to delve deeper, to explore, to search intensely for truth or for the ability to see a situation or problem more clearly. It begs the question: what's making you furious? Not irritated. Furious. Now take that energy and start exploring how things could be done differently. This is how change happens.

The Little BIG Things
Synopsis Series
#30 Gender
#31 Innovation

It's time for two new sections in The Little BIG Things Synopsis Series. The next two sections in The Little BIG Things: 163 Ways to Pursue Excellence are titled "Gender" and "Innovation." Tom covers a lot of ground in Gender—from the penultimate example of female persistence to the economic impact of serving the women's market—when he points out why the gender difference is something worth your attention. The Innovation section is packed with insights and examples surrounding the key to being innovative: S.A.V. (Screw Around Vigorously).

You can download free pdfs of those sections from The Little BIG Things Synopsis Series* by clicking below:

#30 Gender
#31 Innovation

*The Synopsis Series is an adaptation that gives you a taste of the BIG idea in each of the 163 Little BIG Things. More information on the book can be found on this page. The Synopsis Series as released thus far can be found here.

Little BIG Video #45
Innovation:
Angry People Make Change

In video number 45 from The Little BIG Things Video Series, Tom tells us the single source of innovation is angry people. Their anger allows them to penetrate the resistance they encounter.

You can find the video in the right column of the front page of tompeters.com or you can watch the video on YouTube. [Time: 2 minutes, 57 seconds] You can also download a PDF transcript of the video's content: Innovation: Angry People Make Change.

World Business Forum 2010
#wbf10

Our longtime friends at HSM put on their annual World Business Forum in New York last week. Tom has spoken at this event in the past and this year they invited us to attend via the Blogger's Hub, a special section monitoring the event.

The roster of speakers was impressive, to say the least. To name but a few: Al Gore, Jack Welch, A.G. Lafley, Joseph Stiglitz, Steve Levitt, Jim Collins, James Cameron, and Charlene Li. The presentations ran the gamut from economics to innovation, but there was no lack of commonality of message with what Tom has been espousing for decades. So what were the major themes and takeaways of the event?

Talent
The first day of the event seemed to have an underlying theme of talent. Jim Collins, author of Good to Great, asked, "How many key seats are on your bus? How many have you filled with the right people?" Carlos Brito, CEO of Anheuser-Busch InBev, offered the equation, "Great people = Great companies." He advocated for creating a culture of owners, avoiding the "don't be gentle, it's a rental" mindset (you'd do things in a rental car you wouldn't dream of in one you own). Jack Welch, former CEO of GE, put it simply and definitively: "You get the best players, you win."

Experiment
Welch went on to say that "you have to create entrepreneurial innovators within your business." Renee Mauborgne, coauthor of Blue Ocean Strategy, went a bit more deeply into this argument. She said, "The more we benchmark, the more we become like the competition." And that certainly isn't going to inspire game-changing innovation. She emphasized the importance of shifting your focus from day to day productivity into creativity and thinking about the future. As A.G. Lafley, former CEO of Procter & Gamble said, "Great innovators constantly disrupt themselves."

Lafley encouraged the audience to cocreate products with their customers. Charlene Li, coauthor of Groundswell, gave a specific example of how Starbucks cocreated a new customer experience (self-serve drip coffee) using social media, and despite the failure of the feature, strengthened customer relationships by including them in the process, start to finish. Steve Levitt, coauthor of Freakonomics, also highlighted the importance of experimenting. "'I don't know' is the least common phrase in business today. ...Try to utter that phrase at least once a day." But he cautioned to not forget to measure the results of your experiments, as this happens all too often.

Storytelling
Spending two days watching such an impressive lineup of speakers provides ample opportunity for comparison and critique. What makes for the most compelling speech? Whenever Tom is asked for advice regarding speeches, he never fails to mention the importance of storytelling. Joseph Grenny, coauthor of Influencer, spoke of this outright. Cool Friend Martin Lindstrom showed the power of brand storytelling. The slides that speech-veteran former Vice President Al Gore used were almost completely text-free and only served to enhance his case for action against the devastating effects of global warming. James Cameron, director of Avatar and Titanic, described his journeys in storytelling and the techniques he used to make stories come to life. But it was a survivor of a plane crash in the Andes, Nando Parrado, that captured the audience's full attention and garnered the only standing ovation when he took us on his incredible journey, providing a compelling reminder of what really matters in life.

Aspiration
Tom frequently asks, "If not Excellence, what?" Several of the speakers shared this message of aspiration. Vijay Govindarajan of the Tuck School of Business and Renee Mauborgne presented clear arguments for lifting your focus from the daily churn so that you can take the essential step of plotting strategy for the future. Carlos Brito used the example of a high jump when discussing leadership. He said you must set the bar high, because like athletes training for the high jump who only just make it over the bar, people will only jump as high as is required to achieve the goal. And to leave you with the words of the last speaker of the World Business Forum 2010, James Cameron said, "The biggest risk is not to be bold."

California Dream

"Rumors of my death are greatly exaggerated."—Mark Twain

Did you know: 43% of all U.S. venture capital in 2008 went to the San Francisco Bay Area.

California on its last legs? I probably heard that sorry story five times in my 30-plus year residence, roughly 1966–2000.

What a crock!
Then!
Now!

Check out this week's Time cover story, "The End of California? Dream on!"

Here's an excerpt:

"Ignore the California whinery. It's still a dream state. In fact the pioneering megastate that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency [CA's per capita energy consumption index has gone down steadily for the last 40 years while the U.S. overall has gone up], health clubs, Google searches, Craigslist, iPhones, and the Hollywood vision of success is still the cutting edge of the American future—economically, environmentally, demographically, culturally, and maybe politically. It's the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It's also an unparalleled engine of innovation, the mecca of high tech, biotech, and now cleantech. In 2008, California's wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, The Gap, and countless other companies that drive the way we live."

I'll close with this quote from genomics guru Craig Venter: "This is the most dynamic place for change on earth. That's why we're here."

I suggest you delay the publication of the obit.
Roll on, mighty California!

Latest Whoops!

The Innovation120 once again grew; it's now the Innovation121. Tom assures us "This is it." We'll see!

Whoops!

The Innovation114 grew to the Innovation120. Plus I added two Appendices. The first is a collection of some of my favorite innovation quotes—87 to be precise. The second Appendix is a personal story of "spontaneous discovery," to steal from F.A. Hayek.

Innovate or Die: The Innovation114
A Menu of [Essential] Innovation Tactics
Part Four: Tactic #76 through #114

[If the numbering in this post doesn't seem to jive with yesterday's, that's because the list of 110 tactics seems to have grown in the course of the week; we've adjusted accordingly. As promised, however, a PDF of all 114 tactics is also available. Addenda 01.13.09: Now find 121 tactics in the PDF!—CM]

Adhocracy.
Love It or Leave It.

76. Projects "emerge." Recall "spontaneous discovery process," our item #3. Most projects invent themselves, rather than being the product of a formal planning process; and their growth into something big is also mostly organic. An effective culture of innovation is largely ad hoc—which drives many senior managers crazy. If they can't "get it," then they don't belong.

77. Leadership is on the fly. Things change rapidly. Teams are born and teams die. Yesterday's leader is today's follower—and vice versa. Developing "on the fly" leadership skills is no walk in the park. First, it must be perceived as a describable and learnable skill. (Hint: Women are better at this than men. Arguably, much better.)

78. Plan-less-ness. If your organization chart "makes sense," then you probably don't have an innovative enterprise. Adhocracy requires letting go of linearity assumptions.

Skunkworks.
Creating Parallel Universes.
Invisible/Shadow Organizations.

79. Parallel Universe/Unit within unit (School within a school). Big firms win in part through focus—which eventually means blinders that destroy them. The best way to innovate is often to create a Parallel Universe. It's effectively a "shadow company" with its own staffing, its own culture, in fact. As business schools saw the 2-year resident MBA decline, for instance, they sensed a rise in demand for executive education. But professors often balked. Smart schools set up schools within schools using new assets to experiment with and deliver exec ed. In many cases, the school-within-a-school was eventually re-integrated, but only after it had enough muscle to resist the regnant culture; in some cases the "shadow organization" eclipsed the traditional organization.

80. Skunkworks at all levels. Lockheed invented the term "Skunk Works;" the Lockheed Skunk Works was a small unit, in Burbank CA, that used a totally unconventional approach to developing essential military aircraft in record time with an astonishingly small group of astonishingly motivated people. The generic "skunkworks idea" is a variation on #79 above. That is, a "band of brothers and sisters" who are contrarian in nature, determined to go their own way and do it their own way, and who stink-up-the-central-culture as they pursue what they believe is an earthshattering dream. For example, Apple boss Steve Jobs "left" his own company and set up a Skunkworks, complete with pirate flag proudly flying, to develop the first Mac—it took dead aim at the heart of the company's then-current (successful) product line.

81. All Units/One-off projects. All units of all sizes should mount at least one "sorta Skunkworks," that is, separated bands pursuing no-fit, low-fit projects. Such a "band" may be one person in a 6-person department.

82. Centers of Excellence. A more formal approach to important innovations is setting up "centers of excellence." For example, GlaxoSmithKline created 7 CEDDs, Centers of Excellence for Drug Discovery. Previously, GSK had used a huge functional organization to do its development work; now these CEDDs became self-sufficient units led by powerful project managers.

83. Center of Excellence/Design. Design, writ large, is increasingly the route to product or service differentiation. Many companies are now beyond lip service, but a long way from fully incorporating design and experience creation into the heart of the company culture. One effective approach is a center of excellence with the avowed goal of nothing less than becoming a "hotbed" of global excellence—for example, Samsung followed this path and is giving Sony a run for its money.

84. Center of Excellence/Women's market. Tom rant. Creating products and services tailored to women's desires is obvious as the end of one's nose—and still honored in the breach. Especially when the magnitude of the effort adds up to strategic repositioning of the enterprise as a whole. My advice: Don't mess around, get serious, win big.

85. Center of Excellence/Boomer-Geezer market. Equivalent to #84 above. Market potential enormous. Will dominate for next quarter-century. Many "trying a few things." But strategic re-alignment more aptly suits the magnitude of the opportunity. My advice: Don't mess around, get serious, win big.

86. Acknowledgement. This section is about acknowledging the limits of change in the regnant culture. Hence, creation of parallel, shadow, etc. organizations-within-the-organization becomes part of the "way we [necessarily must] do things around here." There are no guarantees of success—but the ideas are worthy of serious consideration in small organizations as well as large ones.

Decentralization.
First Among Equals.

87. Decentralize. #1 innovation strategy. Big company. Pretty small company.

88. Keep decentralizing.

89. Decentralize "before it makes sense."

90. There is "decentralization," and then there is Decentralization. Beware the difference between "sorta" decentralization—and the real deal, à la GE or Johnson & Johnson or PepsiCo. Decentralization is an attitude as much as the shape of an org chart.

91. Form a cadre of formal "centralization fighters" with muscle. Beware ICD, Inherent Centralization Drift. (This is a top management task.)

The Team at the Top.
Diverse or Dead.
Cherish & Demand Disrespect.

92. Top team risk profile. You are what you eat. You are where you've been. A successful commitment to innovation will only come when the top team, in every function, has a l-o-n-g history of unflinching commitment to innovation.

93. Top team CQ/Curiosity Quotient. Innovators are unhappy if new ideas are not the currency of their everyday affairs. While execution is paramount, catholic interests must be permanently in evidence. Curiosity may well have killed the cat, but the lack thereof is the bane of successful longterm organizational vitality and, indeed, survival.

94. Board composition/Innovation experience. Boards must ooze with experience in and commitment to innovation. (Most don't.)

95. Top team/Innovation coaches and mentors. Top team members in innovative enterprises take innovation personally—from the top to the bottom of the organization. Among other things, they act as mentors for innovation projects, including small ones three or four levels down in the organization.

96. Women as leaders in project organizations. Women do better at adhocracy than men. Women do better with minimal hierarchy than men. Women do better with diversity than men. Women do better with shifting leadership that disobeys traditional ideas of power distribution than men.

97. Top Team Calendar management. If you are an Innovation Obsessive, it will show up in unmistakable fashion on your Calendar. Calendars never lie. They are 100% accurate and visible indicators of your priorities. Micromanage them accordingly. Make your Innovation Obsession scream from your calendar! (There are few more powerful change levers.)

98. Chief Forgetting Officer. Learning is a cakewalk. Forgetting is hell—particularly for "seasoned" successful executives. Therefore, the idea of "forgetting" per se is of perpetual strategic importance. Perhaps it should be formalized in the shape of a Chief Forgetting Officer?

99. Diversity. Diversity. Diversity. (Rare in top teams! Fix it! Fast! It works! Especially when innovation is the goal!)

100. Forward look. Beware offices (especially that of the Big Boss) and hallways and cafeterias awash in tributes to the past—even terrific ones like a Baldridge Award or a "product of the year award" from 1993, or even 2003; also dump the photos of you and famous "people of the past." When Steve Jobs re-arrived at Apple he tossed out all the models of yesterday's great "industry changing" computers—and replaced them with prototypes "from" tomorrow. Such "mere" "look and feel" stuff is potent medicine.

101. Irreverence. Innovation is about changing course before it's absolutely necessary. Hence excessive reverence for the past is Public Enemy #1. Establishing a "culture of irreverence" at the top is far easier said than done. But done it must be.

Commitment to Excellence in Innovation.
Or Bust.

102. Innovation is fun.

103. Innovation is a glorious way of life.

104. Innovation is scary. (But what is life without risk? Living death!)

105. Innovation is enthusiasm.

106. Innovation is passion.

107. Innovation is a matchless source of pride.

108. Innovation is life at the speed of light.

109. Innovation is an "all hands" game.

110. Innovation is big.

111. Innovation is small.

112. Innovation is an iPod.

113. Innovation is a Tuf-E-Nuf hammer.

114. Excellence in innovation.

We can't all be Apple or Cirque du Soleil or Basement Systems Inc.
But we can damn well die trying.

Innovate or Die: The Innovation110
A Menu of [Essential] Innovation Tactics
Part Three: Tactic #43 through #72

Celebration!

43. Celebrate! Innovative organizations are places where people enjoy their peers' work, good tries, good screw-ups, milestones reached, etc. Celebrating these events, large and small and very small, is a fullscale part of the "innovation culture."

44. Celebrate failures. This peculiar form of celebration deserves particular mention. "Fast failure" is innovation's bedrock. Hence the encouragement thereof, rather than the stigmatization, is of paramount importance. Hence, the hearty celebration of the quick try run amok is of strategic importance.

R&D, Ubiquity of.
"Staff Department" R&D Paramount.

45. R&D spending/Overall. This is a "boring" staple of innovation, but obviously of great importance. Aggressiveness is called for. In addition to the firm itself, having, say, a set of vendors, most or all of whom are top-quartile in R&D spending in their industry, is also of great importance.

46. R&D/Big Co, Small Co. Aggressive R&D is not just the provenance of the big company. In fact, it is more important to the 2-person Professional Services Firm than the lumbering giant—talk about "Innovate or die"!

47. R&D spending/Small projects. Make sure the R&D portfolio includes many one-off, short-term projects. (Quite often, these little fellas grow to become the biggest of the big.)

48. R&D/100% Staff Departments. Aggressive R&D is as important in Finance and Purchasing as in IT or New Product Development!!!

49. R&D/Systems! Innovative systems are as important as innovative products (witness Dell's 2-decade systems-driven run, which changed the world). Manage the hell out of this!

50. R&D/Practice "Nudgery." Small system nudges can cause grand behavior changes. Become a "nudge aficionado." Teach Nudgery.

51. "R&D" Play Money/Ubiquitous. The ability for virtually anyone to get their hands on a few bucks (and a mentor) to play around (right term) with a new idea is essential.

52. Venture Funds/All levels. This can run to billions of $$ at Intel to much smaller sums, but the idea is casting a wide, speculative net.

53. University support. Research universities are among America's most vital competitive advantages, and are likely to be so for decades. Associations, large and small, with universities are an important part of the innovative enterprise.

54. "Sell-by" date, consideration of. Peddling old stalwart parts of enterprises when they become commoditized may help free the spirit of the enterprise to move toward a new playing field. (On the other hand, oldie goldies can surprisingly often become hotbeds of new innovation under inspired leadership.)

55. R&D/good times and bad times. R&D may have to take its lumps in tough times like the present. But beware of cutting too much muscle. Moreover, bad times can be the perfect time to get the jump on competitors with innovations if at all possible. Tough times are also ideal for little R&D projects that might just grow legs.

The Essential Role of Lead Customers.
Loving Angry Customers.

56. Lead customer portfolio. Innovation is not natural in the best of circumstances. Stasis is comfortable. Hence, we must force ourselves into uncomfortable circumstances. (I accept speeches to groups where I have no expertise.) Customers who are far from our norm are frontline change agents. We must formally create a portfolio of lead customers—and then commit to joint product development and connection in general. Again, this must be managed and not left to chance.

57. Customers on all teams. Customers must pervade our electronic and physical halls. They must especially be part of all innovation teams.

58. New network forms. Constantly experiment with new forms of networking with customers of all sizes and shapes.

59. Pissed-off Customers Association. No group is more valuable than pissed off customers!! (Even, or especially, irrationally pissed off customers.) Make them part of the family. Shower them with love. Reward them for their contributions. Bring then into electronic and physical networks.

XFX/Cross-Functional Excellence.
No Option.

60. XF Obsession. Implemented innovations generally (100% of the time?) include and are significantly shaped by contributions from all departments. Lousy cross-functional (XF) communication-cooperation-synergy-esprit is often Problem #1 in enterprises of all sizes. Thus a culture of innovation is dependent on constant-strategic-executive attention to XF effectiveness.

61. XF Innovators. The heart of an innovation that goes in a wonderfully unpredicted direction is very likely to have come from a contribution by a "secondary"-to-the-project functional expert.

62. XF Programs. Formalize numerous programs and nudges, small more important than large, to specifically and measurably attack-enhance-vivify XF effectiveness.

63. XF Friendships (measurement thereof). It is this simple: Friendships across boundaries are the best lubricant there is. Foster them! Formally!

64. XF-centrism in evaluations. Repeated XF obfuscation is a firing offense. XFX (cross-functional excellence) is cause for early promotion, hefty bonuses, etc. This part of the evaluation must have sharp teeth.

65. XF/All teams. Foster cooperative XF involvement in activities of all sizes and shapes by all sorts of folks, even, or especially, when the need is not obvious.

66. XF assignment as requisite career step. Promotion to relatively senior positions or above is dependent on at least one full XF assignment—e.g., a year or so tour of duty.

67. XF/Finance. Get as many managers as possible to spend non-trivial time in finance, to develop a "business" perspective on their work—this is especially important regarding innovation activities.

Project Team Primacy.
Project Managers Rule.

68. Project team as basic organizational unit. The largely independent project team, the coherent entity of 2, 21, or 212, is the basic building block of the innovating enterprise. This comes as no surprise, but must be underscored anyway. Innovation work is rarely accomplished via a routine grouping that follows the conventional org chart and involves members from various functions who remain under the jurisdiction of their traditional bosses. Obvious or not, innovating organizations are collections of energized project teams—with functional affiliations secondary.

69. The excellent project manager is the Superstar of the innovation-centric enterprise. These are the small numbers of superstars who must be retained at almost any cost. And they do stand out as superstars.

70. The development and care and feeding of your cadre of project managers is human resources Job #1. Effective project management is a peculiar discipline requiring a raft of skills, from the very hard to the very soft. Understanding the discipline and carefully developing project management skills is paramount to creating and maintaining a culture of innovation.

71. Project manager cadre diversity is imperative. Period.

72. Entire talent pool available to project managers. Creating a process, preferably Web-driven, for project managers to cobble teams together for the long haul or for a 48-hour project is essential. But remember to take into account the "soft stuff," and not over-mechanize the process.

Innovate or Die: The Innovation110
A Menu of [Essential] Innovation Tactics
Part Two: Tactic #17 through #42

We Are What We Eat.
(And Who We Hang Out With.)

17. Hang out/"We are what we eat" We are what we eat/We are who we co-habit with, and variants thereof are of infinite importance to the effective innovator. Managing "the hang-out factor" is of the utmost strategic importance—and usually an under-tended lever.

18. Hang out/Basic axiom. Hang out with weird—get more weird. Hang out with dull—get more dull.

19. Hang out/Customer portfolio. Consider one's customer portfolio. Perhaps a few giant customers account for 85% of one's revenues. One must listen to them, but the odds are that these giants are relatively conservative. Hence one must purposefully and urgently recruit oddball-"on the frontier" customers. Their revenue stream may be limited, but these folks force you to play with novel products and services to meet their peculiar needs. Hence careful construction of the total customer portfolio is an essential practice.

20. Hang out/Customers everywhere. Customers at various staff meetings, on various teams, etc.

21. Hang out/Our folks at customer sites. Imbedded staff at lead customer locations. The success watchword is "intermingle."

22. Hang out/Vendors/Outsourcing Partners Portfolio. Instead of a few "strategic suppliers," as important as they may be, one needs "far out" vendors and outsourcing partners whose innovations force you into an innovation mode. I.e., repeat #19 and #20 and #21 for vendors.

23. Hang out/Locale (Hotbed). Company or unit HQ location is important beyond measure. Working in a "hotbed" (e.g., Cambridge MA and biotech) is an immeasurable spur to innovation. (Beware: Hotbeds eventually become lookalike and-or complacent—think Detroit, 1920 vs 1980–2008.)

24. Hang out/Team placement. An offsite team in an innovation hotbed often takes on the attributes of a gang of on-the-make pirates. A team near a plant takes plant-derived considerations particularly seriously. Etc. Want weird? Start with consideration of locale.

25. Hang out/Space management. Space management is arguably the singlemost important strategic lever. Designer moved next to the CEO? Design vaults up the importance scale. Etc.

26. Hang out/Consultants Portfolio. Types of consultants brought in influences who we talk to-live with, how we approach problems. There are "hot" consultants, and "not-so-hot" consultants. Again, purposefully and strategically manage the portfolio.

27. Hang out/Crowdsourcing. Crowdsourcing stands a good chance of radically changing the world of innovation! You simply must experiment vigorously. The tool is powerful, but the process is not automatic—it needs lots of thought and oversight. (And it applies to every nook and every cranny of the enterprise—and to small enterprises.)

28. Hang out/Clubs, learning networks, etc. Electronic, physical, any and all formats. Turning the enterprise into a de facto university, with learning and growing honored and ubiquitous and fast and furious and fun, is the point here.

29. Hang out/Staff. Where staffers live relative to their line customers is critical. A finance person imbedded in the logistics department, for example, changes both perspectives.

30. Hang out/Lunchmates. Never waste a lunch!!!! Lunch is 5 opportunities per week, 220 opportunities per year, to get to know interesting outsiders, folks from other functions, customers, vendors, frontline staffers. This is remarkably important. "Lunch management," a "lunch culture" is not an amusing aside.

31. Hang out/Meeting Attendees. We spend enormous amounts of time in meetings. Never waste a meeting. Invite interesting outsiders, folks from other functions, etc. (See #30 immediately above.)

Diversity Per Se.
Sine Qua Non.

32. Diversity/Every flavor/Management & Measurement. Diversity with a lower-case "d." Black, white, brown, purple ... tall, short ... North American, Asian ... public school, private school, no school ... etc. ... etc. (Etc.) Decision-making of every sort is far, far better with diverse views of any flavor. Period. I have come to view this as a gamechanger—for a 6-person project team, a 20-person company, a huge enterprise.

33. Diversity/Hiring. Search every oddball corner of the world for interesting people. Hire dull, get dull results. (Duh.) (This holds across the board—and irrespective of the size of the enterprise.)

34. Diversity/Freak Acquisitions. I'm an enemy of 99% of mega-mergers, and a vigorous ally of small acquisitions that allow skipping steps in obtaining interesting new pieces of the puzzle for an enterprise. This can be the purchase of an intriguing 2-person accountancy by a 15-person accountancy, as well as a small-acquisition overall strategy by the likes of Cisco Systems.

35. Diversity/Promoting. Diversity of every stripe at every level, achieved by design. Remember, diversity-qua-diversity works.

100% Enthusiasts.
100% Innovators.
HR = Supercool.

36. "What do you think?" Innovation-an innovation culture engages one and all. (All = All.) Getting everyone to think about improvements small and large comes from, de facto, constantly asking "What do you think?"—perhaps the 4 most important words in the innovator's vocabulary. Treating every voice as valued yields more value from every voice.

37. Hire enthusiasts. Innovation is about active engagement. The more enthusiasts, the more people want to "opt in" and fully engage. Enthusiasts are innovators almost by definition. (Or, at the least, non-enthusiasts are guaranteed non-innovators.)

38. Promote enthusiasts. Enthusiasts are important in all roles. Enthusiasts as bosses is a "no option" imperative—if you want to create an "innovation machine" in organizations of any size.

39. Innovative behavior is the best predictor of innovative behavior. Want to discover an innovator? Best test: a history as an innovator, apparent at the latest by, perhaps, age 10 or 12 or 14.

40. Re-invent HR to be a Center of Innovative People. It's not that HR has to "support" a culture of innovation. HR must be a chief carrier of the culture of innovation, must model innovative behavior 100% of the time. An "innovation culture" in HR is arguably more important than an innovation culture in marketing and new product development. (Think about it.) (Alas, this is ever so rare.)

41. Get the incentives right! Profitability, quarter by quarter, is essential—in organizations of all sizes. But a commitment to innovation as evidenced by the likes of share of revenue from products introduced in the last 24 months should be a major component of discretionary compensation. Equivalent measures must be developed for logistics, purchasing, HR, IT, etc. Incentive schemes must "speak" innovation.

42. Get the evaluations right! Per #41 immediately above, the evaluation process must focus on risk-taking, innovations launched, "excellent failures" as one exec puts it. Department bosses might be evaluated by comparative innovativeness at similar departments in peer-competitor firms. Etc. Innovation-in-evaluation is a 100% affair.

Good as It Gets!

If there are two better quotes than this pair I came across yesterday, which capture the spirit and practice of innovation as I see it, I don't know what they are:

"America is probably the best culture in the world at failing. We're willing to navigate in a fog and keep moving forward. Our competitive advantage tends to be at the fuzzy front end of things when you're still finding your way. Once the way has been found, we're back at a disadvantage."—Geoff Moore, Mohr Davidow Ventures, on the importance of investing in innovation (New York Times, 0104.09)

"We normally shoot a few takes, even if the first one is terrific, because what I'm really hoping for is a 'mistake.' I think that most of the really great moments in my films were not planned. They were things that naturally occurred and we said, 'Wow, look at that—that's something we want to keep.' That's when you hit the truth button with the audience."—Robert Altman, on his Academy Award winning Gosford Park

Both emphasize the role of failure and the unplanned—the twin centerpieces of effective innovation.

2009: Week One

I started jotting down a few summary thoughts about innovation this past Saturday. Next thing I knew I had a list of 110 items. I decided to break the list into four parts. One part will appear each day through Thursday of this first full week of the new year. On Thursday we will also offer a PDF of the entire list.

Innovate or Die: The Innovation110
A Menu of [Essential] Innovation Tactics
Part One: Tactic #1 through #16

Recession or no recession, deep recession or not, the challenge to add more and more value grows, and the importance of innovation, and a culture of innovation, grows exponentially. A "culture of innovation" covers "everything." There is no halfway. There, of course, are "first principles." Or are there? I started a list of "stuff" that's imperative to creating an innovative enterprise. The list of 10 or so grew to 25, then 45, and at the moment includes no less than 110 "tactics." Of course you can't do all of them. Or must you? Well, you can't do all 110, or maybe even half that number, but the absence of any one or two or three or six weakens and perhaps even imperils the entire structure. Use what follows as you will.

Trying Stuff.
Screwing Stuff Up.
Fast.

1. Tries. Darwin rules. More stuff goin' on, more interesting-good stuff happenin'. Innovation is to a large extent a "numbers game": He-she who tries the most stuff wins. (Astonishingly true.)

2. Culture of "Try it! Now!" Culture! Culture! Attitude! Attitude! Mindset! Mindset! "The way we do things around here." "Around here, we try things first, fix 'em fast, try again, talk about it later, when we've got something to talk about."

3. Philosophy/F.A. Hayek/"spontaneous discovery process." Firm as market economy. New stuff emerges "spontaneously" from lots of trials and lots of errors. The innovator's life is life on the run, zigging here and zagging there—but always hustling.

4. Failures encouraged/celebrated/cherished. Failure is the key to success. Period. Fast failure is the key to fast success. And so on. This must be "cultural" to the core.

5.Transparency. All info on all these tries and cock-ups available to all to inspire, to chew over, to add to, to attract adherents and champions, etc.

6.Connection/Ubiquitous. No barriers! Across-the-wall communication is as normal as breathing!

7. MBWA/Managing By Wandering Around. An informal, in touch, high-camaraderie, on the move atmosphere underlies the "try it"-"screw it up"-"learn from it"-"fast" "culture."

8. Fail to share yields "death penalty." Sharing-transparency are the innovation organization's lubricant; therefore those who hoard must get the boot.

9. Fast prototyping/Serious play. Prototyping skills-attitude are more central than almost anyone can imagine. Entire organization as "playpen" with "playmates" gathering spontaneously to try stuff. Quickly. Quickly.

10. Tempo/OODA Loop mastery/RFA. "Ready. Fire. Aim." is the premier cultural trait. Try it-learn from it-try it again-spread the news-recruit adherents-etc. The organization has a high metabolic rate ("metabolic management"), a rapid tempo. The Observe-Orient-Decide-Act cycle, invented by military strategist John Boyd, is quick and the quickness per se confuses one's competitors.

11. FFFF/Find a Fellow Freak Faraway/"The Sri Lanka Strategy." Try cool-scary-risky stuff out in the boondocks, well away from HQ and typical HQ stuffiness. Find a playmate in "Sri Lanka" ready to give your idea a whirl; eventually, the network of Champions-from-the-boondocks become the premier carriers of the innovation.

12. Demos/Heroes/Stories. Tries and screw-ups and sagas of bold champions become the "stories" that animate the organization—and induce everyone to climb aboard, play with vigor, or lose out.

13. Social Networks. The emerging social networking tools become the accelerator for the process described and implied in these first dozen ideas. Nothing automatic about this—must be thought through, overseen (but also loose-as-a-goose, not judgmental). Emergent leadership from hither, thither, and yon becomes the de facto "leadership for innovation" in the organization.

Discipline.
Accountability.
Execution.

14. Department of Sanity/"Dreamers with Deadlines"/Fiscal responsibility/Budget skills. Warren Bennis called hot groups of innovators "dreamers with deadlines." Innovation is not pie-in-the-sky, "let's all have a blast, yo my man, cool, eh?" in nature. There is a compelling and disciplined "execution" thread that is central to the innovating organization. The innovating organization is focused on "new stuff," "cool stuff"—but is pragmatic to a fault. The project "budget and milestones guru" is as honored as the true believer-dreamer-champion.

15. Department of Sanity/Accountability. Screwing up, for instance, is essential to innovating. But there is as much accountability around screwing up as there is around inventory management in a traditional outfit; that is, the innovator takes responsibility for the screw-up and for insuring rapid learning and dissemination of lessons learned and for mounting the follow-up experiment posthaste.

16. Department of Sanity/Implementation training. Execution and Implementation are paramount skills, highly rewarded and cherished. Bunkmates to the end.

Radically Thrilling.
Lickable.
Recession Cure.

Steve Jobs says that the definition of a perfectly designed product is one you want to lick.
BMW claims that one of its models is radically thrilling.
Economists agree that inducing people to open their wallets is the cure to the recession.
And I claim it all boils down to the right kind of hammer.

A hammer you want to lick.
A hammer that is radically thrilling.
And a hammer that induces you to make an expenditure that you hadn't intended to make.

Hence: See the photo above of the Tuf-E-Nuf hammer.

This gorgeous little hammer is a true innovation, even an earth-shattering innovation. The head is the head of a [normal] heavy hammer. But the handle is only five inches long, half the standard length. And the grip is great, up to the OXO standard. The net result is the ability to maneuver in tight spots while retaining almost all the power of a full-size hammer. And, as a bonus, owning a piece of sculptural art. So I ended up buying six of the bloody things for Christmas presents—including, Christmas spirit be damned, one as a present to myself.

Great design rules!
Innovation is king!
Functionality scores!
Lickability and Radically Thrilling are the standards worth shooting for!
There is more to life than iPods!
Beating the recession occurs at the checkout in the R.K. Miles hardware-home-building supplies store in Manchester Center VT!
Excellence knows no bounds!
Happy 2009!

What the Hell!

Found this on a greeting card in a Boston paper store. Frankly, it doesn't get much better than this:

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

Innovation ... It's Easy as P___!

If innovation is still the best source of competitive advantage, then this truism should apply beyond the world of fashion, IT, and pharmaceuticals, and into less obviously promising areas, like aircraft toilets! A client who works in this sector told me recently that men (still) make up 70% of airline passengers carried. (Reason in itself to re-read Chapter 13 of Re-imagine!) Further, and without going into unnecessary detail, he told me that three out of every four visits passengers make to the toilet during flights is to pee. So, putting these two statistics together, over 50% of toilet utilisation on flights is by men peeing. Question then. Why are there no men's urinals on planes, as there are in just about every other venue where men and women co-exist in large numbers?

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. DASELL Cabin Interior (see the Washroom with Urinals page on their website) 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?

Hard Work Matters

I enjoyed the recent discussion we had on Innovation and Execution. I was delighted to read an article in Sunday's New York Times business section titled "Eureka! It Really Takes Years of Hard Work," by Janet Rae-Dupree. In her article, Ms. Dupree states that innovation is much more than the aha! moment. It is most often the years of hard work in the background that really leads to innovation. I think she is right on.

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.

Innovation and Architecture

The Center for Creative Leadership recently released the findings of their study of senior executives' opinions of the future trends they face. It is no surprise that the increasing complexity of their challenges was forefront on the executives' minds. As authors Corey Criswell and André Martin noted in the introduction to the report, "Senior executives face increasingly complex challenges that involve organizational changes, market dynamics and talent shortages. One popular response to increasing complexity is to lean on innovation. Our respondents believe that aiming for innovation through overt processes (systems and structures) and talent development is paramount to creating a culture that is agile enough to address complex challenges."

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?

Built to Be Eclipsed

Partially the "built to last" bit (and my deep philosophical problems therewith) is on my mind because I'm immersed in a biography of Joseph Schumpeter. (Prophet of Innovation: Joseph Schumpeter and Creative Destruction, by Thomas McCraw.) For decades Schumpeter played, to his chagrin while alive, second fiddle to JM Keynes. In a penetrating review of the book, the noted economist Robert Solow convincingly argues that the first violinist now has rather clearly turned out to have been Schumpeter.

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.

Told You So!

"Told you so" is really stupid, a sign of senility and petulance; so I retract. But I will nonetheless quote from page 307 of my 1997 book, The Circle of Innovation. I was riffing on the problems associated with ISO 9000 certification, and unearthed the perfect quote to match my sentiments, courtesy Richard Buetow, then director of corporate quality for business systems at Motorola:

"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."

It Was 40 Years Ago Today

Yes, today marks the 40th anniversary of "Sgt. Pepper's Lonely Hearts Club Band"—which forever altered the landscape of popular music. On June 1, 1967, the Beatles released what most music critics still hail as the greatest rock & roll album of all time. Why the greatest? Short answer: It was the most innovative. But how so? It wasn't the Beatles' most original collection of songs. In fact, I'd argue that their previous album, "Revolver," contained compositions that were more creatively crafted. But, of course, there's more than one way to be innovative, and the Beatles always found several. The group presented the songs on Sgt. Pepper as a unified package, the repertoire of a fictional band they created. The album had an overarching theme and distinct identity, musically and lyrically—with smooth segues between songs that reminded us that the whole was more important than the sum of its parts—a first in pop music. Some would say it created a new business model: the preeminence of the 33 1/3 RPM album. (Sales of albums would eventually replace sales of singles as the barometer of pop music success—a better indicator of depth of audience appeal. This, in turn, led to the success of FM radio, which by favoring album tracks catered to a less fickle and more sophisticated pop music audience.) Sonically, Sgt. Pepper cut new ground as well, with an unprecedented degree of multilayered vocal and instrumental tracking—as well as circus-like sound effects and crowd noises that fully exploited the new stereophonic technology. And Sgt. Pepper revolutionized album design and packaging with its first-of-a-kind, laminated 3-D album cover, gateway sleeve, and printed lyrics on the back cover.

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?

Lucky Fella

So what did I do to deserve all this?

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.)

Hey, Tom, There's More to Life Than 3000 Sand Hill Road

Though I'm of liberal descent, I'm an unabashed member in very good standing of Capitalist Pigs LLP. The private sector is my weapon of choice for most human development issues, and the venture capitalist who unearths the upstarts is my chosen shooter.

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 start-ups. 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?

Taleb's Black Swan

Tom's audioblog last week talked about the new book by Nassim Nicholas Taleb, The Black Swan. I loved hearing Tom's comments because I was, at the time, on vacation immersed in The Black Swan. But I have only just finished Part 1, 133 pages. This book is not to be read smoothly from start to finish. As it is a book about the importance of what you don't know, and how we all tend to fool ourselves about what we do know, it requires time to read, absorb, think, and challenge some of your most fundamental ways of learning and seeing the world. (And, I say, ignore Gregg Easterbrook's NY Times review on April 22. Easterbrook picks on Taleb for certain comments and ignores the mind-shocking new perspectives Taleb offers us.)

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!)

House!

I watch damn little TV, even on the road. But now I'm building my travel schedule around episodes of House. Love the show! Love the stories! Love the pace! Love Hugh Laurie!

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.

Fare Hunting

A friend has sent along a link to a Wired article that points to a couple of websites that purport to find low airplane fares. Flyspy finds cheap fares on Northwest flights originating in Minneapolis. Farecast now searches flights from 55 American cities and also claims to predict if prices will increase or decrease in the future. In that way the site helps you answer that often lingering question: "Do I buy now or do I buy later?"

A Hole in the Ceiling

Just when I thought innovation—or "design thinking"—couldn't get much hotter, I see that BusinessWeek has launched a quarterly magazine within the magazine: Inside Innovation. In this mini-mag, innovation is hailed as "the new currency of competition ... the Holy Grail of 21st century business." But more interesting is Inside Innovation's choice for its top 25 Champions of Innovation (C-suite executives from Chief Innovation Officers to Chief Marketing Officers) who are hell-bent on transforming their companies' cultures in pursuit of design thinking: nearly 70% are women. Is this where two mega-trends in business (innovation and women's leadership) join forces for maximum impact? Has innovation cut a permanent hole in the ceiling?

Innovation

I love New York: Barney's window above.

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.]

On the Cover ...

The 1000th issue of Rolling Stone magazine is out, with a laminated 3-D cover featuring pictures of the biggest pop icons of the rock & roll era—reminiscent of the Beatles' Sgt Pepper's album cover. [See it here.] The only problem: Where are the Beatles? It took me several minutes to locate them, buried behind the front line of Bob Dylan, Janis Joplin, Chuck Berry, and Jimi Hendrix. The latter artists (of whom I'm a huge admirer) deserve their eternal props, but not at the expense of the former. The Liverpool Lads single-handedly resurrected and reinvented rock & roll in 1964 after its demise five years earlier. Simply put, no Beatles = no rock revolution = no Rolling Stone magazine. (Also no Joplin or Hendrix.) As Newsweek once put it: "What the Beatles did in the 60s remains the most thrilling surge of creativity in the history of pop culture." Shouldn't game-changing innovation get a LITTLE more respect?

Innovation U

Bill Taylor, co-founder of Fast Company and co-author (with Polly LaBarre) of Mavericks at Work (pub date Sept. 1, 2006) is now writing a regular column for the New York Times. Sunday's article, titled "Here's an Idea: Let Everyone Have Ideas," discusses Rite-Solutions, a software company based in Rhode Island (USA) that has "an internal market where any employee can propose that the company acquire a new technology, enter a new business or make an efficiency improvement." It's a good case study of how a company taps into the collective genius of the whole organization.