87% of the companies on the Fortune 500 in 1955 no longer exist!

4 Ways To Beat Disruptive Innovation

These days, every business needs to innovate.  While many in the past assumed that they could get by running the same old business the same old way, the fact is that 87% of the companies on the Fortune 500 in 1955 no longer exist.

So clearly, today’s firms can’t stand still and must pursue a variety of innovation strategies.  Some invest heavily in R&D, others use advanced technologies to improve existing products and others create open innovation partnerships to solve tough problems.

Yet even if a business diligently pursues these efforts, it’s still vulnerable to disruptive innovations.  These are especially challenging because they require a change in business model and aren’t profitable for incumbents to pursue.  However, while competing with a new disruptive competitor is difficult, it can be done.  Here are 4 ways to approach it.

1. Acquisition

Disruptive innovations don’t mint money from day one.  They focus on new markets, made up of light or even non-consumers of the category and require a new business model.  That takes lots of sweat, tears and, most of all, time.  So, in the early stages, there are always opportunities for incumbent businesses to acquire the disruptor.

Certainly this is true in the tech industry.  Apple routinely uses acquisitions to launch new innovations like Siri and other companies, such as Cisco and Microsoft, have made hundreds of small acquisitions over the years.  Not all of these were disruptive companies, but a lot of them were.

Yet acquisitions are not a panacea.  The important thing to remember about a disruptive innovation is that it’s not the technology that makes it disruptive, but the business model.  So acquiring a disruptive startup and then pushing them to embrace your business model will only defeat the purpose.

This is a persistent problem in the marketing communications industry.  The big agency holding companies routinely buy agile new agencies, but almost as soon as they do, they push them—through the “earn out” structure and other ways— to generate margins.  Perhaps not surprisingly, the upstarts quickly begin operating like their agency brethren.

And the death spiral continues.

2. Co-Option

You don’t have to actually acquire a disruptive startup, you can simply co-opt it.  Disney did a masterful job of this when it offered Pixar a distribution deal.  Consequently, Pixar never learned how to do distribution and became so dependent on Disney that they eventually merged.   These days, Pixar actually runs Disney animation.

Steve Jobs was behind both deals (distribution and acquisition), which shouldn’t be surprising.  He was a master of co-option.  In the late 90’s, MP3’s terrified the music industry.  Jobs co-opted the technology, linked it to his existing Mac computers through iTunes and saved the music industry, while generating enormous profits for himself.

Co-option, in many ways, is a more viable strategy than acquisition.  It’s certainly less resource intensive and can often be more effective.

3. Spin Off

In 1980, IBM had already been a victim to disruptive innovation.  As the dominant player in mainframes, it had largely missed out on the minicomputer revolution.  Its management saw personal computers as an even greater threat to its business model and were determined to not be left behind again.

But instead of throwing the full heft of IBM’s corporate resources behind the new venture, they chose a different path.  They sent a small team to Boca Raton, Florida, away from the prying eyes of corporate headquarters in upstate NY to develop a completely new product.  A year later, the IBM PC became a success story for the ages.

Others have taken a similar approach.  Google formed Google X to develop promising new technologies that don’t fit with its core business.  Facebook has made high profile acquisitions like InstagramWhatsApp and Oculus VR, but vowed to keep their operations separate.

Spinning off disruptive innovations, if done right, can offer the best of both worlds, the independence of a startup and the resources of an industry giant.

4. Bayesian Strategy

There is no “right” way to respond to a disruptive innovation.  Incumbent firms have a variety of options and the success of any approach is highly contextual.  The one crucial element is that you have to know it’s going on.  All too often, managers want to be faithful to their business model and do not appreciate the danger until it’s too late.

We can no longer treat strategy as a game of chess, in which we sit in conference rooms and plan out a punctuated series of moves and countermoves.  Instead, we need to take a more Bayesian approach to strategy, in which we are not so much trying to get it right, but to become less wrong over time.

That’s easier said than done because we need to effectively change the software in our organizations to become more sensitive to changes in the marketplace and adaptable.  This transformation starts with data, which needs to be made not only more accessible, but more easily combined with analytic resources to become actionable.

But most of all, it requires a change in perspective.  We can’t wait for emerging trends to become salient, by then it’s often to late.  Rather, we must focus on emerging platforms and build the skills we need to integrate with them.

As Rita Gunther McGrath has put it, planning needs to become discovery driven, rather than knowledge driven.  In other words, we need to focus on how we can learn, not what we think we know.

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FROM BEER TO CAFFEINE, THE BIRTH OF INNOVATION (AN EXCERPT FROM ABUNDANCE)

The World is My Coffee Shop

abundance300 years ago, during the Age of Enlightenment, the Coffee House became the center of innovation.

Back then, most people went from drinking beer to consuming coffee (i.e. from being tipsy to being wired) and ideas started exploding.

The details of this story are important (and fun) one for anyone passionate about innovation…

I wrote about this very phenomenon in Abundance, and offer the excerpt below.

Read, enjoy and pass it on to all the coffee-lovers (and innovators) in your life.

The World is My Coffee Shop, an excerpt from Abundance

In his excellent book Where Good Ideas Come From: The Natural History of Innovation, author Steven Johnson explores the impact of coffeehouses on the Enlightenment culture of the eighteenth century. “It’s no accident,” he says, “that the age of reason accompanies the rise of caffeinated beverages.” There are two main drivers at work here. The first is that before the discovery of coffee, much of the world was intoxicated much of the day. This was mostly a health issue. Water was too polluted to drink, so beer was the beverage of choice. In his New Yorker essay “Java Man,” Malcolm Gladwell explains it this way: “Until the eighteenth century, it must be remembered, many Westerners drank beer almost continuously, even beginning their day with something called ‘beer soup.’ Now they begin each day with a strong cup of coffee. One way to explain the industrial revolution is as the inevitable consequence of a world where people suddenly preferred being jittery to being drunk.”

But equally important to the Enlightenment was the coffeehouse as a hub for information sharing. These new establishments drew people from all walks of life. Suddenly the rabble could party alongside the royals, and this allowed all sorts of novel notions to begin to meet and mingle and, as Matt Ridley says, “have sex.” In his book London Coffee Houses, Bryant Lillywhite explains it this way:

The London coffee-houses provided a gathering place where, for a penny admission charge, any man who was reasonably dressed could smoke his long, clay pipe, sip a dish of coffee, read the newsletters of the day, or enter into conversation with other patrons. At the period when journalism was in its infancy and the postal system was unorganized and irregular, the coffee-house provided a centre of communication for news and information . . . Naturally, this dissemination of news led to the dissemination of ideas, and the coffee-house served as a forum for their discussion.

But researchers in recent years have recognized that the coffeeshop phenomenon is actually just a mirror of what occurs within cities. Two-thirds of all growth takes place in cities because, by simple fact of population density, our urban spaces are perfect innovation labs. The modern metropolis is jam-packed. People are living atop one another; their ideas are as well. So notions bump into hunches bump into offhanded comments bump into concrete theories bump into absolute madness, and the results pave the way forward. And the more complicated, multilingual, multicultural, wildly diverse the city, the greater its output of new ideas. “What drives a city’s innovation engine, then — and thus its wealth engine — is its multitude of differences,” says Stewart Brand. In fact, Santa Fe Institute, physicist Geoffrey West found that when a city’s population doubles, there is a 15 percent increase in income, wealth, and innovation. (He measured innovation by counting the number of new patents.)

But just as the coffeehouse is a pale comparison to the city; the city is a pale comparison to the World Wide Web. The net is allowing us to turn ourselves into a giant, collective meta-intelligence. And this meta-intelligence continues to grow as more and more people come online. Think about this for a moment: by 2020, nearly three billion people will be added to the Internet’s community. That’s three billion new minds about to join the global brain. The world is going to gain access to intelligence, wisdom, creativity, insight, and experiences that have, until very recently, been permanently out of reach.

The upside of this surge is immeasurable. Never before in history has the global marketplace touched so many consumers and provided access to so many producers. The opportunities for collaborative thinking are also growing exponentially, and since progress is cumulative, the resulting innovations are going to grow exponentially as well. For the first time ever, the rising billion will have the remarkable power to identify, solve, and implement their own abundance solutions. And thanks to the net, those solutions aren’t going to stay balkanized in the developing world.

Perhaps most importantly, the developing world is the perfect incubator for the technologies that are the keys to sustainable growth. “Indeed,” writes Stuart Hart, “new technologies — including renewable energy, distributed generation, biomaterials, point-of-use water purification, wireless information technologies, sustainable agriculture, and nanotechnology — could hold the keys to addressing environmental challenges from the top to the base of the economic pyramid.”

However, he adds, “Because green technologies are frequently ‘disruptive’ in character (that is, they threaten incumbents in existing markets), the BoP may be the most appropriate socioeconomic segment upon which to focus initial commercialization attention . . . If such a strategy were widely embraced, the developing economies of the world become the breeding ground for tomorrow’s sustainable industries and companies, with the benefits — both economic and environmental — ultimately ‘trickling up’ to the wealthy at the top of the pyramid.”

Thus this influx of intellect from the rising billion may turn out to be the saving grace of the entire planet. Please, please, please, let the bootstrapping begin.

~ Curated by The Marketing Curator and TME Pass The Idea (www.pass-the-idea.com)

Source: http://singularityhub.com/2014/07/10/from-beer-to-caffeine-the-birth-of-innovation-an-excerpt-from-abundance/

China – Unleashing the power of innovation

LI MIN/CHINA DAILY

Is China about to lead the world as an innovator again?

2014-07-07 08:40 China DailyWeb Editor: Qin Dexing

LI MIN/CHINA DAILY

A number of Chinese companies beginning to make breakthroughs

Is China about to lead the world as an innovator again?

The world’s second-largest economy invented gunpowder, the compass, printing and papermaking, but has fallen behind not just in recent decades but for most of the last two centuries.

After reform and opening-up in the late 1970s, China became the workshop of the world, mainly through low cost original equipment manufacturing.

Now, however, as China’s economy starts to slow and wages rise, there are greater incentives for Chinese companies to innovate to improve profitability by greater productivity.

Although China’s investment in R&D is still just 38 percent of that of the United States, according to the China Europe International Business School, a number of Chinese companies are now beginning to make breakthroughs.

Ninety-three Chinese companies are now in the top 2,000 global companies in terms of R&D intensity (R&D spending as a percentage of sales), ranked by the EU Industrial R&D Investments scoreboard in 2012.

While this is fewer than the 658 from the US, 527 from the European Union and 353 from Japan, it represents significant progress.

Huawei Technologies Co Ltd, the telecommunications giant, is the highest-ranked Chinese company-31 in terms of spending, investing some $3.5 billion on research, almost a quarter of its total sales.

PetroChina Co Ltd, the State-owned oil company (66) and another telecommunications company, ZTE Corp (94), make the top 100. In fact, ZTE made the most patent applications by any company in the world in 2012.

Many Chinese companies are acquiring technology through acquisitions with high profile deals such as computer giant Lenovo Group Ltd buying the Motorola handset division from Google Inc this year for $2.91 billion.

Chinese companies are also snapping up R&D facilities in the US and Europe. There have been several acquisitions of German small and medium-sized businesses in engineering and manufacturing technologies.

Many expect this to be a significant trend in the next decade. Much of the progress has been in line with the Chinese government’s Five-Year Plan (2011-15), which places emphasis on achieving breakthroughs in areas such as integrated circuits, space research and nanotechnology.

China’s achievements in R&D came under the spotlight at the China Innovation Research Findings Conference held at the CEIBS campus in Shanghai in May.

Attended by R&D heads from some of the leading multinationals in China such as AkzoNobel NV, Robert Bosch GmbH, DSM NV, Royal Philips NV and Royal Dutch Shell Plc as well as Chinese companies, it presented the findings of the work of the business school’s Centre on China Innovation, set up three years ago.

George Yip, professor of management and co-director of the center, believes China is on thebrink of major technological breakthroughs.

“Chinese companies are investing more and more in R&D, and the Chinese government’s investment in research institutions has started to produce results,” he says.

“I think the next few years are going to see a dramatic take off.”

Yip, former dean of the Rotterdam School of Management and co-author of Strategic Transformation: Changing While Winning, says one of the key breakthroughs has been in aerospace technology.

COMAC (Commercial Aircraft Corporation of China) is to launch its first commercial airliner, the C919, to rival The Boeing Co and Airbus SAS, in 2016.

“It is leading-edge technology and almost no other country in the world can do this outside the United States and Europe. It will sell very large volumes in China and from there to the rest of the world.”

Bruce McKern, former co-director of the center and now visiting fellow at Stanford University’s Hoover Institution, says the Chinese have built a strong research base from essentially copying technology.

“They started to learn how to innovate by copying. They then improved on the copying with their own innovations. As a result they have become good at incremental innovation,” he says.

The Australian academic says this type of incremental innovation is now vital for the current stage of China’s economic development, where production has to become more efficient to absorb higher labor costs.

“A richer society that has higher labor costs has to innovate because it has to find a way of producing things more efficiently,” he says.

“The Chinese don’t have to reinvent the wheel or the steam engine, but the time will come when there is an earth-shattering innovation. I fully expect that to happen, but it is not necessary at the moment.”

Some are skeptical that China will make technological breakthroughs.

Regina M. Abrami, coauthor of Why China Can’t Innovate, with William C. Kirby and Warren McFarlan, argues that the academic system works against the free flow of ideas.

“Young PhDs are often beholden to a university professor and basically told what they are going to do research on. So it becomes more like an apprenticeship program than self-mastery of a topic. China is not unique on this so it is not completely a East-versus-West thing, but it is a barrier to innovation.”

Engineers work at Bell Labs in Shanghai. Many multinational companies have set up their R&D centers in China.CHINA DAILY

Engineers work at Bell Labs in Shanghai. Many multinational companies have set up their R&D centers in China.CHINA DAILY

Abrami, a senior fellow in the department of management at Wharton School, speaking from Hong Kong, says there is no issue with the innovative or intellectual capacity of the Chinese people.

“The institutional structures are such that although China has made tremendous leaps and bounds in terms of process innovations and spin-offs, you are not seeing these disruptive innovations.”

The Chinese government set itself the target as far back as 2006 to transform the country into an innovative society by 2020 and a world leader in science and technology by 2050.

However, some doubt there is a direct relationship between R&D effort and economic performance.

Edmund Phelps, the Nobelprize winning economist and director of the Center of Capitalism and Society at Columbia University, believes there may be no link at all.

“It is curious that some industries have a lot of R&D going on and others do not. If you look at national data you see Germany is right up there in terms of R&D but it happens to focus on one or two industries that are relatively heavy on R&D. I just don’t think R&D data is very meaningful or helpful.”

Phelps, also dean of New Huadu Business School at Minjiang University in Fuzhou and author of Mass Flourishing, which raises innovation issues, also does not believe that despite Apple iPhones and the new information age, the current period is a great innovation age.

His measure of innovation success is its impact on economic productivity. He says it is clear that more advances were made in the late 19th century and from 1920 to 1960 than now.

“Productivity growth has slowed markedly from the late 1960s and early 1970s. I take that to mean that either innovation has shrunk as a slice of the economy and that Silicon Valley wasn’t enough to offset that diminution of innovation elsewhere or maybe that innovation doesn’t have as large an impact on productivity as it used to.”

Gong Li, senior managing director and chairman of global management consultant Accenture China, says China has a problem with bringing up groundbreaking research.

“R&D in China is more about the ‘D’ than the ‘R’. There are about 110 products of which China is the largest manufacturer in the world but only about 10 of them have enough IP (intellectual property) in them to be a China product,” he says.

Gong, who was a scientist himself majoring in physics at Fudan University and doing a postgraduate degree in electrical engineering at the University of Houston, says there is still too much of a “rush mentality” in China that hinders basic research.

“Research takes years and there might not be any benefit immediately from it. But Chinese companies want a return in three years. As a result it is not an easy environment for basic research.”

Han Jian, associate professor of management, who is also co-director of the CEIBS Centre on China Innovation, agrees there is some evidence that there is a skills gap that makes blue sky research difficult in China.

She has recently conducted panel research with the R&D heads of 15 multinational and Chinese companies as part of the innovation center’s recent findings conference.

“One leading Chinese company’s R&D head said there was still a lack of really innovative people with, in particular, maths skills. He also said there was a lack of people able to express ideas in a logical and comprehensible manner and to come up with a holistic picture that can be defended and analyzed.”

However, Han has problems with seeing R&D success at individual country level since much of it is conducted by multinationals and is industry specific.

“The main priority for the multinationals in China is building teams. It is not just about having enough really smart people but about motivating the people who are not so smart. These people are often doing most of the work, and it is about them being a meaningful part of the jigsaw.”

Abrami at Wharton says there is also a lack of capital for early-stage entrepreneurs in China compared with the US and Europe.

“The lack of angel investors compared to what we see elsewhere is a problem. I think also there is less scope for failure in China.

“If you think of Silicon Valley, it is almost a badge of pride about how many companies you have been involved with that have bombed. I don’t get a sense there is a lot of room for that in China,” she says.

A major issue for R&D in China remains IPR.

McKern at the Hoover Institution says it has been a major issue for foreign multinationals in China.

“They have always been looking for ways to prevent leakage. The big change here, however, is that Chinese companies who have developed their own technology are clamoring for protection and putting pressure on the government,” he says.

Klaas Vegter, who heads electronics company Royal Philips NV’s R&D in China, says there can be too much focus on IP protection and research in China.

“In my personal view, IPR is overstated. In many markets, the product lifecycle right now is so rapid the idea you can protect IPR is almost ridiculous. The average patent lifecycle is 17 years, and for the product just one to two years.”

Vegter says a distinction now has to be made between core DNA technology and the products that appear on the shelves in shops.

“We have made a distinction between innovations that are secret processes and products which are assembled, even if there happens to be 10 years of research behind them,” he says.

“If you assemble anything and bring it to market, three months later it is copied.”

Regardless of the IP issue, there can be no doubting the government support to R&D in China.

There is increased investment in the research bases of the universities and there are more than 100 science and technology parks across the country.

~ Curated by The Marketing Curator and TME Pass The Idea (www.pass-the-idea.com)

Source: http://www.ecns.cn/business/2014/07-07/122642.shtml

Insead – Organising for Innovation: Old Ideas about New Ideas

Good organisation design can help companies become more innovative, but first you have to understand the nature of “new ideas” and how to generate them.

Phanish Puranam, The Roland Berger Chaired Professor of Strategy & Organisation Design at INSEAD, and Benjamin Kessler, Web Editor | July 1, 2014

Good organisation design can help companies become more innovative, but first you have to understand the nature of “new ideas” and how to generate them.

Not long ago, I was teaching organisation design to a group of senior executives when a somewhat tangential but insistent question rang out: “What can you tell us about innovation?” For today’s business leaders, it’s an understandable obsession. Most agree that the need to innovate is no longer confined to Silicon Valley; rapidly changing business conditions force a heavy and constant imaginative burden on all businesses that want to remain in the game long-term. There is no dearth of consultants and advisors offering to help “make your organisation more innovative” (for a fee). What should you know before you buy?  I have listed here what I shared with the executives during class: some of the most reliable old ideas about new ideas that I know of.

  1. Constraints are good for innovation

Most innovations aren’t necessarily the product of companies throwing large amounts of money at a problem – quite the opposite. New ideas have historically arisen when individuals were confronted with a problem they couldn’t buy their way out of, and so had to experiment within constraints. Constraints force us to discard preconceptions about processes and products. They require companies to rediscover their essential goals and improvise new, streamlined ways to achieve them. Be sceptical of the prevailing stereotype that innovation is about blue-skies thinking with lots of resources at your disposal. Creativity, ingenuity, and finding quick fixes and workarounds are all compatible with innovative thinking. By implication, so are organisational attributes such as performance targets, accountability and cost discipline.

  1. Most new ideas are re-combinations of old ideas.

Case in point: the iPod, undoubtedly an iconic innovation in recent memory. It left the global music industry forever changed, yet from a technological standpoint, it offered absolutely nothing new when it emerged in 2001. Already existing mp3 players contained all its functionality and more. New ways of combining old ideas are at the heart of innovation. Hence the continued importance of innovation hubs, from the coffee shop where intellectuals gathered in 18th century London to Silicon Valley, where spontaneous interactions among imaginative people have produced miraculous results. That’s also why I stand with Yahoo! CEO Marissa Mayer in opposition to the idea that employees can be as creative in isolation at home as they would be working with colleagues in the same physical space. There is an important connection between creativity and proximity. Design the organisation in a way that allows “ideas to have sex” as British author Matt Ridley puts it.

  1. Most new ideas are bad ideas

Organisation theorist Jim March taught us about the exploration-exploitation trade-off: If we keep re-using what works, we will never discover anything better; but the search for something better may well turn up duds. The implication: it’s not crazy to throw some money at crazy ideas. Example: In 2001, McDonald’s in Switzerland opened a pair of four-star branded hotels that lasted just two and a half years. While on the surface a baffling move, the hotel project was in fact a direct response to a call from HQ for experiments and ideas to help expand the brand. The fast food giant was aware even then that diversification was needed to offset the long-term threat that increasing global health-consciousness posed to their burgers-and-fries business model. The “Golden Arch” hotels certainly lost money, but the loss was no doubt deemed acceptable, incurred as it was while the company was flush with cash, and sacrificed as it was at the altar of the prospect of innovation. If you want to innovate, learn first to tolerate failure.

  1. New ideas are necessary, but not sufficient for innovation

Producing a good new idea doesn’t mean it will make you money. The classic illustration of this principle is the story of Xerox PARC, an R&D division that in 1973 produced the Xerox Alto, the world’s first personal computer and a major influence on all the commercial PCs that would follow. It was also responsible for the first prototypes of the laser printer, graphical user interface (GUI) mouse, and other technologies that were to become staples of home computing. Yet, in the end, Xerox failed to capitalise on its legendary innovation capacity, and PARC could only sit back and watch as Steve Jobs and others reaped extremely lucrative inspiration from its inventions. Myriad theories have sprung up to explain the failure of Xerox to capitalise on PARC’s new ideas. I don’t have the space to go into them here – but the case suffices to illustrate why having new ideas is not the same as being able to monetise them.

  1. Organising for generating new ideas is not the same as organising to use new ideas effectively.

The McDonald’s example above demonstrates that generating good new ideas requires a certain amount of tolerance for failure, but clearly this can’t be the standard for parts of the organisation that must specialise in implementing good ideas.Manufacturing processes, by necessity, are considered successful only if they are able to provide flawless replicability and reliability, something that would be considered an insane expectation in an R&D department. Organisations must take these differences into account either by making room for both kinds of contexts in different parts of the organisation, or by abandoning the dichotomy altogether in favour of specialisation. The pharma industry has seen a sharp division of labor between risky idea generation by biotech firms and commercialisation by big pharma.

Phanish Puranam is the Roland Berger Chair Professor of Strategy & Organisation Design at INSEAD.

~ Curated by The Marketing Curator and TME Pass The Idea (www.pass-the-idea.com)

Source: http://knowledge.insead.edu/blog/insead-blog/organising-for-innovation-old-ideas-about-new-ideas-3438

A Better Way to Group Brainstorm

Group brainstorming should be considered part of a process that includes sufficient time for individual thought

Mikael Cho

A Better Way to Group Brainstorm

Over dinner a couple months ago, one of my friends said he needed some help coming up with a name for a new website. He told me a bit about the site and asked if I could help think of something over dinner. He also asked my other friends to join in so we could get a whole bunch of ideas on the table and choose the best one.

From my experience working at an agency, as a designer, and at [my company] ooomf, coming up with ideas from a single brainstorming session like this one is usually not the most effective way. Many people I’ve come across, including the most creative ones, need individual time to let ideas marinate before the best concept reveals itself (even if it’s something that seems as simple as naming a website).

I encouraged my friend to take some time to do the same — to play with his concept a bit more before bringing it to anyone for more input. After this experience, I wondered why the group brainstorming session is often the default choice when we’re pressed to find that perfect idea.

The Origins of the Brainstorming Session

In the 1940s, advertising executive, Alex Osborn, was frustrated with his employees’ creative output and began experimenting with ways to improve it. In 1953, Osborn published a book titled Applied Imagination, where he discussed how group brainstorming is a more efficient way to improve ideation compared to individual thought. To have an effective brainstorming session, Osborn outlined that the group must:

  1. Defer judgment (don’t get upset when people say bad ideas)
  2. Reach for quantity (come up with as many ideas as possible)

This sounds like simple criteria to follow but the challenge is actually orchestrating brainstorming sessions where these two principles are consistently put into practice.

What Goes On in Your Brain During a Group Brainstorming Session

Unfortunately, the typical brainstorming meetings that many of us experience today do not follow Osborn’s criteria. Even if the intentions of the meetings are good, most break one or both of Osborn’s principles because there are multiple psychological factors at play that are hard to control. Here’s the most common social factors that make group brainstorming sessions difficult to get right:

1. Fear of Judgment from People in Positions of Power

Studies indicate that it’s difficult for people to remove fear of judgement when presenting ideas in meetings where a boss or someone with a higher status in the company is present. Since most meetings include a manager, boss, or someone in a position of power, there’s a chance that presenting a bad idea, may make you look like you’re not smart and perhaps unworthy of your job. This makes you less likely to share quirky ideas for fear that they may come off as bad ones.

2. Extroverts Take Center Stage

When faced with creating ideas during a group setting, extroverts find it more natural to share their ideas; whereas introverts, are more likely to process information internally and make meaning before contributing to the group discussion. Brain imaging studies have shown that in the presence of external stimulation, introverts show more activity in the regions of the brain that process information, make meaning, and problem solve compared to extroverts.

In fact, the pathway where external stimuli travels in an introvert is much longer than that of a person who is more extroverted, navigating through complex areas of the brain associated with information processing and problem solving. Here’s a graphic showing the difference:

A Better Way to Group Brainstorm

The Introvert Advantage: Making the Most of Your Inner Strengths

This difference in neural processing can hurt the effectiveness of a typical group brainstorming session because people in the group who are more extroverted will naturally get their ideas out faster than introverts, whether they have the most innovative ideas or not.

3. Groups Hate Scary Ideas

No matter how much we say we love creative ideas as a society, our brains are hardwired to fear novelty. Researchers at Cornell, the University of Pennsylvania, and the University of North Carolina noted that we generally value practical ideas because they are proven and familiar compared to novel concepts which are riskier to endorse.

This thought process is difficult to control because it’s driven by a built-in motivation to reduce uncertainty in our lives. Making a wrong decision is literally painful for our brains to cope with so we tend to seek out ideas that are safer. This tweet by Box founder Aaron Levie sums up how people tend to react to ideas:

A Better Way to Group Brainstorm

The Incubation Period: the Forgotten Step to Great Ideas

Many brainstorming sessions are thought of as an end goal—that an answer needs be drawn at its conclusion for it to have “worked.” If the perfect idea doesn’t show itself by the end of the meeting, the brainstorming session is usually deemed a failure. This is in spite of research that show the optimal process for creativity is not within a single group setting with time as the official.

Creative theorist Graham Wallas presented one of the first models of the creative process in 1926. Wallas noted that our creative process stems from an evolutionary process that allows us to adapt quickly to rapidly changing environments.

Wallas concluded that the creative process can be broken down into five stages:

  1. Preparation (individual study to focus your mind on the problem and explore its dimensions)
  2. Incubation (the problem enters your unconscious mind and nothing appears to be happening externally)
  3. Intimation (you get a “feeling” that a solution is on the way)
  4. Illumination (your creative idea moves from preconscious processing to conscious awareness)
  5. Verification (your idea is consciously verified, expanded upon, and then executed)

The problem is, we typically cannot move through this creative process within a single group meeting. Sometimes the incubation stage itself can take days or weeks before you get a feeling that a good idea is on the way. Many of the most creative people in the world validate this, reporting they only arrive at the best solutions after a constant zig zag through alternatives.

The incubation period can be stressful because there is no clear time as to when inspiration may strike and to make matters worse, it looks like no progress is being made. Sally Hogshead, an author and creative director who helps develop ideas for both Fortune 500 companies and start-ups, even compared the incubation period as a time of doubt leading into agony:

A Better Way to Group Brainstorm

But coming to terms with how the creative process works is important for it to work. As Albert Einstein noted, “Creativity is the residue of time wasted.”  Being too rigid in the creative process can kill the seeds of exceptional ideas. Joshua Slayton, an engineer at AngelList, shared this slide in a recent presentation, making the case for the importance of removing rules when it comes to creativity:

A Better Way to Group Brainstorm

Slide from Joshua Slayton, Engineer at AngelList Keynote

Re-Thinking the Brainstorm

The point of brainstorming is to set aside uninterrupted time to think about how to solve a problem. This doesn’t mean a brainstorming session has to always be done in a group setting to be effective.

Start with Alone Time

When you give yourself alone time to ponder an idea, you don’t have to worry about other people’s perceptions, which opens up more creative avenues for you to explore. Scott Berkun, author of The Year Without Pants: WordPress.com and the Future of Worknotes the importance of individual thought to spark creativity in people:

“Great programmers, designers, and even managers come up with many of their best ideas in the solitary space of their own minds, or when working alone at desks and computers. It’s important to remember that you don’t need a big meeting or some fancy process to generate ideas: a brain, some desire, and some time are all you need.”

Removing the fear of judgement from others by giving yourself alone time with a concept can help improve your creative output.

Follow with a Group Session

Input from someone else or a small group is most valuable once you’ve had some initial time to think about an idea individually. In 2008, research from the University of Toronto showed that group brainstorming can be more effective if people come to a group session after some initial ideas are already cooking. In other words, showing up with a blank slate to a meeting is not as effective as coming in with a few boundaries in place.

A Better Way

When I or one of my co-founders setup a group meeting with some initial thought already done, we’ve seen dramatic improvement in the quality of ideas and steps to execution. Most of our blog posts and tools like Unsplash and How Much To Make An App came from initial time spent alone where there was a spark of inspiration before we explored the concepts as a team.

I’ve since observed a loose format that our most effective group meetings tend to follow. Everything from this list might not work for you but you’re free to take from it what you wish:

  • Allow for tangents. Sometimes going off in different directions during a conversation opens up opportunities for a wide range of connections to be made. Keep the topic in mind but research shows that a few injections of humor and wit along the way can spark novel ideas.
  • No time limit. Why end a meeting early if it’s producing tons of ideas? And why force a meeting if nothing’s coming from it? We’ve had meetings go for a couple hours and others last only a few minutes. However long your meeting is, let it go until you notice the creative output stalling. Then, shut it down.
  • Don’t force immediate conclusions. Ending some meetings without a clear answer is tough but sometimes it’s necessary. When you’re faced with a challenging problem, sometimes it’s best to remove from the problem rather than stare directly at it. The ideas you generate at first may not be the best but letting them sit for a while can provoke new connections, leading you to where the good stuff lies.
  • Beer is welcome. Studies shows that one to two beers can help you be more creative. We try to keep a couple cold ones around just in case we need to fuel some inspiration.

Having a group brainstorming session isn’t wrong but it shouldn’t be thought of as a single event. Instead, group brainstorming should be considered part of a process that includes sufficient time for individual thought.

~ Curated by The Marketing Curator and TME Pass The Idea (www.pass-the-idea.com)

Source: http://lifehacker.com/a-better-way-to-group-brainstorm-1445054503

Executives need to be disruption-ready: Insights from GE’s Global Innovation Barometer survey

The latest GE Global Innovation Barometer is a must read for all executives. As organizations enter a world of digital business and digital transformation, the findings show that most leaders realize that unless they disrupt, they will be disrupted.  Moreover, a growing sense for co-creation, co-innovation highlights the benefits of collaboration. 

Summary: Disruption, collaboration, and the future of work are highlighted in GE’s fourth annual survey — a must read for business leaders.

By R “Ray” Wang

Last week, June 16, 2014, GE unveiled the 2014 results for its “Global Innovation Barometer.” In the 4th annual survey, the GE team commissioned Edelman Berland to phone interview 3,209 senior business executives between April 2, 2014 and May 30, 2014.

Interviewees represented VP level and higher respondents from 26 countries including Algeria, Australia, Brazil, Canada, China, Germany, India, Indonesia, Israel, Italy, Japan, Kenya, Malaysia, Mexico, Nigeria, Poland, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Sweden, Turkey, UAE, UK and USA.  The average age of respondents was 44 years old and 31 percent represented C-Level decision makers. Four key areas of findings focused on:

 

  1. Macro trends show how essential innovation is to overall strategy. The study showed that 80 percent of respondents believe that people in their country live better today than 10 years ago because of the impact of innovation on their life and on their country.  However, 47 percent felt that technological innovation will increase inequalities.  Collaboration (47 percent), convergence of technology (32 percent), big data (25 percent), and industrial internet (25 percent) show some mindshare gains in terms of companies with a strategy or process to make the most of these new technology trends (See Figure 1).Figure 1.  Businesses Embrace New Trends In stages
  2. Glocalization emerges as a key requirement for successful innovation. 82 percent of organizations interviewed believe that innovation is a global game.  Meanwhile 73 percent believed that innovation needs to be locatized to serve specific market needs (See Figure 2).  This leads to the need to “Think Glocal.”  Survey results also show that Mexico, Singapore, Indonesia, Sweden, Brazil, South Africa, and South Korea lead the perceptions that constraints create innovation opportunities for those willing to invest.Figure 2. Organizations must think glocal in order to deliver on innovation
  3. Delivering on new business models creates challenges on successful innovation projects.  Over 60 percent of respondents found it difficult to define an effective business model to support new ideas and make them profitable, creating a challenge killing the ability to innovate. In addition, understanding customers and anticipating market evolutions (84 percent),  attracting and retaining the most talented and skilled individuals (79 percent), and adapting and implementing emerging technologies (67 percent) rose to the top three critical requirements for innovation (see Figure 3).Figure 3. Customer Understanding And War For Talent Remain key Critical Requirements For Innovation
  4. Speed and agility to innovate better is more mantra than reality at most organizations. The survey showed 67 percent of respondents agreed that success in innovation requires companies to quickly adapt and implement emerging technologies (see Figure 4). Concurrently, 57 percent consider the internal inertia and the incapacity to be nimble, failing at rapidly converting ideas into actions is a challenge limiting their business’s ability to innovate efficiently.Figure 4. Organizations Find It Hard To Deliver on Agility Despite The Benefits 

The Bottom Line: GE’s Global Innovation Barometer Highlights Growing Sophistication Among Executives To Embrace Or Prepare For Business Model Disruption

The latest GE Global Innovation Barometer is a must read for all executives. As organizations enter a world of digital business and digital transformation, the findings show that most leaders realize that unless they disrupt, they will be disrupted.

Moreover, a growing sense for co-creation, co-innovation highlights the benefits of collaboration. This trend correlates with increasing requests from market leaders and fast followers to identify startups and other forward thinking organizations to partner with.

With 70 percent of respondents identifying big data as a critical foundation for digital business and digital transformation, organizations expect to not only optimize business efficiency, but also 69 percent of respondents expect to use big data to improve the innovation process.

Finally, organizations strangely expect their governments to provide a framework to support top drivers of innovation either by fighting bureaucracy and cutting red tape (87 percent), ensuring business confidentiality and trade secrets are adequately protected (86 percent), and better aligning student curriculum with the needs of business (85 percent).

Constellation sees the overall findings as positive for innovation in the enterprise.  As organizations enter the next phase of business model disruption via digital, the attraction and retention of key talent, the internal agility of new business models, the adoption of new technologies, and real leadership amidst change are key success factors for this digital transformation.

The GE Global Innovation Barometer does a great job of quantifying the sentiment leading into 2014.  The hard work of getting the job done is ahead but at least it’s no longer unknown.

~ Curated by The Marketing Curator and TME Pass The Idea (www.pass-the-idea.com)

Source: http://www.zdnet.com/executives-need-to-be-disruption-ready-insights-from-ges-global-innovation-barometer-survey-7000030885/

The Power Of Benchmarking Nature And Other Industries To Generate Breakthrough Innovation Ideas

Thomas Edison, who was a methodical inventor, once said “to invent you need an imagination and a pile of junk” (aka stimuli). One of the very best forms of stimuli comes from looking at other industries for ideas, relevant analogies, and problem solving.

Forbes, CMO NETWORK 6/24/2014

Thomas Edison, who was a methodical inventor, once said “to invent you need an imagination and a pile of junk” (aka stimuli).  One of the very best forms of stimuli comes from looking at other industries for ideas, relevant analogies, and problem solving.  The trickiest part is to figure out which industries to benchmark.  That, in itself, requires brainstorming sessions.  Biomimicry is an area that has proven extremely fruitful across a range of industries, as nature has solved many problems through evolution, and the best solutions in nature often determined which creatures and plant life survived and thrived.  What follows are 10 examples of bio-mimicry and other types of benchmarking outside of nature that have proven highly relevant for new product and service development.

1)   Japan’s high-speed Shinkansen “bullet trains”, were designed using some of the aerodynamic principles associated with the long, pointed beaks of hummingbirds.

greenwald1

2) The molecular pattern on sharks’ skin prevents bacteria from growing.  This led the Sharklet Technologies Company to apply the pattern to hospital wall coverings to reduce germs that can be spread in hospitals.

3) Bat sonar or “echolocation” that keeps bats from bumping into things by detecting when they get close, is currently being applied to keep drones that fly around from bumping into people and objects.

4) Thistle plants and burrs were the inspiration for Velcro, because they attached and separated easily from soft fabrics.

5) The German company Festo benchmarked elephant trunks, which are extremely strong, forceful, flexible and soft, for use in factories to replace hard, more rigid equipment that was more likely to break fragile items on assembly lines.

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6) The lobster industry benchmarked the avocado industry to learn how to separate avocado pulp from their shells, for insights into extracting lobster meat for making lobster salads.  The high-pressure equipment used on avocado exteriors, proved a great solution for the lobster industry.

7) I‘ve heard the product and services design firm, IDEO, relate several times how they benchmarked Formula Race car pit crew teams to apply the way they’re organized, to developing nursing stations for hospitals.  The analogy is that both types of teams are responsible for the immediate health of their charges, with instantaneous decisions required, multiple sub-specialists on each team, and one individual responsible for giving the ultimate orders that alert everyone when the cars and patients are ready and healthy enough “to go”.

8) When tasked with developing a better surgical clip to reduce bleeding during operations, Johnson & Johnson, years ago, tasked a multi-disciplinary team with benchmarking other types of clips from diverse industries including office paper clips and hair clips.

9) The founder of Pinterest was said to have conceived of the idea for the highly successful platform based on the visual image of the mounted bug collection that he created as a kid.

10) The brilliant, multitalented Catalan architect Antoni Gaudí used bio-mimicry as design inspiration for his building exteriors and interiors.  Dragon scales and spines were the inspiration for the roof of the residence Casa Batlló, and the spiral of seashells influenced his unusual winding staircase in his building La Pedrera.

I wrote the book Catalyzing Innovation to start companies thinking about industries around the world they might consider benchmarking for relevance.  It’s filled with several hundred categorized, visual examples across industries and countries, to set companies on the path of exploring analogies for new product and service development breakthrough insights.  I recommend all firms when embarking on innovation, first take a look at other industries and countries for ideas.