Journey of Innovation

Georgia Needs a Revolution

2012-07-28T05:05:00.001-04:00

I should clarify the Republic of Georgia needs several revolutions related to innovation to build its economy.

Currently Georgia is focusing all of its attention on tourism. There is a challenge here, the only tourism that Georgia has to offer is small niche tourism. One of the current initiatives is to develop their tourism related to wine. This is perfectly fine but will not generate the revenue required to rejuvenate or invigorate Georgia's economy. Although it is a great starting point for building the local economies.

Due to the nature of growth related to the tourism industry, Georgia should now focus attention on three industries that could be used to overcome its small market. These industries could lead to significant revenue based on exports. The first industry is agriculture, the second is the continued development of its financial sector, and finally it should develop a stronger technology industry.

When it comes to agriculture the real challenge is in education and resources. Most Georgian farmers use traditional farming techniques that are outdated. This is due to the lack of agricultural education. If the country can manage to educate people in the industry it could see a revolution in agriculture that could make it competitive in the markets across the region. The other major challenge is resources, Georgian farmers have little access to modern reliable equipment for farming and this would require a significant investment by foreign aid and the Georgian government. By having access to innovative agricultural techniques and equipment it could also see major increases in productivity and crop damage prevention.

The financial sector in Georgia is growing extremely rapidly and is doing extremely well in a time the banking industry is in peril due to the economic downturn. The problem that I see in Georgia's banking system is much harder to correct. Unlike agriculture it isn't a problem with education it is a problem in the sense that it is completely mostly self-regulated. The regulatory body for banking in Georgia is made up of bankers and this in effect makes this industry lose and focus on protecting the customer. When mixed with a monopolistic business culture that strives to eliminate competition you end up with a bubble that is most certainly going to burst in the future. Georgia needs an innovative business person to step in and disrupt the banking industry, by provides customer oriented services, terms, and conditions you could potentially disrupt the system and correct some of the challenges that this industry could face in the future.

The final area that Georgia has real potential in is technology and in this area Georgia could truly shine. There are just a couple of major challenges that need to be met for this to happen. The first is intellectual property rights. Per capita Georgia has the worst IP protection in the world. You can see this on a daily basis. Take software as an example. You can go to any store in Georgia and buy a software. This lack of IP protection makes it challenging to develop a technology industry because people will not spend the time developing software if they see blatant IP infringement going on around them. They will see no way of protecting their investment. Now given that the Georgian market lacks IP protection it is a good market for export and Georgia could take advantage of the low cost of development and build a relatively stable industry. The next challenge is getting the population interested in technological degrees. This is a serious challenge as the most desired degree by students in Georgia is a business degree. For this industry to grow there needs to be a larger number of highly technical graduates and that will require government initiatives to develop an interest in these fields. By developing a nurturing this industry Georgia could actually become a major player in external markets.

Challenges Facing S-Curve Analysis

2012-07-23T08:11:00.000-04:00

S-Curve analysis is an incredible tool for determining which strategy a company should use when developing new products or determining which types of innovation are required to make your products competitive. Although in a changing world the S-Curve is facing new challenges that it lacks the capabilities to accommodate.

The challenge comes when it is not a product that you are focusing on but a service or business model. How does one determine where exactly their service or business model is on the curve? We know that knowing where your product resides is key to understanding the strategy that should be taken but with services and business models the challenge is determining where they reside. If the service is an internal service that makes it much more challenging because you lack competition as a comparison.

One key concept required to understand where your product or service resides along the S-Curve is the level of competition if you are not able to determine this factor a accurately determining the position will be far to challenging and subjective. In cases such as this I must say that S-Curve analysis will hardly be sufficient to determine proper strategies moving forward and could lead to implementing the wrong strategy. My best suggestion is to leave S-Curve analysis for product development and use other models when trying to understand innovation of business models or services.

This is important because the innovation of services and competitive business models is a fairly new field and will require the development of models that are aimed at servicing these types of innovations.

Finding Balance between Profit and Geopolitical Social Responsibility

2012-07-10T08:14:00.001-04:00

Generally speaking western organizations are geared towards one main goal and that happens to be making profit regardless the cost. This shareholder driven lust for profit can have a significant and detrimental impact on the world at large and on the organization itself. This leads us to an important question, is there another way? Could companies maintain good profit while at the same time focusing on sustainability and social responsibility? Do organizations need to chase profits recklessly and often at the expense of the people that they are supposed to be serving? In my opinion this is not the only way; this is a very narrow minded and short sighted means of conducting business that inevitably leads to unsustainability.

When we think of social responsibility we think of tangible aspects that we can see and touch. Ones that have visible results and are geared at maintaining better brand images aimed at sustainability. One great example of this is organizations making a dedicated effort to go green or become eco-friendly. After all when an organization reduces it greenhouse gas emissions it is highly visible and can be shown to the public.

This paper is aimed at addressing a less tangible aspect of Corporate Social Responsibility. That being geopolitical social responsibility aimed at creating sustainable business environments. It is based on better business practices that allow the natural progression towards the equilibrium of free market capitalism and socialism.

As we learned in economics there is a concept called equilibrium and unless the market is manipulated in an unethical fashion there is a self-correcting push towards this equilibrium. This is also evidence that there is this same self-correcting push towards equilibrium in the balance between capitalism and socialism. There is also evidence that striking this balance creates a more sustainable organization.

There exists one major issue in regard to the natural push towards equilibrium, human self-interest. In western society we are taught from a very young age to be polarized. We are taught that there is only good and evil, right and wrong, and that perfection is found by being the one over the other. Needless to say the majority of people that are brought up under this climate eventually realize that there exist many shades of grey and end up leaning one way or the other with varying intensity. It is not the people that fall towards the middle of the spectrum that are a barrier to equilibrium it is the people that lean farther to the right or left that create the real barrier towards natural equilibrium. At the same time the further from the center ones personality falls the more challenging it becomes to accept concepts that lean towards the other end of the spectrum creating a form of moral conflict.

First I would like to point out one piece of evidence that supports the claim that there is a natural tendency for society to push towards equilibrium between capitalism and socialism. This evidence exists in the United States as lobbying and campaign finance. According to thehill.com and opensecrets.org the record setting year for lobbying was in 2009 and amounted to $3.49 billion dollars. Now, one might ask the question, how is lobbying evidence that there is a natural push towards the equilibrium between capitalism and socialism?

This $3.49 billion dollars is ties into a certain scenario that we must explore if we want to understand the relationship between specifically US based corporations and social responsibility. In the United States businesses believe that it is the role of the government to regulate social responsibility. The general concept of Corporate Social Responsibility is deemed as a need to maintain a decent image and is geared at protecting an organizations brand image. When it comes to serious regulatory issues that could be deemed a more serious attempt at social responsibility, Corporations prefer to go the route saying that regulation is a rule of law. This usually revolves around the very simple fact that it will affect their bottom line. This is the typical sense of corporate business and is based on one stakeholder and that happens to be the organizations shareholders.

Now since US firms believe that it is the role of government to impose legislation that regulates corporate social responsibility they have effectively washed their hands of any real responsibility in regard to sociological needs of the community and placed it effectively in the hands of the US governing body. That is all well and good and without further influence the balance would eventually shift to a more balanced form of socialism and capitalism. The government would regulate the organizations and impose stricter measures to insure corporate social responsibility. Corporations would then have effectively allowed the natural progression to occur. Needless to say this is where lobbying come in.

Now as dictated by the corporations when it comes to any real and truly costly social responsibility the government is tasked with the regulatory aspect of CSR. Now as dictated by nature the shift occurs towards equilibrium and the government begins the process of regulating certain industries such as the pharmaceutical industry. This could in effect damage the profits of an industry and force social responsibility on the industry. The response is that the corporations in the industry join forces and begin the lobbying process. By contributing large sums of money they effectively drive the legislation in the direction that they desire. There is an added benefit here in the sense that it is generally an industry that is behind the process and the individual organizations can still manage to maintain an individual brand image that is untarnished. This process is designed to allow self-interest to halt, slow, or even reverse the natural push towards equilibrium between social responsibility and profit driven capitalism.

There is a great example of this that also explains why 2009 saw record spending in regard to lobbying. In 2009 the Obama administration conducted a serious push to regulate healthcare availability in the United States. One of the drivers for this push was the unaffordable nature of pharmaceuticals for average citizens in the United States. By regulating healthcare the United States would be able to push the costs of medication down and make it affordable for the masses in the United States. There is an example given in an article by Time Magazine that shows how significant this cost can be compared to the rest of the world. It stated that one pill in Canada cost $500 compared to the same drug in the US which cost $1900. As you can see there is a serious disparity between the price of drugs in the US and the rest of the developed world and although the article is a bit dated it is common knowledge that this is still the case. Pushing down the price of these drugs and making them affordable in the US is a serious problem and one would think that it would be a part of the CSR plan for a pharmaceutical company in the United States. Needless to say this CSR would have a significant impact on the bottom line for these organizations and when the current administration began the process of implementing healthcare reform that included controlling the price of pharmaceuticals the pharmaceutical industry and the healthcare products industry responded by spending close to $266.8 million dollars on lobbying in an attempt to prevent regulation.

Another area that we can see evidence of this natural push towards the equilibrium of profit vs. social responsibility has started becoming evident in society around the world. This was the occupy movement that took the world by storm in 2011. The growing disparity in wealth has created a climate that is a forecast of what may come if countries do not begin to understand the natural need between the free market and socialistic tendencies. This movement arose from the housing crisis and the recession that followed when average middle class Americans began losing their homes and then their lively-hood in the recession that followed due to a lack of social responsibility in the banking industry.

Following the burst of the housing market bubble the banking industry was left holding vast amounts of bad debt. This led interestingly enough to the banks pushing for a more socialistic standpoint. In this instance the banks were in favor of the natural progression towards the middle in the case of a bailout. This was of course not driven by social responsibility but in the self-interest, if they took the stance that we are capitalists and need to push further towards the right they would have effectively driven themselves out of business.

According to the Occupy Wall Street movement’s website you can see evidence of that directly relates to the claims made in this paper. Here is an excerpt from their website that I would like to quote: “OWS is fighting back against the corrosive power of major banks and multinational corporations over the democratic process”. This statement alone supports my claim that by not focusing on healthy geopolitical social responsibility and allowing the natural progression towards a balance between capitalism and socialism organizations create a risk to their own sustainability. Civil unrest in most cases leads to an unsustainable business environment.

Now if we go to the other end of the spectrum and look at countries that have embraced a more socialistic leaning you will also find evidence of a natural push towards equilibrium. For this example, I will be using the former Soviet Union as my primary cases. During the Soviet era the evidence existed in the form of a shadow economy that made up a large percentage of the GDP. According to research the exact percentage of GDP was difficult to pinpoint it is estimated to be somewhere between 10% and 50% of the Soviet GDP. Considering the stories that recited to me by people living in the region I would surmise it being on the upper end of that spectrum.

This is also a good opportunity to understand where sustainability comes into the picture because we have historical proof that if you journey too far to the left the system becomes unsustainable, as was the case in the former Soviet Union. We can also look at Cuba in this same regard. Cuba has managed to hold on to its traditional socialist society to the point where it is basically an impoverished country waiting for the day it can modernize. We also see evidence that this is unsustainable from the stance that some modern communist countries have displayed towards the concept of capitalism such as China and its heavily controlled capitalism. China has pushed towards the center as a means of creating sustainability the challenge is has it moved far enough and has it moved other sociological needs such as human rights far enough to the center to become sustainable.

The evidence is at least in my eyes apparent that to create sustainable business environments organizations need to address their geopolitical corporate responsibility stance and allow the natural process of regulation to occur. If organizations continue to strive for deregulation so they can conduct self-regulation they need to be aware that a balance needs to be struck between their need for pure profit and the social responsibility required to create a healthy business environment.

Can any organization handle this level of responsibility? The answer is simple most certainly not. This leaves one avenue open to industries and that is an equally challenging proposition. Can organizations, most often directed by the proponents of free market capitalism, address the opposing need for geopolitical social responsibility? When you look at the US model of lobbying and campaign finance you must understand that this is a legal practice even though it basically equates to legal bribery. To be quite honest there is not much difference between using lobbying to influence policy and just paying a bribe in a different part of the world to influence policy. After all the aim in both cases is the same, it is to steer policy in a direction that benefits the organizations bottom line. Problems arise by being involved in this process organizations are preventing or often reversing the natural push towards equilibrium between free market capitalism and socialism. At its core this not only affects the civil sustainability but also many other areas of sustainability such as environmental. In the end one way or another, organizations that are involved in steering political policy with a target of making their industry more sustainable are actually working towards creating unsustainable business environments. After all there is a saying in the US “You can’t have your cake and eat it too”, in this case you can’t dictate that it is the role of governments to regulate business practices and then steer the policy away from regulation in hopes of creating a business environment that promotes sustainability.

The Importance of Communication in Innovation

2012-07-02T09:03:00.002-04:00

Innovation is synonymous with change. Needless to say, change for most people is something terrifying and much harder to accept than the status-quo. Since in the end innovation is basically change you must expect the result to be fear and resistance is inevitable.

One of the leading causes of failure in any change process is the lack or vagueness in regard to communicating change. When people are kept in the dark it leads to an even greater fear related to change, the fear of the unknown.

When it comes to innovation this is particularly true due to some of the functions that your change such as innovation of internal processes, business models, or organizational restructuring. In these situations people could perceive threats where the are none. In these situations you must communicate every aspect of the change in detail and show the benefits of this change to the employees.

This sounds so simple on paper but the reality is that this is were most organizations fail when it comes to their change implementation plans. Acquiring buy in from employees, even projects that will make their lives easier, is one of the most challenging aspects of innovation. Hence the importance of communication in relation to the innovation process. It all starts with being as detailed as possible. You must communicate the benefits of the project, any ramifications that the project will have on the community including if the change will cause any job losses, the organizational need for the project, and any goals that the project has.

If you remember when you were a child, your parents needed to hold your hand and explain things in a very detailed manner for you to accept anything unknown. I truly wish that this was a trait that we would mature out of but that isn't the case. Adults and employees, much like children, quite often require this same attention to detail and hand holding when it comes to change.

Having a great vision of the future for your organization but if you are not able to coherently and in detail explain this vision your organization will never end up at that vision. For your organization to excel in innovation you really must communicate it to your employees and acquire their buy in. Otherwise you only have vision but no real path.

Importance of Innovation in Emerging Economies:The Republic of Georgia

2012-06-19T08:28:00.001-04:00

The Republic of Georgia is a small country just east of the black sea. Bordered to the north by Russia and to the south by Turkey, Armenia, and Azerbaijan. It is known for its rich heritage of wine making and has started developing a tourist industry that revolves around its expertise in wine making.

When it comes to innovation Georgia faces many challenges though. Recently I was speaking with a firm about consulting and the topic of innovation came up. The response to my inquiries on innovation in Georgia were not very well received. What I was basically told by this consulting firm was that innovation is not important in Georgia because it is a society of copy and paste business. Basically the way you create a business here is just to copy a western business and its business model. There is nothing wrong with this if you are the first to market but the challenge comes when you start an organization that needs to compete with an existing player.

This concept of copy and paste business is ripe for incremental innovation. By using a more evolutionary innovation approach businesses in Georgia could find serious competitive advantages. This evolutionary approach would possibly even lead to a few revolutionary innovations that could provide Georgia a means of acquiring a competitive advantage in other markets.

Currently I am working on an architectural evolutionary innovation that is doing just this. This project relates to adding transparency to face to face interviews being conducted by market and social research firms. When it comes to face to face interviews for social research or censuses methodology is extremely important and that is where this system comes in. It has been piloted in Georgia and is currently being piloted in Algeria, Armenia, Belarus, Russia, Ukraine, and Moldova. Although I will not go into to much detail about the system until it is released commercially, I did want to use it as an example of how Georgia can use incremental innovation not only to compete in Georgia but also provide products and systems that can target markets outside of Georgia and a means of further developing its growth.

The concept that in a copy an paste business society innovation is not important is seriously flawed. It is in this type of environment that incremental innovation can be significantly harnessed to generate competitive advantage. I have seen several companies in Georgia that take advantage of this concept. One was created by a colleague of mine and uses e commerce to deliver everything from food to catering to clients. This might not sound that innovative for western business models but it faces many serious and unique challenges in Georgia. My colleague has successfully found innovative ways of overcoming these challenges and is in the process of developing a new market in Georgia. Another organization that I have seen that uses innovation is UGT. I have even had an opportunity to discuss how they use a funneling model for their ideation phases. It is no surprise to me that UGT has won several awards for innovation in Georgia. It is businesses such as these that do understand and harness innovation that will build this economy and they will be the market leaders of the future as this market continues to develop.

Innovation Management Aimed at Sustainability

2012-06-16T09:30:00.002-04:00

This is a more personal post for me due to the fact that it relates to how my specialization has changed me. When I was younger I had a tendency to be quite idealistic. As I aged, like many people I migrated from being idealistic to being significantly more cynical. This conversion is not hard to explain due to the burdens put on us by life in general.

In reflecting on the process I just went through for my specialization, I realized that it had awakened a piece of me long thought lost. That is the concept that by understanding innovation and innovation management people do have a means of changing the world. Now this doesn't mean that I have completely given up cynicism, it means that by understanding the innovation process we can work towards sustainability. It also encompasses the concept that doing so is not necessarily mis-aligned with the needs of business.

In the modern world, businesses need to understand that image is very important. Given the advances in global communication and the ease of access to information organizations can and often do damage their existing brand image. The concept of sustainability can be a powerful tool in building strength and image in an organization and managing this challenge. Although I should add, sustainability is not a cure all for businesses. We are all well aware that it is impossible to satisfy the needs of all stakeholders and when working towards sustainability you should focus on finding a balance where the majority of stakeholders are satisfied.

One of the greatest challenges organizations face in this regard is the simple fact that sustainability, quite often, is a very long term process. The rewards may not being seen for many years and to be quite honest targeting the future is extremely difficult given the economic challenges we face today. The problem is that if we continue to always focus on short term initiative things will not change. For organizations to focus truly on sustainability a longer term approach needs to be adopted. Though challenging if properly implemented it has the potential of building a more robust organization.

At the same time businesses should never be expected to completely solve issues of sustainability. Governments, international organizations, and the communities themselves are just a responsible for their own futures. With out this dedication no business can be expected to solve these problems. As it come down to a balance in an organization it also comes down to striking a balance in these other areas especially government. For the United States this becomes even more challenging in the sense that US politics has become more driven by separation than collaboration. Without collaboration a balance cannot be struck in regard to sustainability. Without the leadership finding a means of breaching this gap and trying to actually solve these problems communities and businesses cannot find guidance in the proper direction.

Sustainability is a significantly important concept not only for future success but also in regard to correcting issues in our economies. It is my personal belief that businesses need to strike a balance between being profitable and being socially responsible. At the same time governments need to find a balance between being fiscally conservative and socially responsible. Though these challenges seem insurmountable, in my opinion they are not impossible. The key to success in this is being able to understand the give and take required for individual stakeholders aimed at creating moderate levels of sustainability.

The Embedded Innovation Paradigm

2012-06-13T17:15:00.001-04:00

The Embedded Innovation Paradigm

The embedded innovation paradigm takes a new approach to how an organization develops geared at creating sustainability. This new approach focuses on the concept mentioned in my last post regarding business intimacy. The whole purpose of this model is to integrate the organization within the community being targeted.

By integrating into the community the organization adds a significant competitive advantage in the sense that it builds consumer trust and a long term relationship.

The Structural Innovation Paradigm

So what exactly is the embedded innovation process and how does an organization implement the model? To understand the this we must first look at the more traditional model of innovation called the Structural Innovation Paradigm. Then we can determine where the models differ and also where this traditional model breaks down.

As you can see from the image the Structural model is driven by latent need. It is focused on developing products that answer the needs of the consumers and is very market driven. Now this system works well for developed markets where consumption is the driving factor. Where the structural model breaks down is in traditional markets or in the BoP (Base of the Pyramid).

Given that the BoP in emerging markets make up roughly four billion people it is a huge untapped market. The problem is that these are the most impoverished people in the world. This leads to not only the challenge of how do you target these markets but also the ethical aspect of targeting these markets. If you follow the structural innovation paradigm you just produce products they need and get them to consume those products. As you can see when a person makes the roughly two dollars per day to be considered a member of the BoP this method creates challenges of image and the ethical nature of your business. Beyond the ethical nature there is also the challenge of understanding your market. How many people can honestly say that they understand the needs of lets say a village in Uganda and has the market data required by the SIP.

First let me say that people living in the BoP do have needs and those needs also need to be fulfilled. Now, one might think that charity is the best way to assist people in the BoP; based on this organizations should donate products that are needed in the BoP. This was one of the questions I had and the argument I received against this was very compelling. Many organizations have gone the route of just donating products to the BoP but due to peoples pride and the lack of a sense of ownership the products actually end up not being maintained. This leads these products to being discarded and not necessarily in an eco-friendly manner.

One solution to the challenges face with providing consumers at the BoP the products the need is the embedded innovation model. SIP is based on the fact that there are latent needs that must be fulfilled. In EIP this becomes a focus on latent potential. This is the believe that there is potential in today's diverse economies. Since these markets do have a latent potential you need to find a way to address that potential.

the next concept is based around building local relationships. By generating these relationships an organization can build trust and generate a sense of belonging in the community. This is a very important part of the process especially if you want your product to be successful and if you want them to receive a quality product that fulfills their needs. If you go the traditional route you will find that they will learn the concept of lower price consumption relatively quickly. This does come with serious drawbacks that I have seen in a developing country and that is the concept of low quality often illegal knock offs at cheap prices. This low quality leads people to buying a product that is inferior which often doesn't last long. In the end this doesn't solve the problem. By building this trust you also build their loyalty and at the same time protect them from problems associated with inferior products.

The next phase is all about maintaining a positive relationship with the community. You see to use the embedded model correctly you create a give and take relationship with the community. You offer your solution to local entrepreneurs. In turn other enterprises arise around the the solution that you have provided. In the end what your organization ends up doing is building a local economy. This adds even more value to the lives of the people in the community and in turn builds a local sense of responsibility and an awareness by the communities that you support the part your organization had in this development. In turn leading to more brand loyalty.

This model seems to be quite idealistic but in one of my upcoming posts I will describe how this can be done and also if I can acquire the permission provide a real world example.

source:
MIT Sloan Management Review 2009
Innovation from the Inside Out
Erik Simanis and Stuart Hart

What is Business Intimacy?

2012-06-11T09:24:00.001-04:00

For this post we will be examining the concept of the business intimacy.

So what is business intimacy? At its heart business intimacy is a relationship in which the identity of the community at large is fused with that of the organization. The organization not only defines itself by the bottom line but includes factors structured around providing a better life for the community it serves.

The challenge faced by an organization is that it must take into account the needs of many stakeholders and not only their shareholders. Business intimacy focuses on being beneficial to the community and in turn organizational success quite often relies heavily on the success of the community. Needless to say this concept of a business being a part of the community instead of being segmented from it is not a new concept. Prior to 1850 the concept of humans as consumers did not exist. The concept of "Market Economy" undid this long standing relationship.

So what is the importance of business intimacy. The is a bit more challenging to answer and many organizations may not embrace the shift from only seeing the community at large as consumers. Although this paradigm shift is not generally misaligned with the goals of the organization. The key benefit to this model of business intimacy is that it provides organizations loyalty at the consumer level. If people perceive that an organization is a member of the community they are more likely to become loyal customers and even spend more to support this community. This paradigm will also require a realignment of the consumers themselves and is a long and drawn out process with the goal being to build trust in local communities.

The key here is to think globally in your organization but to act locally. By building trust at the community level organizations are able to build local relationships, support local entrepreneurs, and improve life at the community level. In the end this creates a very strong sense of trust and respect. Organizations that move in the direction of business intimacy can over time create a strong competitive advantage that revolves around the community feeling that they have a stake in the success of the organization.

source:
MIT Sloan Management Review 2009
Innovation from the Inside Out
Erik Simanis and Stuart Hart

The Importance of Incremental Innovation

2012-06-01T19:17:00.001-04:00

When people think of innovation they think of the concept of the breakthrough. Everybody loves a breakthrough. Just look at what digital imaging did to film. A breakthrough technology that completely disrupted an entire industry in a relatively short period of time. When breakthroughs take place the fact of the matter is that people take notice and it can have a significant impact on the world at large. This is why breakthroughs are important and recognized.

Needless to say people generally don't recognize incremental innovation as a part of innovation. After all if you create a new technology that only improves upon existing technology what is there to take notice of. A great example of this would be making minor improvements to the reception of a cellphone antenna.

What makes incremental innovation so important? The most important aspect of incremental innovation is equilibrium. Breakthrough innovations, especially competence destroying breakthroughs such as the case of digital imaging can involve significant risk and affect the sustainability of an organization. The key to success is by finding equilibrium within an organization between achieving breakthroughs and using incremental innovation to sustain what you have and maintain market share.

By focusing only on breakthrough innovation and neglecting incremental innovation you are simply not balancing your portfolio of risk.

Emerging Trends in Innovation Innovation of Business Models

2012-05-29T08:08:00.001-04:00

Innovative Business Models are Fascinating

In my honest opinion, there is just something about creating a new way of doing things that appeals to me. In turn the question becomes why are innovative business models so appealing. Quite often it stems from the fact that once implemented the change seems almost obvious and one begins to wonder why didn't I think of that. It is this concept of noticing something obvious that others never thought about that gives such a sense of satisfaction.

Now we need to think about how one goes about developing a new business model. One would think that creating a new business model is a quite simple feat due to the obvious nature of the solution. This does actually occur, a person has that eureka moment where they realize that something could be done in a completely different manner that offers added value to the consumer. One must note that it doesn't end there, one needs to then analyze the details of the idea such as risks involved as a means of developing the final business model. This is one very valid way of creating new business models. The more common route is to do a full analysis to determine where to apply innovation into the model. This is more common due to human nature. Quite often to point out the obvious one must run through a complex process. The more focused you are in one industry the harder it becomes to point out obvious changes because you are used to doing things in one manner.

This issue of narrow mindedness is why for the innovation of business models it is suggested that you use multi-disciplinary teams that quite often include the consumers. This grants the benefit of seeing things in a different light. Then from this point on it actually follows the innovation process of ideation, prototyping, piloting, implementation, and finally commercialization.

Generally once the process has been completed you will have run through an extremely grueling process to find a solution that will eventually become another persons "that was so obvious why didn't I think of that" and your team can take satisfaction from the sense that they did think of it.

Appealing Innovation 3:Urban Automated Flight

2012-05-21T07:35:00.000-04:00

This post is all about automated flight in urban environments. Although I would like to take this chance to put forth the idea of integrating these to concepts into one system. After all this is what innovation is all about seeing an idea and wanting to make it better.

The first is a spherical flying robot that flies in such an interesting manner I couldn't help but fall in love with the design. Hovering around the room in a manner that one could only associate it with science fiction.

The second is a system for automated flight in tightly confined urban environments the doesn't require GPS as a means of navigation.

First take a look at the video below which depicts the spherical flying robot developed by the Japanese Defense Ministry's Research Department.

Now let us take a look at the micro air vehicle developed by The Robust Robotics group at MIT. It flies without the assistance of external GPS or motion tracking.

Now let us take a quick moment and imagine these two concepts being integrated together and you have an autonomous robot that can travel just about anywhere and hover in place allowing it to scan an area. These two ideas put together would provide a highly mobile system that would have significant military applications and applications such as searching a disaster area for survivors without risking the lives of rescue workers.

Appealing Innovation 2: Google's Self-Driving Car

2012-05-16T08:08:00.001-04:00

The Future of Driving

Google is bringing driving into the future. My next appealing innovation post is dedicated to the Google's Self Driving Car. When one thinks of innovation the concept of a car that drives itself takes the cake. As this technology is perfected it will completely change our daily lives. Just imagine a small car designed to take children to school and activities, or the ability to reduce the number of deaths related to drunk driving.

The possibilities are endless and as you can see from the video below this technology is already improving one person's life in a completely fundamental way. The first owner of the Google Self Driving Car is blind. This car will give him the freedom to travel as he likes without relying on others.

The future of driving is now and process of change has begun. the state of Nevada has become the first state to grant a self driving license with several other states soon to follow. Now just imagine how this technology is going to change your life. That is why Google's self driving car is such an appealing innovation.

Appealing Innovation Lego Mindstorms NXT

2012-05-14T06:24:00.001-04:00

Introduction to Appealing Innovation

This is my first in a series of posts about innovations that I find enjoyable and very appealing.

This series is dedicated to products, services, and processes that either inspire innovation or have the possibility of changing the current world in some fashion. I must admit this series is inspired by a project that I was assigned for my Innovation Management specialization. I was tasked with choosing a product that I personally found appealing in the sense of innovation. For this project I chose the Lego Mindstorms NXT due to its ability to inspire Innovation.

Check out the video below to see just how creative you can get:

The Lego Mindstorms NXT

In 2006 Lego Robotics introduced the Mindstorms NXT a robotics development kit that could easily be enjoyed by not only children but adults as well.

At the heart of the kit is the NXT Brick or the brains of the robot. It has three motor ports and four sensor ports and a 32 bit processor. The NXT brick can easily be programmed by amateurs via the NXT’s visual programming language provided by the kit on a Mac or PC. If you are looking for a bit more of a challenge when it comes to programming the NXT I would suggest using Microsoft’s Robotics Development kit. This allows hobbyists that have knowledge of programming to use a professional interface to program their creation. Programs can then be transferred to the brick via a USB 2 port or by using Bluetooth embedded in the brick.

The other core pieces of the Mindstorms NXT were the sensors and motors. The model release in 2006 came with four sensors the offered several different functions and three motors. The motors were servo motors that could track each positive or negative movement to very precise level of degree allowing for many sorts of motion. The two easiest sensors to describe are the touch sensor and the sound sensor. These two sensors provide your robot with the ability to touch and hear. The next sensor is the light sensor. This sensor gave the robot the ability to determine light levels. This is used for functionality such as following a line or determining if a room is dark. Another innovative way that I used this sensor was to extend it in from of my rover robot and run it along the ground while monitoring its light level. If my rover detected an extreme change in light levels it meant that it had encountered the living room stairs in my house and needed to back up to avoid taking a tumble. The final sensor was the eyes of the system called the ultrasonic sensor. The way the ultrasonic sensor works in on par with how bats or submarines work. It sends out sound and uses the echo to determine the distance to an object.

The system also comes with instructions and programs examples to build several default robots. Although I can honestly say I never built exactly what was described because as soon as you see the default robot your immediate response is a desire to make it better. Below are images of a few of the default robot plans that came with the system.

Why Choose Lego Mindstorms NXT

There are several reasons that I chose the NXT for my first appealing innovation post. The most important being that when I think of innovation this is one of the first products that comes to mind. I have loved this product since I purchased it in late 2007 and it has inspired many hours of entertainment and pleasure for my family and I. Another very good reason for choosing this product is that it has not only won awards for innovation it also inspires people to embrace innovation. The whole concept of the product is to come up with new ideas and improve upon designs of others as a means of promoting the core ideals of innovation.

The way the NXT was developed also makes it a prime candidate for this post due to the involvement of community members in the innovation process. The original Mindstorms product was the Robotic Invention System developed in 1998. Adult users quickly determined how to hack the brick and began using it in ways that Lego never foresaw even besting Lego’s own team of developers. From there the community grew and when Lego decided to revive the Mindstorms name they selected four community users with knowledge that Lego lacked in house to assist in a collaborative innovation of the NXT. The user collaboration was one of the driving factors in the success of the product as a whole. After all who better knows what your customers want than the customers themselves.

What I Like About the Mindstorms NXT

This product is absolutely amazing and I have enjoyed hundreds of hours putting different robots together and coming up with new projects to implement. There is just something about the product that inspires you to be creative and work towards the next cool development. Now to clarify this I will explain some of the things that make this product so enjoyable. First I would like to discuss my favorite aspect of this product. That is the development model used to program your robots. Starting with the NXT programming software included with the product. This visual language is simple enough that even without knowledge of programming an amateur can create a sophisticated robot that can handle many situations and you will have no lack of projects that you can accomplish if you put your mind to it. As for people that have development experience and knowledge of programming there are many products that you can use to program the NXT but the one I will mention here is the Microsoft Robotics Development SDK. This makes the NXT shine and provides a professional IDE in the way of visual studio and the power C# and Object Oriented programming to develop highly sophisticated robots. Using this you are only limited by your imagination and your programming capabilities.

Example of Visual Programming using LEGO's Robotics Interface

The next aspect of what I love about the NXT is the community. After purchasing the NXT I would certainly suggest joining the community and looking at the projects that others have completed. I would peruse the projects and think of ways to improve them or on occasion come up with a completely new project that I could create. There are social media features that allow you to share your projects and videos of the robots you have created and even competitions for truly innovative creations. This aspect of the product really makes it shine.

Finally the original reason I purchased the NXT was as a means of getting my children interested in technology and programming. The future is technology and understanding how technology works in a fun and playful way is extremely beneficial to the education of children. Due to ignorance children by their very nature are innovative and inquisitive into the inner working of just about anything. Using a toy such as this you can channel that innovative nature and provide a means of nurturing that innovative behavior and promoting future innovation.

That being said the NXT could certainly be improved upon. I would implement several changes to make the NXT into a product that would appeal to a larger audience and at the same time add a certain level of complexity that could be harnessed by professional developers to come up with some truly unique projects.

The first change I would make is to include wireless capabilities in the system. Bluetooth is great for people that want to transfer programs to the NXT brick or for people that want to turn their smartphone into a remote control for the robot. Wireless would add feature that allow you to access your robot from anywhere on your network. For people with an understanding of networking and security this would mean from anywhere in the world literally.

The next I change I would put include in the NXT system is a webcam sensor. For advanced developers this would allow for more sophisticated sight in conjunction with the ultrasonic sensor. For more basic users when combined with the inclusion of wireless capabilities it would allow you to create the perfect remote control roving spy-bot.

Another change I would make is to adjust the size of the sensor and motor plugs on the Brick itself. Even replicating USB ports would be a benefit. This would give you the capability to add roughly 8 sensor ports and 6 motor ports. Together this would increase the capabilities of the system significantly. Take for example the roving bot that I created if my bot comes into the steps at an almost parallel angle the sensor doesn’t have time to recognize the drop and it tumbles down the steps sideways.

The final change I would make is the use of a smartphone style touch screen. Adding this to the brick would add so many capabilities to the brick that I could write a paper on this concept by itself. One great example would be an app that allows you to program the brick without a computer.

The History of Mindstorms

As mentioned earlier Mindstorms started in 1998 with the Robotics Invention System (RIS) and immediately generated an unsuspected community of followers . The concept was based on a programmable brick developed at MIT . Lego designed it to be a toy for children but was surprised when the main market for the RIS ended up being adults. When this occurred one of the first things that occurred was that the brick was hacked by the community and creating projects that Lego had never imagined possible with the product. This lead to a serious conundrum Lego’s first reaction was to involve its lawyers but then decided to embrace this new community of adult engineers.

The choice to embrace this community benefitted Lego in 2006 when they decided to renew the Mindstorms brand. In 2005 Lego selected four engineers from the community to involve them in the innovation process to create the Lego NXT system. It was this embracing of the community that made NXT the success that is not only in the leisure robotics market but in the educational robotics market as well. They also implemented MUP the Mindstorms User Panel . This panel consisted of users selected by Lego to collaborate in the innovation process of the NXT.

Even today with the newer NXT 2.0 the Mindstorms community is quite active and promotes contests and conventions to continue to develop interest in the Mindstorms products.
I have yet to find a robotics creation system that matches Lego in ease of use for all ages. There are a few higher level products such as Vex but in my opinion nobody offers anything close when it comes to this type of system.

Mindstorms Financial Impact on Lego

This was the most difficult aspect of this project as I wasn’t able to find any hard numbers on the sales of Lego Mindstorms NXT. The only relevant information I could find about NXT was that according to the 2006 Lego annual report it exceeded all expectations. It won the parent’s choice award in 2006 and was one of the most desired toys in 2006 just behind the Nintendo Wii . As you can imagine being listed at number six this product certainly had an impact on Lego’s bottom line.

Even though I was not able to find hard numbers on the NXT I was able to find them for the Mindstorms RIS. Given the level of user driven innovation and the awards won by the NXT it is safe to assume that it performed almost as well as the RIS which was Lego’s bestselling product ever with over one million units sold at $200 dollars a pop that accounts for at least $200 million dollars in sales revenue. This bodes well for the financial future of the Mindstorms line of products and it is safe to say that given Mindstorms success throughout the years it certainly has a significant impact on the Lego Corporation.

The Future of Lego Mindstorms and the Key Lessons to this Lines Success

Lego Mindstorms NXT has an almost cult like set of followers and their decision to integrate with their Mindstorms community has promoted this to no end. This is a major factor in the success of this line of products. By allowing their customers the freedom to hack the bricks of the RIS system Lego took a large step forward in the collaboration between the organization and its customers. Then to take it one step further Lego later involved their Mindstorms community in the innovation process of the next generation of the Mindstorms line the NXT. As long as Lego continues to follow this trend of customer collaboration it significantly reduces its risk. After all who better knows what they want than the customers themselves.

The one threat I think that Lego need to avoid to maintain this success though is the continued advancement of this product and a dedication to maintaining the line of products. The recent release of the new Lego Mindstorms NXT 2.0 didn’t see many changes to the core system but it did have some improvements such as a color sensor instead of the light sensor and a gyroscopic sensor. With RIS developed in 1998 and the NXT released eight years later Lego needs to understand that this is a technology product and technology changes rapidly you cannot wait eight years to release the next generation model if you choose to grow this market.

The S-Curve

2012-05-11T16:26:00.001-04:00

I would like to take the time to explain the concept of the Innovation S-Curve. As you can see below the concept of the S-Curve is used to determine performance in regard to time or effort. These are extremely important due to the fact that understanding where you are in regard to this system determines how you should proceed in regard to innovation strategy. It can also assist you in understanding your current risks and how to avoid certain pit-falls common to products or services in certain phases of maturity.

Technology Life Cycle: the “S” Curve

Now if we look at the same S-Curve in the context of innovation in regard to an industry or product we can see that there exists four major stages of innovation. These are Ferment, Takeoff, Maturity, and Discontinuity.

Industry or Product Lifecycle as an S-Curve

Ferment - This is the when a product or industry is completely new. A dominant design has not been recognized and competition to create the dominant design is fierce.
Takeoff - If a dominant design has been determined and the innovation crosses the chasm of death you will see a rapid period of growth as the innovation moves towards full market acceptance.
Maturity - The product or industry has become a completely accepted by the general public and has matured. It is at this point that only a few large players exist and the markets are clearly defined. This is also the point when products become completely standardized and the products are less and less unique.
Discontinuity - Once a product has reached maturity it runs that risk of being discontinued by newer technologies a great example of this was the transition from film cameras to digital cameras.

What Exactly is Innovation & Innovation Management

2012-05-07T15:08:00.002-04:00

Innovation management is quite a confusing concept for many people. After all how can one manage innovation, not to mention what exactly is innovation? What makes these questions interesting and even more confusing is the fact that if you ask twenty different innovation managers the same questions you will get twenty different explanations as to what innovation is and any number of methodologies to manage innovation.

I would like to take this opportunity to explain what my definition of what innovation is. Innovation is when an organization or person/s successfully add value to a product, process, business model or service and innovation management is the process and methodology used to add value to a product, process, business model, or service. Believe me, the process of innovation management can be extremely simple and undefined, for example an entrepreneur comes up with an idea goes through the process of implementing based on his own intuition. At the same time it can be a clearly defined process with phases that include brainstorming, funneling ideas, prototyping, getting customer input, and finally releasing a product. Either way there is always a process involved and understanding this is what innovation management is all about.

Although these definitions are extremely general the goal of this blog is to take a journey through the deeper concepts of innovation. Not only for you the reader but also as a journal of my progress through the realm of innovation management.