Innovation Blog - UCI Paul Merage School of Business

Design Innovation & Research Conference Hosted by The Merage School

Alladi Venkatesh — Wed, 17 Jun 2009 23:07:00 GMT

The Merage School hosted a Design Innovation Research Conference in
November 2008. It was a great success judged by the quality of
presenters and presentations, and the number of attendees both from
academia and industry. Interested readers can now find the presentation
slides at the Center for Reseach Technology and Innovation (CRITO).

One of the speakers from India, Dr. Seema Khanwalkar, presented the
design development of the people's car, Nano, which has received
worldwide attention. Recently, her work was recognized by Mr. Ratan
Tata, the brain behind Nano and one of the leading industrialists in
India and also the head of the Tata Business Empire. We are very
pleased that Dr. Khanwalkar was recognized for her work. Dr. Khanwalkar
is currently a faculty member at the Center for Environmental Planning
and Technology (CEPT), in Ahmedabad, India. Other presenters included
Richad Harper, Senior Research Scientist, Microsoft Cambridge, UK;
Kathryn Best, author and designer from UK; Victor Gonzalez, University
of Manchester (UCI alum); Norman Stolzoff, Design Consultant,
Ethno-Insight, Washington; Christopher Han, Stanford University Design
School; and Frederic Brunel, Boston University.

The Lost Decade

Lynda Lawrence — Wed, 17 Jun 2009 21:56:00 GMT

Despite our shiny new iPhones and flat screen TV’s, the June 15th cover story in Business Week laments that in the last decade American innovation has failed to live up to its promises. No cure for cancer. Still driving gas guzzlers.

In fact, Mandel suggests that our inability to commercialize the breakthroughs of the late nineties has contributed to our trade deficit and our financial mess. From hydrogen fuel cells to biomedical advances, everything proved more difficult to get to market than they anticipated.

What he doesn’t mention, however, is the role of public policy in those delays. Stem cell advances were waylaid by inserting religion into the scientific realm. Lobbyists for the big car companies fought funding for alternative fuels (and how is that working out for us—or them?). Massive off-the-books expenditures on the Iraq war precluded even modest research spending on new science, health care and technology.

If, as most economists agree, we must innovate to climb out of the recession and fuel a new economy that will put our educated work force to work, we must have public policy that supports innovation. There are some promising baby steps in the stimulus bill, but the recession has forced cuts in programs for fuel cells and other scientific advances. And private industry is not in a position to make up for government shortfalls.

While Mandel cites several areas where new products are about to be launched—like the first new drug for gout in 40 years—if government and private industry don’t invest in education and innovation now, we could spend another decade falling behind.

The Truth About Dead Cats

Lynda Lawrence — Wed, 17 Jun 2009 21:46:00 GMT

What drives people to innovate? Why do some people keep innovating and others are content to leave everything the way it is, thank you very much? In Gallup’s Strength Finding system, there’s a whole category devoted to people who like to learn things for no reason except to learn them. And another devoted to people who like to have new ideas. What links them—and why should you care?

According to Dr. Todd Kashdan, in his new book Curious?, every human being is born with a certain amount of curiosity. The amount is probably determined genetically and has some correlation with risk-taking. (If we weren’t curious, we’d still be sitting in caves). The second part of the equation is environment. If the nuns slap you on the back of your hand for asking impertinent questions, you’re less likely to keep asking. The third part of the equation is your own interpretation of the curious impulse. If you think it’s anxiety when you head into a new situation, you’re less likely to try something than if you label that feeling as exploration.

So how do you tap into this well? Another part of the answer comes from a book called Why Don’t Students Like School, by Daniel Willingham. He says that brains are actually pretty lazy—they don’t like hard problems. When faced with a tough new challenge, they’re likely to give up before they start. They also don’t like easy ones—they slip immediately into answers they’ve already used. So it’s only the Goldilocks problems that engage humans in new thinking—just challenging enough.

The trick, whether you’re trying to summon up your own creativity or encourage your team, is to find problems that are just hard enough to engage natural curiosity without scaring off or boring our lazy brains.

What Fox News and MSNBC Teach Us About Innovation

Lynda Lawrence — Wed, 17 Jun 2009 21:42:00 GMT

One of the principal tenets of innovation is that diverse groups have better ideas. And the opposite holds true: like-minded people have come up with such great ideas as the Edsel, thalidomide, launching the Challenger, the German invasion of the Soviet Union, the Bay of Pigs, and the Iraq war.

The perils of groupthink, according to Cass Sunstein’s new book, Going to Extremes, apply equally well to business and politics. The more polarized the groups, the less they listen to other ideas, which in turn leads to even more polarized groups who don’t listen…well, you see where this is going. And just as Fox News viewers will hear no evil about their preferred politicians, people in different divisions of a single company will stubbornly resist giving up their cherished ways of doing business while rejecting good ideas that come from other divisions. The more closely people identify with their groups, in fact, the less they are open to anyone else’s ideas.

This could explain the stunningly low success rate of mergers and acquisitions. It also explains why it is absolutely necessary to get diverse people in the room when you need any organizational change. When working with those people, however, you will be more successful if you remind them of the things they have in common: the MSNBC and Fox viewers could be sports fans, and your different divisions could be coping with the same tough economy.

Of course, finding those commonalities takes work, both from leaders and group participants. And diverse groups take a little more time to create better ideas. Ultimately, though, the extra time and effort are worth it—unless you’d like to be famous for one of your industry’s most famous disasters.

The No-Plan Plan

Lynda Lawrence — Wed, 17 Jun 2009 21:34:00 GMT

Jack Ma, CEO of Alibaba.com, runs one of the most successful business-to-business marketplaces in the world. He’s profiled under "Builders and Titans" in Time magazine’s 100 most influential people. His keys to success? “We had no money. We had no technology. And we had no plan.”

So how did that plan lead to nearly half a billion dollars in sales last year? In a word: Flexibility. If you read the real success stories of leading companies today, you’ll see that often their first ideas weren’t very successful. But because they didn’t have too much invested, they were free to abandon those ideas, or revise them and keep revising them, as they learned more about the market or as conditions changed.

In Joshua Ramo’s new book, The Age of the Unthinkable (see our book review), he suggests that replicating past successes simply won’t work in a fast-paced global market. Only companies which acknowledge that they can’t know the future will survive—because they are prepared to be flexible forever.

How does that work in a business climate that demands quarterly projections and next year’s budgets and five year strategies? One way could be the way Li & Fung does it: as Senior VP Alan Fromkin explained in our class this winter, they create a three-year goal, but they don’t dictate how they are going to reach it. Which gives them the flexibility to keep trying things until they get it right, at that time and in those markets.

It’s not an easy sell, when people around you are desperate for solid answers. But it is perhaps the only strategy that will succeed in the years ahead.

Birds Do It

Lynda Lawrence — Wed, 17 Jun 2009 21:10:00 GMT

That’s right, according to the New York Times Science section, when sparrows have to figure out novel ways to reach their food, bigger groups do it eleven times faster than smaller ones. And they open four times as many containers per capita.

The researchers, reporting in the Proceedings of the National Academy of Sciences, say that larger groups were more successful because they were more diverse—a six-sparrow group was more likely to contain some innovators.

If diversity works so well in groups with brains a bit smaller than ours, it should remind you to use the same principles whenever you need a new approach to a problem. Bring in some brains with different experiences than yours, people who are open to trying to do things in ways you might not imagine.

Come to think of it, bees seem to prosper by raising group intelligence when they add members too. Maybe birds and bees have more to teach us than that lesson your parents attempted in your youth.

Failure as a Success Strategy

Lynda Lawrence — Wed, 06 May 2009 23:54:00 GMT

The June issue of Psychology Today is what I’d call the Recession Issue. There are articles about getting laid off, working as a free-lancer, relationships to money, relying on friendships, and failure. If there’s a unifying theme, it could be that this recession is actually good for you.

Could the same principles apply to business? Is this recession the best thing that could happen? The answer, I suspect, is a strong perhaps.

Relationships to money, for example, are relative instead of absolute. We compare ourselves to the guy in the next cubicle, not the guy with the private jet. So if your company isn’t likely to make its quarterly earnings projections anyway (and neither is your competitor), it might make that risky endeavor with the upside potential seem like a better idea.

Then there’s the notion of happiness. Study after study indicates that past a certain threshold, money doesn’t increase happiness. Passion, friendship and meaning do. Thus spending time in activities you love, or with colleagues you enjoy could pay big dividends in your personal happiness quotient while creating new professional opportunities for the future.

And finally, there’s failure—or what some people call learning experiences. If you hate what you’ve been doing for years, a layoff or negative earnings can be just the incentive you need to go back to school or move into a venture that you’ve always wanted to try.
It’s times like these, remember, that have given birth to many of the world’s breakthrough inventions.

Some Surprises on the Innovation Survey

Lynda Lawrence — Tue, 21 Apr 2009 22:40:00 GMT

In Business Week’s annual survey on innovation, it’s not a big surprise that many of even the most innovative companies have taken a hit. (With stock indexes hovering at about half their peak value, it would be amazing if they hadn’t.)

Also it’s no surprise that Apple and Google lead the list of still-innovating companies. It’s in their DNA.

The surprises are hidden in the deeper stories. Tata Motors, for example, has not only upended the car industry by producing the first
$2200 car, they are going to be selling those cars at electronic stores and department stores, plus Tata owned retailers. That’s a whole new business model after a century of dealerships.

One important element of their innovative approach is that they sponsor annual awards for the best innovations. Plus an award for entrepreneurial employees who tried something new that failed. What? Yes, awarding failure—something that a lot of companies give lip service to, but very few actually do.

A less hopeful surprise, however, is the result of a survey by Duke’s Pratt School of Engineering. They found that half of Americans believe that the innovations of this century will not come from this country. Most believe that China will take the lead.

If you’re an entrepreneurial company today, you have a chance to prove them wrong—but only if you keep innovation alive during these financial times.

Killer Cultures

Lynda Lawrence — Thu, 16 Apr 2009 01:50:00 GMT

As an advertising professional, you couldn’t miss the launch of the revolutionary new Saturn some twenty years ago. Never mind that it wasn’t an engineering marvel. It was built by GM, but created in a clean new plant with friendly labor relations, sold by dealers who wouldn’t haggle on price, delivered to customers who were so loyal they would use scarce vacation days to celebrate together at a manufacturing plant.

Today, unless there’s a last-minute Hail Mary from the dealers, Saturn is dead, a toxic brand that’s helping bring down GM. In an article in Newsweek, Paul Ingrassia explains just what went wrong, and it’s a classic lesson in corporate culture.

First there was infighting--sibling brands fought for resources, and won. Then they lost their champions—both the CEO and the labor leader were replaced by people who quickly reverted to the status quo. Then massive debt and falling sales drove GM to start making Saturns at otherwise idle plants, far from their distinctive culture. R&D was cut—they didn’t have a new model for a decade. In short, everything that made this an innovative approach was scuttled, and the entire auto industry has paid the price. Because instead of learning from Saturn, GM used their powerful internal culture to kill it.

GM execs have long lived in a bubble, getting fresh new cars every few months, driving wide mid-western streets to their spacious suburban homes, flying to meet their peers in corporate jets. So while their market share has been falling for 30 years, they kept reinforcing the old way of doing things, fighting the fuel standards that could have made them competitive, and killing their own innovations in electric vehicles.

Looking to the future of your company, if you want to stay ahead, it’s not enough to come up with a new product now and then. You have to make sure your corporate culture isn’t killing innovation faster than you can create it.

Investing in the Recession, Part Two

Lynda Lawrence — Thu, 16 Apr 2009 01:47:00 GMT

The Wall Street Journal is calling it the iPod Lesson—and it’s more proof that investing in innovation during hard times pays off. The amazing 9-minute Kraft macaroni and cheese, launched in 1937. Miracle fiber nylon, 1938. And, of course, iPod in 2001 when the dot com bubble had flattened technology companies.

Somehow people found the money to buy these items that nobody knew they needed, even in the hardest of times. And the advantage lasted for decades. Which is why even though revenues dropped 7.7% last year, R & D spending held flat at the most innovative companies, and some even reported higher spending.

Intel, for example, had a 90% drop in fourth quarter earnings, but only a slight dip in R&D, and new investments of $7 billion slated for the next two years. They’re investing in novel ways, partnering with universities to share their expertise and reap the value of fresh ideas. In our Topics in Strategic Innovaton class last quarter, our MBA students worked closely with Intel to explore new markets and new technologies.

So if you’re trying to predict the winners after this recession, you might want to take a closer look at the folks who are brave enough to keep investing in innovation when all other budgets are slashed.

Top Performers — This Year?

Lynda Lawrence — Wed, 15 Apr 2009 22:21:00 GMT

Business Week’s Top 50 Best Performing Companies from the S&P 500, as you might expect, has some pretty sobering news. Because it’s figured on a three-year average, some of the companies that made the list are now going through layoffs, reduced earnings and are trading at a fraction of last year’s share prices.

Oddly enough, however, only one was cited for its excellence in cost cutting. The star performers in this group are the ones who have a strategy of innovation. And not just Google and Apple, but even staid Colgate-Palmolive, with their new disposable toothbrush with built-in toothpaste, or #1 Gilead, with a single-dose timed-release HIV drug.

In fact, recessions are precisely the time when companies get ahead by doing things better, cheaper and faster. Pepsi gained huge market share against once-invincible Coke by selling in bigger bottles during the Depression. The iPod launched during the last recession. And according to a McKinsey study, the companies that were most profitable over the last two decades were the ones that increased spending on R&D and acquisitions during recessions.

So whether you’re contemplating strategy for your own company, or looking to invest, now more than ever is the time to look toward disruptive innovation.

Print, podcasts and video: The BusinessWeek 50

Obama and Innovation

Lynda Lawrence — Tue, 17 Mar 2009 19:04:00 GMT

In Business Week March 9, there was a plea for President Obama to adopt an innovation agenda to help the country out of its current mess. I’m not sure about some of Kuczmarkski’s tax credit ideas, since I’m not an economist, but several of his other ideas deserve discussion.

Innovation awards seem to be pretty effective, judging by the growing list of them. Booster grants to bring promising ideas to market could speed things along, as could his idea for intellectual property auctions for patents gathering dust at thousands of corporations.

For long-term growth, however, I love his idea of paying for university-based executive education programs in innovation. (Full disclosure: I teach innovation in the MBA programs at UCI Merage School.) But even though I am not an unbiased observer, I’ve seen the effects of executives trained in innovation, who then create cultures that foster creativity, and eventually an entire organization that creates both incremental and breakthrough innovations every year.

The real wealth in this country, and in the world, is created when people develop better ways to do things—railroads and cars, computers and cell phones, t.v. and the internet. So tell your elected officials that some of the stimulus should be going to build the intellectual capital that will really build the future.

Top 30 Innovations in 30 Years

Lynda Lawrence — Mon, 23 Feb 2009 23:21:00 GMT

Last night, to celebrate the 30th anniversary of PBS’s Nightly Business Report, they highlighted the 30 top innovations, selected by professors at Wharton. Since the focus was business, it was no surprise that many of the choices were key drivers in the growth of technology—and thus are known by the three-letter acronyms beloved by geeks: ATM, GPS, LCD, LED, MRI, DNA.

Since the Internet was their number one choice, with the PC, mobile phones and e-mail rounding out the top four, it stands to reason that the list would include the technology that makes those possible and popular: microprocessors, fiber optics, open source software, media file compression, SRAM memory, graphical user interfaces, digital photography, online shopping, office software and even social networking.

Medicine got a few nods, for non-invasive surgery, stents and retrovirals plus MRI’s, DNA testing and human genome mapping.
Energy earned a few: wind-turbines, photovoltaic solar cells and bio-fuels.

And while all this technology has indeed changed the world, there was only a single mention of a fundamental change to a business model: microfinance. Arguably the biggest innovations in the next 30 years will come from rethinking business models, which in turn can accelerate the pace of innovation from the sharpest minds around the world. How will the world be different when today’s technology enables people to interact differently, using global resources, borrowing the best ideas from one field to apply to another, changing lives for the 97% of people today who do not have an Internet connection?

Link: Top 30 Innovations

YouTube for “Innovation Seekers”?

Mike Mata — Mon, 23 Feb 2009 22:55:00 GMT

“Off and on” over the last couple of weeks I have been filling in my free time viewing inspiring talks from the annual TED Conference on the web. The presentations are less than 20 minutes long and cover the wide range of topics which have been delivered during this invitation-only conference since 2006. (The conference itself has been held for 25 years but, it was only in 2006 that the TED.com website was created to expand the audience.) So, now you do not have to be a Bill Gates, Nicholas Negroponte, Rupert Murdoch, Jeffrey Katzenberg (or, one of the other 1,000 notable attendees) to gain useful insight and motivation from this forum where big thinkers are tackling big ideas.

I was prompted to check out the TED.com website after I met up with a friend of mine for dinner a couple of weeks ago that had flown in from the East Coast to attend the conference (now being held in Long Beach after they outgrew the previous Monterey, California location). What I found was an easy to use website that currently has 388 videos posted which cover the official topics of “technology, entertainment, design” that have been sub-categorized by some 200+ tags. A more leisurely way to browse the content is either by sorting the content in a variety of interesting grouping (e.g. most…emailed, discussed, favored, jaw-dropping, persuasive, courageous, ingenious, fascinating, inspiring, etc.) or; you can peruse via themes such as “tales of innovation”, “inspired by nature”, “to boldly go…”, “what’s next in tech”, “design like you give a damn”, “evolution’s genius”, and 30 other themes. What I also found pleasantly surprising was the large number of truly interesting comments that have been posted on each of the videos which often provide additional sources of information and perspectives on the topic.

I will not try to report on all of the aspects of the TED non-profit in this post but, I will encourage you to try out the TED.com site and see if it becomes as addictive to you as YouTube has become for web surfers of all generations.

(FYI, beyond the TED Conference there are TED related effort which include TED Global, TED Prize, TED Talks, TED Fellows, TED Blog, and now a TED translation project which “aims to tap into the skills of the global TED community in a crowd-sourcing effort to translate the most inspiring talks into the world's myriad of languages”.)

On a separate note…when creating the title of this post I struggled with trying to find a catchier term for “innovation seekers” so; I was hoping that some creative journalist had coined some attention-grabbing term along the lines of the digerati, glitterati, literati or even the Technorati. But, obviously I have not yet found any such label yet for the scholars of innovation.

Blues Help Creativity

Lynda Lawrence — Mon, 23 Feb 2009 21:58:00 GMT

Can color affect your creativity? In a study in the online version of Science magazine today, researchers at the Sauder School of Business at the University of British Columbia discovered that the wall color in your room or the color on your computer screen can influence your creativity—and your accuracy.

Subjects in red painted rooms scored better on accuracy, but those in blue rooms scored significantly higher on creative tasks. The effect even worked when blue was the predominate color on a computer screen.

So if you’re hoping to get more innovative ideas from your team, you might think about designating an empty office as a discovery room (be sure it has windows), painting it blue, and adding some plants, toys and music. Easier still, make sure your accounting people have red backgrounds on their computer screens and everybody else has some nice, tranquil blue.