November 2008 - Posts


Welcome to the Innovation@Merage Blog
The Paul Merage School of Business is pleased to provide this blog for discussing information on all aspects of innovation and how it is impacting businesses and academics. We hope you will find our blog to be an engaging way to communicate about the latest topics on thought leadership.  

  • Innovation in the Bad Times

    As the financial crisis has taken over the news cycle, it’s very hard to focus on innovation. Yet, As Janet Rae-Dupree points out in her New York Times article Sunday, this is precisely the time when innovation is most important. She cites Howard Lieberman, founder of the Silicon Valley Innovation Institute and a serial entrepreneur himself, “ the companies that survive are those that keep creativity and innovation foremost.”

    Indeed, hard times can be the source of innovative inspiration, according to Chris Shipley, executive producer of the DEMO conferences of new ideas. “Some of the best products and services come out of the worst times.”

    There’s proof.  A new study in the peer reviewed journal, Marketing Science, shows that cutting back on R&D in hard times is exactly the wrong strategy.  Studying 69 publicly traded companies over 30 years, the researchers found that on average, shares in companies that announce new R&D efforts rise above their competitors—and long term, they beat their rivals who don’t focus on R&D.

    For a PDF of the return on innovation study, see the attached file below.

  • Breaking the Rules of Brainstorming

    One of the sacrosanct rules of brainstorming is that criticism isn’t allowed.  Yet according to a new study from Berkeley psychology professor Charlan Nemeth and grad student Matthew Feinberg, enforcing that rule can lead to less creative sessions.

    The key, according to the study, is the way in which the rule is communicated. In an earlier study, Nemeth found that encouraging debate had resulted in livelier, more productive sessions. So in this study, she set out to discover whether the no-criticism rule actually stifled creativity.

    The answer?  It depends.  If the instruction is delivered as a rule, participants seem to feel constricted.  If it’s delivered as coaching or a suggestion, people feel less restricted, more able to express divergent ideas.

    So, when you’re telling people to break the rules, make sure you’re not imposing another one.

  • The Role of Design Thinking

    The first week of the Design (and Innovation) Management Class I teach with Alladi Venkatesh and Raymond Pirouz, as always, reminds me that Design Thinking is at the heart of all innovation. It's not just about designing new products, or even new customer experiences—it’s a different way of seeing the world that results in breakthrough innovation.

    This October issue of Fast Company has a number of provocative articles with concrete examples of how this theory translates into innovation today. Products inspired by wasps’ nests and butterfly wings. A computer chip that sucks up a tiny fraction of power and puts the Internet in your hand. Factories for design.

    There’s also a terrific video from one of the principals of IDEO which describes many of the same concepts we explore in class: the interplay and the roles of customers, business and design, the importance of storytelling, and concrete examples of new services that were inspired by ethnography—carefully watching how real people really live.

    In the world ahead of us, it will be innovation that drives the economy, green technology, and new approaches to the world’s thorniest problems. If you want to be successful in that world, it’s worth taking some time to start seeing and thinking with that neglected part of your brain that’s tapped in design thinking.

    (Click here for sneak previews of more talks by innovative thinkers.)  

  • You Are Where You Live?

    A recent story in the Wall Street Journal has a nifty map which demonstrates that people with different—presumably inherent—character traits cluster in different states. Neurotic? Definitely hang out in the Northeast or the Mississippi Delta.  Openness, as defined in the study in Perspectives on Psychological Science, is the trait most linked to new ideas, and indeed those states where open people flock have higher per-capita patent production.

    This map is very similar to those in Richard Florida’s latest, Who’s Your City?  As he says, “Innovation, economic growth and prosperity continue to occur in places that attract a critical mass of top creative talent.”

    So what makes a place attractive to innovators?  It seems that you need critical masses of intellectual capital (no surprise that many of the most innovative hot spots are around universities), financial resources (New York & the Bay Area are perfect examples), and an open cultural climate that encourages diversity.

    It’s a classic chicken-and-egg conundrum: Do creative people flock to creative places to gather with their peers?  Or is it something about creative places (is it in the water?) that makes people more creative? Either way, if you want to increase your potential for innovation, you might want to check into the places where it’s already thriving.

    Sources: The United States of Mind: Researchers Identify Regional Personality Traits Across America, Wall Street Journal, September 23, 2008, Pg A26.
    Interactive map at WSJ Online.
    Florida, Richard. (2008). Who’s Your City? How the Creative Economy is Making Where to Live the Most Important Decision in Your Life. Basic Books, New York, NY.

  • Innovative Entrepreneurs and Curious Consumers…

    Inc. Magazine ran an interesting interview with Amar Bhide, a professor at Columbia University, which discusses the strength and resiliency of the U.S. economy from a perspective that made me think a bit differently about the subject.  So, while the U.S. is struggling through the failings of a financial system that used borrowing to leverage the returns from schemes that had no underlying assets, the first light at the at the end of the tunnel may come from our broad base of innovative entrepreneurs and curious consumers. 

    curious consumersAmar argues against the idea that the greater the technology lead one country has over another, the greater the lead country’s prosperity.  Instead his analysis is that “advances abroad will help improve living standards in the U.S.”  Some of the key points of Amar’s argument are that (1) the U.S. is very good at taking new technologies and “weaving them into our commercial fabric”, (2) the U.S. has a “more commercial culture than any in history”, (3) most entrepreneurs are “skilled at taking inventions…and putting them into use, because they can’t waste money doing R&D”, (4) “as a country and a culture, we just like to take chances when we consume”, and (5) the U.S.’s large number of venturesome consumers “are willing to invest in learning how to use technology and make it work for us.” 

    To paraphrase Armar, the strength of the U.S. is the combination of effectively applying inventions to the marketplace as well as our ability to consume those innovations.  If I read Amar’s related book titled “The Venturesome Economy: How Innovation Sustains Prosperity in a More Connected World”, I’ll write a short review to let you know if it effectively expands on these concepts.  Tom Peter’s analysis of Amar’s new book states: “If I were asked to recommend to the next president just one book on the trajectory of the U.S. economy in the next several years, it would unhesitatingly be Amar Bhide's The Venturesome Economy. The book is an utterly original interpretation of the nature of the complex process of innovation.”