Reading Malcolm Gladwell’s new book, What the Dog Saw, I was struck by his descriptions of infomercial king Ron Popeil and the famous copywriter, Shirley Polykoff, who made hair coloring acceptable, and changed women’s looks for half a century. These were not middle-of-the-night inspiration people—they were hard workers who kept looking for new ideas and perfecting them for years. Or, as legendary dancer Paul Taylor says, in a profile in the New York Times, ”People think some muse comes down and strikes. Well, making a dance is just plain work like anything else. The inspiration is the deadline.” So which is it, deadlines or daydreams? Research is mixed. Real deadlines are important incentives, but too little time can stifle creative solutions. This weekend I scratched my cornea and couldn’t read. Without my daily fix of five newspapers, internet sites, weekly newsmagazines, professional journals and business books, I found myself full of ideas that had been rumbling around the back of my brain but hadn’t fully formed. Suddenly I knew how to tackle that weird transition in class, that emotional hitch in a consulting assignment, that tricky patch in a report. And then this morning in the Wall Street Journal, business book writer Pat Lencioni addressed the same issue. According to him, you need to block out creative time in every day. Even with deadlines, you’ll have better solutions if you let your mind drift, enjoying that walk or a long shower or staring out the window, instead of staring at your computer forcing yourself to THINK, DAMMIT. The truth, of course, like all things in life, is not simple. You need deadlines and daydreams, perspiration and inspiration, and the trick is finding the right balance.

Yesterday in the New York Times, Thomas Friedman’s column defined the new untouchables—the people who are in such demand that employers sacrifice to keep them, or who readily find new jobs in the worst economy. They are the top half of the class, he says, not the ones who can do routine engineering, but the innovative thinkers who create the new products. And today on MSNBC, Intel’s Paul Otellini showed off a vial of teeny, tiny chips, each with the computing power of the best laptops three years ago. Like Friedman, he said that entrepreneurial power comes from education—but the kind that equips people to invent instead of just learning the basics. Finally, Newsweek’s cover story is on changing education, from the idea that there is a set curriculum to the idea that school is to give you the tools to succeed in an everchanging world. I couldn’t agree more. In our Design and Innovation Management class (shameless plug here), we’ve opened it to continuous input from our FEMBA students. Last week, a Tweet from a student alerted us to a YouTube video about changing behavior by making a staircase into a live piano, which in turn we incorporated into our class as part of a workshop exercise that uses toys to inspire new ideas. Because we can’t possibly predict the future, the best education can prepare people by giving them the tools to be flexible, to build on the ideas of others, and to stay constantly alive to opportunities. I’d argue with Friedman that these skills are not just the whipped cream and the cherry on top, that thinking like an innovator is the only way to create the whole sundae.

On the same day the world is mourning the Nobel Prize-winning scientist who started the green revolution that transformed Asia and saved billions of lives, the Wall Street Journal is also honoring the 2009 Technology Innovation winners. The Gold goes to a sensor that can instantly identify pathogens, even ones it hasn’t encountered before, potentially spotting and staving off the next pandemic. And there’s software that enables remote health workers to track health statistics via cell phone, potentially catching AIDS or Ebola early enough to stop it. There are solar stations for cell service, borrowing Ikea’s easy packaging and assembly techniques to make cell service a reality in villages reached by donkeys. There’s an artificial hand that actually works like a hand, and drywall with a small environmental footprint. There are speakers as thin as a credit card and a patch that uses electromagnetic energy for drug-free pain relief. There’s even a once-theoretical memory resistor that could make electronic devices so small and powerful we can’t even imagine them. The fascinating thing about all the winners, launched during a worldwide recession, is that any of them could be—or could lead to—a world as different from ours as the world pre-auto, pre-tv, pre-airplane, pre-internet, pre-cell world was from the place we live today. And we have absolutely no way of predicting which of these, or something else lurking behind the sparkling eyes of the inventor on the laptop next to you at the coffee shop, will be the one.

In Fortune Small Business magazine this month, the cover story features innovation in small business, and how to achieve it. And for those who think that innovation takes a large R & D budget, there are some eye-opening statistics: • Small business generates 13 times more patents than large business • Those patents are twice as likely to be among the top 1% of patents cited • 77% solicit ideas from customers, and act on them • 70% actively solicit ideas from their employees. In short, these tiny businesses are doing precisely what experts urge all businesses to do: adapt continuously to changing markets. The stories range from products like a single person commuter car to services, like life celebrations marketed by a funeral home, complete with Harley Davidsons, fishing poles and bingo games. There’s a detergent that actually gets rid of sweaty smells from hi-tech athletic clothes, invented by a guy with no background in chemistry or laundry. The keys are these: 1) know your history 2) lose the routine 3)use the brains you hired 4) get cozy with customers 5) share the load and 6) fail quickly. What drives them to follow these rules so successfully that 63% of small business owners have had eureka moments that changed their business? Necessity. They don’t have the luxury of losing money for years or ignoring bad performance. Or, as the director of the Institute for Innovation at the University of Michigan says, “ In an economic downturn, innovation isn’t your best friend. It’s your only friend.”

In the latest McKinsey digital newsletter, Mark Marino muses that innovation is like a coral reef: nobody quite understands what causes reefs to form, but human actions can nurture or harm the process. Silicon Valley, he says, is an innovation reef, started by Dave Packard and Bill Hewitt in their Palo Alto garage during the depression — an organic, bottom-up, self-sustaining ecosystem.

And while that model has built hubs of entrepreneurial growth around Boston, Seattle, and Raleigh-Durham, it may not be sufficient  to jumpstart innovation today. He argues that bottom-up strategies need an umbrella approach at the top — something like a national "innovation czar" to focus on the big picture. This czar could drive investments in renewable energy, better health care and improved education by selecting areas that are near the tipping point and funding them. Perhaps the czar could also eliminate needless regulations or address immigration policies that send our highly educated immigrants away when they'd prefer to stay here and start breakthrough companies.

Good ideas all, but likely to fall off the radar screens of a county that's struggling with recession, war, unemployment, and health care reform. Of course, it's precisely during difficult times that people try to do things better, for less. Maybe today's Dave and Bill are tinkering in a garage someplace (or on their laptops at Starbucks), and this recession will see the birth of innovation we'll need for the next growth spurt in the world economy. Perhaps tomorrow's billionaires are working on their own ideas since they can't find work elsewhere. Let's collectively hope so. 

Nurturing the innovation reef.

This week’s Wall Street Journal special report on innovation has two interesting insights. First: advances in technology in the last decade make innovation both more important and easier. With better computer prototyping, infinitely more data, and instant feedback, companies can test more ideas, more cheaply and more accurately. Walmart can test combinations of displays and prices and know within three days how best to sell products.  Instead of limiting new ideas to the few that can be fully tested, companies can encourage lots of ideas.

 

Of course, if innovation can happen quickly, then more companies will realize that it must happen quickly. This in turn creates a climate where innovation is not an afterthought, but an integral part of the corporate culture.

 

The second insight is about innovation strategies that work: trying all four at once is seldom successful. The most effective way to improve innovation is Jim Collin’s entreaty to get the right people on the bus.

 

By hiring both star inventors and star implementers, companies can insure that enough ideas are in the pipeline and that enough of them make it to market. And given that the recession has sent a lot of very good people into the marketplace, smart companies should be looking right now for the talent that will keep them ahead of the competition.

 

So, if you’re an innovative individual (like many who have been in my classes), keep looking for companies that will appreciate you.  And if you want to be an innovative company, keep hiring them.

 

In Business Week’s July 27 issue, there’s a simple chart that tells a big story. Creative Beginnings in a Downturn shows that Hewlett Packard learned to buy game-changing companies in recessions, that Genetech leaned to use strategic partners when they couldn’t afford research labs, and that Google snagged top talent after the tech bust.
In another article in the same issue, General Mills reports increased sales, stemming from bigger marketing budgets, exactly when everyone else is cutting back.

They are just a few examples of some counter-intuitive strategies that smart business people have used successfully in past recessions. When others are cutting back, you can launch new companies, new products, and new approaches when the competitors are not circling around. And years of statistics prove that people who invest in research and marketing in recessions emerge as leaders for years or decades to come.

What’s more, in cost-cutting climates, people are more willing to risk doing business with a new supplier who can accomplish things faster, better or cheaper.  That incumbent relationship may not survive belt-tightening, especially if the procurement guy has been laid off.

For those who aren’t frightened, it’s a perfect time to launch your innovative ideas, and watch them take off faster than the recovery.

Business Week calls them under-the-radar start-ups in alternative energy, and warns that they may not be the ground floor opportunities that investors are seeking. What’s amazing about this list, however, is the wide range of approaches these companies are taking.

Geothermal energy. Making ice at night. Cylindrical and thin film solar cells. Wind turbines that fit on a house. Ocean and river generators. A truck-top plant to convert industrial waste to biofuel. New ways to conserve, meter, and sell energy. New ways to finance solar panels. Algae for jet fuel, and that elusive clean coal technology.

Maybe none of these will work commercially. Maybe all of them. More likely, some portion of these and others that are not on the radar screen this month will be changing the way we run our homes, offices and vehicles over the next few decades.

If any of these technologies work, we could be on the verge of a new industrial revolution—one that won’t take our depleted natural resources for granted. When everyone is busy looking backwards at how we got ourselves into this financial and environmental mess, it’s exhilarating to see how we just might find out way out.

The Next Energy Innovators, BusinessWeek

 

On my way to an Ikea exhibit in Stockholm last month, I took a plane, train, taxi, subway, and ferry to the art museum. Once there, I was impressed by how both experiences underlined the Swedish approach to design, and what we can learn from them.

First the Ikea part. It started with a young entrepreneur who tried to sell cheap furniture through the mail.  Since it was difficult and expensive to ship, he figured customers might be willing to assemble it themselves to save money. When existing furniture manufacturers boycotted him for undercutting their business model, he had to design his own, and he decided that his customers deserved good design as much as wealthy people did. Hence the strategy of Design for All that has driven the company to international success.

That same strategy applies to transportation in Sweden. The airport is a dream, with easy security, uncrowded gates, polished wooden floors, walls of etched glass, even luggage carts that look like sculpture. The train and subway stations are easy to navigate, clean, cheerful and efficient. The ferry is a pleasure. Everything is designed to make getting around a large city built on 14 islands easier than getting through two suburbs in L.A.

While the latest trend is to talk about being customer-centric, most of our public and private efforts fall woefully short of that ideal. Because we focus on the short-sighted decisions that make shareholders happy, we don’t reap the long-term benefits of creating a better world, with better products and services for everyone.  Perhaps we too should think about Design for All.

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.
 

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.

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.

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.
 

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.
 

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.