Innovation Blog - UCI Paul Merage School of Business : Consumer Products, Future

Energy Innovation: From Chocolate to Diapers

Lynda Lawrence — Wed, 16 Jun 2010 16:57:00 GMT

In this week’s Bloomberg Business Week, Esme Deprez highlights a few of the more innovative sources now being explored for fuel. In the wake of the gulf oil spill and the coal mining tragedy, it makes sense to look at more of these options: 1) Chocolate: a Formula 3 racecar that runs on biodiesel from chocolate waste in Britain. 2) Turkeys: diesel from bones, beaks and feathers 3) Coffee: from the 20% of grounds that are oil—comes complete with that scent of fresh-brewed java 4) Beef: Amtrak is using biodiesel from beef by-products in Texas 5) Human fat: a plastic surgeon is converting liposuction waste to power his car 6) Urine: especially from pigs, converts to hydrogen, helps with disposal 7) Manure: Every day a cow produces enough energy to power two light bulbs 8) Dirty diapers: the products and their contents yield methane and diesel oil. In fact, most of these solutions offer twin benefits: providing energy while reducing waste and emissions. Perhaps if these solutions got just a fraction of the subsidies we spend on oil and coal, they might add to the mix we need for a better future.

Deadlines and Daydreams

Lynda Lawrence — Tue, 27 Oct 2009 22:37:00 GMT

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.

Which one will change more lives?

Lynda Lawrence — Wed, 21 Oct 2009 18:41:00 GMT

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.

Innovation as Ecosystem

Lynda Lawrence — Thu, 10 Sep 2009 16:35:00 GMT

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.

Innovation At Warp Speed

Lynda Lawrence — Thu, 20 Aug 2009 04:05:00 GMT

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.

Smart Moves in Tough Times

Lynda Lawrence — Thu, 30 Jul 2009 23:01:00 GMT

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.

Little Green Companies Coming to a Planet Near You

Lynda Lawrence — Thu, 30 Jul 2009 22:48:00 GMT

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

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

Design: Ideas vs. Implementation

Lynda Lawrence — Mon, 28 Jul 2008 20:46:00 GMT

Preparing for the class I teach with Alladi Venkatesh on Design and Innovation Management, I’ve been reading the Henry Dreyfuss classic, Designing for People, published in 1955. From the thirties to the sixties, he designed everything from flyswatters and tractors to airplane cabins and touchtone phones.

One thing that really struck me was the similarity between the things he was imagining in the fifties and the contents of the file I keep on innovation today. Textiles that light up? He designed curtains using tiny medical device lights for a night club in the forties. Cars with automated parking systems? His drawings were there in the fifties.

What was even more striking, however, was how much things have NOT changed in more than 50 years: washing machines, ovens, urban crowding, traffic, gas-guzzling cars. In fact, his photos of relaxed air travel then (complete with comfy sofas and curtained beds) make you long for those good old days.

So while computers and phones are delivering on his promises, most things are not. The differences, I think, are in the inertia that attaches to any established business. Detroit was doing quite well, thank you, with gas-guzzlers so until this year there was no incentive to change. Ditto for washing machines that waste more water than most people use in a week.

It’s not really ideas we lack—it’s the will to buck the system and create much better solutions. It’s been too easy over the last century to forget what architect Daniel Burnham advised: Make no little plans.

“The Most Innovative Small Business in America”

Mike Mata — Wed, 04 Jun 2008 00:22:00 GMT

“The customer is the company. Threadless churns out dozens of new items a month – with no advertising, no professional designers, no sales force, and no retail distribution. And it has never produced a flop.”

The above title and quote is from the current Inc. Magazine cover article. The article profiles Treadless, a $30 million business with 30% profit margins, which is built around a social network where users are central to idea generation, marketing and sales forecasting. Threadless could be viewed as a poster child for the concept of “user innovation” as defined by MIT’s Eric von Hippel or “crowdsourcing” as coined by Jeff Howe in a June 2006 Wired magazine article about istockphoto (http://www.wired.com/wired/archive/14.06/crowds.html) (For more on Jeff Howe’s views on crowdsourcing, visit his blog and view excerpts from his book at http://crowdsourcing.typepad.com/cs/).

One element that makes the Treadless story so interesting is the fact that the founders evolved a onetime design contest into powerful business model without comprehending how unique it was at the time. This is especially interesting given the fact that Treadless is not in the software or electronic media business where “open sourcing” is commonly thought to be leveraged. The founder was quoted about his successful model as “I think of it as common sense. Why wouldn’t you want to make the products that people want you to make?”

The Inc. Magazine article integrates a number of thoughts from Eric von Hippel where he envisions a day when firms move away from traditional R&D to where users drive product definition. He observes that today most businesses employ an iterative process of market research testing and product redefinition which can end up being inefficient. And, von Hipplel notes that many firms are better at collecting customer input than they are at productively exploiting it. I’ll suggest that this view of a day where product ideation is driven by “user innovation” is more likely to be applicable for one end of the innovation spectrum than for all types of business innovation.

Professor Michael Tushman of the Harvard Business School describes an innovation framework with customers on one axis (existing, new) and technology on the other axis (incremental, architectural, competence-destroying/ discontinuities). Incremental improvements in both product definitions as well as go-to-market models which address existing customers could obviously benefit from the appropriate deployment of “user innovation”. But, a crowdsourcing approach to product definition could be much less successful in identifying and driving discontinuities within an industry. We used to view this as the difference between “edge-out” and possibly “reach-out” innovation versus “break-out” innovation. I will further explore these three types of innovation and how they are best attained in a future post.

If you would like to read more about firms that have effectively used the concept of crowdsourcing (in addition to exploring the Jeff Howe links mentioned above), also take a look at the list of firm on the Wikipedia entry at http://en.wikipedia.org/wiki/Crowdsourcing.