Innovation Blog - UCI Paul Merage School of Business : Leadership Style, Management Processes, Technology

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.

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.