Innovation Blog - UCI Paul Merage School of Business : Strategy/Vision, Leadership Style, Innovation

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.

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.

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.

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.

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.

Exactly Where Does Creativity Come From?

Lynda Lawrence — Wed, 11 Jun 2008 18:53:00 GMT

Over the last few years, functional MRI testing has given researchers the ability to see inside the brain in real time. Now, according to this month’s Scientific American Mind, researchers at the National Institutes of Health have used jazz pianists to show that improvisation generates activity in the medial prefrontal cortex—the same area that lights up when people are storytelling.

It’s the first scientific evidence that backs what I’ve seen in practice and explored in my thesis: telling stories excites more and better creative ideas than working from facts or tasks. In fact, when you start with a story about personal creativity, people in brainstorming sessions generate more than twice as many ideas.

It also explains why charismatic leaders with visionary stories about change can inspire even huge corporations—those stories turn on the creativity in every person who hears them. Perhaps companies that want innovation throughout the ranks should invest more in finding and telling the right stories.