Innovation Blog - UCI Paul Merage School of Business : Strategy/Vision, Technology, 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.

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.

The Lost Decade

Lynda Lawrence — Wed, 17 Jun 2009 21:56:00 GMT

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.

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 Innovation & Research Conference

Lynda Lawrence — Fri, 02 Jan 2009 22:59:00 GMT

Why on earth is this fellow driving on the highway with a metal helmet blocking his view? Why is mythology important to the launch of the world’s least expensive car? What do consumers mean by “green” behavior? What do different family members want from their computers, and how do neighborhoods use private computer networks? Why does design thinking drive everything from retail store experiences to new products to social networking?

These topics were just a fraction of the insights in the Design Innovation and Research Conference organized November 15 by Alladi Venkatesh, Lynda Lawrence and Raymond Pirouz of the Paul Merage School of Business, co-sponsored by the Design Alliance and CRITO.

Gathering experts from the U.K., India, and all over the U.S., the conference offered the latest research, design publications, ethnography, semiotics, and business case studies to reflect the importance of integrated design from the consumer, designer and business perspectives. In a world where innovation is key to success, design thinking is increasing vital in every aspect of life and business.

For more information and complete presentations: Design Innovation & Research Conference