Kellogg EMBA … Innovation Strategy and Management

Prof. Rob Wolcott is leading a very interesting and practical class on Innovation Strategy and Management, at the Kellogg School of Management Executive MBA elective week. The topic of innovation has been widely written about in the context of seed stage startups, a-la ‘garage ventures’ that were born in a moment of inspiration and nourished through the soul of committed entrepreneurship.

What makes Prof. Wolcott’s focus on innovation is his empirical evidence and conviction that true innovation potential and possibilities lie within large corporations. Yes, you read that right … and your latte was not spiked.

Think about it. Large companies are large for a reason. Something works. They have customers. They understand their needs. They are able to meet them. Question is, can they look around corners and beyond the horizon to create and meet the next generation of needs?

With a truly strategic focus (as you would expect from a B-School of this stature), yet grounded in empirical evidence, Prof. Wolcott’s class is one that can reframe mental models and create a sea of possibilities.

3 obvious ideas:

a) innovation as a process: think of the process of coming up with a new idea and going to market. look at your own middle management, and ask if they might inadvertently be coming in the way of innovation. ‘this is not in our budget’, ‘do we have a customer who needs this’. and other forms of blockers could come in your way.

b) hindsight bias: business history is replete with examples of large companies that failed to see an upstart innovation, or buyout a small startup that was poised to go big. the story of Google wont be repeated here. intelligence is a given in the rear view mirror. so, why dont you take yourself to the future, say 5 years out, see where you might be and look back to see how you got there. time travel, anyone?

c) worse, before better: Prof. Clayton Christenssen popularized the notion of disruptive innovation. things are worse before they are better. yet, how many times do we choose to ignore something that might be better in the long term, only because it ‘doesnt look like the way we do things’. lets see, how about your own hiring processes? so many firms are wedded to a regimental recruiting process that doesnt allow them to truly identify the next new generation or type of talent. why cant disruptive innovation apply where it matters most, i.e., managing your human capital?

ok, enough provocative thoughts for one day. what’s your innovation story? what worked? what can be done better?

btw – if you are in the Kellogg EMBA program, dont miss this class. Truly what Executives and others need today. The future is built today, and we work on it, one day at a time.

obviously,

sai

“Sustainable” competitive advantage in tech

I spend a lot of time thinking about “sustainable” competitive advantage in the world of consumer-facing technology-enabled services.  The once volcanic MySpace now appears to be a cooling lump of lava rock.  Of course there is news today that AOL is finally on its own.  Wonder how many really miss Geocities today.

All this leads me to look more closely at valuations of these firms.  During the .com days, at least we had ‘eye balls’, inaccurate as they might have been.  But at least they provided a frame of reference.  Today, we could use ‘clicks’, ‘unique users’, ‘growth rate’ and a slew of other metrics.  However, the big, I guess Billion $ question is … how long will success last?

Twitter came out of … literally nowhere.  Fledgling Facebook overtook MySpace.  AOL, the grand daddy of ’em all risks becoming totally irrelevant to a Facebook-fed generation. 

3 obvious ideas to ponder upon … as an investor / user / competitor:

a) What’s feeding your success? Ironically, it appears that the very hand that feeds success gets bitten.  Consider that the inherent power of Facebook that comes from its millions of users can itself be a liability.  There is literally nothing stopping Facebook’s competition to use the power of Facebook groups to launch its competing set of services.  Of course, there is nothing that could stop users’ leveraging their own social networks to create a tsunami-exodus to a more attractive alternative. 

b) What’s the abandonment rate? The moats keep getting destroyed.  Switching costs are pretty low.  While there is an inherent lock-in that comes in with the network-effect, there is nothing stopping someone from trying a more attractive alternative.  And then, one by one, the network joins.  Until the entire herd migrates to greener pastures.  Almost like humans did in ancient times.  Maybe, just maybe, we are meant to be that way.  Seeking.  Searching.  Settling Down.  Seeking.  Searching.  Settling Down. … … …

c) What’s the innovative alternative? Human time is limited, attention spans even more so.  There are reports that youngsters in Japan spend more time on electronic devices than “on” the Internet.  As we get older, our own preferences change.  We hang out in different places.  Our kids might consider our hangouts ‘uncool’.  Any bets that Facebookers’ kids will find their own hangouts?

So, wither valuations?  What is “sustainable” competitive advantage?  Sure these properties can add features, integrate with other properties and acquire interesting upstarts.  But, in many cases, they risk losing the very simplicity that attracted users in the first place.

sai@obviousideas.com

www.obviousideas.com – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

sensible tech supply and demand

what do samsung and barnes&noble have in “common” today?  well b&n seems poised to lose out a golden opportunity create a market for nook. they wont have the nook in stores for sales or demos because … get this … excess demand for its devices!  hmmm …

on the other hand, samsung announced that is has beat its 2009 handset demand handsomly (pun intended).  50M units by end of nov 09 vs. 10M units by end of nov 08.  wow ….

so, what’s with the difference between ‘hmmm…’ and ‘wow…’ … and whats it got to do with the economics of tech supply and demand?

3 obvious ideas:

a. plan for success … blazing success: whether you are an old hand at tech a-la samsung, or a newbie like b&n, plan for success.  if you truly believe in your product, plan to have a product on hand when that elusive much-anticipated customer comes calling.  especially during holiday shopping.  there is no charm in gifting someone a nook gift-card.  get the real deal.  or be ready to see your competition kindle a hotter fire this year!

b. strategy focused operations: got to get your operations right and have it aligned with your strategy.  strategy without operations is like a hot air balloon without the hot air.  operations might be the plain ‘old boring stuff.  but thats what makes organizations run … or soar.  if you cant make a holiday delivery during the holiday season, its time to re-examine your operations.  what are the kinds of cascading management decisions that led you to this mess?  some over-compensation for the bull-whip effect?  cludgy inventory holding costs that held a supplier back?  a vendor management policy that turns up with unintended consequences?  oh, pray.  what made a ‘wow’ a ‘hmmmm’?!

c. marketing buzz and magic: whatever you do … whatever you do … dont forget the power of marketing.   even scarcity is an opportunity … if marketed well.  (apple seems to get this right all the time).  why, even google, the purveyor of digital goods has made scarcity an art form … and used it to generate hyper demand.  no wonder you see waves of interest in google!

sai@obviousideas.com

www.obviousideas.com – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

business value alignment … keeping it simple

i cant but help think about what the world might have looked like about 50 to 100 years ago.  before we had alphabet soups and tons of buzzwords.  when the world was a much simpler place.  yet a place that saw tremendous transformation. 

first commercial flight.  first radio broadcast.  why…. even first cup of instant coffee.  we went through so much change as a human race, yet were not bombarded with noise about the change.

organizations typically go through change all the time.  whether they acknowledge it or not, there is always an undercurrent of organization change and transformation.  some of course, are more pronounced or planned than others.

so, why do we generally approach this topic with a mix of trepidation and trite proclamations?  why do we start with the typical notion of “here is the change cycle… you go through denial, acceptance, … etc etc.”?

shouldnt the conversation really be about business value alignment?

in lieu of the 3 obviousideas, check out my interview on pmopodcast

http://www.thepmopodcast.com/mp3/The_PMO_Podcast_175_Value.mp3

sai@obviousideas.com

www.obviousideas.com – the Business Value Alignment™ firm, linking Strategy | Organization | Execution

whole foods + whole lot of social-media mess

what a week it must have been for whole foods ceo john mackay and his crisis-pr team!    just a week after a major scientific report that there is really no material health difference between organic and non-organic produce. 

1.  john mckay writes a wall street journal oped on the united states healthcare debate

2.  w.r.to his customers, he picks the ‘wrong side’ of the debate … with a conservative-piece despite serving a largely liberal-customer base

3.  blogosphere and twittersphere explodes in rage .. with some stating that they will not shop at whole foods because of the ‘social darwinism and elitism’ reflected in john mackay’s piece

4.  traditional media picks up the story

5.  www.wholeboycott.com is formed

6.  welcome to traditional media meeting social media in the age of the empowered customer with a keyboard @ hand …

3 obvious ideas:

a. personal ceo opinion”, really?: ironically there is no such thing as a ‘personal opinion’ for public cxo’s in an age where social media promises to enable personal expression! et tu, social media?

b. understand your customer before you communicate … because social media is the voice of many, not just marketing: you dont need to have a ph.d. in anthropology to know your customer-base, its major likes and dislikes.  if you are in a fishbowl (as they say about ceo’s), communication is hard to begin with.  your every move is being followed, interpreted and amplified.  social media just made it harder.  most companies and ‘social media experts’ belabor about why it is important for companies to market themselves through social media… conveniently forgetting that the power of social media is tilted towards the voice of many … i.e., the customers and quick-to-convert ‘former customers’!

c. b2c brands can become fragile faster than you can say “oh tweet!”:  b2c brands are built on perception.  brands take time and money to build.  like humpty-dumpty that sat on a wall and took a great fall, brands can fall quickly with the nudge of social-media ire.  and despite all the king’s horses and all the king’s men, it might not be possible to put humpty-dumpty together again.  just ask any 2 year old.  

sai at obviousideas dot com

social networking … will the pendulum swing back?

in a world where everybody seems to have something to say in the hope that everyone else is following … we are beginning to see some curbs come into play.

the pentagon reviewed social networking on computers and we see that the marines have banned social networking sites.  that is pretty reasonable given the security risks involved in publishing any-to-any information over open networks.

one person has even gone far enough to suggest that social networking is outright dangerous!

the transient nature of instant-contact and combined with the permanence of communication-records, makes for an interesting environment where folks tend to share things that they might never otherwise consider sharing.  add to that the relative comfort afforded by keyboards that seem to ‘de-personalize emotions’, you’ve got a flood of expression out on in public domain that might otherwise not escape the privacy of ones cranial confines.

makes me wonder whether the pendulum which has swung to the extreme of total openness will begin to swing back … after all, just how much of our time pie can be continue to give up to the social networking slice?  what do you think?

3 obvious ideas:

a. why: consider why you are connecting and communicating through social networking sites.  if its ‘because its the cool thing to do’, you are probably sending the wrong kinds of messages.  it helps to have a pretty solid reason to be out there.  while this might appear to go against the very grain of social networking, let us not forget that social networking on the internet is still about human-to-human contact and you dont want to be out there blabbering from a soapbox like the guys you find at trafalgar square declaring that the ‘end of the world is here’.  (i guess you could say they know ‘why’ they are there)

b. what: consider what the core essence of your message is.  whether you are posting pictures of your weekend party or random musings from the beach, dont lose sight of what the core message is.  communicating for the sake of communicating just adds more noise to the channel and makes for an overall sub-optimal experience … over the long term.

c. whom: its pretty obvious to consider whom you are trying to reach out to.  deeply divisive and polarising topics tend to attract undue interest and intense online debate.  dont forget that the ‘whom’ in this case can be pretty much anyone out there.  so dont get into an online debate or argument with a total stranger … regardless of how passionate you are about the topic.  its just not worth it.

sai@obviousideas.com

teachable moments … in technology leadership

the world of technology leadership is long overdue for its share of ‘teachable moments’.  i was going through some old trade rags and business mags that seemed to have escaped the eventual journey to the recycle bin … for about 7 or 8 years!  i was struck by how the topic of ‘business-IT’ alignment seems to have barely progressed in the last half decade or so.

the pain points, promises and pontifications on business-IT alignment have not seemed to change a lot.  indeed, that is depressing.

i would have hoped to see the dialog progress in some direction.  hopefully progressive, not regressive.  but status-quo is dangerous.   even disastrous.

3 obvious ideas:

a. from buzz to business-need: we need to step back from the din of new buzzwords and tech, and ask ourselves a fundamental questions: “what do we want to achieve with technology?” “what are we able to?” “what are we not able to?”

b. from cost to competency: we need cio’s to move away from a focus on cost-containment to one on organization competency-creation.  “what can we do with technology to enable business value creation?”

c. from staffing-for-operations to staffing-for-success: we also need cio’s to shift their staffing from a vertical domain-orientation to a horizontal competency-orientation.  while engineering and operations oriented teams will still be needed, we will need to see more artistic analysts and creative consultants within the cio organization.

what do you think?

sai@obviousideas.com