English: Google driverless car operating on a testing path (Photo credit: Wikipedia)
Last week’s debate on the Google driverless car raged across Forbes, auto sites and Google +, yet I found little in the discussion to convince me that this is Google‘s opportunity.
Last week I said the idea of a Google driverless is nonsense and I repeat it – Google will not be a force in autos. In fact I’d go further and say I doubt this is a disruptive innovation. It is happening incrementally, now.
But what Google has done, through intense lobbying and publicity, is pave the way beautifully for BMW, Mercedes and Volvo to launch autonomous cars in 2014. Yes, 2014 (go here for information on 4 almost autonomous cars you can drive today).
Within two years these major European manufacturers, particularly BMW and Mercedes who sell upmarket cars and have the margin to innovate, will have all the components of an automated car on the road, in production vehicles.
For example, to quote the World Future’s Society: “BMW plans to extend that idea in its upcoming i3 series of electric cars, whose traffic-jam feature will let the car accelerate, decelerate, and steer by itself at speeds of up to 25 miles per hour—as long as the driver leaves a hand on the wheel.”
And: “Mercedes is equipping its 2013 model S-Class cars with a system that can drive autonomously through city traffic at speeds up to 25 m.p.h.”
Here’s some more detail:
The S-Class will sport a stereo camera on the windshield to peer ahead in 3D, short- and long-range radar in front and rear, and short-range radar on the sides. Twelve ultrasonic sensors will detect objects very close to the car—during self-parking, for example. And added to external sensors, the S-Class will have internal sensors to monitor drivers.
And the other types of things that will happen, down the range, are more automated braking, more collision avoidance, more safety, more incremental change that began as as long ago as the early 2000s and whose R&D history spans back to the 1980s.
So why won’t these car makers go to Google? To understand that better I talked last week to Richard Bishop Richard who appeared on Twitter commenting on my post and Chunka’s. A good thing too.
He is a former head of the US intelligent highways program and oversaw public trials of driverless cars in the 1990s. Since then he has been consulting in this area to car companies and Governments.
1. The don’t need Google
The German car makers are using different technology. “The (Google) system combines information gathered from Google Street View with artificial intelligence software that combines input from video cameras inside the car, a LIDAR sensor on top of the vehicle, radar sensors on the front of the vehicle and a position sensor attached to one of the rear wheels that helps locate the car’s position on the map.” But most are manufacturers are not dependent on complex databases and retrieval. They use sensor technology to recognize what is around them.
Might Google be setting itself up for the wrong project. Its system relies on rich data maps, which can also be created by its laser technology, so it looks like a great “organize the world’s information” project. But maybe not that necessary for cars. However, there is no doubting it could have a role in freight distribution for when you get used to the idea of lorries on the highways with no driver!
2. They already do great, safe software.
Automated safety technology is in the DNA of Tier 1 suppliers like Bosch who brought the world the first advanced braking systems. They have years of experience in creating safe software for cars, according to Richard Bishop, and they test the hell out of it. Before automated cars go down the car range to mid-market luxury car makers will have more years of experience and data. Bosch is offering its automated driver technology for 2014, also.
3. Google has a poor record outside search and ads
Google‘s great moment was its first – monetizing content through search related ads. But its record of pulling off further disruptive change since then has been poor. Android is an exception but is Google the real beneficiary there? Samsung benefits. So does Amazon. As do HTC and ZTE.
Google‘s extra-curricular projects appear more designed to boost its information businesses and in cars it might just want the opportunity to organize the world’s spatial information at a deeper level of granularity than it can right now. Can that goal produce a competitive enough product?
What I read into last week’s debate is that people are thirsty for some disruption and opportunity. Sorry, but this isn’t it.
Amazon founder Jeff Bezos starts his High Order Bit presentation. (Photo credit: Wikipedia)
Amazon’s Jeff Bezos has a famously academic rather than business-like approach to strategy. He pressures executives and innovators to write essays and to be thoughtful and comprehensive when taking the podium at his strategy meetings.
He sells products close to cost, if not below. And he invades markets where he doesn’t belong – like consumer electronics at the time he was selling books, cloud services at the time he was big-retail, or devices when he became a publisher.
What we know about Amazon is it breaks the rules. He runs Amazon like a bunch of start-ups. He takes the long view, in contravention of Wall St culture. And he hops around adjacencies in a way that totally ignores the idea of core competency. For strategy read: we do it our way.
And his share price has risen from below $200 to $270 during the past twelve months. Shares rose again after it reported a profit decline this quarter.
Remember those Apple numbers and its subsequent share price decline?
Facebook meanwhile fell again yesterday after announcing a jump in mobile ad revenues -a jump![/entity][/entity]
Trouble for Facebook is the jump wasn’t high enough and it seems to have persuaded analysts that their mobile strategy is not good enough, certainly not when set alongside Google‘s.
Meanwhile RIM has finally shown us its two new Blackberry devices and a revamped branding strategy (it will now be called Blackberry). And it too saw its shares drop.
Nine months ago I wrote that RIM’s problem lay in its lac of strategic options. It seemed to be doing the only thing it could be doing. And herein lies the challenge for RIM, Facebook and a host of other companies, including Apple. Either de facto or in appearance, they are now companies that seem tied to one option.
That appearance is not always fair. Facebook has search – yet it’s never going to be a Google, so how strong an option is it? QNX, the OS behind the Blackberry re-launch has interesting projects in cars and healthcare but cars are a small market and healthcare is a difficult one to crack. With Apple we are waiting on the next move – will it be TV? Will it be a different size iPhone (a move that could wreck its reputation for innovation)?
Where are the options that Apple seemed replete with a year ago – maps and location-based services, voice interface, TV, Ads, or you name it because there is cash enough in the bank to do anything?
In The Elastic Enterprise, Nick Vitalari and I made much of this point, that innovation today requires complex portfolio management. We called it the strategic options portfolio.And what we meant by it is that you need innovations you might never use but that you can drop into the market seemingly at will, you need multiple options to keep the market guessing and you need options to prevent the impression that RIM gives of being in a make or break moment.
Successful companies breed options. They don’t always take those options. Sometimes they hold back as Jobs did with the iPad (cautious no doubt after his Newton moment). But what they have are enough options to tune the market to their song.
Now look at Amazon. It is probably the most successful Cloud company out there, is unparalleled in the online business, has taken customer service to a new level, has ramped up its apps market to bring it to the top of the tree in terms of monetization, within a year of launch, is in the device business with maybe a smartphone soon and leads the way in crowd labor.
Amazon has also taken over from Apple as the leading ecosystem management company. A lot of what Amazon does is encourage other businesses to build on its platform, so the crowd community builds around Mechanical Turk, Kindle fire and its apps market attracted developers very quickly, its Cloud services power SaaS businesses, in publishing Amazon is a key enabler of the little guy, the promise Jobs made soon after the iPhone launched.
All this is important because we are now in a peer economy. More and more the cornerstone company is a platform for its peers, to do business.
Elsewhere I’ve called the underlying expansion strategy radical adjacency and the only other company I can think that is mastering it at this level is Samsung, which recently launched into ads, has a smart TV in the market, does multiple smartphone lines, is launching its own new OS, and breaks the rules around form factor with Notes . I expect Samsung will move into content soon.
The point about these two companies is they never get stuck with one option, or the appearance of one option. They have multiple options, all of which appear deeply credible. And certainly in Amazons case the line running through all its actions is its peer group and the advantage Amazon brings them.
Go 50 (Photo credit: Wikipedia)
This time last year I published a list of the top 50 social media power influencers as measured by PeekAnalytics. The list had some surprising names, some omissions and the usual heroes.
Over the past few weeks the original article has had several thousand new readers, a few of whom have contacted me about the list. Time to update it, with your help I hope.
I’m going to update it during February and I would like readers to contribute names of bloggers and influencers they think should be on the list. Please remember to add the Twitter handle.
Some baseline conditions. The idea is to discover those people who are most influential about social media. There are plenty of people blogging about a hundred different topics who have influence but the list will be those who teach, advise, opine and influence around social media and social business.
It’s important, then, to nominate people who are creating original content, not just people who curate on Twitter.
Last time out I excluded corporate bloggers because they would not necessarily be strong on social media itself. But this time please propose away – I will create a separate list. I’ll also create a list for PR influencers.
Once again I will use PeekAnalytics metrics. Once we have that list we can think about some form of public vote or perhaps a discussion around its validity, to adapt it, if consensus is at all possible!! But the initial list will be totally objective (based entirely on the numbers).
Last year I did most of the leg work because I was interested in finding out who the algorithm says is most influential. It would be truly great if you could help with your suggestions this time around – please put nominations in the comment box please. Bear in mind that the bar is very high. Power influencers have very large followings across all networks – and this metric focuses on the strength of those networks – particularly how active they are.
There has to be a deadline of course – three weeks from now, the 20th February.
To keep up with the project follow me on Twitter @haydn1701
Social network (Photo credit: Wikipedia)
Anybody who has spent more than a minute sweating over their online social networks needs an answer to this question. In fact when I began thinking about it I came across some pretty sad literature of young people shamed by their lack of Facebook friends.
Friends are important but I was thinking more about professional friends, colleagues, contacts. And asking myself: Is the emphasis on growing our network of connections blinding us to the value that people can bring to our careers?
If you are in a profession that requires distribution (journalism, marketing, sales) then the more contacts the merrier. When I look at my 800+ LinkedIn connections though, I start to feel uneasy. What is this thing called connections? The best definition I can come up with is contingency list – in case they might be useful.
A couple of years back I gave up my smartphone so that I could become more focused. This year I want to focus my list of connections down to those that matter, the ones I can help and who can help me, people who are good at paying forward and who have some wisdom to impart.
I got talking on this issues last week with Jason Womack who provides companies and individuals with advice on productivity improvement and is the author of Your Best Just Got Better.
Jason contends that, yes you really do need friends and they really should be influencers, so some of the concepts of online social media are useful for how we see our broader professional circle. But they should be your personal influencers. And we need to be quite clear about their role. Your social network is there to help you to make good decisions.
To make good decisions you always need advice, and you need people whom you trust if they are going to influence your decisions. Looked at this way your personal social network is quite small.
Five is the most you need for any one issue you are trying to address, says Jason. Three is better.
Of course that is not going to win you a whole lot of peer kudos. Jason’s contention though is that if we are to improve the way we do things it’s the people you invite to help you make key decisions who really matter. The rest are a combination of casual friends, passing contacts and, let’s face it, sales lists.
I once interviewed Phil McKinney, former HP personal systems CTO on the same subject. Phil uses 40 as his magic number. That is 40 people that he has regular contact with, people who mentor him and people whom he mentors.
Phil is a high achiever, so I won’t argue. Yet I find 40 a ton of people. In fact if I am truly honest, five seems to me to be about the limit and I’m still searching for number 3.
You can keep up with my posts by following me on Twitter @haydn1701
Image via CrunchBase
Samsung’s AdHub launched last year to very little fanfare. In fact most observers seemed a little puzzled. An Asian electronics manufacturer providing a platform for ads? Isn’t the convergence of technology and the creative professions the kind of innovation we are supposed to do?
And think, arch convergence culturist, and main competitor, Apple has struggled with its own ads’ network, probably grateful at this stage that it doesn’t get too much press. Apple Insider carried a critique a year ago:
A report by the Wall Street Journal describes iAd as being a disaster, saying that advertisers’ “response so far has been tepid,” and complaining that marketers are turned off by iAd’s “high price tag” and “Apple‘s hard-charging sales tactics and its stringent control over the creative process.
In 2012 Apple reduced the minimum buy on its network to $100,000 and increased developer revenues from 60 – 70% but the Apple way seemed to irk the ad community.
iAds has not been a succcess, and arguably AdHub won’t either. But Samsung start with a distinct advantage, with a strategy that is looking ahead to HTML 5 and TV, as much as it is to mobile. They have also invested in OpenX Technology, the platform that integrates the different ad options:
OpenX products, including OpenX Enterprise, OpenX Market, OpenX Lift and JumpTime provide a unique Software-as-a-Service platform by combining ad serving, an ad exchange, a Supply Side Platform and content valuation.
According to OpenX CEO Tim Cadogan, with whom I spoke last week, OpenX served 4 trillion ad impressions last year, not a bad basis for Samsung to show the way in cross platform ads. The company’s main driver is to serve real time ads on mobile devices. Samsung had an additional requirement – serve them also on TV sets.
Samsung AdHub empowers advertising across various platforms, reaching audiences wherever they are from mobile, tablet, TV and beyond. Samsung AdHub empowers marketers to easily build highly engaging marketing campaigns. We deliver ads that are more relevant and interesting to the audiences and boost monetization for all stakeholders from agencies to publishers.
Los Angeles-based OpenX opened its doors four year ago and already has revenues of $150 million, doubling its staffing in 2012 to 260.
From Samsung’s point of view, however, the interest in OpenX seems to be to steal a march on its rivals by allowing advertisers to create a seamless advertising message across smartphones and TV sets, an objective that its new Tizen OS will hep further given its support for HTML 5.
Meanwhile we are still waiting for the next installment of Apple TV.
As Apple stalls, Samsung is pushing Tizen as an alternative to Android, which means the mobile OS and cross-platform advertising could shape up very differently by the end of 2013 than it did at the end of 2012, all of which means the time is now right for a supercharged ads platform.
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CHIBA, JAPAN – SEPTEMBER 16: Visitors look at game titles for Apple Inc.’s iPad tablet computers and iPhone mobile handsets during the Tokyo Game Show 2010 at Makuhari Messe on September 16, 2010 in Chiba, Japan. (Image credit: Getty Images AsiaPac via @daylife)
How much of a self-fulfilling prophecy can the decline of Apple‘s stock price become? From $700 to the mid $400s, Apple is clearly losing ground even as analysts continue to support the stock – the majority of analysts tracked by Yahoo Finance retain buy recommendations with a mean target price above $600. Expert investment opinion is not the problem.
Something else is going on, akin to a run on the stock. Only the world of social media could inflict this damage.
There are also dangers for Apple within the expert community, though. While tech commentators want to see more innovation and damn Apple for not delivering, the analyst side clamors for a different kind of change:
Investors who bought the stock on the way up will be chasing the next hot stock. The company needs to make itself appealing to a new crop of people who’ve never considered the stock, analysts say, by doing what Wall Street wants and doling out more of its massive cash pile in the form of more generous dividends and stock buybacks.
That, of course, could be disastrous for Apple in the long term, as it would involve significant culture change and focus away from the customer, who would see the company dividing its loyalties. This though is also not quite the point. Apple‘s stock price decline is a story foretold. Already a year ago people were complaining online about the stall in innovation at Apple – whether justifiably or not.
And then nine months ago Apple‘s reputation was attacked in a run of negative articles that I summarized here, even as seasoned commentators were looking beyond $1,000.
I contrasted Eric Jackson’s view (Apple to go to $1650) with Edward A. Zabitsky’s,quoted in the Sunday Telegraph (Apple to drop to $270). Zabitsky’s was one of the first times in the iPhone/iPad era that we’ve seen serious reservations expressed about Apple’s business. The process of negative reporting is picking up momentum….
Business Insider yesterday quoted NYU finance professor Aswath Damodaran as having dumped all of his Apple stock. Damodaran said as much in a Bloomberg interview. “I sold because I’m very uncomfortable with the other people who are holding Apple shares right now. The new investors of Apple scare me. They’re momentum investors. They’ve shifted the game. Once stocks become a momentum play, intrinsic value goes out the window.”
Here on Forbes, Todd Ganos speculates: “We warned about Apple a couple weeks ago. The question is: will what happened to gold also happen to Apple? If yes, it would mean a return to $400 per share.” While Nigam Arora had this to say: “The real reason for the swoon is that the stock is over-owned, sentiment is too bullish, and there are jitters over upcoming earnings.” Meanwhile, the Boston Globe reports, it was analyst Walter Piecyk, moving from buy to hold that broke Apple’s run. Piecyk worried about carriers ending their subsidies of iPhones. And here about the risk to Apple’s business model.
By the way, Samsung has some new content initiatives that I hope to get round to writing about this week but go here to OpenX for a preview of Samsung’s move into mobile advertising.
Although there has been a lot of focus on Apple‘s mis-steps on technology like Maps and Siri, I think it’s biggest problem is its reputation management. Though some readers have accused me on being anti-Apple I have tried to be pro-understanding and my biggest concern is the impact of social media on reputation.
Online sentiment turned against Apple way before its share price began to slide and I’ve tried to make the point a few times that it is change in the information layer that could be hurting Apple the most:
The rise of “write what they read”. Over the lifespan of the iPhone the information layer has changed. No longer does it have the appearance of objectivity in the way a CNET tried to create for the WINTEL era. A new information dynamic is taking hold. Increasingly writers will write what they see people read about. Every writer needs an audience and it is useless to write on topics that have low appeal. That is a big booster for a company like Apple. Or it was. But now Apple is a magnet for writers with a wider variety of opinions, negative as well as positive.
I wonder then whether purveyors of opinion in the new information market will drive Apple down further, perhaps as low as Zabitsky’s $270 for no better reason than it is out there?
This is a serious development in how information is originated and conveyed. In the old days of the press we had press commissions, people’s editor, a long established objectivity ethos, and other ways to contain opinion within some kind of bounds. This is a different world, yet Apple has been reluctant to step up as a social media participant. I wonder if its shareholders are now paying the price for that or whether there is time for Tim Cook to change.
You might also like to read: What’s really going on at Apple.
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Alex Ferguson, manager of Manchester United F.C. (Photo credit: Wikipedia)
I was delighted to read Mike Ozanian’s piece yesterday that Manchester United had become the first sports club, globally, with a $3 billion valuation. I’m a long-time fan of Man U, and like so many of us cannot possibly get or afford a ticket. A couple of times I had to walk away from the ground with my children because it was too expensive with the touts.
There are some great lessons from Man U, anyway, lessons in how the club grew its influence and how it stays on top.
#1. Manufacturing global appeal. Manchester United have long had a policy of buying players from around the world, from markets where the appeal of soccer is growing, and markets where the fervor is hot. The team has players from Brazil and Portugal (is looking to Spain right now), Japan, the Netherlands, often taps the French league, and until recently from Korea. Manchester United know how to use the transfer market to build a global audience.
“During the 2010/11 season, our games generated a cumulative audience reach of over 4 billion viewers, according to the Futures Data, across 211 countries.” They average an awesome 49 million viewers per game. Their Facebook page has 30 million likes.
For a club representing a small(ish) city in the north of England they have incredible local traction around the world, because they embed themselves through local player affinity.
#2. Quiet, consistent innovation. Manchester United rarely trumpet the innovations that go into being consistent champions but were among the first soccer clubs to put data at the heart of player selection and management, having learned from Milan about the benefits of player longevity. For example, they began using GPS player-tracking in 2010. Weirdly, too, they have been one of the first clubs to adopt old fashioned spiritual exercise regimes. Long time player Ryan Giggs attributes his longevity to yoga, which he took up as a way to manage a career-threatening hamstring injury. They are currently building a £25 million sport science center. The Club rarely sits back on its reputation.
#3. The long view. Manchester United has a special relationship with age. It looks as though two of its key players are likely to keep going until they are 40 (Ryan Giggs and Paul Scholes). This is unheard of in the modern English league which has a horrendous burn-out rate. The manager, Alex Ferguson, is more than 25 years in the job, a second surprising longevity stat. But Man Utd take the long view even further. They have regularly bought up players in the twilight of their careers – Teddy Sheringham, Laurent Blanc, maybe soon Iker Cassilas of Madrid and Spain, or Frank Lampard of Chelsea, to provide experience and balance and to demonstrate professional ethics to younger players.
#4. Leadership and ethos. Manchester United blend leadership and ethos seamlessly. The ethos of the club is to entertain, and has been since 100,000 people lined the banks of the club each week in the 1950s. Club legend Bobby Charlton, in his autobiography, tells of how the club sent him to work in a local factory when he was a club apprentice, so that he could understand what it meant to people in routine jobs to get their release from their local team at the weekend.
I have visited houses in the area around the club where evidently poor people collect every video available from Man U. They too cannot afford tickets but love the values of the club. Leader Ferguson has an insatiable desire to win but to win well. There is a Manchester United way that resonates with its followers. He is also completely in charge. Studies of companies with stock market listings have shown that dispersed ownership dilutes managerial control. Not in the case of Man U.
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English: Map of Emerging Markets (Photo credit: Wikipedia)
I got talking with Scott Anthony yesterday, managing partner at Innosight, the innovation advisory firm founded by Clayton Christensen. I asked him for his take on the most important attributes of leaders in companies that innovate.
We were specifically talking about companies in Asia – Scott is based in Singapore. These leadership attributes are applicable anywhere but the interesting feature of them is to compare and contrast US vs Asian leadership attributes.
Here are the three top attitudes or behaviors in companies that he regards as innovative. They’re the ones that make the difference between succeeding and failing, often in the tough business of disruption.
#1 Long term thinking.
There is a stereotype of the Asian innovation leader, the willingness to take a long term view instead of being driven by the quarterly reporting cycle. Scott’s experience of this – throughout India, China and the Philippines, is that it is true and it is effective.
Maybe that’s what we’re seeing with Apple right now, an ability to see the long term and a determination to see the vision through.
#2. A global outlook.
Asian executives are taking a global outlook, something I drew attention to here. They are entering other developing markets – and they spend time in other markets. Many have spent school time in the west, for example, but if not they make sure they get direct experience. And they are attempting to create a blend of East-West cultures. Lenovo is an example of that. The company makes an explicit virtue of this global outlook. You can read about Boston Consulting Group’s account of emerging market challengers in this earlier piece.
I think GE are in this category, among others of course. But western companies still see “global” as an extension of their market rather than a collection of distinct, new requirements.
Here is the trickier attribute. Scott says in general Asian leaders have not yet learned how to moderate their behavior, strategy or outlook in the light of market surprises. This lack of experience with the market currently, gives them a sense that they are more in control than they actually are. They don’t have it but many western leaders do – though I am not so sure about that!
Scott’s warning is that these companies are coming after global markets with attributes lie long-term thinking and a global outlook well embedded in their practices. Add in some more creativity and they are going to be formidable.
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SAN JOSE, CA – JULY 30: A sign is posted in front of a Samsung Electronics office on July 30, 2012 in San Jose, California. The trial in the Apple Inc. and Samsung Electronics Co. patent battle begins today at a San Jose federal courthouse to determine if Samsung illegally copied technolgy used in Apple’s popular iPhone and iPads. Apple is seeking $2.5 billion in damages. (Image credit: Getty Images via @daylife)
The most impressive part of Samsung’s earnings over the past quarter is a rise in profitability of 76%, or maybe it’s the doubling of smartphone profits.
A close contender for achievement of the year, though, is the sheer volume of smartphones sold by Samsung. According to Strategy Analytics, “Samsung’s 2012 shipment volume was the largest number of units ever shipped by a smartphone vendor in a single year.”
Apple profits, announced yesterday, were more or less flat, prompting further coverage today of Apple‘s declining innovation leadership.
Earlier today I wrote about the most important aspects of innovation - the one thing you cannot do without in innovation is strong, committed leadership. Is Apple‘s overdependence on its narrow range of products a result of leadership hubris or fear? That’s now a consistent theme in commentary.
Samsung’s strategy is to see what the market likes best. It’s an overblown version of lean innovation.
In the past 12 months it launched more than 35 new and variant mobile devices. The Galaxy S III and Note II are selling well but it seems to be Samsung’s willingness to hook into customers across their range that also drives the business forward (I touched on the need to broaden innovation capabilities here, in the Elastic Enterprise). The S III however was the main driver of profits.
Interestingly Samsung sees significant change in the shape of the smartphone market this year. They expect to see a decline in momentum in developing markets but an increase in demand in mature markets to the west. The reason is – lower prices for good smartphones.
That does not sound good for Apple which has held out against a cheaper iPhone so far.
Coverage of the Samsung earnings announcement is making a lot of the Samsung – Apple comparison and in general sounds a sour note for Apple:
The rapid growth stands in stark contrast to rival Apple, which saw sales stagnate, and underscores the scale of the challenge facing the Californian iPad and iPhone-maker. Samsung, which overtook Apple as the top smartphone producer last year, said that the popularity of its Galaxy smartphones helped it to surpass analyst expectations and post a 7.04trn won (£4.1bn) profit.
A consistent theme here on ReThinking Innovation is Apple‘s requirement for better management of its reputation. I don’t recall ever seeing as much negative sentiment around the company.
You might also like to read: How the Apple vs Samsung Litigation Hurts Apple
Or this piece on Apple’s faltering reputation management.
Follow me on Twitter @haydn1701
While I was editing innovation management, I got to see just about the whole range of opinions on what made for good innovation. The problem was, those opinions kept coming round and round.
The techniques, the motivation workshops, the imploring of people to be more innovative. But there didn’t seem to be much consensus in these techniques, consensus on what really made innovation work. I used to ask myself could we all, ever, agree – what are the essential ingredients of effective innovation – or were we just going to keep passing around opinions?
Scott Anthony at Innosight believes there is such an ingredient – more of that below.
In fact there seems to be a paradox at the heart of innovation because while a lot of companies ran up a flag saying “we are innovators”, those same companies often allocated pitiful resources to their innovation departments. I believe that is changing but it is still a big problem executives pay lip service to innovation.
I remember talking to one company with a huge public commitment to innovation whose innovation department was staffed by two people – whose innovation duties were in fact only part-time.
Innosight is the innovation advisory firm founded by Clayton Christensen, and Scott Anthony, managing partner, yesterday told me that he thought there really was one real essence of innovation, the factor that you can’t do without.
“We know enough about innovation to know how it should be done,” says Scott, over Skype. “So if it isn’t being done properly there’s only one explanation for that.”
And the explanation is leadership. Now on the face of it that might sound trite or banal. But the fact is, in many companies, leaders do not commit to innovation. They let a willing executive set up an innovation department and they OK a culture change program and they starve both of resources. So the very think many companies need tends to be the one they avoid.
And innovative companies need leadership that not only commits the resources.
“What allows companies to be great or mediocre is the leadership and the willingness to be misunderstood, for years if necessary. I haven’t seen a great innovation that doesn’t have leaders who are committed” says Scott and to underline his point he adds: “Any company that thinks it has an innovation problem in fact has a leadership problem.”
Proctor and Gamble under AG Laffley grew an open innovation department that P&G staffed with 30 people, based around the world, and committed to the various tools needed to seek out experts, innovators and networks wherever they might be.
So is there a way to summarize what leaders need to bring to innovation?
#1. Resources and commitment. The P&G example, in my experience, is unique in the extent to which they commit resources to open innovation, the process that changed their innovation culture. The CEO, Laffley embodied the spirit of innovation too, making it an imperative for his senior team. I guess what Scott is also saying is that any excuses around innovation should just not cut it. We know how to do innovation and if internal talent wont do it – hire in. There are no excuses.
#2. Being prepared to be misunderstood. As Scott says, good innovation leaders are prepared to be misunderstood while the market catches up with them. They take the long view and stand up for it.
#3. Humility and avoiding the favorite baby syndrome. I also hear from innovation folks how often a senior executive can screw up their world by having a favorite project, one that gets the resources and fattens up its staffers. Some humility from leaders, to let the internal crowd have its say is important. Time and again people inside organizations tell me thy know what is wrong but have no way to convince senior leaders how to fix a problem.
#4. Living with more chaos. This one I’ve heard from leaders themselves. the most difficult part of innovation for them is often knowing that their people are on a problematic course but knowing also they need to find this out for themselves. The new buzzword is “setting the guide rails”, so as long as their people are inside the rails there are times, even difficult times, when leaders need to stand back.
#5. Lean. In fact I also believe these qualities are perhaps becoming outdated. Lean innovation is a way round the challenge of getting leaders to take innovation seriously, so it’s not quite a quality of leadership but in time a commitment to lean processes might be.
I’d be interested to hear your views on this. What are the main characteristics of innovation leadership?
Folow me on Twitter @haydn1701