Ignite Princeton 2 – 4 minute recap

For those of you who attended Ignite Princeton 2 at the Nassau Inn in Princeton, New Jersey on Wednesday February 9 – Thanks! It was great to see and great to have your support for a fun local event. Thanks to the people who traveled from near and far to participate and present. Without your involvement it wouldn’t have been half as good. A little video recap to share with you…

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What the US jobs picture says about the need for innovation here—and abroad

Periodically, we revisit the aftereffects of the “Great Unpleasantness” and how they are playing out in the global economy. One of the challenges in drawing conclusions based on macro-economic data is that it hides profound local consequences in the shifting of percentage points. In most first-world nations, the current game is watching the unemployment rate. A tick up a few tenths of a percentage point, and the hand-wringing and gnashing of teeth commences. A few ticks down, and a corresponding sigh of relief—if not mild euphoria—in the media is exhibited. Unfortunately, the focus on this sole metric is of little value, as it provides little insight into deeper fundamental challenges at play.

The recent unrest in Egypt resulting in the reluctant relinquishing of power by the former-President-for-Life Muhammad Hosni Sayyid Mubarak is in large part due to rising unemployment and economic disenfranchisement among the educated youth. Strangely, the reported Egyptian unemployment rate of 9.4 percent was a near-perfect match for the USA’s at this time, yet there is no protest marching in Washington, D.C., or any other US city for that matter.

A possible reason for that difference is that in the US, there still exists a hope that job growth will come, that the current economic downturn will end, and that people still retain the freedom to reinvent themselves in order to better their present circumstances. This positivity may be the result of the wide range of people affected by unemployment stretching across demographics and therefore not finding commonality among local peers, or the usual buoyant “can-do” US attitude. The current long-term economic outlook would tend to contradict positivity.

It’s a recession when your neighbor loses his job; it’s a depression when you lose yours.
Harry S. Truman

This is partly due to the depressing news presented to us by those we know and love struggling to come to terms with long-term unemployment, especially among the approximately 7 million people who have joined the 99 Club in the USA: people who have termed out of the available unemployment benefits. They represent slightly less than half of all unemployed…

Source: Bureau of Labor Statistics

The unemployment figures don’t take into account a larger swathe of people. The current figure under-represents the chronically underemployed (those working multiple part-time jobs) or those who are contingent (both seasonal workers and contract workers to whom unemployment benefits are unavailable). While the reported unemployment figure of 9.4 percent converts to 14.5 million people, the true picture is closer to 26 million, when the 2.6 million people marginally attached to the workforce are added along with the number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers), which was at 8.9 million as recently as December 2010.

The hole we must innovate our way out of is a lot deeper than most people recognize. Except, perhaps, for the people at the bottom of it looking up. Where does this leave us?

Dig and ship versus design and build
We must start with the reality that corporations cannot guarantee anyone a lifetime job any more than corporations have a guarantee of immortality.
John Snow

Jobs have gone. It’s not that they have been left unfilled, simply awaiting an economic turnaround. The jobs have gone, never to return. Whether replaced by technology-created efficiencies or exported to lower-cost economies, old mainline manufacturing jobs and data processing jobs have disappeared. The auto industry in the US is probably most emblematic of the shift in the US economy. Take the rapid bankruptcy or near-bankruptcy induced reduction in the number of vehicle models in production. This reduction had a cascade of effects up and down each auto manufacturer’s supply chain, from design and raw materials sourcing through to delivery, sales, and distribution—the number of people required to bring products to market has been significantly reduced. Those jobs are not coming back.

One reason is that local economic factors are tied to global economies now more than ever. Chrysler’s part ownership by Fiat means that cars that would have originally been designed in-house are now shared as platforms across the entire Fiat/Chrysler network. Similarly, General Motors has availed itself of the cover of bankruptcy to increase its investment in global partnerships, perhaps best represented by the success of GM in China. This is represented by the Chinese-designed Buick Lacrosse in the Chinese auto market, where it’s considered a direct competitor to BMW and Mercedes Benz as a luxury vehicle. It’s also seen in the manufacturing joint venture SAIC-GM-Wuling Automobile, which successfully sells minivans under the Wuling badge.

The offshore manufacturing of US brands is also symptomatic of a greater shift. Brands may reflect national origins, but their point of manufacture may be many thousands of miles from their “home.” The only jobs that seem to be staying put are those that cannot be moved: resource extraction (minerals, metals, and ores), domestic food production, and direct support services (such as trucking, healthcare, hospitality services). The US economy is sliding into a mode in which it provides raw materials to other resource-hungry nations, exporting low value-added ingredients for what will eventually become consumer goods that it will turn around and import. Either that or we’re becoming the Vanna Whites of the global economy.

It’s not the most intellectual job in the world, but I do have to know the letters.
Vanna White

Recapturing and fostering the spirit of design and build is a necessity if the massive unemployment is to be addressed in any full measure. Which is the whole point: this is a spirit not to be created, but reinvented and restored to the heart of the US economic engine.

Exporting hope
The best way to appreciate your job is to imagine yourself without one.
Oscar Wilde

One of the other factors influencing the US jobs situation is the very same “can-do” attitude that kept it ticking over for so long. The problem is that now, given the US’s wholesale exporting of its culture via consumer products, TV, film, and the Internet, that “can-do” attitude has been exported, too. Most recently this has been reflected in a book by Anand Giridharadas, India Calling. Based on his own search to discover his roots as a US-born child of both Northern and Southern Indian parents, Giridharadas recounts the way in which a brain drain of talent is gaining momentum, where Indians are returning to India as they see greater opportunities there than are available in the US. In essence, the US has begun exporting hope.

Previously, the United States was seen by the entrepreneurial as a promised land. For those with the ingenuity and the willingness to apply themselves, the sky was he limit. The best and the brightest came from around the world to attend its universities, and many stayed, helping to build some of the biggest and most high-performing companies in the world. In recent years, however, the desire of university graduates to stick around has diminished. Yale University professor and immigration researcher Vivek Wadhwa has discovered that many foreign-born workers in high-tech industries are returning home or contemplating such a return. The reasons for this are many, including better economic prospects or job opportunities. That the US, and other developed nations, have seen only recent anemic economic growth compared with developing nations like China or India is not lost on young entrepreneurs or individuals in the early stages of their careers.

The US is no longer seen as the only place to forge a future for oneself, because it has done such a phenomenal job of exporting its value system to the world. Not necessarily the values of consumerism and voyeurism, although they have been exported too, but primarily the values of hard work, self-reinvention, and yes, innovation. Which leads us to the US response.

Sputnik moments
Job security is gone. The driving force of a career must come from the individual.
Homa Bahrami

In his most recent State of the Union address, President Obama noted that this is the time for another “Sputnik Moment” for the US, a time during which there must be sharp realization that complacency and half measures simply will not have the desired effect:

…The only way to move to full employment is to lay a new foundation for long-term economic growth, and finally address the problems that America’s families have confronted for years. We cannot afford another so-called economic “expansion” like the one from last decade—what some call the “lost decade”—where jobs grew more slowly than during any prior expansion; where the income of the average American household declined while the cost of health care and tuition reached record highs; where prosperity was built on a housing bubble and financial speculation…

… You see, Washington has been telling us to wait for decades, even as the problems have grown worse. Meanwhile, China’s not waiting to revamp its economy. Germany’s not waiting. India’s not waiting. These nations aren’t standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They are making serious investments in clean energy because they want those jobs.

The US economy, for so much of the last century the bulwark of the global economy, needs revitalization. In thousands of businesses large and small, the path to success lies in creating space for the millions of underemployed and unemployed, so that these disenfranchised can add their intellectual weight to the economic transformation that must take place. How can we grow, smartly, wisely, and in such a way that we don’t need to strip jobs out of our enterprise every time there is a hiccup in global trade? We must find a way to make innovation not an addition to our enterprises, but the engine at the heart of what makes us successful. We have done it before. Others have learnt from that success.

We must remember what we have forgotten and get busy.

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New from Primed Associates – Primed for Innovation Issue 1

Primed for Innovation Issue 1 - The Innovation Ecosystem

Primed for Innovation Issue 1:

Welcome to Primed for Innovation a primer on things to consider when you are interested in improving your organization’s approach to innovation. The following topics are offered as thought starters. [Read more…]
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The Entrepreneur Equation by Carol Roth

Are you ready? It’s such a simple question. When asked of the would-be entrepreneur inevitably the answer is an enthusiastic, “Sure!”, or, at the very least a more tempered, “I think so.” Contained within that one question is a whole universe of variables that business strategist Carol Roth seeks to unfold and hold up to the scrutiny of common sense and rationality in her book, The Entrepreneur Equation, which I was lucky enough to receive as an advance copy. Styled by her friends as the Lucy Van Pelt of the business world, Carol offers her assessment of how people should go about determining whether or not they really want, need or should be entrepreneurs.

Half measures are not an option and often, in the world of entrepreneurship, end in disappointment.

Seeing a book like this, questioning the basic foundation of the “can-do” ethos that powers so much of the spirit of enterprise in the USA, coming to the market at a time when small business is being touted as the savior of the economy, is a testament to Carol’s personnel commitment to supporting excellence and success. Certainly the advice it contains seems to fly in the face of conventional wisdom. But isn’t that what has been said about common sense – it’s not that common.

With over 90% of all entrepreneurs losing some or all of their investment within the first five, perhaps taking a closer look at the attitude and effort it takes to make a business work is warranted?

To call Carol a pragmatist would be to understate her willingness to address some fundamental flaws in the ethos surrounding building a business. With the enduring love affair between business and innovation, Carol’s approach is to dispel the notion that anyone with an idea could or should be in business for themselves. She focuses on the idea that a passion does not make a business and that an invention is not a business model. If a business is not desirable, feasible, or viable, it should not exist. Carol’s goal is to provide her readers with a useful set of assessments to determine whether they have the right idea and the right fit to create a business from the ground up.

This is not someone who hides her recommendations in a cloud of jargon or confusing “consultant-speak”. Carol calls it like she sees it. A hobby that you turn into a job is a “jobbie”; the call of the new, a business idea that will break you out of your everyday and perhaps hum-drum existence, is targeted at “The Shiny New Thing Syndrome”; and the bottom-line to Carol’s advice, she’s the friend who tells you that you have “Spinach in Your Teeth®”. It is rational, accessible, witty advice delivered in a frank and concise manner.

In reading Carol’s insights, I often found myself laughing at my own choices and furiously scribbling down notes to help me tighten my approach. The wisdom she shares from her own experience, and the experiences of others she taps into frequently, help make this book a great, low cost, low threat tool for assessing yourself and your ideas before you spend, and perhaps waste, a good deal of time, energy and effort. The best part about how Carol presents her ideas is how accessible she makes that advice. The “Personal Brainstorm” that concludes each chapter is only one of the many ways she makes her advice tangible. Which is what she is all about. Carol was, in her words, compelled, to write this book to help others.

To that end, Carol has partnered with the national non-profit organization SCORE, to help with their quest to create 1 million successful American businesses by 2017.

If your friends won’t tell you your business idea is no good, why not use Carol’s tools to conduct your own self assessment? After all, if The Entrepreneur Equation saves you from yourself, or better yet helps you to make a better business, Carol Roth may be the best friend you never met.

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Finding the right box—innovation success is constraint-based

Some people are shoppers, some people are spendthrifts, and some people are hoarders. The same can be held true for companies. Some companies are acquisitive, some are profligate, and some hoard resources. There is a special breed of company that chooses to hoard intellectual property—whether they use it or not—or hoards data without thinking about its purpose. Information is only useful when used, and much of it has a surprisingly short shelf-life. A company that is demonstrably hoarding, Generate Company—an innovation-focused consulting firm based in Minneapolis, Minnesota—has taken to hoarding innovation processes. Not happy with creating and disseminating their own processes, they are now collecting them on a grand scale and brokering them. The end result is an innovation database with the superlative title “The World Database of Innovation.” Thank goodness they are not driven to hyperbole.

Setting aside the relative value of such a database for the time being, one very interesting piece of information has bubbled to the surface as a result of this information hoard. It seems that among the 163 different processes for innovation that have been accounted for thus far, common to those that have verifiable data points is that constraints are a significant factor in success. Based on their analysis of the information in their database records, scarcity of resources shows up as the single strongest driver of innovation within organizations in general. The power of constraints raises its head yet again.

Not all constraints are the same
The problem is all inside your head
She said to me
The answer is easy if you
Take it logically
I’d like to help you in your struggle
To be free…
There must be fifty ways
To leave your lover

Paul Simon “50 Ways to Leave Your Lover”

For most organizations, the definition of constraints is usually confined to time, cost, and resources, but there are two other more powerful constraints to be considered at the outset of any innovation efforts: 1) constraint created when we define the challenge we will address, and 2) the constraint created when we define the opportunity we will target. These constraints are anchored in the strategic intent of our organization and in our will to achieve that intent. They lie at the intersection of what we want to do and what we will actually do. This intersection is often a gray area in organizations, filled with miscommunication, poor decisions, and limited attention spans.

Where most organizations get wrapped up in attempting to balance their competing operational constraints is in the direct management and enforcement of the imbalance among constraints, where much of innovation lies. The simple fact remains that if any one constraining factor changes, at least one other constraint will be affected. If the schedule for development is shortened, then the budget will likely need to be increased. If additional features are added, then the risks associated with releasing the product to market will increase, too. Each choice we make is a reflection of the associated constraints within which we manage. But a constraint is also something we can react against. A constraint can provide a foundation for pushing us in a new direction.

An artist faced with a blank canvas, access to all the materials and colors of paint she could possibly desire, and as much time as she wants, will likely find herself unhinged by the freedom if asked to paint whatever she chooses. The range of outcomes is infinite in this setting. If a single choice is made, however, such as a determination on who the painting is for, automatically provides the artist with a frame of reference within which to work. Regardless of the subsequent choices she makes, that first choice of constraint by the artist will directly inform all subsequent outcomes and her eventual success.

Powered by the right constraints
The only way to discover the limits of the possible is to go beyond them into the impossible.
Arthur C. Clark

The same can be said in product or service development when there is an ill-defined customer or market. In this situation, the product development team, or innovation group, will find itself floundering. Without a clearly defined customer, there is no one to build for, no problem to define and design against, and no way to assess whether or not you have successfully addressed a need. Yet when you look out at the range of products and services available, you might find yourself asking, “Who the heck was this intended for?” The constraint of a specific customer need is missing in action. Design and development efforts disconnected from customer need leads to products in search of a buyer.

A poorly identified customer may wreak more havoc on an initiative than any lack of funds or resources ever could, because it leaves innovation efforts untethered. Without anything to anchor new concepts to, any and all concepts will be satisfactory (or correspondingly unsatisfactory) and the only measure of success will be whether or not the effort is validated in the marketplace through sales. Determining success will be hit or miss, because even the absence of sales doesn’t necessarily mean that the effort is not useful to someone—it simply means that the market was not discovered or defined before an effort was expended.

The absence of a clearly defined target customer also upends the usefulness of managing resource and time constraints. Why bother limiting use when the stakes are so low? Why spend at all? All of which leaves us in the unenviable position of defending the indefensible and delivering the useless. Not exactly the best way to add value, is it?

Joy of constraints
The more constraints one imposes, the more one frees one’s self. And the arbitrariness of the constraint serves only to obtain precision of execution.
Igor Stravinsky

Rather than being dismayed by constraints, those determined to innovate must learn to, if not love, then at least embrace them. By embracing constraints and recognizing the value of limits, the effort to overcome them may yield surprising results. Consider the perennial favorite example of those who have a deep and abiding passion for innovation—Steve Jobs. His intense dislike of buttons (he finds them aesthetically unappealing) has driven consumer product innovation in surprising ways.

Four years ago, prior to the release of the iPhone, Mr. Jobs’ dislike of buttons became something of fetishistic side dish in the hoopla over the game-changing nature of that device. It was perhaps most clearly on display when Mr. Jobs unveiled the remote control for Front Row, the media center software for Apple TV, when he reveled in the simplicity of the Apple remote and compared it on a presentation slide to a large, ugly complex remote with more than 40 buttons. “I don’t know that there has ever been a slide that captures what Apple’s about as much as this one,” Mr. Jobs said at the time.

This dislike led to a design constraint, which then led to some remarkable changes in the accepted way we interact with our personal digital devices. We are moving from hunting and pecking on tiny, ill-formed keyboards to swiping, flicking, and wiping our way into and through the information available to us on our nearly buttonless devices. The contact we make today may disappear into the ether, too, with the fast-approaching wave of gestural input-controlled devices, if the most recent Consumer Electronics Show in Las Vegas is any indication. All because one man with a love of black turtlenecks (if ever there was a design cliché) hates buttons.

Constraints are not our enemy. They are a fact. We can choose to endure them and use them for our purposes, or let them define our efforts in entirely negative ways. Define your purpose in relation to your intended customer and define your outcome in terms of their needs—in so doing, you can move the goalposts and change the nature of the competitive landscape. Make a sandbox of your own devising and discover the creativity inherent in constraints.

How are constraints defined in your organization? How might you make better use of your constraints?

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Resource Acquisition: beg, borrow, steal or bargain, rent, reuse—innovation resources are a matter of mindset

For those coping with the annoyance or pain of resource scarcity, it is required that they go on the hunt. Some people think that in order to get a thing done any means necessary might be used. “By any means” usually causes more damage and heartache than success. Rather than begging, borrowing, or stealing, what if a more expansive approach was adopted? By avoiding zero sum or negative stakes game-playing, a more successful path to addressing the need for resources might be followed.

Neither a borrower, nor a lender be; for loan oft loses both itself and friend, and borrowing dulls the edge of husbandry.
William Shakespeare

Beg or bargain
I wish I could stand on a busy street corner, hat in hand, and beg people to throw me all their wasted hours.
Bernard Berenson

In its most simple form, begging is requesting a donation in a supplicating manner. It places the person requesting resources in a submissive position and creates an unhealthy power dynamic which is not conducive to the spirit of innovation. The issue with begging when seeking resources for innovation efforts is that it devalues both the effort and the outcome. The one-sided exchange that begging represents actually has a detrimental effect on the ability of the team working to produce an innovation, too. It can be demoralizing and can de-energize the pursuit of breakthrough ideas. A better alternative is to bargain, which may mean that the exchange will take on a much more dynamic quality.

Bargaining is an alternative strategy for acquiring needed resources. Optimally, if it costs the provider nothing to engage and allow bargaining, they can position themselves for either present service or future benefit. It allows for capturing hidden organizational or operational surplus as it allows value discrimination, a process whereby a provider can “charge” at a higher rate to those who are most eager (or more desperate) to use their resources. Haggling may be a part of the bargaining experience, but a better alternative is to use a bargaining approach that accounts for and supports common interests.

Integrative bargaining (also called “interest-based bargaining” or “win-win bargaining”) is a negotiation approach in which parties collaborate to find a win-win solution to their dispute. This strategy focuses on developing mutually beneficial agreements based on the interests of the parties providing and seeking resources. Interests include the needs, desires, concerns, and fears important to each side. They are the underlying reasons why people become involved in a conflict, and integrative bargaining seeks to neutralize them by balancing needs across a time continuum.

In this way a resource-poor innovation team can gain access to things that may have been previously unattainable. Another alternative is to “rent” the resource required.

Borrow or rent
A great pilot can sail even when his canvas is rent(ed).
Seneca (rented to fit)

Those of you not on the East Coast of the United States the day after Christmas Day (aka Boxing Day) missed “Snowpocalypse 2010.” At least, that’s what the local news media wanted to call it after over a foot of snow (more in some places) was dropped. To say that it put a crimp in post-holiday plans, for example returning home, would be putting it mildly. And as someone, among many, who had to dig through a few feet of snow to clear footpaths and restore access to pedestrians and automobiles alike, I found myself wishing for a better way.

Regardless of the impacts of global climate change, we can expect to experience about one or two severe storms in a given season where I live. If I was foolish with my money (I try not to be) and in love with loud and expensive gadgets (I have weaned myself off them), I would have taken this storm as a sign that I need to purchase a snow blower. For those of you in warmer climes, a snow blower does exactly what its name suggests. It takes snow from one place and blows it someplace else, essentially making the snow someone else’s problem. Think of it like a wood chipper on wheels or a lawn mower without a bag—in its place is a spout that sounds the snow flying. All good fun.

Snow blower-less, I was left with limited alternatives: dig and keep digging, rely on the kindness of snow blower-owning neighbors to share, or go rent a snow blower for the day. Given that the rush on snow blower rentals was likely high (and I was a day late and a dollar short), the only options left to me were kind neighbors and my own brawn. Thank goodness the kindness of neighbors prevailed and my digging was somewhat lessened.

The choices we face as innovators are somewhat similar when our resources are tight. We can muscle our way through as best we are able. Often the end result is a longer effort and a poorer-quality output. Or we can rely on the kindness of others to provide support or material, but that usually is at their whim or disposition. Borrowing always leaves us open to question. A better choice is to plan for the resource shortfall and respond accordingly by scheduling your rental of the required resources.

More often than not, flexible, time-bound, contracted resources can meet our needs better than we might anticipate. An example of this is the abundance of application development in the App areas on the iPhone/iPad ecosystem, the Google Android Apps Market, or BlackBerry’s App World. There simply aren’t enough developers on these platforms to create the range of apps as fast as desired if they were all to reside as employees inside the companies who want their creative output. Instead, these developers have mostly formed cooperative project teams focused on delivering apps on a per contract basis for third-party clients. They are the quintessential “guns for hire.”

By using this kind of resource, what first appeared as limits are soon realized as assets. You now have access to the latest development methods, you can pick and choose from the best developers in your price point, and you can build new products and services without adding large overhead to your operation. Renting doesn’t seem like such a bad idea now, does it?

Steal or reuse
We won’t even begin to consider building a case for stealing. It is simply an inappropriate (and illegal) method for addressing your resource shortfalls. Instead, we should consider the concept of reuse.

Two recent books have made a compelling case for reuse as a worthwhile pursuit that can certainly fuel innovation. The case they make is not necessarily to address any shortage of resources; mostly it is to prevent the needless waste of resources by acquiring things for which we will have limited use. The first book is Mesh: Why the future of business is sharing by Lisa Gansky. The second is What’s Mine is Yours: The rise of collaborative consumption by Rachel Botsman and Roo Rogers.

Gansky tackles the value of sharing as a way to supplant rampant consumerist tendencies, many of which fueled the recent global credit binge and subsequent (no so) Great Recession. In her view, “mesh” companies use social media, wireless networks, and the abundance of readily available data from a multitude of sources to create goods and services at the exact moment they are needed—and without needing to own them outright. For Gansky, it’s all about helping your customers buy less but use more. She cites Zipcar, the car share program, and Kickstarter, the artist and design funding network, as two models of the mesh principle at play.

In What’s Mine is Yours, Botsman and Rogers explore the changing face of consumerism (which may have profound consequences for those of us in the innovation space—but more on that another time). The authors see a growing dissatisfaction with people who perceive they are being treated as robotic consumers manipulated and made voracious by marketing. They see the beginning of people turning more and more to models of consumption that “emphasize usefulness over ownership, community over selfishness, and sustainability over novelty.” What drives this new behavior is the enabling technology of the internet and social media in particular to create networks of shared interests, a spin on the communities of practice model in learning organizations, and the establishment of trust in unknown people as a viable currency addition to simplify the logistics of collective use.

In both these books we see the early stages of ways in which we can release ourselves from the limits and restrictions forced on us by resource constraints. Reusing resources in new and meaningful ways after they have already had a useful life in another’s hands creates a remarkable abundance just waiting to be tapped.

Which brings us to the key questions: If resource constraints and scarcity are not the major impediments to innovation that we believe them to be, why do we treat them as such? And why beg, borrow, or steal when bargaining, renting, and reusing can get us just as far (or further) without the associated pain?

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Resource Poverty: cash-strapped bootstrapping your way to innovation success

The concept of bootstrapping, to finance your company’s growth with the assistance of or input from others rather than a large capital outlay, has for years primarily referred to startups. Today, with economic pressures continuing unabated (see below), the concept of bootstrapping is being adopted by organizations of all sizes and structures. Resource poverty is the order of the day, and an austerity mindset is being incorporated into all facets of organizational life. The area of innovation is certainly no exception. But things certainly aren’t as dire as the dog’s fate in the old nursery rhyme:

Old Mother Hubbard
Went to the cupboard,
To give the poor dog a bone:
When she came there,
The cupboard was bare,
And so the poor dog had none.

– From “Old Mother Hubbard”

Living in a world of hurt—some features and constraints of resource poor-systems and enterprises.
Characteristics of resource-poor enterprises:
– Meager holdings or access to physical assets
– Little or no capital
– Few market/customer opportunities
– Income strategies are varied and complex
– Complex and diverse systems in fragile environments

Constraints to which resource-poor enterprises are exposed:
– Heterogeneous and erratic environments
– Market failures
– Institutional gaps
– Public good biases
– Low access to land and other resources
– Inappropriate technologies

The challenge is not to conjure the new and improved by plucking elements out of thin air, but to endeavor to use all available resources, especially those previously unconsidered, to produce innovation. The bootstrapper’s mindset is a valid way for business leaders and employees to treat valuable resources at any stage of their business’s growth. Not having many resources also means using what is available in a careful and judicious manner. The measure of successful bootstrapping will be the value created. One of the key traits of this approach is to seemingly turn it on its head and seek ways to frame the current resource situation in terms of abundance.

What does that look like, I hear you ask?

Thinking of abundance
The appetites and passions of man are also modified, making them do and want what is more in conformity with their environing conditions. Each new want limits the field in which old appetites dominated, and the great variety of new impulses soon bring the old under control.
Simon Patten

One of the earliest advocates for pursuing an attitude of abundance was Simon Patten, a professor of economics at the Wharton School of the University of Pennsylvania at the turn of the 20th century. Patten sought to justify his conviction that men (and at that time he would almost certainly, unfortunately, only have considered men) could create and sustain an age of abundance by developing appropriate restraints. He was an early believer in the enforcement of contract laws that were pro-labor, in the limitation of consumer credit and in restraints on speculation.

Patten insisted that progress was hindered mainly by ignorance and prejudice, which could be overcome by a higher standard of living, by education, and by increased opportunity for everyone. This was landmark thinking in its day and went completely counter to the prevailing attitude that scarcity was enduring. For Patten, the basis of an abundant civilization required, in his view, new strategies and tactics for planning and implementing social change.

By thinking of opportunity and educating towards it, Patten highlighted that there might be new ways of conceiving present scarcity that would help transform it. For an innovator, the challenge of creating something new is often in direct response to what is perceived to be missing: a problem unsolved, or a challenge unmet. Accomplishing that end with limited resources means using every ounce of an available resource. Waste is criminal.

Bootstrap in innovation really begins and ends with your attention to careful management of all your resources. It demands that you remain aware of what you spend and keep your overhead low. If you need to buy premium resources or support, it is necessary to justify the expense either by longevity of use or savings elsewhere. It means bartering for goods and services when appropriate and buying items on promotion, to take advantage of better prices offered for a limited time, that will drive your innovation performance. Too many allow resource scarcity to impede their innovation efforts. The better capable innovators are better prepared, primarily because of the choices they make.

Making better choices
It is our choices that show what we truly are, far more than our abilities.
J.K. Rowling

One of the greatest challenges innovators face is making choices about how to spend or deploy their limited resources. Often the reason for this is the uncertainty of the data informing those choices. Some of us make the most of the available data by sorting, organizing, and analyzing it, employing a bit of artful extrapolation to fill the gaps, and then make the leap. Others, not necessarily interested in slowing down for anything, being almost shark-like in their need for forward motion, pause only long enough to recoil and then jump. Often directly into hazards.

One such example of the latter instance was the founder of the company Ear Peace, which sells high-end earplugs for people in high audio volume environments for extended periods, such as band leaders or rock concert-goers. Jay Clark is the quintessential bootstrapper. He developed his designer ear plugs for looks, comfort, and sound quality himself. The only problem came when he needed to place his initial orders—that’s when he created an unnecessary financial scarcity:

Over-ordering inventory. This was the biggest mistake. As soon as you get your first run of product, you are already tweaking it and making it better. Bargain and promise the moon on future sales, and keep the inventory low. On the second order (the blister-packed EarPeace for venues), I over did it.

While Jay was able to quickly recover, and now controls his inventory levels much more stringently, he already knew that one of his greatest resource constraints was himself. He couldn’t be everywhere at all times. His course of action was to ask as many smart people for their opinions as he could. He noted that, “The forest quickly gets lost for the trees when you are in the thick of operational, distribution, creative, and financial decision-making.” He saw that there are so many decisions that make it impossible to do everything alone when you are trying to bring an innovation to market. So don’t go it alone if you can help it. Choose to let others help, and strangely enough, they likely will.

The first steps when faced with a resource-poor situation: Consider where you are abundant with resources and choose wisely how to maximize their use. Where do you have hidden assets that you could be exploiting, and how might you choose to use them differently?

Look for upcoming articles on resource creation and resource acquisition to round out your approach to innovation resource management.

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Resource Re-Creation: think less is more and make more innovation from less

Recycling is not a new concept. As long as people have had “stuff,” they’ve been figuring out ways to re-use and re-purpose it. We visited that topic when we explored bricolage—and dipped into the idea of innovating with what you have. At the time we explored four concepts that help to support a “can-do” attitude when it comes to finding breakthrough uses for existing materials and concepts. This time we are going to dig a little deeper on the first concept—the power of having an intimate knowledge of resources. The reason for this exploration is that increasingly, the notion of “doing more with less” has been replaced with “make do with what you have.”

Our duty, as men and women, is to proceed as if limits to our ability did not exist. We are collaborators in creation.
Teilhard de Chardin

As innovators I think we can reach beyond “making do,” can’t we? How might we push beyond our perceived limits? How might we use what we have to make things that are great?

Taking a different perspective
One of the simplest paths to take involves supporting your organization’s use of existing assets and leveraging them via technology. The application of technology to an existing product can transform it from functional tool to a necessary piece in a business model ecosystem. Consider the Velibe: the Velibe (a contraction of vélo libre or vélo liberté) is the bicycle-share program that was rolled out in Paris, France in 2007. It is a simple concept, offered at various places around the city: bicycles that might be shared among the people of the city, residents and visitors alike. These bicycles are available for rent by the hour or day.

Apart from the challenges involved with capacity management, and yes, the occasional “blue screen of death,” the Velibe program has created a service of value. At the intersection of a centuries-old transportation method and modern billing systems this bicycle share program enables a city to move. It helps reduce traffic for short distance errands, and it creates a ready and reasonable alternative to other forms of transportation. A simple innovation to an existing technology can transform a city.

Another bicycle company, Pi Mobility Systems, has begun to transform the way in which bicycles might serve a wider set of local and longer-distance transportation needs. Pi Mobility was struggling to realize prototypes of its electric bicycles, and the amount of time, effort, and money was exceeding the limits of their resources. It could not afford to build any more prototypes without having a product to sell to offset their costs. The whole enterprise was in a perilous state. Rather than seek additional funding they sought an alternative solution.

That solution was for Pi Mobility to strike a partnership with the AutoCAD software publisher Autodesk, through their sustainable design initiative. Where their previous six prototypes had been achieved at a very high cost due to their complex physical nature, Pi Mobility were now able to use $150,000 of Autodesk software for a nominal $50 fee. Using this, they were able to hold off a physical prototype until just before production, much in the same way that Boeing used the CATIA system (Computer-Aided Three-dimensional Interactive Application) that it sourced from Dassault Systemes and IBM. In Pi Mobility’s case, they found that they could rapidly prototype their electric bicycle online in order to get it to market faster, minimizing the additional risk and cost of physical prototyping.

Using what you know and combining it with the technology or subject-matter expertise of others can help you take your resources further. The same resources, when combined with new thinking, might yield even greater returns. The challenge is to be flexible enough to recognize them.

Build on traditional knowledge—use measured destruction
Every act of creation is first of all an act of destruction.
Pablo Picasso
Another essential trait for better exploitation of available resources is to build on the knowledge we already possess. In manufacturing, it might mean taking an existing product but conceiving of its construction in different forms or using different materials. This might require us to destroy the way we currently perceive the value we create for customers. For example, a team of designers rethought the Coke range of cans by eliminating the need for overly printed surfaces. They killed the flash. The newer designs stripped colors down to two (at the most). Less ink meant lower cost and also a more readily recyclable container. Some enterprising design students, such as Harc Lee, have done away with inks altogether, which may be a step too far for Coca Cola, but it does point to the ways in which an existing product can be transformed via design and innovation. Other beverage firms have begun to follow suit in terms of re-conceiving what they already bring to market.

Consider plastic bottles: like plastic shopping bags, they have become an environmental scourge. Bottle-making practices for years were bound by the need to emulate the hard container styles of glass and metal bottles. With the recognition of a need to produce a product with a reduced environmental impact, Poland Spring developed the Eco-Shape bottle. The recyclable Poland Spring Half Liter Eco-Shape bottle is not only less impactful on the environment, it’s purposely designed to be easy to carry and hold. It is lighter, requiring less energy to make—resulting in a reduction of CO2 emissions—and also requires less energy to recycle. Additionally, the flexibility of the plastic, initially a concern when the bottle was empty, became a non-issue when the bottle was filled. The contents provided the necessary pressure to make the bottle feel substantial.

The microcosm of sub-cultures within the social network in your organization can also yield unique ways to transform your limited resources into something unique and new and, perhaps, game-changing. As well as building on the explicit and tacit knowledge resident in the people within your organization, it pays to pay attention to the communities of practice they represent, too.

The tribe knows: know your tribe
Call it a clan, call it a network, call it a tribe, call it a family: Whatever you call it, whoever you are, you need one.
Jane Howard

One of the fastest ways to reveal and realize the hidden potential of resources you already have at hand is through the social networks that exist in your organization. The social relationships that comprise a present-day organization consist of a variety of subgroups, such as functional teams, project teams, new hires, managers, experts, or communities of practice. It is in the last subgroup that the most tribal aspects of organization life may be at work.

The cliques that form around communities of practice are created by a commonly held belief in a set of operational practices that create value in an organization. They usually comprise those subject matter experts (a core group) most interested in furthering their understanding of their knowledge, and who are often most interested in sharing that knowledge with newer members. Other members of a clique may be ad hoc or occasional members who engage when they have a specific need to address. The value of the tribe is their willingness to share information, knowledge, and collective wisdom that may be completely unrecognized by existing knowledge-management tools in the organization.

It is in their ability to serve as a knowledge-management repository that these tribes can provide significant value to the organization. Their experiences can improve decision-making about when and how to apply scarce resources for maximum value and minimal waste. They can connect needs expressed to potential solution-finders or problem-solvers faster and more effectively than most technology. Better yet, they may be a self-sustaining and self-governing source of ongoing innovation that requires very little in the way of “care and feeding.”

A wise innovator sees opportunities where others believe none exist. In times of severe economic constraint, it is a common practice to reduce the explorative and expansionist tendencies that innovation requires. Leaving little to chance or risk results in little innovation. By seeking to view existing resources with fresh eyes, taking the calculated risks to destroy existing products and services in the pursuit of breakthroughs, and leveraging the hidden knowledge residing in your people, you may find that making innovation with less is not as difficult as you first thought.

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Organization Structures for Innovation – Stop reorganizing deck chairs on the Titanic

Every company has two organizational structures: The formal one is written on the charts; the other is the everyday relationship of the men and women in the organization.
Harold S. Greene

Organization. It’s a noun and a verb. It’s a label applied to any collection of individuals pursuing a perceived common purpose, regardless of how organized they may be. It’s an act designed to bring structure out of chaos and meaning out of confusion. It’s a loaded word. So much rests on the shoulders of organization. This is especially the case when innovation is the desired result of organization’s application.

As its members work together, every group will evolve a structure over time, whether by design or not. Many of the performance deficiencies of a group will often be blamed on individuals, in spite of the fact that performance more often arises from the fitness of the organization structure and its cohesion. By paying attention to the structure of an organization and the roles within it, significant advantages may be created that enable increased group efficiency and effectiveness. Perhaps the most vital lesson for an organization that wishes to become more innovation-capable is that it should create a structure that enables it to flex in response to changing environmental conditions, modifications of tasks, and shifting circumstances.

A challenge arises when we acknowledge that organization design needs to be based on the unique strategy and situation of the organization itself. In the absence of a uniform approach to organizing organizations, what considerations are universal?

We don’t know what we don’t know
If you’re not serving the customer, you’d better be serving someone who is.
Karl Albrecht

One of the most immediate concerns is that all aspects of the organization should be “fit for purpose.” Each business unit, department, group, team, and function should be aligned to the strategy of the organization and should have, if necessary a sub-strategy that directly supports and addresses the key attributes of the overarching enterprise strategy. That strategy should have as a primary target the customers the organization is designed to serve and a plan of how it will serve them. Without a clearly defined and universally understood strategy, an organization will grow haphazardly, accommodating distractions that come into view rather than focusing on specific goal completion.

Strategically focused organizations become useful backgrounds against which capability gaps and confused or absent roles may be identified in the context of the other enterprise variables necessary for innovation success. This might be knowledge management systems, business processes or even leadership attributes. If a clear strategy is in place, an organization’s leaders should ask some of the following questions to understand whether the organization should be modified or restructured:

  • What’s the nature and degree of innovation-related interaction among a group’s participants?
  • What is the geographic distribution of an innovation group?
  • Given the innovation objectives and limits, where does autonomy reside for the innovation group (internal, external, adjacent)?
  • How is coordination achieved?
  • What is the best structure for the present?
  • How can we best accommodate structure changes in the future?

The answers to these questions may determine clear next steps, which may include asking additional, deeper questions. This self-examination creates the capacity for an organization to create spaces into which sub-strategies, in support of the overarching strategy, can be embedded.

The critical component in this exploration and the eventual decision-making around organization structure is communication. Communication is critical so that the front line is aligned with the bottom line. Without it, not only might chaos ensue but the effectiveness of the structure may be hampered from the outset. Yet this is one factor that many organization leaders fail to consider, or if they do, they pay it only cursory attention—to their eventual dismay.

Moving deck chairs on the Titanic
We believe we will be able to get the airline back during the reorganization process.
Jerry Murphy

Reorganization is one trigger that’s often pulled, to the least effect. For many organization leaders, reorganization is the one thing they know that they can do and “implement” quickly, giving them both the satisfaction of taking action and the recognition that they are “doing something.” Unfortunately, the hair-trigger reorganization does little to improve an organization’s innovation performance. Instead, many organizations suffer through poorly planned transitions during which the need to “get it done” trumps “well done.”

What these leaders demonstrate are the very worst aspects of impulse control. They desire visible evidence of something (anything) being done, and they want it now. Reorganization is often the first initiative of new leaders, even when it’s not clearly needed. An organization structure should represent a resolution of any number of enduring performance dilemmas, and it should not be tampered with unnecessarily or unthinkingly.

Often in fast-growing or start-up organizations the desire to reorganize arises from the feeling of being out of control. Reorganization may be the most appropriate response in these circumstances. For a larger organization, multiple reorganizations in a short period of time are not only uncalled for, they may be detrimental in the long-term to the organization’s viability. The key is to think through the repercussions before taking action. By asking, “When we do this, what might go wrong?” it may clarify alternatives that won’t require the upheaval (and distraction) that reorganization represents.

Yes, a leader seeking innovation may use a reorganization to challenge comfort zones, but unless they also take time to create organization resilience, they may deliver carnage instead of results. Not pretty.

Impediment or enhancement
It’s about bringing the structured and unstructured information in an organization together, analyzing the information and delivering it to the right people in the organization when they need it.
Michael Schroeck

Organizations should focus on fostering implementation of plans and projects, delivering increased throughput and maintaining quality. Any organization that creates barriers, or blocks and impedes issue resolution, will kill innovation capability. The whole reason for (the verb) organization is to bring order so that information can flow and materials can be transformed into the services and goods necessary to meet customer needs in the cleanest and simplest manner. For innovation to thrive, an organization must also make accommodations for that information and for those materials to be used in unique and different ways. Rather than confining, it should promote expansive actions.

At its most elemental, an organization structure represents a set of pre-made decisions about where, when, and how to deploy resources to greatest benefit. It should create a supporting performance environment that values and recognizes contributions of its members and keeps them focused on the achievement of the strategic intent. If innovation lies at the heart of your strategy, how you decide to organize can be a firm foundation for your future success. Just remember, a given organization structure may resolve present tensions, but it might not be appropriate for all times. Keep monitoring your organization structure—and when it impedes your ability to innovate, then and only then, you should consider change.

Effective restructuring requires both a microscopic view of typical structural problems as well as an overall, topographical sense of structural options.
Lee G. Bolman & Terrence E. Deal

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Innovation Tells – 12 signs innovation is alive and kicking in your culture

What are tells? A tell is an unwitting signal made by a player in a poker game. It is any clue, habit, behavior, or physical reaction that gives other players more information about your hand. Organizations have tells, too, signs, patterns, and behaviors that indicate what is going on across and within the organization without any explicit announcement. Reading tells is an essential skill for anyone looking to have a positive impact on an organization. Knowing how to read innovation tells can give you an idea of how well-disposed your organization is – or isn’t – to achieving its innovation goals.

Why are tells important?…for the answer and more see the full article at Blogging Innovation

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