Tag: innovation

Defining Innovation — and Converting Words to Action

Posted on October 18, 2011

Innovation is a tough word to define, but most would say they know it when they see it. At the recent Wharton Women in Business conference, participants in the panel, “Driving Innovation through Careers in Technology,” were asked to discuss their personal definitions of the term and give a concrete example from their own experiences.

Here is a look at what they had to say:

Julie Anixter, CIO MagaDesign, a visual information mapping and communications firm.

Her definition: “My definition until about two years ago was doing something game-changing. But with the financial free-fall that the world is in today, my new definition is saving our great companies, saving ourselves and creating our futures by doing something really game-changing.”

An example: “The last great project that we did was with the CIO of the Air Force, who has lost a lot of budget and influence with the changes at the Department of Defense, but nonetheless needs to finance his strategy for an integrated Air Force. We worked with him to do a series of 18 maps where we got leaders in the room to co-create a visual strategy for the next couple of years for the Air Force.”

Linda C. Brigance, vice president, IT customs clearance and logistics, FedEx Services and chief information officer, FedEx Trade Networks.

Her definition: “Innovation is about people. It’s about putting an idea into motion.”

An example: “I always go back to an old example. FedEx.com was the first to put [package] tracking onto the web. At that point, the web was just a repository of information. This wasn’t an idea that came from the board room; we had a guy who just did it…. A more recent example is a GPS device for the health industry and a web portal collaboration that allows tracking showing if a package has been opened and the variance in [package temperature] because a lot of health care products are very sensitive and have to stay within a certain range of temperature.”

Brooke L. Eplee, director of strategy and corporate development for Sony Music Entertainment’s global digital business division.

Her definition: We live in such a fragmented world these days, especially in a place like the music industry, so a lot of good ideas out there haven’t been brought together. The dots haven’t been connected, and if you have someone who is thinking about how to connect the dots, often there are ready sources of information just waiting to be tapped.”

An example: “Vevo is a property that we launched in December 2009. The music industry had never monetized music videos; they were thought of as a promotional tool…. What we have done [with Vevo] is … built [a portal] where users could watch videos for free…. That way, we can curate the experience that people have on the website and sell ads against that. When the experience is a premium experience, premium-tier advertisers are more willing to put advertising behind it.”

Stephanie Ferguson, GM of Windows Phone, Microsoft.

Her definition: “At Microsoft, we think of [innovation] in terms of inventions and reinventions that are brought to the market … and actually transform the experience for the customer.”

An example: “Kinect is a sensor we built for the Xbox 360…. For the person standing in front of it, the Kinect builds a skeletal replica of you and uses software to process what the skeleton is doing and relates it to the application you’re using. There’s also voice recognition, so with those two natural user interfaces at work, you don’t need to use a controller anymore…. From a business standpoint, it is a huge opportunity to … break out of our traditional 17-27 year-old male customer base for the Xbox and really broaden the addressable market. It also opened up possibilities in terms of what could be done in entertainment….

Deborah Nelson, chief of staff, global sales and enterprise marketing, Hewlett-Packard.

Her definition: “[At HP,] we think about innovation as translating ideas into a meaningful impact for our customers. When we talk about innovation at HP, we mean innovation with a purpose.”

An example: “Counterfeit drugs are not as much an issue in the United States, but when you go into third-world countries, it’s a real problem. We don’t know much about counterfeit drugs, but we know a lot about counterfeit ink. We put together a partnership, and now drugs in Africa come with an area that you scratch off and see a number. You can send a free SMS text that goes to a database, which can tell you if the drug is actually what it should be.”

Caroline Strzalka, business development director, Sesame Workshop.

Her definition: “[At Sesame Workshop,] we define innovation as taking risks to make people’s lives better. It could be doing something that hasn’t really been done before or finding a workaround to a problem that currently exists.”

An example: “We’re working with [Microsoft’s Kinect technology] on Once upon a Monster, a new game coming out. We work with preschoolers, and for years, we’ve known that they don’t have the manual dexterity to handle normal controllers…. Sesame’s all about taking devices created predominantly for entertainment and figuring out how to make them educational.”

What does innovation mean to you? How are you seeing that definition play out at your firm?

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Can Bangalore Become the Innovation Hub of Asia?

Posted on September 22, 2011

A couple of years ago, the city of Bangalore made global headlines thanks to President Obama. In May 2009, when, in a bid to boost the U.S. job market, Obama removed some tax incentives for U.S. companies that offshored work rather than creating domestic jobs, his rallying call was “Buffalo [New York] before Bangalore.” Obama was reflecting popular public perception when he chose to highlight Bangalore. A few years prior to his speech, the term “Bangalored” — meaning to be laid off due to outsourcing — entered the lexicon.

Indeed, over the past few decades, Bangalore has been seeing a steady makeover. Riding on the success of its booming information technology and business process outsourcing (BPO) industry, the city has become the “IT capital of India” and has even been called the “back-office to the world.”

Bangalore now has another aspiration: to become the innovation hub of Asia. This was the theme of the recently-held India Innovation Summit 2011 organized by the Confederation of Indian Industry (CII) in the city. Various speakers at the event pointed out that this goal is grounded in current realities. Bangalore is already home to a large number of technology professionals, both from within the country and many who have relocated there from across the world, and some of the world’s leading edge technology work is being done from there. For many of the multinational companies, be it GE, Cisco, Intel, Yahoo, 3M and others, their research and development centers in Bangalore are among the largest in their network. With India being one of the fastest-growing economies of the world and with a huge market, many global innovations by multinationals are now happening in the country.

According to Praveen Vishakantaiah, president of Intel Technology India, “the research and innovation capability is present in the DNA of Bangalore. Over the past decade, the development work from there has ramped up significantly. It is now time to push the research element.” But Ajay Nanavati, managing director of 3M India, pointed out that, for innovation to grow, there needs to be a lot more interaction between the different companies. “What we have at present is a very silo-ed mindset,” he said. “Everyone is working in their own little universe.” Stronger industry-academia interactions, well-defined IP protection policies and a wider and deeper talent pool are other aspects that need to be explored, he added.

But that’s not all that Bangalore needs if it wants to don the mantle of Asia’s innovation hub. The city’s infrastructure — its roads, power supply and transportation system — all need a massive and urgent overhaul. For example, take the city’s power supply constraints. Vivek Mansingh, president of the collaboration and communication group at Cisco Systems, noted that “we have thousands of square feet of lab space, but we don’t have enough power to bring in more work here.” In terms of transportation gridlock, Bangalore ranked sixth in IBM’s most recent global Commuter Pain Index, which was conducted across 20 cities.

Sridhar Mitta, IT industry veteran and founder of NextWealth Entrepreneurs, said that in 2000, researchers from Stanford University concluded that “what distinguishes the Silicon Valley is not its scientific advances or technological breakthroughs, but the overall habitat or environment that is tuned up to turn ideas into products and take them rapidly to market by creating start-ups.”

So what does the government have to say? Addressing the audience at the CII conference, D.V. Sadananda Gowda, chief minister of Karnataka (Bangalore is the capital of the state of Karnataka) was categorical that, “The government is committed to supporting all initiatives needed to foster innovation.”

Now it remains to be seen if the government and other stakeholders will walk the talk.

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Can India Make a Global Impact with Its Innovations in Services?

Posted on July 29, 2011

For the past 10 years, Indian cardiac surgeon Devi Shetty has been working relentlessly to drive down the cost of quality cardiac care in India and to make it accessible to the masses. At his Narayana Hrudayalaya chain of cardiac care hospitals, Shetty offers heart surgeries at a fraction of what it costs across the world. The cost savings have been achieved through what he terms “process innovation.”

Shetty is now looking to take this service model outside India with a 300-bed hospital in the Cayman Islands. Over time, the facility is expected to expand to a 2,000-bed multi-specialty hospital. Talking recently to economic daily, Business Standard, Shetty said: “The Cayman Islands is an hour’s flight from the U.S. We intend to offer cost-effective treatment for the citizens of the U.S. and also for those who are under-insured. We will also cater to the local population.” Shetty is now looking at creating a presence in Malaysia.

With spiraling health care costs a matter of serious concern across the world, Shetty’s model could be a game changer for the global health care industry. Rana Mehta, executive director PricewaterhouseCoopers, notes: “The Indian model of health care is a very cost-effective one and is attractive to both developed and developing countries.” Rana says that, within the health care sector, services like diagnostics could also be an area where Indian companies can make a significant mark worldwide.

K. Raman, practice head (infocomm, media & education) at the Tata Strategic Management Group, an independent management consulting firm, points out that health care spending is high all over the world both at the individual and government level. “Any solution that brings down the cost of health care delivery can have a large scale impact,” he adds.

But this is not about health care alone. Shetty’s move needs to be seen in the larger perspective of services from India having the potential to be game changers and redefining various sectors across the globe. It has already happened in the information technology and business process outsourcing (BPO) industry. Not only are Indian IT and BPO companies servicing their global clients from India, they are increasingly taking their model outside the country and setting up centers in different parts of the world. Other global players have had to follow suit.

In the telecom industry, Bharti Airtel, India’s largest telecom player, is seen as a pioneer in introducing a new, low-cost business model. Last year, the company took its learning from the Indian market to tap African consumers through its acquisition of Zain Africa. Bharti plans to look at other markets, too.

According to Raman, services from India that are built around innovations to cater to the unique needs of the Indian market have global potential. Education, he says, could be another sector where India could make a mark. He points out that education, like health care, involves significant spending at the government and individual levels. The sector has a large nation-level impact; needs to be delivered over a wide area and can leverage technology in a big way. “If India is able to address its own internal challenges in this sector, particularly in terms of quality and reach, it could be replicated across many countries,” Raman notes.

He goes on to add: “As a concept, frugal innovation has been there for some time. The whole idea is around innovating for developing countries and then taking the same innovations to developed countries. Until now, this has primarily been on the product side. Taking low-cost service methodology to other countries is a logical extension.”

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Why Sharing Failures Can Speed Up Innovation

Posted on June 17, 2011

When it comes to innovation, most companies would prefer to share successes rather than failures. But sharing failures may ultimately drive faster innovation, according to one speaker at a recent conference held by Wharton’s Mack Center for Technological Innovation, titled “The Changing Face of Innovation: Next Challenges for Practice.”

Daniel Zweidler, an independent management consultant and former senior vice president at Merck, believes the pharmaceutical industry could save itself as much as $7 billion a year if it would share information about failed experiments in the early phases of drug research. “We waste $7 billion a year on repeating experiments that somebody has already done,” he said.

Failure is generally regarded as an overly negative term, Zweidler pointed out. “Actually, [failure is] just an experiment that gives us negative information.” Drug development depends on information, he noted. If drug experiments fail about 90% of the time, “it means that you’re wasting 90% of your information.”

Today, companies keep the results of all early-stage drug experiments to themselves. This is unnecessary, Zweidler argued, because once a particular molecule is found to be viable, drug companies still have to modify it and test it extensively before bringing it to market.

He advocates the creation of a public-private partnership to collaborate on phase I and II studies, the early stages of drug trials that examine the viability of a drug target. Companies in the partnership would share research about drugs from discovery through phase II, Zweidler noted. “And we’ll also share the data with the rest of the world, but six months later. This molecule will not have any intellectual property rights on it. It will be totally public.”

Research beyond phase II would remain a drug company’s intellectual property, he added.

Zweidler envisions the partnership resulting in a pipeline of 10 to 20 new molecules per year that would build over time and save manpower and money for the entire industry. “And everybody will bring different types of expertise to it. Universities may bring expertise early in the discovery process. Then pharmaceutical companies and CROs [Clinical Research Organizations] will bring their expertise in terms of clinical trials…. Rather than having company A, B, C and D repeating the same experiment and coming to the same conclusion — which is negative — you just do it once.”

The idea of sharing failures has value not only “across organizations but probably also within organizations,” added Wharton management professor Nicolaj Siggelkow, co-director of the Mack Center. “Not only do we replicate things across companies, but … how many times do we run an experiment in one division that another division may already have run?”

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‘Trusted Ties’: Is Your Company a Spider Web or a Snowflake?

Posted on June 10, 2011

Companies spend millions recruiting top talent and pushing innovation. Yet even when talent pools in large organizations overflow, innovation too often just trickles out.

Untangling knots in company networks could be the key, suggests Rob Cross, a management professor at the University of Virginia. “Many companies have a lot of talent in house, but they are not getting much out of it from a collaborative standpoint,” Cross noted during a session at  “The Changing Face of Innovation: Next Challenges for Practice,” a recent conference held by Wharton’s Mack Center for Technological Innovation.

For his research, Cross analyzes relationships and informal networks in organizations, and has found that mapping out communication patterns can reveal blockages that stifle  innovation. People become dots; lines between them show “most trusted” connections. Does the resulting design look like complex spider web, with every dot connecting to several others? Or a snowflake, with a few densely connected dots in the center and the rest strung out in isolated branches? Do clusters clump together by region, bridge gaps of expertise or dangle tenuously from thread-like links?

Identifying “trusted ties” is just one way Cross maps out company connections. He also shows the impact of “energizers,” people who elevate the energy of those around them, as well as company downers, the “people who will just suck the life out of a room.” And he’s always looking for what he calls “brokers,” the people who are able to bridge disparate groups together and see connections that others don’t. “We look at information flow, but depending on the context, we’ll look at trust or energy or other dimensions,” said Cross. “That turns out to be incredibly predictive. When an idea moves from one person to another and they actually do something about it in these networks, it’s almost always associated with some kind of trust.”

Network maps reveal unknown silos, dominance of certain groups or isolation of key expertise, Cross noted. The map of one company, for example, showed a lone dot at the end of a long branch. The company had spent thousands to recruit the employee, but did little to help him integrate with other groups. Instead of sparking innovation, he languished and soon left. “If you are trying to innovate in a certain way and you’re hiring all these key technical capabilities, are they actually influential in the network, or are they peripheral?”

Likewise, are your existing connections the most strategic for the goal at hand? Many executives who climb the ranks of an organization tend to rely on old ties even when they should be connecting to new people with different expertise. “Generally, 60% to 70% of their ‘trusted ties’ are back in the area that they came from,” Cross pointed out. “It’s a really core innovation challenge.” Often, companies will report that they have hired a slew of new experts to drive innovation in a new direction, “but you look at these network patterns, and [companies are] overly reliant on all the people who were good for yesterday’s capabilities.”

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Innovation Tournament 2011: The Winners Are …

Posted on May 24, 2011

Turning clunkers into hybrids and powering Tanzanian villages with rechargeable batteries are just a couple of the ideas to come out of Knowledge@Wharton’s second annual Innovation Tournament. Sponsored jointly by K@W and Wipro Technologies, the tournament challenged innovators from around the world to compete for a total of $40,000 in cash prizes.

The top 14 submissions were invited to Philadelphia on April 27 to present their ideas to a panel of judges made up of academics and industry leaders. After the winners were announced, Knowledge@Wharton interviewed the victors in each category and the grand prize winner:

Best new customer-centric innovation: L3, a new video encryption technology, represented by Anil Gupte:

 

Best new sustainability innovation: Welectricity, a social networking site that encourages energy savings, represented by Herbert Samuel:

 

Best implemented customer-centric innovation: WiseWindow, a data service that collects, sorts and displays customized business intelligence in real time, represented by Alex Costakis:

 

Best implemented sustainability innovation: Revolo, a process that converts old automobiles into hybrids, represented by Rajeev Kulkarni:

 

Grand prize winner: EGG-energy, a battery swapping service in Tanzania, represented by Rhonda Jordan:

Check out Knowledge@Wharton Wednesday for more coverage of the Innovation Tournament.

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Innovation and Climate Change: Will the Two Ever Meet?

Posted on May 13, 2011

What have scholars and business leaders learned about creating the right environment for technology to evolve? According to several speakers at the 11th Wharton Technology Conference, the last few decades have taught us plenty. But Rebecca Henderson, a professor of environmental management at Harvard Business School, challenged industry leaders to stop looking backward and tackle an important piece of technological innovation in real time. The pressing need: addressing climate change.

During a panel discussion titled, “Technological Change and Industry Evolution,” Henderson noted that the basics of developing a system to dramatically reduce pollution from greenhouse gases — finding the right price, managing the necessary research and development, and assembling an “eco-system” where all this innovation can best take place — are highly doable. The problem, she said, is that “the energy incumbents sit on top of this system, politically and structurally. We need to find a way to get through them.”

Addressing her fellow panelists, Henderson added: “We have a place to stand, to speak on this debate. We have expertise; we have understanding. This innovation theme plays extremely well with businesses and with firms…. We have a duty to be engaged.”

Henderson said that her main academic obsession in recent years has been understanding how the accumulated knowledge about entrepreneurship can be applied to the groups of scientists and others seeking to discover and then implement solutions to manmade climate change.

“Some of the models suggest that what could happen is very nasty,” she noted, referring to data that show greenhouse gases from human activity warming the planet at a rapid rate. That could lead to rising sea levels, more frequent natural disasters and lowered food production. The problem is a classic case of risk management, except that the threats are not concentrated within a company but spread across society. “But if we really get moving, I bet we can de-carbonize the economy for much less than people say.”

That is much easier said than done, she acknowledged – in part because there are large legacy companies in fields such as oil and other fossil fuels that have powerful economic incentives to thwart any radical changes in the way that energy is produced and consumed.  The way around that, she said, involves building on the knowledge that experts like those at the Wharton conference have developed about innovation. The challenges and opportunities for groundbreaking research in global warming mitigation are enormous because so many sectors are involved – not just energy but transportation, real estate and agriculture, among others, Henderson noted. “These are amazing opportunities to study really interesting stuff.”

“Relational contracts” between employees and their firms could also play a significant role in promoting better entrepreneurship on climate change, Henderson said. Traditional business theory — especially within the high-tech industry that developed at the end of the 20th century — says that companies agree to take care of the financial (and other) needs of key employees in return for their commitment to groundbreaking work. But Henderson believes it’s much more complicated than that.

“Economics is still dominated by people who fundamentally believe that … incentives are just a matter of getting the contract right around the qualitative metrics…. But this is a huge issue — it’s one of the reasons why we had the financial crisis.” A focus on short-term incentives can bring negative consequences, she said. Innovation in the technology world is more likely to come from employees who share a stronger bond and a personal commitment to the long-term goals of the company.  Knowledge about how these relational contracts really work could help encourage the innovation needed to tackle global warming.

What’s lacking, she added, is a better academic understanding of where this critical trust and commitment to long-term goals comes from, and how it can be better fostered. “We need to find ways to motivate [employees for the] public good, or at least a longer-term type of view. This focus on short-term, instantaneous optimization is really destructive when we look at some of these big problems,” such as climate change. “And I think it’s really destructive inside firms.”

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Darwin and the iPad

Posted on May 6, 2011

For roughly three decades, a growing band of academics, economists and technology experts have focused intensely on this question: Why do some high-tech innovations succeed, while others fail?

According to panelists at the 11th Wharton Technology Conference, a growing body of research can increasingly explain why a once cutting-edge technology company like Sun Microsystems eventually imploded, and why an invention like Apple’s iPad became an industry leader when the inner workings of the device differs little from what other firms have developed.

Sidney Winter, an emeritus professor of management at Wharton, said that technology changes during the last 30 years have strengthened his belief that the social environment plays a critical role in technological “evolution” — that innovation does not take place in a vacuum. “There has to be a real context,” Winter told the conference participants. “There has to be something happening in the world that makes the industry appear at roughly the time it appears. That fact then colors what happens in the industry’s very important early stages of the development.”

In order for technology industries to evolve, the firms themselves must also participate in creating the right environment for innovations to take hold. “The history of technological evolution isn’t merely the history of patented or non-patented advances,” said INSEAD professor of entrepreneurship Philip Anderson, another conference panelist. “What you have to do, if you really want to create value, is to hook up the technology with complementary assets and customers — it’s not merely coming up with a better technology that works.”

Science-based breakthroughs have proven the quickest and most effective way to carry out Austrian-American economist Joseph Schumpeter’s broader theory of “creative destruction” — bringing together new ideas, organizations and consumers to destroy old ways of doing business while creating more viable ones — Anderson said. But he added that Schumpeter and some of his followers are wrong to focus solely on the firm as the key building block for change, when more recent evidence suggests that wider ecosystems of technological development are at the root of entrepreneurial progress.

“Where do routines come from that make it possible for somebody to come up with a good mini-computer?” Anderson asked. The iPad is a huge commercial success, he said, not because its technology is particularly radical — “as far as I can see, it’s a big phone” — but because Apple created a home for innovative applications, or apps, that many customers would probably never buy otherwise. He cited in particular one iPad app that he can hold up against the evening sky and use to identify constellations — a product he loves but would not likely have purchased as a separate, stand-alone item.

He also pointed out that there is a certain irony in the fact that Facebook’s Silicon Valley headquarters was the home of a recently bought-out 1990s technology leader, Sun Microsystems. “The interesting thing is that while Sun is no longer an organizational structure within which all the brilliant people who worked there can create the kind of value that they once did, the disappearance of [it] has essentially spewed all kinds of genetic material into the environment that now works in different places and can create amazing results.” During the dot-com boom of the late 1990s, he added, some of the greatest advances in reaching customers through e-commerce came out of firms that failed within a few years. Those advances were eventually picked up by larger and more prosperous companies.

The question of how ideas evolve and become commercialized transcends mere academics, Anderson said. Understanding how these ecosystems of innovation work can make the world a better place more quickly, “but in this networked world, maybe the most interesting question is: How do talented people find a way to keep moving in these different structures and different places at different times and find a way to express [their ideas] to the world?”

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