Steve Jobs: Innovation, Capitalism, and the American Dream

The Apple Inc. CEO embodied all that this nation is supposed to stand for - ingenuity and innovation; endless opportunity in a free market; and the ability for anyone willing to sacrifice blood, sweat, and tears to achieve the American Dream.
At his core, Jobs was an inventor. He can rightfully be aligned with Thomas Edison, Henry Ford, and Alexander Graham Bell.

He was a pioneer who created products - new and groundbreaking products - that would change the world.
Jobs is to thank for a new way of thinking (the first computer for public use, Apple II); for a new age of film (Pixar); for a new way to love music (iTunes); and for a totally new way of life (iPad, iPhone, everything).
Without a free market within which to work and develop, none of this would have been possible. And we would all be using PCs.
His company has created thousands of jobs worldwide since it was founded in 1977 and has inspired other companies along the way.
Of course Jobs operated with a desire to invent and build for the greater good; but he also wanted to make money. He understood the current markets and he envisioned future markets. He utilized very carefully detailed marketing plans and packaging designs to create not just a product but an accessory almost as necessary and useful as a bodily appendage.

Most of all, he had eager and willing consumers who were - and still are - excited about these new innovations. Demand is the root of Apple's success.
Profits are not deductions from the sum of the public good, but the real measure of the social value a firm creates. Those who talk about the horror of putting profits over people make no sense at all, writes Kevin D. Williamson for the National Review Online.
With investments from Wall Street and shareholders alike, Jobs was able to transform the downtrodden Apple Computer Inc. into the powerhouse that we know as Apple Inc.
Hey, Occupy Wall Streeters, if Steve Jobs represents capitalism that makes it not so bad after all, right? With an iPhone in hand, it is hard to deny that simple fact.
Capitalism is a system of give and take, but everyone profits. Some may have more pennies in their pockets than others but this is immaterial. The collective benefits overall.
A free market allows individuals to dream, to build, to create. Without it, the Steve Jobs of the world would surely cease to exist.
There is no need for a painter in a world of gray.
So what has Steve Job left behind? A company whose shares have risen more than 6,000 percent? Yes. Products that have changed the way the entire world connects and communicates? Yes.
Jobs is the pioneer of Manifest Destiny for the digital era.
More importantly, though, Jobs has inspired people to inspire others. In a time of vast uncertainty, economic turmoil, unemployment and hardship, Jobs' legacy is a beacon of hope.
The American Dream is not dead.
The American Dream is, of course, better categorized as a generic term that does not solely apply to one geographic region but rather an entire global community. It represents one principal notion - possibility.
Yesterday, Oct. 11, the winners of the Wendy Schmidt Oil Clean-Up X Challenge were announced. The contest was launched in July 2010 and asked inventors worldwide to develop innovative, rapidly deployable, and highly efficient methods of capturing crude oil from ocean surfaces writes PR Newswire. The contest developed in the wake of the Deepwater Horizon oil spill in the Gulf of Mexico.
The grand prize winner of $1.4 million, selected from 350 applicants from around the world, was Elastec/American Marine from Illinois.
Elastec/American Marine developed a system that recovered 4670 gallons per minute, compared to the average 1100, with an average ORE of 89.5 percent oil to water recovered.
The company is described in the PR Newswire report as: A manufacturer of oil spill and environmental equipment known for innovation in machinery design, is a self-funded, privately held Midwest Corporation that has grown to become one of the largest manufacturers of oil spill equipment in North America. The company, which started over 20 years ago as just an idea, has grown into a 100+ workforce.
That was a long-winded approach to getting to the point. To make a long story short, this company is just one of many that displays astounding advancement. Elastec/American Marine aspired to improve, to make the world just a little bit better of a place.
Or take the two 17-year-old whiz kids who got over 250,000 unique hits to their website during their coverage of the Apple keynote event simply because of keen intellect and self-promotion.
In 2007, at 13-years-old these two boys developed a jailbreak iPhone app that generated more than one million downloads.
They may become the next Apple CEOs, or scientists, or Nobel Prize winners. Millions of others will likely, hopefully, follow suit.
Stay hungry. Stay foolish, is a motto that may have fallen to the wayside of the American lexis. But it is a phrase that needs to be said again and again. It is probably the most valuable four words anyone could ever be told.
Jobs' most renowned brainchild will not go down in the history books as the iPhone or the iOS 5 or even Apple itself.
Jobs' brainchild is the reestablishment of the power of innovation, the asset of capitalism, and the endless possibilities of the American Dream just on the horizon. via ibtimes.com

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To Begin Innovation Starts With Disruptive Hypotheses. Here's How To Create One

 The process hinges on three steps: Defining the situation, searching for cliches, and twisting those cliches around, according to Luke Williams.

A disruptive hypothesis is an intentionally unreasonable statement that gets your thinking flowing in a different direction. It’s kind of like the evolutionary biology theory of “punctuated equilibrium,” which states that evolution proceeds slowly and every once in a while is interrupted by sudden change. Disruptive hypotheses are designed to upset your comfortable business equilibrium and bring about an accelerated change in your own thinking.

The ability to ask, “What if?” is an essential part of every executive’s skill set.

Contrast this with the more traditional definition of “hypothesis,” which is a best-guess explanation that’s based on a set of facts and can be tested by further investigation. With a disruptive hypothesis, however, you don’t make a reasonable prediction (if I charge the battery, the phone will work). Instead, you make an unreasonable provocation (what if a cell phone didn’t need a battery at all?). The difference between prediction and provocation, to paraphrase George Bernard Shaw’s famous line, is the difference between “seeing things as they are and asking, ‘Why?,’ or dreaming things as they never were and asking, ‘What if?’” In our fast-changing world, when business certainties are no longer certain, the ability to imagine things as they never were and ask, “What if?,” is an essential part of every executive’s skill set.

What Do You Want to Disrupt?

To meaningfully differentiate yourself from everyone else in the same space, you have to define the situation in the industry, segment, or category that you want to challenge. Here’s what a list of what you want to challenge might look like:

• This is an area in which everyone seems to be stuck in the same predicament and nothing has changed in a very long time.
• This is an area where profit performance is average—it really should be more successful than it is.
• This is a category where growth is slow and everything seems the same.

Once you have a situation to focus on, describe it in one sentence: “How can we disrupt the competitive landscape in [insert your situation] by delivering an unexpected solution?”

Whether you choose to think about an industry, segment, or category is up to you and your business needs. For example, if you owned a boutique hotel in San Francisco, you might describe your situation in one or more of the following ways:

• How can we disrupt the competitive landscape of the Travel & Leisure industry by delivering an unexpected solution?
• How can we disrupt the competitive landscape of the Hotel segment by delivering an unexpected solution?
• How can we disrupt the competitive landscape of the Luxury Hotel category by delivering an unexpected solution?

That’s it. The important thing is that the high-level situation you choose is just that—high-level. It’s essential that you resist the natural urge to start thinking in terms of specific “problems.”

What Are the Clichés?

Now that you’ve defined your situation, what are the clichés—the widespread, hackneyed beliefs that govern the way people think about and do business in a particular space? If you pay attention, you’ll notice that clichés are everywhere.

Consider the multi-billion dollar video gaming industry. Video consoles were driven by several clichés. First, that the world is split into “gamers” and “nongamers.” Second, that gamers mostly care about faster chips and more realistic graphics. Third, game consoles are expensive. And fourth, that people play video games sitting down, barely moving anything but their fingers. With the Wii, Nintendo turned the gaming industry’s clichés on their head.

Searching for Clichés

Just being told, “Okay, get out there and find those clichés,” can be extremely daunting. So, here are a few tips that will help you jump-start the process. Start by getting online and identifying a handful of direct competitors in the industry, segment, or category you’re focused on. Group together those with similar characteristics (such as size and resources), strengths (such as brand name, distribution), and strategies (such as high quality). Select one or two competitors in each group that are pretty representative of the group as a whole. A total of three to six competitors are the ideal number to work with.

With the Wii, Nintendo turned the gaming industry’s clichés on their head.

Now, do a little research on each competitor and make a list of the clichés that keep everyone doing the same thing, competing the same way, or operating with the same set of assumptions. Keep your research activities quick and informal, intuitive and qualitative. To keep you from drowning in a sea of information, consider using the following three filters:

• Product clichés: What are the cliché features and benefits? What are the cliché product attributes that are advertised (convenience and reliability, for example)? Where are the cliché areas where the product competes (typical customers, typical geographies, and typical market size?).
• Interaction clichés: What are the cliché steps a customer experiences when buying and consuming their products and services? Is the interaction face-to-face? How frequently do customers purchase or use? In the rental car business, for instance, the prevailing interaction clichés include the following: face-to-face interaction with a service agent, completing a lot of paperwork, and renting vehicles by the day.
• Pricing clichés: What are the typical ways companies price their products and services and charge customers? Are they packaging products and services together or pricing them individually? Are they charging the customer directly or through a retail partner? Are they offering discounts or other incentives?

What Are Your Disruptive Hypotheses?

Now that you have a list of the clichés that are influencing the business situation you’re focused on, your next goal is to start provoking the status quo. To do that, you’ll take those clichés and twist them like a Rubik’s cube. You’re trying to find a way to rearrange the pieces, which in turn will provoke a different way of looking at the situation.

What Can You Invert?

If there’s an action, look at the opposite action. If something is happening over time, run the time scale backward. Whenever there’s a one-way relationship between two parties, try changing the direction 180 degrees.

What Can You Deny?

The denial method works by completely dumping key aspects of a cliché. Back to our rental car example for a minute, where the prevailing industry clichés include: See the customer. Complete a lot of paperwork. Rent by the day.

What would happen if you no longer needed to see the customer, you got rid of the paperwork, and you started renting by the hour? Well, you’d end up with something very much like Zipcar. The disruption? Don’t see the customer. No paperwork. Rent by the hour.

What Can You Scale?

What is scarce that could be made abundant? What is abundant that could be made scarce? What is expensive that could be free?

After going through these steps, you should be able to generate several hypotheses that will challenge your established way of looking at an industry and help you imagine radically new scenarios, ask unconventional questions, and discover unexpected advantages. The general rule is that the bolder your “What Ifs,” the fresher the perspective they offer. 

Now, while that’s a huge accomplishment, hypotheses aren’t really worth much all by themselves. In the next post, we look at the process process of taking hypotheses and gaining the customer insight necessary to turn them into business opportunities.

[This is a condensed version of the first chapter of Disrupt: Think the Unthinkable to Spark Transformation in Your Business. Click here to buy the book.]

via fastcodesign.com

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Jim Woods is president and founder of the InnoThink Group. He is a no nonsense "tell it like it is" author, speaker, and a strategic management, innovation, commoditization and hypercompetition expert to business and government. He advises clients with an objective view of their competitive capabilities and defines a clear course of action to maximize their innovation return on investment to achieve profitable growth. To build your capability for ongoing innovation across your company or to secure a riveting speaker for your next event - Call 719-649-4118 or email us for more information on hiring Jim. Check Availability. 

The DNA of the World's Most Innovative Companies

Innovation makes millionaires and undermines monopolies. It raises the profitability of companies and puts a premium on the shares of the most successful. But how can companies foster it? New research sheds light on the innovation process and how firms can tap into it to raise their performance and their share price.

Innovative business leaders typically share certain qualities. They are always asking questions, experimenting, observing and networking. While building on past successes, they keep the doors open to future innovation.

 

In a world where success often breeds more success, such behaviour can boost the market value of their companies well beyond what current profitability would justify. In a newly published study of what makes a successful innovator, “we looked at people who lead incredibly innovative companies”, says Hal Gregersen, INSEAD Senior Affiliate Professor of Leadership and Director of the Learning to Lead executive education programme and one of the study’s co-authors. “And we realised that these companies seemed to be incredibly valuable.”

In reaching this realisation, Gregersen and his co-authors, Jeffrey H. Dyer of Brigham Young University and Clayton Christensen of Harvard Business School, had hit on what they call the “innovation premium”. And in their book, “The Innovator’s DNA”, they explain how for some of the world’s most innovative companies it can add 50 percent or more to their market value.

“Investors pay a stock price based upon two things,” says Gregersen. “One is the cash flow - the money coming from existing products, services and markets. The other is the belief that the company will develop new markets, new services and new products tomorrow.”

More jam tomorrow

Take a company like Amazon. Given its reputation, suggests Gregersen, an investor might well say: “I’ll pay you this amount for your stock for the existing products and services, and for the markets that you’re in. But I also believe you will do something different in the future. You’ll have new markets. You’ll have new services. You’ll have new products you don’t even have today - and because of that, I’ll pay you a premium.”

Building on this insight, Gregersen and his co-authors worked with HOLT, a unit of Credit Suisse Group, to draw up an innovation premium roll-call of innovative companies based on analysis of the relationship between their cash flow and their share price. To qualify, companies had to be listed on a stock exchange and have a market capitalisation of at least US$10 billion. They also had to have published financial statements over at least the past seven years.

The results were striking. Companies like Toyota, Sony and Samsung, which frequently feature on other lists of innovative companies, sank to negative ratings. In their place emerged a number of unexpected and relatively unknown companies - firms like California-based Intuitive Surgical, which builds systems for robotically assisted, minimally invasive surgery, Natura Cosméticos, a Brazilian manufacturer of cosmetics made from plants from the Amazon forest, and Keyence Corporation, a Japanese producer of electronic sensors for automated factory systems.

Cut-throat car market

The list includes household names like Amazon, Apple and Google. But what makes it different from other similar lists is that it ranks firms not just by past achievements but by what investors expect going forward. “Our list is future-looking, forward-looking and it’s based on past performance predicting the future,” Gregersen explains. “These are organisations that systematically, over at least a five-year period, have generated this kind of premium. Investors bet with their wallets: this company is innovative, not only now but in the future.”

Common to all companies on the list is the fact that their share prices are 25 percent or more above what would be justified by cash flow alone. The leader is cloud computing company Salesforce.com, with its AppExchange that offers more than 1,000 applications for businesses, and which recently launched Chatter draws on features of Facebook and Twitter to provide social software for enterprise collaboration. Market expectations for further innovations have given it a premium based on 2010 results of no less than 75 percent. Bringing up the rear, PepsiCo scrapes in at number 50, with a premium of 25.45 percent. Companies like Toyota and BMW, by contrast, despite their known capabilities for innovation are nowhere to be seen. That, says Gregersen, is because investors expect them to find it hard to earn dividends from new innovations in the face of tough competition from Chinese manufacturers in today’s cutthroat car market.

Think different, behave different

So how do companies develop the innovative qualities that enable such results? “There are three elements to this,” says Gregersen. “The people in the company, the processes they have and the philosophies they have.” The essence of the innovator, he adds, is that he or she not only thinks differently from other people, but also behaves differently.

Take Steve Jobs, the founder of Apple. “If we walked into his world and followed him for a day, we could see him behaving in ways that will generate new ideas. He lives the Innovator’s DNA skills. He observes the world really carefully. He talks to all different kinds of people. He’s more than willing to engage in different kinds of experiments, constantly peppering the world and the people around him with questions that provoke people and challenge the status quo.”

Or take Mike Lazaridis, founder and co-CEO of Research in Motion, the firm that gave the world the BlackBerry, or Scott Cook, the founder of Intuit. They, too, are always asking questions and looking out for the unexpected: “Why not this? Why couldn’t we do that? What’s going on here? How could we do this better?” When someone “behaves that way, acts differently, asks lots of questions, observes like an anthropologist, experiments constantly, networks for new ideas,” Gregersen observes, “they’re likely to get incredibly insightful ideas about new businesses, new products, new services, breakthrough processes: things that will make a difference for any company or country.”

Down on the farm

That’s something most companies in today’s environment would pay dearly for. And the good news for those who really want to innovate is that, given the right environment, innovation can be within the reach of anyone.

“About 25 to 30 percent of our innovation capacity is a genetic component, it’s our DNA,” says Gregersen. “But that’s one-third of the equation. The other two-thirds is the world we live in. It’s fascinating when we interview these famous entrepreneurs to realise that they grew up in worlds where adults paid attention to these innovation skills.” Most often these adults were parents and grandparents, but in about one-third of the cases they were master teachers at Montessori or Montessori-like schools.”

To show how curiosity and willingness to experiment can be nurtured, he cites the founder of Amazon, Jeff Bezos, and the chair of Bain & Company, Orit Gadiesh. “Bezos had grandparents who taught him and reinforced to him that experimentation matters. He lived on a farm with them in the summertime and when things broke down, they fixed the things that broke down. They learned that when you try and experiment you can figure out a solution.”

As for Gadiesh, “She grew up in a family where questioning was everything and it was reinforced to her that she question. So they both not only had some genetics around these skills, but they grew up in a world that said ‘keep them, pay attention to them, use them, do something with them’. And then when they became adults they actually went out and did something with them.” 

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Everybody’s job

What lessons does Gregersen draw for other firms that want a piece of this innovation bonanza? Firstly, innovation starts at the top. “Companies on this list are led by leaders who spend at least a day more a week than a non-innovative CEO doing these innovation skills: asking provocative questions, going out there and making real observations and not relying on second-hand data.”

Secondly, innovation must be allowed to permeate every level of the company. In a truly innovative company, innovation has to be everybody’s job. “It’s just part of what you do when you walk in through the door today when you come to work. You need to figure out a better way, a more innovative process, a better product, better service.”

Finally, however, a warning: innovation can be disruptive, and in a company with no innovation philosophy, it’s likely to be unwelcome. In this case, says Gregersen, a would-be innovator faces a Catch 22 situation. “If I’m in a company that’s not innovative and I just do what they ask me to do, I’ve sealed my fate to not have a future. If I start engaging these skills, on the other hand, I may get a lot of pushback and irritation, and I may even get fired.”

In such a worst case scenario, he concludes, it’s time to use these skills in a more receptive environment, so as to “create a future that otherwise won’t be there”.

The book's research led to the publication by Forbes of the Innovation Premium List of the 100 most innovative large companies in the world. via knowledge.insead.edu & Nichloas Bray. 

 Consulting, Speaking & Coaching. Driving Growth through Innovation  

Innothink Group is a strategic management and innovation consultancy. Where many consulting firms are reluctant to bear risks or tie their rewards to project outcomes, we decided to build a better model. We align our success with yours. We’re outcome obsessed, outcome paid, putting over a third of our fees at risk subject o hitting predetermined milestones. More than a guarantee we wanted from the outset to create true partnerships. 

For speaking, coaching or consulting inquiries contact: 

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Steve Jobs: A Genius, Yes; A Role Model for the Rest of Us, No Way - Scientific American

I happened upon this article this morning in Scientific American on Steve Jobs and Leadership. In stating the obvious I am a fan of Mr. Jobs. However, while there are certainly aspects of his life to emulate, there are many others to denounce. For example, consider emphatic leadership. This is not an attempt to demoralize a gifted man. For turning around a business or career depends on which you choose. Jim Woods

 

The nearly three weeks since Steve Jobs’s death has been like an extended tribute to the first global head of state. The memorial ceremonies worldwide, the special commemorative issues and, today, the release of Walter Isaacson’s Steve Jobs, all bear testament to the Apple founder’s legacy. Jobs deserved it. As Isaacson pointed out on CBS’s 60 Minutes last night, Jobs transformed personal computers, telephones, even retail stores, among others—and he would have probably taken on television, if he had lived long enough.

Many heads of state assuredly do not merit such eulogies. Gaddafi is dead. And when the Turkmens turned out to mourn Saparmurat Atayevich Niyazov in 2006, they were probably secretly celebrating at least the recovery of the month of January, as Niyazov had renamed the first month of the year after his personal honorific, Türkmenbaşy.

One thread among the encomiums suggests that the world would be a better place if we just had more Steve Jobs in high places. Consider this from Thomas Friedman: “The melancholy over Steve Jobs’s passing is not just about the loss of the inventor of so many products we enjoy. It is also about the loss of someone who personified so many of the leadership traits we know are missing from our national politics.”

It would be unfortunate if the remembrance of Jobs spawns a legion of Steve wannabes. Jobs, in geekspeak, was an “N of 1.” Jobs’s perfectionism and design sense helped establish Apple’s signature “iBrands,” but these traits also transcended, to some extent,  a toxic personality that could have served as a model for the Kevin Spacey character in the movie “Horrible Bosses.” In the film, Dave Harken implies that a promotion awaits one of his employees but ends up awarding it to himself. The Jobs equivalent: stiffing early Apple employees out of stock options when the company first went public. The guy was a…

In the weeks since his death, Jobs has been compared to Einstein and Edison. Maybe so. But the problem with using his interpersonal style as a management role model is that the rest of us, to parrot Apple advertising, will assuredly blow it. In business, the control freak boss—the emblematic Jobs model—is a recipe for unintentionally delivering your best employees as new hires to your closest competitors. Talk to us about leveraging your capabilities.

Millions of people have to manage others, and this challenge doesn’t necessarily bring out the best in us. A 2005 article by two psychologists from the University of Surrey, “Disordered Personalities at Work,” found that senior British executives were more likely to demonstrate histrionic personality disorder (grandiosity and lack of empathy among other traits) than criminal psychiatric patients at Broadmoor Special Hospital in Berkshire, England, and they were equally likely to show narcissistic (perfectionism and a dictatorial bent) and compulsive tendencies. Is it that this type of person is attracted to the job or the workplace encourages this type of behavior? Who knows? But entreating subordinates to “insanely great” levels of performance, to quote Jobs’s hyperbolic rhetoric, is more likely to initiate a collective bargaining drive than produce the next iPad.

Even Jobs may have been at his best when he left behind the persona of the old Steve. New Yorker writer James Surowiecki and author of The Wisdom of Crowds: Why the Many Are Smarter Than the Few and How Collective Wisdom Shapes Business, Economies, Societies and Nations, noted in that magazine how Jobs loosened up in recent years on his insistence on totally closed architectures. The old Steve might have forbidden MP3s on iPods and apps for iPhones and iPads. Giving up a modicum of control eventually propelled the company to heights it had never before experienced—and cemented Jobs’s legacy in the most histrionic terms imaginable.

via blogs.scientificamerican.com

Consulting, Speaking & Coaching. Driving Growth through Innovation  

Innothink Group is a strategic management and innovation consultancy. Where many consulting firms are reluctant to bear risks or tie their rewards to project outcomes, we decided to build a better model. We align our success with yours. We’re outcome obsessed, outcome paid, putting over a third of our fees at risk subject o hitting predetermined milestones. More than a guarantee we wanted from the outset to create true partnerships. 

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For Some of the World’s Poor, Hope Comes Via Design and Innovation

It is late. About 12:10 in Colorado Springs. I am fascinated by the social and business ramifications associated with Mike Kimmelman's New York Times story on design and technology through "Why didn't someone think of this before" solutions. The photos below provide a multitude of implicit ways to better the world locally. Indeed Kimmelman’s article is awe inspiring not from the standpoint of observation but transformative participation. Which is the point. 

Below a renovated public walkway, along the canal in Bangkok, where residents are helping to design cleaner places to live. With families in flimsy homes on stilts above polluted waters, architects from nearby Sripatum University were enlisted to devise row houses, detached houses and semidetached houses, along the lines of what residents said they wanted.

via nytimes.com

In the photo above the solution is absolutely simple. They have enriched a community. That enriches familes. Do you think the value of the improvements have been achieved? 

A community cooker is fueled by refuse that residents collect in return for time using the oven.

A few solutions:

1. a filtered drinking straw that prevents the spread of typhoid and cholera
2. a bamboo treadle pump that helps poor farmers in Cambodia and India extract groundwater during the dry seasons
3. The Q Drum, a doughnut-shaped plastic container, easily rolled, even long distances by children, which is used to transport up to 13 gallons of water.  I suggest reading this article in entirety via New York Times.

 Consulting, Speaking & Coaching. Driving Growth through Innovation  

Innothink Group is a strategic management and innovation consultancy. Where many consulting firms are reluctant to bear risks or tie their rewards to project outcomes, we decided to build a better model. We align our success with yours. We’re outcome obsessed, outcome paid, putting over a third of our fees at risk subject o hitting predetermined milestones. More than a guarantee we wanted from the outset to create true partnerships. 

For speaking, coaching or consulting inquiries contact: 

CEO Jim Woods

+1 719- 649-4118

A Maze Of Tunnels Made Only Of Packing Tape, Suspended In Mid-Air

via fastcodesign.com

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IDEO’s chairman and founder David Kelley talks about regaining creative confidence: Innovation 101

Innovators aren't exceptional as much as they are confident. So says David Kelley, the founder of the venerable Palo Alto, Calif., design firm IDEO.

Mr. Kelley, whose company is responsible for designing a wide range of products and services, including the modern computer mouse, believes—and research suggests—that virtually everyone has the capacity to innovate. It's just that somewhere around the fourth grade most of us stop thinking of ourselves as creative, he says, so our ability to innovate atrophies.

Mr. Kelley has made it his life's work to help people regain their creative confidence. In his three decades as a designer and as a professor in the design program at Stanford University's engineering school, from which he graduated in 1978, Mr. Kelley has developed a set of techniques for solving all kinds of problems—techniques that he came to believe could be taught as a methodology. His approach is called "design thinking."

Six years ago, with a $35 million gift from German software magnate Hasso Plattner, co-founder of SAP AG and a onetime IDEO client, Mr. Kelley founded the Hasso Plattner Institute of Design at Stanford—dubbed the d.school—a nondegree program that draws students from all seven of Stanford's graduate schools. The program aims to help students unlock their creative potential by teaching them to become, among other things, more open to experimentation, more comfortable with ambiguity and less afraid of failure.

Teaching the Process

The best way to unleash creativity, Mr. Kelley says, is to give students an "experience," or in d.school speak, a design challenge. Under his teaching model, however, students aren't just handed a problem to solve—they must define the problem themselves through research and direct observation.

David Kelley says most of us stop thinking of ourselves as creative somewhere around the fourth grade

One group of students, for example, was tasked with designing an incubator for the developing world, where infant mortality is high and expensive incubators are scarce. But when the students were dispatched to Nepal to spend time with mothers and doctors, they found that most births take place in rural areas far from hospitals, so flooding hospitals with cheaper incubators would be of no use to most premature and low-birth-weight babies.

Equipped with this knowledge, and, as Mr. Kelley sees it, a newfound empathy for their subjects, the students reframed the problem. "This was about keeping babies warm, not cheaper incubators," explains George Kembel, executive director and co-founder of the d.school.

The second step in the process is "ideation," where students visualize and brainstorm potential solutions with one another. The students decided that what was needed was an inexpensive baby-warming device that could function in rural communities—one that was transportable, simple to use and sanitize, and worked without electricity.

Next comes "prototyping." The students made sketches and three-dimensional models of potential incubators that they could test, modify, and test again, in an iterative process that is at the heart of design thinking. By the end of the class they had a finished prototype—a kind of sleeping bag made of special material that could be wrapped around a premature infant and kept clean and warm with nothing more than boiling water. The students went on to form a nonprofit company in the hopes of bringing their Embrace incubator to market.

Mr. Kembel says the learning experience at the d.school is centered on a few basic beliefs. One is that people learn by doing, so the more projects students tackle the better. The same goes for developing prototypes. Speed and quantity are encouraged in the hope that students will fail early and often. "If you go through lots of little tests, you learn more than if you just do one test," says Mr. Kembel.

Another guiding principle is that people learn best by collaborating with others who have radically different points of view, so classes should be made up of students and teachers from a variety of disciplines—the more the better.

Moreover, "everyone needs to have an equal voice," says Mr. Kembel, "because everyone in a sense is learning, even the faculty." So the old model of teacher at podium lecturing students has been thrown out in favor of classrooms that look more like studios, with tables and chairs scattered about.

Mr. Kembel says a lot of time at the d.school is spent helping students unlearn things they learned in elementary school. Fear of failure is rampant among students who have been drilled in standardized-test taking, he says. "What we want the graduate students to do is work with others and go out and take risks," says Mr. Kembel.

Making Waves

The d.school is reporting progress on several fronts.

It now enrolls 700 students per year, up from 30 six years ago. Applications are running at two to three times the number of available slots, Mr. Kembel says, and increasing numbers of students are choosing to attend Stanford because of the d.school. He also says employers are starting to seek out students with d.school credentials.

The d.school has produced several companies, including d.light design, which makes solar-powered lanterns for the developing world; Alphonso Labs, which markets Pulse, a news-reading application for iPhone, iPad and Android devices; and of course, Embrace, which hatched from the incubator project.

Almost weekly, educators from around the world make the pilgrimage to Palo Alto to take tours and get advice on how to set up d.school-like programs of their own. Dozens of colleges have programs in various stages of development.

More recently, the d.school has been teaching K-12 teachers how to employ design-thinking techniques in their classrooms. Last year alone, more than 500 educators attended workshops at the d.school's K-12 lab. Research is under way, but early indications are that K-12 students exposed to design thinking are more engaged and motivated to learn, say Rich Crandall, director, and Adam Royalty, founding member and lead researcher, of the K-12 lab.

To Mr. Kelley, that is the Holy Grail of design thinking. He says it is behavioral change that enables students to gain innovation confidence, something he believes is as important as gaining literacy skills. "For me this is a mindset," he says. "It's a way of thinking that you can use in every part of your life."

Ms. Geer is a writer in Connecticut. She can be reached at reports@wsj.com. via online.wsj.com

 Speaking 

As the CEO and founder of InnoThink Group, Jim can help your organization enhance the strategic innovation and competitiveness of your business policy and strategy, with an emphasis on increasing top line growth. 

If you’re interested in having Jim speak at your next event, simply use this form to send us your details and speaking requirements, and we’ll be in touch shortly. Or you may call us at 719-649-4118. Thank you!

Innovation is all about the customer?

Is it ever OK to lie in business? Standing on stage at a central London hotel last week to launch the FT Innovate conference, Martha Lane Fox, co-founder of Lastminute.com, used her own experience to suggest that, sometimes, it was.

Talk to us about our 28 day program to strengthen your innovation capabilities to drive growth.  

The doyenne of the UK’s dotcom industry made what seemed a startling public admission. “The first customer testimonials on the site were made up by me,” she said. “I can say that now with aplomb but I took my friends and I wrote stories about them and the incredible experience they had buying products and services from Lastminute.com.”

The comments elicited barely a murmur among the audience but they matter for two reasons. First, because of Ms Lane Fox’s status as a dotcom trailblazer and, since she sold the company in 2005, her high-profile roles as the UK government’s Digital Champion and as a non-executive director at Marks and Spencer and Channel 4.

Second, and more important, because they hint at the big question underlying all the presentations, the chatter in the hall and on Twitter: how being innovative today means finding how to engage with your customers as early in the process and as deeply as possible.

Context matters. Ms Lane Fox wouldn’t get away with concocting customer feedback today. Why? Because, as she pointed out, in the wild west days of the early dotcom era, customer testimonials were only a small part of the business model. Now, the smartest businesses, from retailers to fashion brands to credit card businesses and manufacturers, are trying to engage their customers to drive innovation in their offerings.

Tasti D-Lite, a US low-calorie frozen dessert chain, says its edge in engaging has been the intelligent use of social networking technologies to do this. So, it uses the location-based app Foursquare to push offers directly to customers that are part of its loyalty programme when they pass within a block or two of its branches. The company is also very active on Twitter, intervening when potential customers are still weighing their options. If a consumer is considering Tasti D-Lite or a rival and tweets about it, the company will start following that individual or send them a message. This, it says, increases its chances of making a sale.

The company also makes sure its employees follow its social networking sites on their monitors, enabling them to understand how powerful a tool they are for the business. B.J. Emerson, head of technology, says a failure to engage with customers who are already using these technologies is a form of “social negligence”.

Using customers to inform your decisions directly is not just about the clever use of technology. Good designers such as Michael Bierut, a partner at Pentagram and co-founder of the Design Observer weblog, understand this better than most. One of his rules for being innovative, he told the conference, is to “shut up and listen”.

When he was hired by conductor Michael Tilson Thomas to come up with a logo for his Frank Gehry-designed concert hall in Miami, Mr Bierut presented him with a series of options. The client’s response to one of them, Mr Bierut said, was to ask if “this is supposed to make us feel nauseous?” and to put forward his own designs. Rather than seeing this as a professional slap in the face, Mr Bierut used the designs to come up with a better one himself.

For big organisations, the big challenge is how to create a culture that encourages customer-led innovation. The best answer I have heard was from R. Gopalakrishnan, a senior executive at Tata. He said that companies need to be willing to look beyond market research and focus groups to understand the context of what their customers’ needs are. When the company, for example, was designing a water filtration system, he personally spent time in the homes of poor Indian families, sitting round the fire to understand how they used water.

Customers have always engaged with those companies with which they have a special affinity. Ms Lane Fox explained that she was once accosted in an M&S shop and asked why the company had changed the packaging of its figs.

The difference now is that this is more of a business obligation than ever if only because if you aren’t engaging, your competitors will be. And that is a very uninnovative way to lose business. ravi.mattu@ft.com via ft.com

New Solutions to Attract and Retain More Customers

Jim Woods is president and founder of InnoThink Group; a leading Strategic Management and Innovation Consulting Firm in Denver, Colorado. He is an author, speaker, and a strategic innovation and hypercompetition expert to profit, non-profit organizations and municipalities. He advises clients with an objective view of their competitive capabilities and defines a clear course of action to maximize their innovation return on investment to achieve profitable growth. Build a capability for ongoing competitive innovation across your company. Call 719-649-4118 or complete our form: contact us for more information on hiring Jim to advise or speak for your next event.

 

 

The 10 Greatest (Accidental) Inventions of All Time - (Not Quite)

Below are ten ceremonious "accidental innovations." Certainly these are wonderful stories. Actually, though, while we delight in retelling such Horatio Algier like successes, I would not really label these "accidental innovation." The innovation itself can't really be said to be "accidental," even though it involves accident. For it takes a considerable capability to see the value in an accident, and to build upon it to create even more value. Jim Woods

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1. The Microwave - Percy L. Spencer
Percy Spencer, an engineer at Raytheon after his WWI stint in the Navy, was known as an electronics genius. In 1945, Spencer was fiddling with a microwave-emitting magnetron—used in the guts of radar arrays—when he felt a strange sensation in his pants. A sizzling, even. Spencer paused and found that a chocolate bar in his pocket had started to melt. Figuring that the microwave radiation of the magnetron was to blame (or to credit, as it would turn out), Spencer immediately set out to realize the culinary potential at work. The end result was the microwave oven—savior of eager snackers and single dudes worldwide.

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2. Saccharin - Ira Remsen, Constantin Fahlberg
In 1879, Ira Remsen and Constantin Fahlberg, at work in a laboratory at Johns Hopkins University, paused to eat. Fahlberg had neglected to wash his hands before the meal—which usually leads to a quick death for most chemists, but led to him noticing an oddly sweet flavor during his meal. Artificial sweetener! The duo published their findings together, but it was only Fahlberg's name that made it onto the (incredibly lucrative) patent, now found in pink packets at tables everywhere. That is to say, Remsen got screwed—he later remarked, "Fahlberg is a scoundrel. It nauseates me to hear my name mentioned in the same breath with him."

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3. Slinky - Richard James
In 1943, Navy engineer Richard James was trying to figure out how to use springs to keep the sensitive instruments aboard ships from rocking themselves to death, when he knocked one of his prototypes over. Instead of crashing to the floor, it gracefully sprang downward, and then righted itself. So pointless—so nimble—so slinky. The spring became a goofy toy of many childhoods—that is before every kid inevitably gets theirs all twisted up and ruins it. 300 million sold worldwide!

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4. Play-Doh - Kutol Products
Before being found ground into the rugs of child-rearing homes everywhere, Play-Doh was ironically created to be a cleaning product. The paste was first marketed as a treatment for filthy wallpaper—before the company that produced it began to go down the tubes. The discovery that saved Kutol Products—headed for bankruptcy—wasn't that their wall cleaner worked particularly well, but that schoolchildren were beginning to use it to create Christmas ornaments as arts and crafts projects. By removing the compound's cleanser and adding colors and a fresh scent, Kutol spun their wallpaper saver into one of the most iconic toys of all time—and brought mega-success to a company headed for destruction. Sometimes, you don't even know how brilliant you are until someone notices for you.

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5. Super Glue - Harry Coover
In what have been a very messy moment of discovery in 1942, Dr. Harry Coover of Eastman-Kodak Laboratories found that a substance he created—cyanoacrylate—was a miserable failure. It was not, to his dismay, at all suited for a new precision gun sight as he had hoped—it infuriatingly stuck to everything it touched. So it was forgotten. Six years later, while overseeing an experimental new design for airplane canopies, Coover found himself stuck in the same gooey mess with a familiar foe—cyanacrylate was proving useless as ever. But this time, Coover observed that the stuff formed an incredibly strong bond without needing heat. Coover and his team tinkered with sticking various objects in their lab together, and realized they had finally stumbled upon a use for the maddening goop. Coover slapped a patent on his discovery, and in 1958, a full 16 years after he first got stuck, cyanoacrylate was being sold on shelves.

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6. Teflon - Roy Plunkett
The next time you make a frustration-free omelette, thank chemist Roy Plunkett, who experienced immense frustration while inadvertently inventing Teflon in 1938. Plunkett had hoped to create a new variety of chlorofluorocarbons (better known as universally-despised CFCs), when he came back to check on his experiment in a refrigeration chamber. When he inspected a canister that was supposed to be full of gas, he found that it appeared to have vanished—leaving behind only a few white flakes. Plunkett was intrigued by these mysterious chemical bits, and began at once to experiment with their properties. The new substance proved to be a fantastic lubricant with an extremely high melting point—perfect at first for military gear, and now the stuff found finely applied across your non-stick cookware.

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7. Bakelite - Leo Baekeland
In 1907, shellac was commonly used to insulate the innards of early electronics—think radios and telephones. This was fine, aside from the fact that shellac is made from Asian beetle poop, and not exactly the cheapest or easiest way to insulate a wire. What Belgian chemist Leo Baekeland found in instead was—get ready—polyoxybenzylmethylenglycolanhydride, the world's first synthetic plastic, commonly known as Bakelite. This pioneering plastic was moldable into virtually any shape, in any color, and could hold its form against high temperatures and daily wear—making it a star among manufacturers, jewelers, and industrial designers.

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8. Pacemaker - Wilson Greatbatch
An assistant professor at the University of Buffalo thought he had ruined his project. Instead of picking a 10,000-ohm resistor out of a box to use on a heart-recording prototype, Wilson Greatbatch took the 1-megaohm variety. The resulting circuit produced a signal that sounded for 1.8 milliseconds, and then paused for a second—a dead ringer for the human heart. Greatbatch realized the precise current could regulate a pulse, overriding the imperfect heartbeat of the ill. Before this point, pacemakers were television-sized, cumbersome things that were temporarily attached to patients from the outside. But now the effect could be achieved with a small circuit, perfect to tuck into someone's chest.

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9. Velcro - George de Mestral
A dog invented velcro.
Alright, that's something of an exaggeration, but a dog did play an instrumental role. Swiss engineer George de Mestral was out for a hunting trip with his pooch, and noticed the annoying tendency of burrs to stick to its fur (and his socks). Later, looking under a microscope, Mestral observed the tiny "hooks" that stuck burrs to fabrics and furs. Mestral experimented for years with a variety of textiles before arriving at the newly invented nylon—though it wasn't until two decades later that NASA's fondness for velcro popularized the tech.

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10. X-Rays - Wilhelm Roentgen
Okay, yes, x-rays are a phenomenon of the natural world, and thus can't be created. But sshhh! The story of their discovery is a fascinating one of incredible chance. In 1895, German physicist Wilhelm Roentgen was performing a routine experiment involving cathode rays, when he noticed that a piece of fluorescent cardboard was lighting up from across the room. A thick screen had been placed between his cathode emitter and the radiated cardboard, proving that particles of light were passing through solid objects. Amazed, Roentgen quickly found that brilliant images could be produced with this incredible radiation—the first of their kind being a skeletal image of his wife's hand.
Eureka is our week-long meditation on the wonders of invention, inventors and genius.

Illustration by our contributing illustrator Sam Spratt. Check out Sam's portfolio and become a fan of his Facebook Artist's Page. via gizmodo.com

New Solutions to Attract and Retain More Customers

Jim Woods is president and founder of InnoThink Group; a leading Strategic Management and Innovation Consulting Firm in Denver, Colorado. He is an author, speaker, and a strategic innovation and hypercompetition expert to profit, non-profit organizations and municipalities. He advises clients with an objective view of their competitive capabilities and defines a clear course of action to maximize their innovation return on investment to achieve profitable growth. Build a capability for ongoing competitive innovation across your company. Call 719-649-4118 or complete our form: contact us for more information on hiring Jim to advise or speak for your next event.

How to Create Customer Led Innovation Strategies

Is it ever OK to lie in business? Standing on stage at a central London hotel last week to launch the FT Innovate conference, Martha Lane Fox, co-founder of Lastminute.com, used her own experience to suggest that, sometimes, it was.
The doyenne of the UK’s dotcom industry made what seemed a startling public admission. “The first customer testimonials on the site were made up by me,” she said. “I can say that now with aplomb but I took my friends and I wrote stories about them and the incredible experience they had buying products and services from Lastminute.com.”

The comments elicited barely a murmur among the audience but they matter for two reasons. First, because of Ms Lane Fox’s status as a dotcom trailblazer and, since she sold the company in 2005, her high-profile roles as the UK government’s Digital Champion and as a non-executive director at Marks and Spencer and Channel 4.

Second, and more important, because they hint at the big question underlying all the presentations, the chatter in the hall and on Twitter: how being innovative today means finding how to engage with your customers as early in the process and as deeply as possible.
Context matters. Ms Lane Fox wouldn’t get away with concocting customer feedback today. Why? Because, as she pointed out, in the wild west days of the early dotcom era, customer testimonials were only a small part of the business model. Now, the smartest businesses, from retailers to fashion brands to credit card businesses and manufacturers, are trying to engage their customers to drive innovation in their offerings.
Tasti D-Lite, a US low-calorie frozen dessert chain, says its edge in engaging has been the intelligent use of social networking technologies to do this. So, it uses the location-based app Foursquare to push offers directly to customers that are part of its loyalty programme when they pass within a block or two of its branches. The company is also very active on Twitter, intervening when potential customers are still weighing their options. If a consumer is considering Tasti D-Lite or a rival and tweets about it, the company will start following that individual or send them a message. This, it says, increases its chances of making a sale.
The company also makes sure its employees follow its social networking sites on their monitors, enabling them to understand how powerful a tool they are for the business. B.J. Emerson, head of technology, says a failure to engage with customers who are already using these technologies is a form of “social negligence”.
Using customers to inform your decisions directly is not just about the clever use of technology. Good designers such as Michael Bierut, a partner at Pentagram and co-founder of the Design Observer weblog, understand this better than most. One of his rules for being innovative, he told the conference, is to “shut up and listen”.
When he was hired by conductor Michael Tilson Thomas to come up with a logo for his Frank Gehry-designed concert hall in Miami, Mr Bierut presented him with a series of options. The client’s response to one of them, Mr Bierut said, was to ask if “this is supposed to make us feel nauseous?” and to put forward his own designs. Rather than seeing this as a professional slap in the face, Mr Bierut used the designs to come up with a better one himself.
For big organisations, the big challenge is how to create a culture that encourages customer-led innovation. The best answer I have heard was from R. Gopalakrishnan, a senior executive at Tata. He said that companies need to be willing to look beyond market research and focus groups to understand the context of what their customers’ needs are. When the company, for example, was designing a water filtration system, he personally spent time in the homes of poor Indian families, sitting round the fire to understand how they used water.
Customers have always engaged with those companies with which they have a special affinity. Ms Lane Fox explained that she was once accosted in an M&S shop and asked why the company had changed the packaging of its figs.
The difference now is that this is more of a business obligation than ever if only because if you aren’t engaging, your competitors will be. And that is a very uninnovative way to lose business. ravi.mattu@ft.com via ft.com
New Solutions to Attract and Retain More Customers

Jim Woods is president and founder of InnoThink Group; a leading Strategic Management and Innovation Consulting Firm in Denver, Colorado. He is an author, speaker, and a strategic innovation and hypercompetition expert to profit, non-profit organizations and municipalities. He advises clients with an objective view of their competitive capabilities and defines a clear course of action to maximize their innovation return on investment to achieve profitable growth. Build a capability for ongoing competitive innovation across your company. Call 719-649-4118 or complete our form: contact us for more information on hiring Jim to advise or speak for your next event.

Find A Need and Fill it: How Apple becomes the first $1 trillion company

Its market cap today is $577 billion. Where do the next $400-plus billion come from? 

Click to enlarge.

In a note to clients issued early Tuesday, Piper Jaffray's Gene Munster raised his Q2 iPhone estimate (to 33 million), set a new 12-month price target ($910 per share) and -- most provocatively -- laid out a roadmap for Apple's (AAPL) market capitalization to go from $576.79 billion as of Monday's close to $1 trillion by 2014.

That would be a first. The previous record for the largest market cap (price per share times number of shares) ever reached by a public company was $619 billion, set by Microsoft (MSFT) in 1999.

So where does Apple get the next $400-plus billion?

The short answer: Half from more money pouring into tech stocks and half from money continuing to drain from the market cap of Apple's major competitors, who have roughly $1 trillion between them.

As the chart above shows, in the past four years, Apple's market cap increased by more than $390 billion while that of six core competitors -- Research in Motion (RIMM), Nokia (NOK), Sony (SNE), Dell (DELL) Hewlett-Packard (HPQ) and Microsoft -- decreased by more than $400 billion.

Turning to the next three years (2012-2014), Munster writes:

First, we believe dollars invested in US technology companies will increase ~5% y/y on average for the next three years (CY12-CY14). By comparison, dollars invested in US tech companies were up 9% y/y in 2011. Therefore, the tech sector will add ~$390 billion in market cap through 2014. We assume Apple could capture half of this market cap (from 85% in the 4 years prior).

Second, the companies we consider to be the 10 most relevant competitors to Apple (Samsung, HTC, RIMM, NOK, SNE, DELL, HP, MSFT, INTC, GOOG) represent nearly $1 trillion in market cap today. We believe 20% of that value, or ~$200 billion could shift to Apple through 2014. Thus there is potential for Apple to repeat history and add another $400 billion to its market cap. At a $1,000 share price (roughly $1 trillion in market cap) Apple would represent 26% of the total US tech market cap from 17% today.

Ironically, Munster believes that the impact of Apple's dividend -- which for years was touted as the trigger for growth funds to finally start putting money into Apple -- will be relatively small:

If we assume that 25% of large cap tech income funds buy AAPL (which we estimate to be about $150 billion), that would add around $40 billion to Apple's market cap or 10% of the total market cap increase needed to get to a $1,000 share price. That said, we believe many income funds have already bought shares of AAPL, so the more likely impact is closer to a 5% benefit.

Posted in: Apple, Dell, Gene Munster, Hewlett-Packard, HP, Market Cap, Market capitalization, Microsoft, Nokia, Piper Jaffray, RIM, Sony

via tech.fortune.cnn.com