Commentary by Jack Hipple

When was the last time you put air in your tires? Do you have a relatively new car that has an automatic warming light to tell you that tire pressure is low? What did you do? Probably pulled into a gas station, maybe put a quarter or two in the slot, and the air pump turned on and you added air to your time. How did you know how much air to add? Did you stop momentarily after eyeballing the tire, get out your tire gauge (you DO have one in the car, don't you? Or did you run in and buy one from the gas/conveneincve store?), or look at the gauge that may have been attached to the end of the air hose? In case you haven't figured it out by now, that's what I did this morming. In any event, you know you should not overinflate the tire and that's a lot harder to "see" than an underinflated tire.

Next time you visit your local hardware or major discount store, go to the auto parts department and find the new tire caps with automatic pressure readings built into the head. They can even be purchased at various pressure levels (24, 28, 32, etc.) that change from green to red when the pressure is not at or above where it's supposed to be. Are you thinking about what a good business tire gauges are right now? Do you have the same feeling that paint roller pan producers felt when the Black and Decker Paint Stick(TM) arrived on the scene?

These two simple examples are concrete illustrations of an irreversible trend in product development---systems and products are absorbed and integrated into their super-systems, irreversibly, over time. If you're in any kind of business where someone is buying something from you, you need to be constantly asking the questions, "What is my product being used for? What system is it being used in?" "What is its FUNCTION (not what it IS)?" The history of inventions and the study of over 7 million patents tells us clearly that this Will happen, with or without your help. You can either follow the train or get run over (put out of business) by it. In the cases above, the suppliers of the metals and plastics used in making paint roller kits and tire gauges see theitr sales volume drop and probably wonder why. If they're only talking to their direct customer and not watching what is going on one step above their customer, they are due for a surprise. There is no product in existence that someone is trying to figure out how NOT to use. You need to be ahead of this thinking and figuring out how you're going to replace the FUNCTION your product provides. This may be very uncomfortable to deal with as it may mean changing your business, the type of people you hire, the intellectual property you license or develop, and the customers you talk to. NEVER rely on your first direct customer to be the sole driver of your market research because if they are not thinking about how they could be replaced, you are even one more step away from that awareness your self.

How could your product or service and what it does be replaced? Integrated into its super-system? If the answer to the second question is "I don't know", then start thinking about it and how it would affect your research budget, the type of people you hire, and who you collaborate with. Now!

Have you paid attention to some of the new product developments lately and looked for some over-riding trends? Think about Dyson, the i-Phone, and the new electronic book readers from Borders and Barnes and Noble as examples. Dyson is selling vacuum cleaners without bags and fans without blades. Both of these advances eliminate significant parts of engineering systems, and, in theory, minimize parts and maintenance operations. The Apple iPhone eliminated the antenna. And you know what happened next---reception suffered when the antenna, embedded in the frame of the cell phone, was obstructed. Competitive phones began an attack with full page ads describing their "redundant" embedded antennas and Apple had to give away millions of dollars in free cell phone cases to compensate.

What do these examples teach us about "trimming and simplifying"? First of all, this kind of thinking is a great starting point for new product breakthroughs and business concepts. In this context, think about how Amazon has virtually eliminated the book store and book readers have eliminated paper and book marks.

Arbitrarily get rid of a part of a system--preferably one that has significant cost or inconvenience to the user. Then figure out how to get back the "function" that this now eliminated part was performing with the elements in the system that are left. But we can't stop there! We need to think about what might make this new design "go wrong" or not function properly. The antenna could get covered up...what if the dust (without a bag to catch) got into the motor? What if the sunlight interferes with the electronic book reader on the beach? What if sand gets on the screen? Challenge the simplified design and ask yourself how you could make it fail! What could you do in the way of simple redundancy that could make the new system cheaper, simpler, and more robust?

The lesson is not to simplify without also asking the question of what negative things could come out of the design change. Without doing both, you're taking an unnecessary risk.

What's so special about this announcement? It says that, after decades of off shore oil drilling, the industry is going to collaborate on safety matters. Do you know what the largest chemical shipped by volume in the world is? CHLORINE--a yellow green, toxic gas that is poisonous in large dosages, but toxic to hazardous bacteria and fecal material, and without which there would be no clean drinking water, nor one of the most widely used plastics for plumbing, house siding, and blood tubing. There are numerous producers of chlorine, which is shipped in tank cars all over the country in huge quantities. The next time you are stopped at a RR crossing, take a look at the stenciling on the side of the tank cars and see how many are labeled CHLORINE. This industry figured out decades ago that there was so much chlorine being shipped into so many different places in the country that it made no sense for each company to be responsible for its own tank cars in the case of rail accidents or emergencies. What made sense was for the CLOSEST supplier with trained emergency crews to respond to a derailed or leaking chlorine car. This rapid response system has been active for over 40 years and has served both the industry and the US citizenry well by minimizing the amount of time it takes for a trained crew to arrive at the scene of an accident and provide assistance.

In a recent headline, "Oil Companies to Create Industry Response System for Deep-Water Oil Spills", we see that a few of the major oil companies have "discovered" this strategy for their own industry: "Four of the world's largest oil companies are creating a strike force to staunch oil spills in the deep waters of the Gulf of Mexico in a billion-dollar bid to regain the confidence of the Obama administration after BP's Deepwater Horizon disaster. Exxon Mobil, Chevron, Royal Dutch Shell and ConocoPhillips are expected to announce Thursday that they are forming a joint venture to design, build and operate a rapid-response system to capture and contain up to 100,000 barrels of oil flowing 10,000 feet below the surface of the sea".

It continues to amaze many of us in the TRIZ commumity how long it still takes for one well known practice to migrate from one industry to other industries. For the hundredth time since these columns have been written, "Who else has a problem like yours? How do they solve it? Who else knows something that can help you?"

The annual meeting of the World Future Society was held in Boston this past week and I attended to teach a short TRIZ Futures Course and listen to a few speakers address future issues of concern. It was interesting that 1/2 of the TRIZ Futures class were from the military. Military atttendees and government contractors, charged with future strategy and planning, represented 6-7% of the 700+ attendees. Next to the US, major countries with attendees were Canada (50), Mexico (13), South Korea (11), UK (9), and Finland (8). Major segements of attendees were from academia, insurance industry, entertainment, and the food industry

Some highlights of presentations I attended:

"The City Sustainable"--a presentation by Jennifer Jarrat and John Mahaffey (Leading Futurists LLC) illustrating many examples from around the world of communiites integrating sustainability concepts into their strategic planning. One of the more interesting illustrations was from Greensburg, KS, a town almost totally destroyed by a tornado some years ago. The city, able to build from scratch, incorporated many "green" and information infrastructure aspects that would never have been doable while trying to maintain an existing infrastructure. This raises the question we should all think about and that is, "what would be do if we started all over again?". Total water recycle, use of vertical and 3D geometry, and alternative fuels were all part of many of these examples. That's an interesting think to think about, isn't it? If everything around you went away tomorrow, what would you replace it with? The same thing?

"Keep It Simple Stupid: Energy and Environmental Strategies"--a stimulating presentation by Ysvi Bisk (Center for Strategic Futurist Thinking) about simple and obvious solutions to the energy crisis. He made the analogy to the monopoly enjoyed by salt traders for food preservation to the current stranglehold that oil has on the US economy. He made a passionate plea for the electric car (to be generated by the vast coal and natural gas reserves the US has) to replace the oil infrastrucure. He pointed out that Mexico and Indonesia were now importing oil, and serious shortages of welders, mining engineers, and civil engineers were being seen. He said that we now use the energy equivalent of 1 bbl. of oil to produce 3 bbls where it used to take only 1 bbl to produce 100 bbls. and that the average age of technical personnel in the oil industry is now 50, and the knowledge and skills required to replace this deep knowledge was simply not happening. He broke down the use of a bbl of oil to be 23% industrial (chemicals and materials resources), 68% transportation, and 3% electricity generation. Eliminating the use of oil as a transportation fuel, he argued, was the best way to free ourselves of the current day "salt" monopoly.

"Oceans and our Global Future"--lunch presentation by Susan Avery, President and Director of the Woods Hole Institute. Susan made an impassioned plea to pay attention to our ocean resources that provides 20% of the aninal protein and 5% of the total protein in the human diet. The challenges in possible global warming, drought management, and eco-systems. She had great concern about global warming stratetgies that did not directly take into account the impact on ocean systems which represent 71% of the earth's surface and contain 97% of the planet's total water.

"Navigating the Future: Moral Machines, Technosapiens, and the Singularity"--keynote by Wendell Wallach from Yale University's Center for Bioethics. Wendell highlighted many of the future challenges that we have faced over and over again with increased knowledge--how will we use it? A skeletal bone can be used as a tool or a weapon, the Internet can provide information or invade privacy, etc. One interesting statistic he mentioned was that by 2050, 1/3 of all weapons in use would be unmanned (I.e. drone missiles as an example). He suggested that we have not begun to think seriouisly enough about the extension of the average life span (it was 46 in 1900 and is now 78 and rising). A population with significant perecentages of those over 100 and 110 years of age has significant consequences to society in terms of costs, medical care, indirect employment impacts, etc.

Other topical tracks were focused on the Future of Education, a look back at Brasilia after 50 years, the Future of Terror, Humans in 2020: The Next Ten Years of Biotechnoloogy, Future Military and Civilian Policing, the Changing Landscape of Nonprofit Organizations, and the Unemployment Conundrum

Website for additional information and purchase of particular presentations is at http://www.wfs.org. The 2011 conference will be in Vancouver, BC, Canada in July 2011.

How many of you are old enough to remember some of the original cast episodes of Saturday Night Live? There have been several famous ones including the mimicing of Julia Child's cooking show and bleeding all over the food she was cutting, as well as hundreds of spoofs of politicians from every party and political spectrum. One of my favorites was the one where one of the actors (Rob Schneider) went into an office area and asked someone at the copy machine and asked what they were doing, and the famous reply came back (sorry I can't imitate the accent, etc.) that he was "making copies".

Why do we make copies? Buy copies? Ever thought about this for more than a second? Well, they're cheaper is the simple answer. Could we afford to pay for an original performance from one of our famous actors or actresses every time we went to a movie? Could we afford to hire Neil Diamond to come into our house or car to sing for us every time we felt like hearing one of his great songs? Have the NY Philharmonic set up on our lawn on Friday night? No, we just buy a record, CD, DVD, etc. and pretend they're with us. Could we afford to have original copies of every handout and invoice in our organizations? Sometime we even "lip synch" because we're too lazy to sing in real time. Making copies is a commonly used inventive principle usually used to just save money or effort. But sometimes it gets to be a more serious endeavor with a little bit of serious science behind it.

Many of you are familiiar with what we call the "placebo" effect. Someone gives you a pill and tells you that it's a medication for what ails you and, amazingly, a small percentage of the time, the individual actually feels better because they think they have taken a new miracle drug. This happens in new drug pharmaceutical trials all the time and has to be figured into the data analysis. Let's see how we see this "making copies" inventive principle is used in a pro-active way. Along the 440 mile stretch of Interstate 40 across Tennessee over holiday periods, the state police would love to have manned police cars every ten miles or so to pursue speeders. But that's expensive, and besides, police like to be home with their families over the holidays just like the rest of us. If you make this drive some time, you may see lots of state police cars, but fewer than 10% of them will have people in them. But by the time you get close enough to actually notice this, you've slowed down because you're not sure. Even the radar guns can be turned on randomly without people being there. Making copies of the policemen. People trying to take advantage of multipassenger express lanes frequently put dummies in the passenger seat to make it look like there are two people in the car. Making copies of passengers.

Now, let's get really serious about this inventive principle. Let's make copies of antibodies. Antibodies are the proteins in our bodies produced by the immune system to recognize and neutralize foreign threats like infections, allergens, viruses, and bacteria. Our body makes them all the time, but occasionally in inadequate quantitities, so that our natural system can be overwhelmed. Producing them artificially is not easy nor cheap though being able to do so would be a breakthrough in the treatment of many diseases. In the latest issue of Popular Science (http://www.popsci.com/technology/article/2010-06), we see a fascinating article about the development of PLASTIC antibodies by a research team from the University of California and the University of Shizouka in Japan. This involves creating plastic anti-bodies 1/50,000th the size of the human hair by molecular imprinting antigen shaped craters into the particles which then attached themselves to the real anitgens in the blood. Our rapid development of nano and micro technology now allows relatively inexpensive duplication of what would otherwise be extremely expensive biological materials. These articifical antibodies tracked down threats and allowed mice to have a much higher survival rate. This is molecular imprinting and using the inventive principle of "making copies" (for the TRIZniks out there with your contradiction table, this is inventive principle # 26, resolving the conflict of wanting to improve "manufacturability" (system parameter #32) vs. "device complexity (parameter #36).

Rob would be proud of us--we're "making copies" and possibly saving lives at far lower cost. We'll have to watch and follow this development. Where and how can you use "copies" instead of expensive originals?

Do any of you use water in your processes? Why? How much? Most likely it's to cool something or to dilute something. Clean water is becoming more precious all the time as a Florida resident such as myself can testify. Though we are surrounded by "water", it's salty seawater and unusable for drinking or most crop irrigation. In fact, Tampa, FL has just (finally, after a year long struggle) brought on stream the country's largest water desalinization plant, supplying 10% of our county's water supply. This water is far more costly than the ground water typically used, but its raw material source is reliable.

Water (fresh water) is not going to become any cheaper. All the inexpensive sources such as dams and lakes are, for the most part, already committed. When a resource, whether it be water, energy, or air, becomes scarce, the processes that rely upon it bvecome very expensive and ultimately unstainable. An interesting book that I purchase every other year or so, Vital Signs,2010, published by the Worldwatch Institute, has a number of very concise graphs and summaries of the world's resource use. One of these that caught my eye was a table (p44) showing the water required to produce selected foods, in cubic meters of water/ton of foodstuff:

Beef 13,500

Pork 4,800

Poultry 4,100

Soybean 2,750

Eggs 2,700

Rice 1,400

Wheat 1,160

Milk 780

Now, I was aware of some of these discrepancies, but not to the degree that I see here. If we're in the innovation business, what does this tell us? First, there will be a crying need for more efficient and effective means of desalinating water, treating brackish water, and recycling used water. This will not be easy since fundamental thermodynamics tells us that water wants to be with salt and it will always cost energy to separate the two.

But more importantly, where do these numbers say that we should focus our food research efforts? Soybeans and eggs are both sources of protein, just like beef, but use 1/5 as much water. The opportunity to make these foodstuffs more palatable to meat eaters is clear. We have seen some of this over the years in the form of soy burgers.

Right next to this chart is another chart showing the water consumption by various energy types:

Solar .0001

Wind .0001

Gas 1.0

Coal 2.0

Nuclear 2.5

Oil 4.0

Hydropower 68

Biofuels (current) 178

More interesting data. Wind and solar have continuity and power density limitations and hydropower is limited by natural locations (and is for the most part already used), but the driving force for natural gas is very clear as well as the tremendous incentive to increase the power density of solar power. Processes that use energy that is both readily available and not as highly dependent upon water as a resource to make and use will have a natural long term advantage.

It's amazing what two simple charts can tell us about where to focus our innovation energy in the water and energy areas.

Comments are welcome!

Theme for the Day: Moving Beyond the Core: New Business Model Creation, Keynote: Vijay Govindarajan, Professor of International Business and Founding Director of the Tuck Center for Global Leadership, gave a fascinating presentation highlighting the ignorance of many in the West about global markets and totally unique concepts for new businesses that escape the mind of someone trying to do business in India.

He summarized the the basic breakthrough new business thinking process as:

1. Manage the present
2. Selectively forget the past and
3. Create the future.

The future needs to be at least 2030 in the thinking.If #3 is to succeed, it is critical to succeed at box #2. #1 is linear thinking as typified by Six Sigma and operational excellence. #2 and #3 have major discontinuities where the fundamental business model shifts. Box 3 is easier than box 2. It's hard to forget.

Strategy is business model innovation. In emerging markets such as India and China, one can't use US models. He cited a classic example of Ford's first attempt to penetrate the lower cost Indian market by taking a basic $20,000 US car and removing features. One of these was removing the power windows in the passenger seats, forgetting that most Indians who could afford a $20K car had a chauffeur and easily opening the back windows was an essential element. The alternative approach, of scaling up and making a $2,000 car by scaling up two wheelers will disrupt the rest of the world. Strategies such as this will transfer back to the West and cause major disruption.

Change the customer, change the value, and change the architecture. He cited Dell computer as a US example.He emphasized this "doing the impossible" (I.e. $2K car) by reminding the audience of the original goal to get to the moon, originally considered unrealistic. (Note to TRIZniks: the Ideal Final Result!). Without a serious challenge goal, we rarely exceed our ambitions. If we are rewarded for meeting goals, that's what we do. We need to focus on "next practice", not "best practice".

He described another Indian business success where a company was founded whose strategy was to lend to the poor (Another TRIZ note: Do it in reverse). Strict small dollar limits were set, women (vs. men) were the primary borrowers, no collateral was demanded, and the "bank" went out to the people (people did not come to the bank). With no bailout money, they lent over $10B in increments of $15 each along with self help groups. 99% loan repayment was experienced and the concept is being expanded to loan money to beggars after asking them what they need. They can get another $20 by repaying. It is estimated that Mumbai has 500,000 beggars and half are now salesmen. This business opportunity could apply to 130 countries globally.

Vijay also went over the top 11 things to deal with a dead horse (http://vjaygovindiarajan.com/newlsetter.html) as abstracted from his newsletter site. A few were quite humorous:

1. Maybe the horse isn't dead,
2. Hire a consultant to study the horse, and
3. Replace/fire the jockey.

We need the VOO, not the VOC. VOO is the voice of the outside. In the Hindu religion, there is the god of the present, the god of destruction, and finally the god of creation. We have to follow this (be born, be preserved, be destroyed. Doing this in our personal lives has value as well.

Presentation: Deb Mills from Corning discussed their recovery from the "valley of death" in 2002 when their stock price went from $110 to $1 in one year. They started a major new business and innovation effort with the goal of doubling the number of breakthrough products and businesses. These new activities were "fire walled" from the rest of the organization until their revenue stream could be said to be predictable.

Presentation: George Glacking from P&G (85,000 employees, operating in 160 countries with 300 product lines) reviewed their box 2 and 3 successes, including Tide and Pampers. Gillette was added in a major acquisition. In 1996 came Fareze and Swiffer. Many of there new businesses were the result of ad hoc activities where team leaders came and went. Not clear to P&G whether it is better to separate these types of ventures as opposed to embedding them. Many teams has 50% representation from outside the natural business area. Staffing choices are critical. The key early stage question in not whether it is possible to do something, but is there a way to capture value. Without a "yes" to that question, a project does not proceed.

"Fishbowl Commentary" Nine Sigma is working hard to change their business model from a transactional one to one where they take ownership of the goal and result for the client. As an outside resource provider they are free to use all tools (not just the clients' ones) as well as to work with the competition in a way the problem owner cannot. Alcoa commented that they used a joint venture approach when the new opportunity does not align sufficiently with their core business. Corning is looking at contract manufacturing much more than in the past. In general, these firms commented that a shortage of the right people, not money, was the primary barrier.

Keynote: Teresa Amabile (Harvard Business School) presented her latest case study findings on morale within organizations as it related to innovation by contrasting a two company study done on outstanding and poor new product development performance. Her findings bottom line finding was that business issues such as ownership form, incentives, personalities, and whether Stage Gate type processes were used were not the key distinguishing difference--it was quality of work life. This study covered238 professionals, 26 project leaders and the analysis of 12,000 diaries! None of the findings were not new, in my opinion, just further reinforcement fo the things we know we should do, but seldom do. Collaboration is one of these. Joy and pride in one's work vs. a culture of anger and fear coupled with project and personal support for individuals play key roles. Frequently goals change and management does not listen. Desired needs from management (again nothing new here, but certainly reinforcement of what know is critical) include recognition, clear goals, support for progress made, providing mentors, and extra personal support. Mundane events matter to people. One bad day has a much more negative effect than a single good day.

Presentation: Bob Wolf and Sandy Linetta (Glaxo Smith Kline) described their efforts to ignite the innovation fires. These included many fairly convention items including hiring some "weird" people, hiring of expert out side consultants, changing organizational structures, basic creativity training, book reading, etc. They did not set up an "innovation center". They felt that inclusion of marketing people with R&D was a excellent "fusion". They took action to move from a functional to more brand siloed groups, moved to a more ext external focus, and had more face to face vs.virtual interaction with customers. Their building of new facilities with "hubs" that included all functions raised key matrices such as "easy access to colleagues" (50-90%) and "easy access to decision makers" (40-80%)

Keynnote: "Innovation is Successful Only When it is "On Code" (Clotaire Rapaille, Archetypes Discoveries Worldwide and Author: The Culture Code: An Ingenious Way to Understand Why People Around the World Live and Buy as They Do

Clotaire made an extremely interesting presentation on the internal "coding" of our thinking and brains, meaning why people do what they do and why they frequently say one thing and do another. An individual's "code"is defined as why they accept or reject new ideas and types of innovation. An example he started with is the difference in approaches to the challenges and opportunities in airline travel. The airplane builders, in trying to improve the qualitry of the air travel experience are thinking in terms of leg room and food service where the big issue in the mind of an airplane user is the time involved (travel, security, etc.) getting on to the plane much more than the flight itself, which in many cases is much shorter than the comiing and going from the airport. No airport at all is what would be desired. He also mentioned the different strategies employed by Boeing and Airbus with Boeing's smaller, but longer range 787 providing more non-stop capability. He suggested that we go beyond getting out of the box and get rid of the box (airport?). (TRIZ folks: Ideal Final Result: Something performs its function and doesn't exist!). Clotaire says that our code of analysis and reference is imprinted early on from our experiences and there's no second chance for a first experience. He pointed out his surprise that in the US conference rooms usually have no windows vs. lots of windows elsewhere. He pointed out the most important code within us is the one related to survival. In this regard, we have 3 brains: reptilian (both an inside version relating to food, care, etc. and an outside, and emotional one). He used the example of the very sucessful PT Cruiser from Chrysler as an example of a product appealing to both inside and outside codes of our brains. The exterior design was very round, shapely, and "feminine" (appealing to our emotional side) while the inside was more like an Al Capone escape vehicle. It was an example of a love/hate car crossing two codes in our brains. Digitial watches vs. hand watches in another example of appealing to different "codes". Then we have the cortex analytical part connecting with other people and facts, data, reality, statistics, and prices. This last part ontrols the other two functions and cleans the plate ccasionally (men and women very diffrent about this). Men tend to react to the aroma of coffee vs. its taste and a mother relates it to breakfast and feeding the family. An innovation in this area must be "on code"--aroma. He related this to the eleimination of the PT Cruiser when Chrysler was taken over by Daimler Benz who did not see the need for a "feminine" code product. He also speculated about the changes in store now that Fiat, an Italian company, was the owner. Chrysler employees must feel very schizophrenic! The American "code" is that they do not want smaller cars. From Geneva in Europe you can be in Italy, France, etc. within 30 minutes or at most 3 hours. In America we can drive for a week and still be in one country. Space and efficiency are both important. That's the "code". In Japan minimal space is the norm--there is no word in the Japanese language that we would interpret as "privacy".

Innovation has to make life simple. Adding one step of complication causes a 20% loss in market. No cables for anything! Approach a car and it starts!

Corporations have cultures and replicate themselves without awareness and then cannot adapt. Terrorists have no structure (vs. the Panzers in WWII Germany). With little investment, big results are achieved. The 9/11 incident involved the purchase of 10 plane tickets.

We don't use outside resources enough to break our "codes". Having seven engineers on a "brainstorming" team is 6 too many, he says. Find a priest, a baker, a car dealer, etc. Multi-cultural diversity to understand "codes" is important. The Japanese perception of cleanliness in a bathroom is different than a Chinese perception since Chinese bathrooms are so much smaller and the focus in on how clean the celliing is since that's the only thing that can be seen. (When was the last time you looked at your bathroom ceiling?). The Japanese and Americans have very different "codes" about time.

It takes only one second to create history. December 6 and 8, 1945 were distincly different for both the US and Japan. He made other comparisons of Japanese and American "codes". Doing things right the first time in the US is "boring. Americans don't read instructions--they make mistakes. The Japanese read the instructions 500 times. We frequently don't use the additive strengths of the different "codes" in people. Be suspicious of any CEO who only knows one language.

In the US we are only interested in what's impossible. That's what we need to ask our teams to do (Note to TRIZniks: the Ideal Final Result)

Jim reviewed his research in the use of collective random intelligence highlighting a study done by placing an oxen on display and asking all passerbys to guess its weight. After collecting hundreds of ballots, the "average" guess was 1197 pounds vs. the actual 1198 pounds. No one guess was correct but the average was. We need to tap into colective intelligence and reach across all inputs. He pointed out that studies have shown that crowd predictions on elections are more accurate than Gallup polls 75% of the time. How do we make sure we "reach across"? Use diveristy (multi-cultural, age, gender, type of training) and expand the range and type of diversity you're considering. Everyone is not making the same mistakes!

Most meetings are echo chambers. He related how the term "devil's advocate" came about. In the early days of the Roman Catholic church's practice of naming "saints", there was great concern about the significance of this decision and a single dissenter was always included in the discussions and just as importantly, the "dissenter" was constantly changed. People dissatisfied with their "team" experience tend to be ones who like consensus and prefere homogeneious teams that can reach consensus easily. Good decisions arise from conflict. This needs to be made explicit at the start (Personal input here--if we made more proactive use of psychological assessment tools, this would be much easier). Imitation and group think are potentially dangerous in innovation. He mentioned a study done in Times Square where one person looked up at the top of a building and 5% of the surrounding crowd looked up. When 5 people looked up, 20% of the crowd did. When 8 people looked up, 45% did.

Be careful about oral responses and talkative people in group decision meetings. Knowledge and incites come from unexpected sources and people and leaders cannot dictate this in advance.

This group discussed their individual company approaches and processes for corporate wide idea collection. Avery Dennison has an "idea bank" which collects employee input and ranks against business needs. Award systems are used but not strictly related to dollar impact. There are special rewards for ideas relating to REPLACING current products and businesses. (Personal note: that's a great idea!). Motorola has an inventory of 16,000 ideas via an Open Idea Market. No special rewards, relying on WIIFM, helping, sharing. Clorox makes heavy use of both internal and external social media.

This session used a very interesting format which may be of value to you. The speakers were on a small stage in chairs, and after their brief oral (no slides)presentations took questions. The person asking the question was invited to join the panelists and participate in the Q/A, providing a "build" on the idea inputs. It suggested to me a possible format to replace the management lecturing presentations followed by Q/A in many companies. The employee asking the question would join the management group, replacing a manager who then beome part of the "audience". Might provide some interesting dynamics!

Sony described their efforts in future scenario planning, primarily based on bundled functionality and bundled services. As a service provider, Pitney Bowes uses the concept of a "challenge architect" in thinking about the service process they provide. They see the "democratization" of innovation. This is a reinforcement of trends mentioned by many other speakers. They use a RGB framework to categorize ideas (red--now, green--procede, blue--blue sky concept). They listen to the "voice of the retailer". Sony pointed out the change in photography trends as an electronic camera allows the user to take many more pictures and then delete them later (Personal TRIZ note: cheap and disposable principle). This is a miniature version of the information age challenge of having too much information and trying to sort what is valuable.

Dr. Vandebroek sumarized Xerox's corporate strategy as combining the customer's wishes and wants with Xeroxx capabilities to produce breakthrough products, services, and $$. She also mentioned their partnership with Fuji in Japan and mentioned their R&D budget was $1.5B and having 50,000 patents and generating them at a rate of 10/day. Xerox sales are $22B and it employs 130,000 people.Business focus is documents, document management, and business proffess outsourcing.Their Palo Alto Research Center (PARC), formally an only internal Xerox research center now gets 50% of its revenue from outside Xerox. Their R&D budget is split approximately in thirds: exploration, incubation of new businesses, and current commercial product lines. They use Customer Innovation Councils with P&G, cited as an example. They collaborate on space design, types of printers, solid ink waste. One of these efforts reduced printer power use from 400kwh/day to 70. She mentioned that there are 3 TRILLION pages/yr. being generated and less than 5% has been digitized. There are 9B times more electronic data than is in books

Internally, employees are required to participate in their "dreaming" process. They observe and categorize opportunities by remote knowledge workers and mobile knowledge workers.

They have recently purchased Lulu self-publishing. A book can be published in 5 minutes and downloaded within 20 minutes.

This talk highlighted the importance of platforms as an innovation engine. A picture of the original Sputnik satellite in 1957 was shown but the point was not the satellite (and its repercussions in the West) but the fact that the signal from this satellite was not hidden. Now satellite signals are use to accurately locate submarines and form the basis for GPS navigation. GPS is now a platform, not just a signal. Ideas are also networks. They start as a network of neurons firing and then making new connections. The history of the Philadelphia Coffee House where Ben Franklin and other early American inventors gathered to not just drink, but to exchange ideas. Platforms build and cross pollinate. We now have Google maps, Twitter, SMS cell phones, HTML, http:, etc Four Square is new business concept using all of these. Clusters, not corporations, are what is important. These are not necessarily exclusive.

The disruption was the flash microchip, but the challenge was culture barriers and roadblocks. In 1975, the first digital image was captured on a TV.The charge coupled device in the late 60's allowed the exploration of image capturing in an electronic fashion. Initially there were no specific business goals. The first digital camera has .01 megapixels, only B/W, and a 120X160 mil active area, and required a custom setup. There was no budget (he had to personally buy the CCD), they had no dedicated space and only 1 technician. The prototype was the size of a toaster, had a digital cassette, and used 16 batteries. With the Kodak "culture" of perfect image quality, the quality of the picture at that point was a major barrier. In 1977, a technical report was written, a patent filed in May 1977, and the first digital camera patent issued in Dec 1978 (#4131919)

The internal reaction was curiousity and caution and there was hesitation to show around. It generated more question than answers (no film? no paper? It's too far out). People don't want to view an image on a TV! How to store the images? (No mass market PC's at that time) How to make reliable? The paradigm is the paper picture is reliable almost forever. The PC, the Internet, wide bandwidth, photoprinting in the home were all paradigm changes. The context of its use was not imagined. In 1976 the question was asked, "when will it impact consumer photography?" In 10-15 years, they went from 10,000 to 1 million pixels and 200X improvement in resolution. There was zero interest in memory cards. There was much more support outside of Kodak than within. The development of digital circuitry in terms of speed, power, and size were just not imagined. Image compression (.jpg) was another enabler. It removed 90% of the image that the eye couldn't see anyway and allowed the introduction of artificats. The D5000 camera introduced in 1989 ran into significant cultural issues ("you can't change film sales", "call it in an image accessory, not a camera"0. The bottom line issues are to understand the corporate culture and view your innovation in their context, have friends (they're had to find!), and be honest and positive with your internal PR. Don't make yourself the issue. Remember all roadblocks are temporary and plan for what's next. Be patient, persevere, and be persistent. The key learning was the need was an image, not the film. Now the internal gospel is "no more film projects"! This was a fascinating presentation by someone who has more patience than anyone I have ever seen make a presentation since Art Fry's Post It Note story.

For those of you who are not aware of or don',t shop at Target, you are not aware of the concept of the "Guest" in the store. At Target, the guest (not the "customer") is at the center. It's an ethos vs. a process. Open innovation is part of Target's DNA along with the emphasis on diversity of intellectuality. Challenges they have been dealing with include balancing the Target store brands vs. the brand names. Their market demographics are getting older and more diverse.

They encourage teams to share results across the company, and strive to diversify the interests and include critical thinkers. Some time ago, they arrived at what they called the "Moment of Truth" and that is that the guest comes first and the vendors/suppliers are second. "Speed is life"--need to learn quickly. "We must not forget what we learned" as the economy gets better--don't let up!

Target now has a Director of Guest Insights to ensure they continue to gather information from the "guests'" perpective.

This division of GE sells CT and MRI machines and has a very engineering focused R&D team. Their challenge is in selling their technologies and products and bringing ethnographic research into their planning. 90% of the time the product technology is there but the design aspects come at the end They have sent a number of their engineers to a design course at Stanford to try to improve the understanding of the product/customer interface to their engineers. In other words, what is the customer "experience"? It's usually not very pleasant, frequently requiring sedation, especially for children under 6 and adults who are claustrophobic. They have made some interesting changes in the design and the experience to try to change the perspective to one of an "adventure" for a child (make it a spaceship with stars projected for example), and introducing comforting sounds and smells, as well as decorations. "We need to get away from the image that we're "torturing people"! Part of the Stanford course involves teaching some basic creativity skills to their engineers to improve their ability to be more right brained in their design thinking to hopefully produce a more user friendly experience, not just a better product.

Day 3 tomorrow!

I am attending the Front End of Innovation conference in Boston and would like to share highlights with RealInnovation readers. This conference was started many years ago by Joyce Wycoff, a creativity consultant in California, primarily for her clients. It was originally called the Fuzzy Front End conference and blossomed into a fairly large conference over time, was merged into the IIR conferences, and has morphed into the Front End of Innovation. IIR's business model, as a profit making conference provider, includes many "paid" speaking slots and workshops, so the material being reported on is a little biased, but valuable nonetheless.

Day 1

Workshop: Increasing Value through Continuous Open Innovation Improvement

This theme of open innovation has greatly permeated this conference over time, recognizing the value of incorporating outside perspectives and resources to improve and accelerate the front end of innovation. Participants included Sealed Air, Hallmark Cards, Philips Consumer Lifestyles, and Nine Sigma (sponsor). Key advantages of open innovation cited by this group included more thorough benchmarking, acquiring talent, and the learnig of how to emotionally connect with consumers on products. Hallmark highlighted their positive experiences using the talents of the MIT Media Lab as well as the acquisition of Crayola that allowed them to successfully commercialize sound cards at an appropriate cost and with an emotional connection with the product. There was significant resistance to a traditional "art"design company to the the use of electronic and digital technology. All the participants cited the importance of high level management involvement and support, including regular reviews and support for external technology search. Hallmark discussed going beyond sound to recordability, and how to use the desire of suppliers to help them as opppsed to telling suppliers what they they (thought they) needed. Sealed Air talked about the advantage of putting out more general inquiries that generate more "serendipitous" outside in ideas. They also discussed the challenge of maintaining excitement for this effort and their partial solution of having quarterly meetings with their CTO and regular weekly conference calls. Their use of an organization such as Nine Sigma helped them to identify technologies and capabilities from totally different markets and very different solutions.(TRIZ practitioners take note!). Hallmark discussed how they targeted the music greeting card by clearly defining the goal as 3 pages of paper plus music at low cost, and clearly identifying the cost of the sound module as the cost breaker. Now the innovation challenge is to go "beyond sound" (recordability, dual sounds). Sealed Air discussed unique challenges in licensing technology from small firms outside the US. Small firms don't think like large firms and don't understand their processes. Language barriers need to be dealt with as well as the inability to accept delayed payments from large corporations. The observation was made that open innovation can actually take longer, but in the end usually is justified.The group, when asked about the future of open innovation, answered by saying that better VOC was needed, product linkage with a company's web site, and forcing the organization to be more deliberate as well as more flexible. Blaine Childress from Sealed Air described a coporation as an aircraft carrier trying to deal with attack boats of smaller, more agile competitors. Graham Mott said Philips hade condensed their learnings into a "cookbook" globally available across 40 different sites, put short time limits on CDA's, and the use of third parties for outside assessments.

Presentation: "Bringing Innovation to a Technology-Enabled Service for Seniors" (Bill Prenowitz, Philips Healthcare)

Bill Prenowitz talked about selling the integration of a product and interactive service to seniors. The fundamental difference is the person needing help can describe symptons to a trained professional vs. just calling 911. The service can also provide follow up calls. The system includes monitoring, calling, and response--all of which need to work to provide a great service. They have achieved 50% market share with only 20% total market penetration for such services. They learned early to hide all the complicated electronics and interfaces---this complexity (how it works) is irrelevant to the consumer. In this area it was critical to provide real product prototypes and not just concepts, as well as to triangulate market input. Their market research showed that seniors WANT to receive calls (they're lonely). Device design is critical in this area. Shrinkage of buttons on a phone makes it more difficult to use for seniors, but large buttons hurts their self-esteem. Large buttons with more space between requiring lower pressure is the compromise. They also discovered that slides on the side of the phone to control volume was preferable to dials.Vision and hearing impairments must be taken into account as well as providing response to varying strength and range of voice (TRIZ folks: Dynamism). In designing the software, functional mapping was used with embedded dynamism if a wrong response is detected.

Keynote: "More Meadows" (Robin Chase, Founding CEO, Zipcar)

Robin reviewed breakthrough products and services (in addition to the idea of Ziipcar, a car rental service with no large storage area) on the Web. Chat Roulette is an interactive web chat that started out with an old computer and in 3 days had grown to 30 million users! Web 2.0 where users are providing the content (TRIZ Folks: Do It In Reverse). Bed sharing in private homes vs. hotels now has 70,000 rooms. The analogy to Skype was made. The I-Phone now has 150,000 apps with 3 BILLION downloads.She pointed out that there are a lot more people outside the room of any ideation or innovation session. The wide availability of information and resources on the web is now allowing a person who used to do just one job to do seven and soon seven jobs at the same time. The paradigm is shifting from ownnership to sharing as the path to success.

Keynnote: "Unreasonable Behavior: A Driving Force for Innovation" (Mark Harrison, Innovation Director, Diageo and Eric Wilkinson, Cambridge Consultants)

Diageo is the parent of Bailey's Irish Creme and other premium liquors. Mark reviewed their long term business journey from growth to acquisition to cost reduction and finally to innovation. He reviewed one of their liquor breakthroughs--Bailey's Irish Creme, a blend of creme and liquor that no one thought would be viable. Significant technical challenges had to be resolved to keep the liquids separated until appropriate. He also reviewed a new product concept of frozen mixed drinks on tap whose major cost constraint was the large cost (80%) in the scraping system to clean the dispensing system. Details were not provided but one design parameter, which had originally ruled out the use of plastics because of low thermal conductivity. However, surface chemistry properties had not been considered and more than made up for the conductivty property. Need to be careful to consider all aspects, properties, and resources in the system. Other words of wisdon: Don't wait for a crisis to innovate. Think how your technology can provide the unthinkable.

　

Anyone old enough to remember that song? "Getting to Know You, Getting to Know All About You..." Well, I am still in a state of amazement and it took 4 days of contemplation to write a column after seeing the article, "Can GE Still Manage?" (Business Week, 4/25/2010, p27-32). As most of you know, Jack Welch thought long and hard about which of his senior executives would take his place and he chose Jeff Immelt, then head of the medical products business. He's had a rough time with GE stock half what it was before, selling long standing businesses, and people beginning to question his strategies and plans.

I don't have enough information to make a total judgment on someone like Mr. Immelt and I doubt that I could run a corporation as global and as diversified as GE, but there are some fundamentals that apply no matter what the business is or how big it is. One of those is having an intimate relationship and thorough understanding of your senior executives and direct reports who, after all, are the ones that actually run the company for you. In this article, Jeff, in an admitted attempt to "bond with this team", invited each over to his house for a Friday night conversation (I'll bet his wife was happy with 150 of these!), and then off to a hotel, only to return on Saturday for a more comprehensive discussion. The article further goes on to discuss his putting his own management style "under the microscope". The perception is that too much "warmth, wit, and attention has been beamed outside the GE family. Inside ...he has been less visible and less available".

What's wrong with this picture? Waiting ten years to have a serious down to earth conversation with the people who run your company? How can you run a company and not be available to the people who make it happen for you? Who are you? What motivates and excites you? What do you want to do ten years from now? How else could the company use your talents? How could we do things differently? What talent do you have that we aren't using? And on and on. Isn't this a conversation that should occur within months of someone taking on a job like this--not ten years later when the seeds of possible mediocrity have been sowed? How in the world can someone expect to achieve corporate goals if he doesn't understand the people who not only work for him, but on whose capabilities and interests rest the success of the company? Shouldn't this conversation take place on a frequent basis? Before you say 300 days divided by 150 is every other day, what else could possibly be more important? I can assure you that over a long period of time Six Sigma, the Crotonville Academy, the price of oil, and the competition in network television pale in comparison.

The questions for you are:

1. Do you run a business with people reporting to you? What do you REALLY know about them? What motivates them? What do they do in their spare time? What do they (really) care about?

2. Do your people wait to be invited to a sleepover to say what is on their minds? If so, why? What kinds of barriers to communication have you set up and don't even recognize?

3. When was the last time you spent talking (not Emailing) with the people you work with for several hours?

4. Do you know what is the most important thing your employees would change if you asked them?

5. What kind of a feedback loop do you have that tells you that you aren't spending enough time with your people? Or do you find it out when they tell you they'er leaving?

Get to know your folks---NOW!

Those of you who are not chemists or chemical engineers probably don't read Chemical and Engineering News which, once a year, reprints the acceptance speech from the recipient of the American Chemical Society's most prestigious award, the Priestley Medal. Dr. Richard N. Zare was recognized for his work in laser induced fluorescence and the study of single molecules in solution that assisted in sequencing the human genome. In his talk, he discussed none of that, but instead chose to discuss creativity. His focus was on the teaching of creativity vs. the learning of it. As most of us in the TRIZ community would agree, creativity CAN be taught and LEARNED. It is a teachable skill and science and not a mystery based on our DNA. This article is on pp 19-21 of Chemical and Engineering News (http://www.cen-online.org).

Dr. Zare says that creativity is the intersection of three things:

1. Your capacity to think outside the box and putting together existing ideas into new combinations (Amen!),
2. The knowledge and information you have (without that you have nothing to put together), and finally
3. Your motivation to think about something different.

All of this requires passion, resources, and daring to play with ideas and concepts that risk that what you are doing may completely fail.

He showed an example of how difficult it is to think outside the box by using the 9 dot illustration that many of you may have seen where you are asked to connect nine dots with only four lines and the recognition that the only way to do this is to go outside the geometry of the nine box. He goes on to show how the assumption that we must put the lines through the center of the boxes prevents us from seeing how to do this with only three lines and finally, by using a spiral, it is possible to connect all the circles with only one "line". (We assume the line needs to be straight, but no one told us that!). The only way to escape the original biases we have about this it to break the inertia in our minds and move on to irritation and the desire to solve a problem (does this sound like resolving a contradiction?). Then we move on to imitation--has someone else solved this problem before? The more and different problems you solve, the easier this is. Finally, he says we move to "intuition"--a thought process he describes as the balance of wild hypotheses and evaluation, requiring one to be a balanced schizophrenic. Finally, inspiration arrives when you see a connection you did not see before. The ability to do this once leads you to try a more difficult problem, and so on.

At a high level, the two key ingredients are confidence (you can solve this problem) and passion (it is important to solve this problem). This again should resonate with both general innovators and TRIZ practitioners. Interesting perspectives on innovation from an industry leader in creativity. What does it say to us?

1. Take off the blinders in both how you analyze and solve problems.
2. Keep your creativity and innovation genes active. They will atrophy just like bones and muscles if you don't use them. There is no shortage of problems in your organization or in the world around you--lots of things to practice on.
3. Keep the balance between analysis and hypothesis. I have been in too many "brainstorming" sessions where the judgment about success was how many ideas were generated, not whether a practical solution was obtained.
4. Look around you for people and industries with similar problems and use their solutions.

A great recipe to follow!

There is a fundamental law of product and business innovation that says that systems integrate into their super-systems over time. What does this mean? Let's take an example. You are in the business of making paint roller pans. You have worked hard over the years to add stability to these simple devices so that they don't tip over on ladders, added coatings to minimize sticking, and even made disposable ones in the hopes that people will buy your paint pans. You may have even gotten together with a paint roller supplier in a joint promotion at a local hardware store. Then you go down to your local Home Depot, Lowes, or Menards and see the Black and Decker Paint Stick(R)requiring no paint pan. Your product has been replaced by the void in a hollow stick, normally thought of as only a means for reaching places too tall for the painter. Being replaced by a void must really hurt an ego!

This is only one example. Here are some others to trigger your thoughts:

1. The elimination of labels on men,s, underwear shirts (don't know about women's!) eliminating the need for sewn labels and the materials used in making them. The shirt is the label.
2. The elimination of bank deposit slips through optical scanning of checks, eliminating the paper, all the chemical used in producing paper from pulp, and the printing inks used in making them. The check is the deposit slip.
3. The incorporation of toothpaste into the handle of a toothbrush, eliminating the need for the toothpaste tube and all the metal used in making it. The toothbrush is the toothpaste tube.
4. The incorporation of a toothbrush head into the end of a flosser, eliminating the need for a normal toothbrush and all the plastics used in making it. The flosser is the toothbrush.
5. The incorporation of a punch out spoon in the lid of a yogurt container, eliminating the need for a separate spoon and the plastics or metal used to make it. The lid is the spoon.
6. The use of the Internet for newspaper publication, eliminating the need for millions of pounds of paper used for printing, and once again, all the chemicals and machinery used in making the paper. The Internet is the newspaper
7. The incorporation of multi-functionality in office machines, eliminating the need for tons of plastic and metal used in manufacturing these separate devices. The fax machine is the copier
8. The incorporation of multi-functionality into home lawn products, eliminating the need for the plastic and paper materials previously used in making these extra product containers. We have also seen the incorporation of a lawn care business under the umbrella of the services of a termite service provider, eliminating the need for two separate business structures and their associated costs. We now have a "home service" provider. The termite provider is the lawn care provider.
9. The selling of duty free products on overseas flights, eliminating the need for a "duty free" store on the ground and all the costs and jobs associated with building and running it. The stewards and stewardesses are the duty free shop.
10. The integration of a tire structure into a wheel by Michelin, eliminating the all the rubber, additives,and the jobs used in the production of conventional tires. The wheel is the tire.

What's the point here? There are two very fundamental ones.

1. First, if you are providing a service or product to someone, rest assured that no matter how much they like you and your product, someone in that company or organization is trying to figure out how to get the function you provide without you. No offense intended, but there's a lot of money to be saved and possibly the invention of a new product or business that will delight their customers. Look at your product or service and and how or why it is used by your customer and ask how could its function (not what it is) be provided within your customer's product or business. Then help make that happen and patent the concept to allow for at least some royalty payments when your product is not needed any more. Or maybe buy your customer and implement the idea!
2. Secondly, if you're the buyer of something, start figuring out how to get the function provided by what you purchase without buying it--preferably by incorporating that function into what you already sell. This will most likely delight your customer and give you some patent rights that could be very valuable.

As an engineer and someone involved with TRIZ and innovation audits of organizations, I frequently find myself in discussions and conflicts with more right brained creativity individuals. I will define right brained as those who basically believe that in the fields of creativity and innovation it is quantity that is important. In other words, any approach that increases the ability to generate more ideas, the better.

I have been in these types of session where the quantity of ideas generated was the yardstick for success (not useful ideas, but total number of ideas). I have also seen some exercises such as walking around matrices that are supposed to generate significant new ideas. All of you have seen group sessions involving any number of techniques involving balloons, music, etc that are supposed to improve our creativity.

I think I have finally figured out how to have a rational discussion about these approaches vs. more structured, left brained processes. That discussion revolves around understanding the difference between attitudes and tools. To be more innovative requires a desire to do something different than is normally done, a competitor is doing, or something that might be needed in the future that is not obvious. There is no point in learning tools that may be needed to allow this to happen without a basic change in attitude. This attitude cannot be changed for any length of time by executive edict and especially not if the edict is not followed up by sincere and continuous support. If an organization has a long history of incremental improvement, listening only to current customers, and doing only what the boss says, there must be an attitude change, up and down the organization. Replacing people may be necessary.

Some of the soft tools such as breakouts, adventures, and internal parties and kickoffs, are frequently necessary to let people know that there is a step change coming and management is serious. However, if requests for freedom and financial support to do something new and different are denied because we will never do something like that, the boss will not like it, or we have no money to do that, then the truth will echo around the organization as fast as EM can travel.

There must be a fundamental shift to think and act differently. It is critical at this point to also understand and acknowledge what the climate is and that means understanding the profile of the organization, using one of many organizational assessment tools. If an organization is composed of 80 percent Myers Briggs sensors and strongly adaptive individuals as identified with Kirton KAI, the challenge to think outside of the box is going to be extraordinarily difficult. People will be frustrated and the results desired will be almost impossible to achieve. The attitude of wanting to change the status quo must be there. Someone who does not see the value in change is going to be difficult to motivate toward true innovation. By the way, it would be no easier for the opposites of these individuals to deal with a short term structured emergency or a quality control procedure analysis. If there is a basic shift in attitude, then we can discuss how to accomplish the goal of the change in attitude.

What is needed now are tools for innovation that support the change in attitude and environment. If the problem is not too challenging, simple tools such as CPS, or DeBono processes may be sufficient. If it is one that has serious contradictions, is complex, or has been approached unsuccessfully for years, it may take more complex tool kits such as TRIZ. There are areas of overlap between them and ways to combine can be very effective. Each of these tools requires a different kind of attitude shift. All require some level of belief in a structured approach and process as opposed to random brainstorming. To be effective these tools and processes must be used broadly, not just by the troops, but the senior executives who are touting the value of them without having used them. The first use of them should be at the executive level to analyze the challenge of innovation inside their organization.We need to understand there is a difference between attitude and tools. If we want innovation and change, we need to change both and it may require different approaches to each.

Many of you may have seen Google's earnings report announced on Friday, January 22. In the 4th quarter of 2009, their sales (just one quarter!) were $6.7 BILLION and profits of $2 BILLION. This was 5 times the profit of the previous quarter. Let's think about this a second. How would you like to make 30% profit on this large a sales volume without MAKING anything that you can touch and feel. Just information!!

Companies like Intel and Exxon spend over a billion dollars in capital just to build a state of the art chip factory or petrochemical plant. Now Google has offices and spends a lot of money air-conditioning the building that hold all its servers, but this is a fraction of what is required in traditional manufacturing of cars, steel, chemicals, and semi-conductors. And none of these industries make 30% on sales. In a very good year, they might make 15-20% return on their capital investment (not sales and maybe a 30% return on sales on a few real specialty products for which patents haven't expired). These plants have to be constantly maintained, updated for constantly changing environmental and safety regulations, and plans for ultimate disposal of the property and equipment.

Wouldn't it be a lot more fun just to collect and sell information? Isn't that a lot easier? Well, of course it's easier if that's all the further your thought process goes. If it was that easy, everyone would do it. Despite the challenges of Microsoft and Yahoo, Google is still number one and is stretching its business vision beyond web searches. This tell us that information, itself, it pretty cheap and a commodity. It's all around us. But to sift through it, analyze it, and get only what you want is the real challenge.

Information is a critical resource. We know this but not everyone recognizes this. Sometimes it's egos that get in the way--we don't collect information that might be bad news or we "spin" it (now don't get huffy here, but consider the last several elections where the results ("information" as well as votes) are trying to tell the politicians something and possibly not just that "they don't get it").

I'll bet that many of you collect tons of information in your process control computers and your customer interviews. What do you do with it? Store it? Or analyze it? How? Do you recognize all the informational resources around you? When was the last time you asked one of your employees their opinion about something vs. telling them to be a "team player"? Have you ever asked your folks what skill or talent they have that you are not taking advantage of? Have you ever asked them about what they observed on the midnight shift? What they saw on the last customer visit that wasn't on the agenda or meeting plan? Have you considered what else you might do with the information that's already out there?

Let's consider a very recent example to illustrate these points. If you are a public agency responsible for traffic control and emergency medical repsonse to a traffic accident, how have you managed this for decades? You sit in readiness and wait for someone to call in an accident. Then you respond appropriately. This takes a certain amount of time. What if you could shorten that time? Clear the road quicker? Possibly save someone's life because you responded quicker with an ambulance? What information is at your disposal that could accelerate your response? Before I tell you the answer, think about this for a few seconds without reading further.......

What do people do today (that they didn't do 5-10 years ago) when a situation like this happens? Don't they get out their cell phones and call someone? Maybe it's their kids--"I'll be late to pick you up". Maybe it's a colleague with whom a meeting is scheduled. "I'll be a little bit late". Maybe it's picking up someone from work. "Don't worry, nothing happened, just stuck in a traffic jam--not sure what's going on". Everyone who does this generates an electromagnetic signal that is going to a cell phone tower. The dramatic rise in the level of cell phone calls is a resource and it is measurable. So if there is a sudden increase in cell phone calls, there's an accident! I know where to go because there calls are triangulated by geography and the signals now tell me where to go, almost instantly. Air Sage is doing this and selling the service.

I also recall a talk some time ago by someone from McNeil Pharmaceuticals about their putting cameras in the homes of people who were using their OTC medications (Tylenol(R) for children for example) to observe what customers actually did with their medicines, not what a consumer panel said they did. This allowed them to re-think packaging, dosing instructions, etc. The information was there all along, but no one bothered to make the extra effort to collect it. (It's a lot easier to just send surveys out, isn't it?).

Think about how football strategy has changed now that someone up in a booth, being able to see the whole playing field, can wirelessly communicate to the coach and tell him what the opposition did that he couldn't see from his ground position. What else is possible to do with this new resource of cell phone signals? Norwich Union Insurance is using this information to know when a car is on the road vs. in the garage. Why pay for accident insurance if the car is in the garage? How about monitoring how fast your teenager is driving? (This now combines cell phone signals with the "new" resource of GPS satellites).

What are the lessons here? First, information is an important resource. Second, it is easy to get overloaded. Thirdly, analyzing and sifting through information is what is critical. Fourth, new informational resources appear frequently (the cell phone example would not have been there 20 years ago), so it's good that we take re-inventory resources and ask how this new resource could be used. Last, and most important, ask those around you what they see and observe. Ask yourself if the information you have is really direct information or indirect. Information and its analysis can be the difference between success and failure in innovation.

We head into 2010 with uncertainty. Things look like they may be turning up a little, but many people are still cautious, considering all the financial turbulence. In times like this, it's always best to fall back on things and principles we know will stand the test of time. Let's review a few of them as we plan our business and innovation strategy for 2010:

1. Cost reduction pressures will not cease, especially with continued globalization of business and technology. So how do we decrease costs? We lower the price of what we pay for raw materials, capital, and people. We beat up on our suppliers. Incremental improvements in these areas come from renegotiating contracts, changing delivery times, reducing overtime, automating--all the things that have been known for years and everyone else knows too. So what can you do that is special? Don't reduce costs--eliminate them! How do you do that? By not using the materials or resources at all. Now I don't mean brutal downsizings--there has been enough dumb non-innovative practice of that. I mean the scientific concept of "trimming." Black and Decker uses the empty volume in a paint stick to help people avoid paying for buckets and paint pans, while at the same time not paying for wood or aluminum volume not needed. CNN uses I Reporters to save all the time of jetting around their reporters around the country and gets the news faster and at NO cost! Put the toothpaste in the handle of the toothbrush--save the plastic as well as the cost to the consumer of buying a large tube they won't finish in a year's time. Email your bills--don't spend postage. Get rid of the tire--use the Tweel (R)! This is downsizing done with logic and science. It may or may not reduce people costs, but it sure opens the door for patentable products, margin improvement, and increased appreciation by your customers.
2. Keep from being "trimmed." Your customers may/should be doing the same thing. So what are you doing to help them get there? How can you reduce their costs, not just yours? How could the function performed by your product be done in a way that doesn't use your product? Think about that before they do. This may force a hard decision about what business you're in, an acquisition that may be needed, or a new approach to your business. If you don't do it, someone else will. Be first to figure out how the function your product performs can be done without it. This is very hard business strategy thinking but it's essential for survival in these times. Don't spend time working on a better "non-spilling" paint pan--it's not going to be needed.
3. We've been brutal with people and their loyalty. How are you going to get it back? How do you change the culture and memory from "shut up and do as you're told or you won't have a job" to "we really need you and your input and ideas".
4. We've written columns about style differences in people. We use all kinds of psychological assessment tools but we really don't USE them. They are discussed and the paperwork stored in a drawer somewhere.We put teams together without any thought to its composition except for the titles and backgrounds of the people. They are asked to work on problem 1. But problem 2 (how the team "gets along") is swept under the table and the problem 2 energy saps that necessary to deal with problem 1. People have different styles of relating as well as problem solving that are very hard wired. Measuring these and making sure that the composition and dynamics of the team are critical to success. Make this the year that this issue comes out in the open and is dealt with pro-actively.
5. Globalization pressures continue to increase. Inventors are figuring out how to deliver PCs and drinking water to third world countries in ways we have never thought of in the West. Potable water is delivered by sucking through a straw with carbon/other adsorbent materials embedded. No central drinking water facility. How much money does that save? What if these approaches are modified and scalable to other situations? Maybe we can learn from these approaches.
6. Egos are still with us. Make this the year you stop using acronyms and jargon to discuss your problems and make them sound fancy, unique, and sophisticated to any one who does not know the special language. Let your hair down and talk to a sixth grader about your problem. Then you'll find out that your problem is not all that special and that video games are the same as air traffic control systems, dissolving heart stents are the same as decomposing garbage bags, and high precision grinding diamond dust generation is the same as blowing the stems out of peppers.

ISPIM (International Society of Professional Innovation Management) Meeting, New York, NY Dec 7-9, 2009: "Stimulating Recovery: The Role of Innovation Management"ISPIM (http://www.ispim.org) is primarily a European based innovation organization with a combination of academics, consultants, and industrial practitioners. They hold two meetings a year and occasionally one of these is held outside of Europe. This year's meeting was hosted by the Fashion Institute of Technology in New York City. FIT is a very practically focused art and industrial design school. Below are commentary on several of the presentations over the first 2 days which I attended, and editorial comments with both my general innovation and TRIZ hat on.

Dr. Rita Gunther McGrath from the Harvard Business School discussed "Growth in Uncertain Times". She made a very interesting presentation on thinking ahead in starting up a new business--asking the important questions first and looking at upward integration for value, which is not a new concept for those familiar with this line of evolution in TRIZ thinking. She illustrated this point vividly with the example of Build-A-Bear, a toy store company (and also on line now) in which a shopper chooses a "basic" bear and then outfits it with whatever clothes, ribbons, etc. that wants, in the store.

This model (the same one used in "cutting your own" Christmas tree farms, or the Chucky Cheese franchises (where the emphasis is on the party and not the pizza) allows individualization of the shopping (and innovation experience) and generates 70 times as much sales volume per square foot as a typical Toys R Us store, upon which they had benchmarked and simply could not generate the sales volume desired in the space they could afford. This also allowed "quantification" of the fantasy as seen by the shopper. Another point during this presentation, as this company's development was reviewed, was the constant tracking of assumptions in a new innovative business.

We all make assumptions and Build-A-Bear made a list of there assumptions, dates, changes that occurred, etc. and then reviewed these on a rigorous time basis. All this takes is a simple spread sheet. The learning here is to constantly review the assumptions made and react before their changes become crises.

A very simple new business innovation tool.Dr. Jody Holtzman from AARP discussed the challenges faced in trying to expand innovate within the traditional structure and original mission ("retired persons") of AARP. The dropping of the "retired persons" from the organization title and moving simply to the AARP acronym has not been successful in removing the stereotype image and prevents a barrier to new business and product offerings to younger individuals. This non-profit organization currently has 40 million members with $1 Billion in annual revenues, 65% of which comes from the sale of auxiliary products, endorsed by AARP. Membership dues, by themselves, are a losing proposition.

The linkage they have discovered for new product offerings and potential broadening is the 18-34 old age segment which is linked to their traditional older membership by the "sandwich" generation issues associated with elder care and college costs. In the US, 10% of people aged 18-34 still live with their parents, 1/2 of whom are retired. AARP has now formed 400 on line communities to share ideas, listen, launch test visions of new products and services. They have 400 on line communities for market research under the heading of Lifetuner.org This is providing support and market research to overcome resistance from senior management. They "fly under the radar", and work remotely, but still report to senior executives in the organization. These on line communities are a vehicle to learn and minimize cost of failure of new ideas. The expert advice supplied as part of this effort is not linked to any sales effort.

An observation made by Jody was that people question methodologies but not results. The key in this effort has been to link the needs of younger people to the current needs of their present membership. (TRIZ principle of using existing resources) This effort has allowed this innovation effort to not threaten the current organization business and structure. There's a lesson here for innovators---linking innovative ideas to an existing business or structure, not only not to be threatening, but also enhance existing product offering. A point made by Jody was that what seems to be "radical innovation" for a given organization may not really be radical innovation in its traditional sense.

It's important to know the difference.Dr. Gina O'Connor from RPI reported on a long term research study tracking the life of internal venture groups, showing the familiar story of less than a 5 year life in the early days of these programs (this author has led and published a similar study also reviewing the psychological profiles of these groups vs. the corporate surroundings). Beginning in 195 through 2000, these efforts took on a different character, using multi-disciplinary teams to produce "radical innovation". After 2000, these efforts focused more on capabilities rather than specific products or businesses, allowing them to respond to a broader variety of challenges. This mirrors the emphasis in TRIZ on understanding the function of a system and analyzing that vs. focusing on a specific product.

Her vision of a radical innovation hub includes a mandate and scope, the skills and talents required, appropriate processes and tools, and integration with decision makers. These observations parallel those made in the 2001 study of failed innovation champions published in Chemical Innovation.Robyn Raybold from Microsoft provided some fascinating statistics on the Web as well as the thinking behind their new Bing search engine product. Since 1997 there has been a 10 million fold increase in content on the web, an increase from 700K to 160 million web sites, and an increase from 256 million to 1 trillion URL's. During this time there has also been a huge increase in video and audio content. She also stated that their research showed that searches drive by visual content and images was 23% faster than with word content.

An example of what they have tried to do with Bing (Note: I have no first hand experience with this search engine) would be someone searching in the new car area would automatically be provided picture and rating information without being asked for it. (TRIZniks: the need identifies itself and comes to you without asking--the IFR). The decision to design the system this way was in part driven by data that says that 25% of user clicks on a web search are to go back for additional information, only 65% of users are satisfied with their search experience, 50% saying their searches take too long, and 42% saying their searches need refinement. An example used was the narrowing of search from "New York" to "New York restaurants" to "Chinese restaurants in New York". She also made the point that a lot of people used to be satisfied with the first cell phone from Motorola (true--do you remember how big and bulky they were? But they did something you could not do before. Think about the original microwave ovens that cost $499 and all they did was boil water!)

66% of people make decisions based on web searches. 43% of searches are in the health care area. It's interesting that in the food industry food products such as Prego now have over 20 variables and Bing is going in the opposite direction with consolidation. Again, from a TRIZ perspective, one can make breakthroughs and make a product or service more ideal by either adding useful complexity or by consolidating and simplifying. A bit of trivia that I found fascinating was that on average, web users check the weather sites 2.6 times a day!

Dr. Howard Moskowitz, in his talk and participation on one of the panels, made the analogy of our progress in innovation as the same as moving from astronomy (observation) to physics (understanding the basic science of the universe). In his primary talk, he made the point that the US has virtually given up manufacturing and that the only thing left is knowledge to distinguish it in the future. He also shared his experience in observing and working with customers and clients and made the excellent point that customers do not tell you in clear detail what they want. Better coffee can mean strong and dark or weak and milky and unless you've actually watched them make their coffee, you can't be sure. He's a fan of the fail early, quick, and cheap school and developing what he calls "rule developing" experiments (sounds like the 40 Principles!)

Dr. Jayakanth Srinivasan from MIT reviewed his work with Rockwell Collins emphasizing the combining of lean principles with innovation. He mentioned the "10X" principle, meaning that a true breakthrough idea could be stimulated by such thinking. This is very similar to the IFR concept in TRIZ except TRIZ goes further! Part of this operates as a suggestion box program independent of the business units (I have my doubts about this). His model is a combination of open innovation, technology scanning, and internal R&D. A quote from 1927(Schumpeter): "Changes of the combination of the factors of production as cannot be affected by infinitesimal steps or changes at the margin. They consist primarily of changes in the methods of production and transportation, or in the production of a new article, or in the opening up of new markets or of new sources of materials". A lot of wisdom from a long time ago!

Andres Stuckl from Swiss Post (post office) discussed their approach to open innovation. Two key thoughts. "Industry related factors determine the need for open innovation, while internal culture determines how it is implemented.Sabube Brunswicker from the Fraunhofer Institute discussed how we have begun to use open innovation concepts in looking for technology, but not sufficiently in looking at the open innovation process itself. This was the only paper to mention TRIZ and of course TRIZ is a tool kit and mental mind set that can assist us in looking for parallel universes with similar problems not thought about previously. The key elements of an open innovation program, according to Brunswicker, are (1) define where is the open innovation needed, (2) where to look [Note: this is a key area for TRIZ assistance through generalizing the function that is needed], (3) what to source--the specific function required, and (4) governance and control (details and mechanics of the search). Key factors to be considered in these activities include trend and competency analysis, abstraction of the problem [Amen!], and domain and firm selectionMy short presentation on inventive principles and TRIZ generated a lot of discussion and I was very surprised at the lack of awareness of TRIZ, especially with all the TRIZ activities and organizations in Europe, including many large corporate and organizational users such as Siemens, Nestle, and the Fraunhofer Institute.The next meeting of this group is in Barcelona in March of 2010. http://www.ispim.org

Why do we go to movies? Because for less than $10, we can see famous movie stars that we could never afford to pay to come to our house for a private showing. Why do we use copier machines? Because we could never afford the time or money to hand write all the copies we want. The Gutenberg printing press was one of the most significant inventions in history. Why do we buy records or CD's? Because, as with movie stars, we could never afford to pay for these singers to sing for us individually whenever we wanted. Copies are cheaper.

Why do we benchmark against the industry's best? Because we hope we will learn something that we can apply to our own situation without having to pay for all the consultants and hard work that was done to get there. We want to "copy" them without having to invest all the time and money they did to learn what they now know.

Making copies is also a significant inventive principle and every once in a while we need reminded of that. Over the past few months, two very clever new products have appeared which solve some long standing every day problems.

1. The first is the problem of people stealing sandwiches from group refrigerators within a common lunch area. What would make you NOT want to steal a sandwich? Maybe because it's not the kind of food you like, so you look for someone else's sandwich more to your liking. But what if the sandwich had mildew on it? You wouldn't touch it with a ten foot pole, would you? A very new sandwich bag is now on the market with pre-printed mildew stains on the film! Not expensive to do and commands a hefty price. Check out: http://www.thisnext.com/item/7BBC47F6/4ED4FA3B/anti-theft-lunch-bag We "copy" the mildew. The mildew performs its function without existing. Note that there are some interesting product improvement opportunities here. What are they?
2. What's another minor inconvenience? You're on a diet and need to measure portions with special cups or spoons and then put the measured portions on a plate. Several new products have come to market in which the portion sizes are painted on the plates or controlled by sectioning. Type in "diet portion control plates" into your browser and see all the products, or take a look at one of your airline or holiday catalogs. Again, the plates now provide the function previously provided by the extra utensils.

In Europe, a painted image of a highway "slow down" hump that's not really there causes cars to slow down. Where else are two items needed to accomplish something where one could be eliminated and its function provided by "copying" it on to or within another system? What product do you have that could perform the function of something else? The other product gets eliminated, you get to raise your price, and maybe even get a patent. What a deal! Copy something! Eliminate the second thing. Raise your price for the "new" product that does two things instead of one.

What is the red zone? In American football over the past ten years it has come to mean the last 20 yards to go before a touchdown--the 20 yard line of the opposing team. Why is this important? Well, the defense gets a little more stingy and there's less ground for the offense to spread out. The defense has less ground to cover and defend, theoretically making their job easier and the offense's harder. The game becomes a little more exciting as a team gets closer to scoring or having to compromise for a field goal.

This past week, I saw an advertisement for one of the satellite dish packages for "red zone" football coverage. If you subscribe to one of their football packages, you are automatically alerted when some other game, that you are not currently watching, is in the "red zone," just in case you want to switch and watch the other game. You don't have to channel surf to see if there is another game more exciting than the one you're watching. Interesting concept, isn't it? The information that you need only comes to you when you need it.

In my last commentary, I mentioned the I-Report system that CNN is now using to have thousands of amateur reporters submit stories. Now this isn't going to happen unless there is something of interest, so CNN can, to some extent, can relax a little in the need to send hundreds of reporters out in the field--when there is something of interest, it will come to them.How much time and money do we waste being constantly on "alert" for what we need or want? Where else have you seen this principle (information comes to you only when you need it) used? We now get alerts from airlines via our mobile devices when a plane is delayed. We get coupons Emailed to us from vendors based on what they know we buy. Where else might this "information only when we need it" principle be used in innovation, from the standpoint of both customer and supplier?

Let's say you are a user of a supplied part from another company. Most of the time you're probably talking about price. Do you have a mechanism for supplying to your supplier critical change in specifications or need on a moment's notice? If you are the supplier, what mechanism have you provided to assist your customer in doing this? Even in pricing, we see Orbitz automatically issuing refund checks when another customer books the same reservation at a lower cost. The customer doesn't have to go looking for the information--it comes to him automatically.

In your own internal operations, what mechanisms do you have in place to let your employees know of a sudden change in the organization's business? A customer's critical need? What mechanisms do you have in place to instantly find out what personnel issues or rumors might be of concern to your employees? Not a suggestion box--something pro-active that alerts you instantly so that you can be supportive and empathetic.What information do you need? When do you need it? How can you get it only when you need it? How would your business change if this was possible? Are you surprised by competitor innovations? How could you find out what their plans are? What are their patent filings? Where are their people showing up at meetings? Who are they talking to? About what? Don't wait for the information to come to you--at that point it's a touchdown; you want to know when someone else is in the "red zone".

Accurate, timely, and low cost information can be a critical component of innovation and market research. Think about the following things that all of you have experienced or seen in the past few years. First "I Report" on CNN News. People all over the country are empowered, with no money (!) to become reporters for the CNN television network and get their photos seen on the air. What an ego rush! Your name (briefly) and your picture are seen by millions of people around the world for a short period of time. You can tell all your kids and relatives. How much money did CNN save in not needing as many reporters out in the filed? How much better was the reporting by having actual local pictures taken on the spot?

Second, airline reservations. If you make one nowadays, you receive an advance check in notice via EM. If you do not react to this, your reservation is not canceled, but I suspect that your seat goes into the "oversold" pool and helps the airline decide how much to overbook the plane to possibly make some more money.

Third, www.despair.com, the hilarious inverted Successories imitator, has just started sending out their proposed lithographs WITHOUT a caption. Thousands of people, with a simple $500 incentive, send suggestions in. The list is narrowed to 5 and then a run off election is held, all electronically. The final result and winner's name is shared with their entire mailing list! What an ego boost to see your caption on an item that will sell for hundreds of times more money with no additional benefit to you. How much market research money has been saved?

Fourth, retail surveys after purchase. I did one of these after a purchase at a local Target store. The incentive was the opportunity to receive a $5,000 gift certificate (only one per month is given out). As I went through the survey, which was quite extensive, they were learning all kinds of useful things, not just about that particular shopping trip, but about my preferences, how and where (else!) I shopped, and much more. Now $5,000 is a lot of money, but I'm guessing that's less than ½ the cost of the salary of an experienced, full time market researcher in their Minneapolis headquarters. What a bargain!

What's the lesson here? What do all these innovations have in common? They are doing the opposite of conventional behavior, i.e. sending out reporters to find people, guessing at the number of actual fliers, spending their own money dreaming up ideas with only our limited brains, trying to guess and spend a lot of money on market research. They also have a common root in trying to get better information. So what's the lesson? The next time you need information think about how you can get it to come to you as opposed to spending your money chasing it down.

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