Innovation Excellence Weekly - Issue 11

Issue 11 – December 14, 2012

1. Nominate the Top 40 Innovation Bloggers of 2012...................….. Innovation Excellence

2. Rejection Breeds Creativity ………………………...……….…………….…….…. Drew Boyd

3. What is the Missing Cost of Not Innovating? …………………....…..……… Paul Hobcraft

4. Ask Not What Your Customers Can Do for You .......................………..…. Jeffrey Phillips

5. Career Thinking at 20+ .………………………..……………………………… David Paschane

6. Why You Need to Ask Why ………………………………………………………. Mitch Ditkoff

7. The Microsoft Delusion (with apologies to Henry Blodget) …………….….... Greg Satell

8. Time to Search for New Strategic Growth Opportunities …………….….. Rowan Gibson

9. Re-inventing Corporate Learning to Spark Innovation! ……………….….. Janet Sernack

10. Are You Ready to Win in 2013? ………………………………………….…..… Holly G Green

Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and

strategic advisors to many of the world’s leading companies.

“Our mission is to help you achieve innovation excellence inside your own organization by making

innovation resources, answers, and best practices accessible for the greater good.”

Cover Image credit: Sun and Snow on the Caucasus Mountains

Nominate the Top 40 Innovation Bloggers of 2012
Posted on December 11, 2012 by Innovation Excellence

Innovation Excellence loves making innovation insights accessible for the greater good,

because we truly believe that the better our organizations get at delivering value to

their stakeholders the less waste of natural resources and human resources there will

be.

As a result we are eternally grateful to all of you out there who take the time to create

and share great innovation articles, presentations, white papers, and videos and to

make a list of the Top 40 Innovation Bloggers available each year.

Our lists from the two previous years have been tremendously popular:

Top 40 Innovation Bloggers of 2010 (download the PDF)

Top 40 Innovation Bloggers of 2011 (download the PDF)

Innovation Excellence is now looking for the Top 40 Innovation Bloggers of 2012.

Do you, or does someone you know, write articles about innovation?

Or do you just have someone that you like to read that writes about innovation, or some of the important adjacencies – trends, consumer

psychology, change, leadership, strategy, marketing, management, collaboration, or social media (as they relate to innovation)?

Well, Innovation Excellence is looking to recognize the Top 40 Innovation Bloggers and you can help us find them.

People who nominate someone to be included on the list will be entered into the prize drawings for a range of great prizes (we’ll add more

prizes here as event organizers and others offer them up), including:

1. Conference Tickets – events TBD (why not yours?)

2. 2 signed copies of the five-star book – Stoking Your Innovation Bonfire by Braden Kelley – priceless

3. More prizes TBD

Let us know in the comments whether some of the prizes we are gathering should be reserved for the top couple of vote-receiving authors, or

whether the prizes should all be reserved for the people nominating innovation bloggers to the list.

The deadline for submitting nominations is December 17, 2012 at midnight GMT.

You can submit a nomination either of these two ways:

1. Sending us the name of the blogger and the url of their blog by @reply on twitter to @ixchat

2. Sending the name of the blogger and the url of their blog and your e-mail address using our contact form

So, think about who you like to read and let us know by midnight GMT on December 17, 2012.

We will then compile a voting list of all the nominations, and publish it on December 18, 2012.

Voting will then be open from December 18-31, 2012 via comments and twitter @replies to @ixchat.

The ranking will be done by me with influence from votes and nominations. The quality and quantity of contributions to Innovation Excellence by

an author will be a contributing factor (through the end of the voting period), so there is still time for authors and bloggers to make their first (or

your best) contribution to Innovation Excellence yet. To contribute to Innovation Excellence, simply:

1. Join the community

2. Click on the ‘Add Content’ option in the site’s main menu and log in with the same username and password you used to create your

account

The official Top 40 Innovation Bloggers of 2012 and the contest winners will then be announced on Innovation Excellence on January 1,

2013.

We’re curious to see who you think is worth reading.

Editor’s Note: Conference tickets are for conference admission only and are ultimately at the discretion of the conference organizers to grant.

Travel and any other expenses for attending the conference are the responsibility of the winner. All deadlines are midnight GMT on the day

mentioned.

Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and

builds B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising

an early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John

Wiley & Sons. He tweets from @innovate.

Rejection Breeds Creativity
Posted on December 12, 2012 by Drew Boyd

New research from Johns Hopkins University suggests that having our ideas rejected

tends to boost our creativity output.

Sharon Kim and her colleagues found that when most of us experience rejection, it

can actually enhance our creativity, depending on how we respond to it. The paper,

titled “Outside Advantage: Can Social Rejection Fuel Creative Thought?” was recently

accepted for publication by the Journal of Experimental Psychology. It also received

a best-paper award at the Academy of Management (AOM) conference held this

month in Boston.

As reported by Behance:

In the first experiment, participants were given a series of personality questions and told they would
be considered for participation in several group exercises in the future. When the participants
returned to the laboratory a week later, some of them were asked to complete a few tasks before
joining their group (inclusion), others were told that none of the groups had chosen them and they
would need to complete their tasks independently (rejection). When they calculated the results, the
researchers found that “rejected” participants significantly outperformed those that were included
in a group. Consider the difference between those who respond to rejection by sulking versus those
who respond by rolling up their sleeves and thinking “I’ll show them.”

The results were conclusive: rejection breeds creativity, especially for those who consider themselves highly independent. In final a follow-up

study, the researchers found the same trend using a different measurement of creativity.

For practitioners, how can this phenomena work to your advantage? When managing individuals or teams, the time will come when you have to

say ‘no’. In that moment immediately after rejecting a person’s viewpoint, you want to let it sink. Don’t try to minimize the impact by rationalizing

the decision or by other means of making the person feel better. But the key is to assign the rejected person right away to a new and important

task. Put them on a project where they can prove themselves and “get even.” You want to let their creative juices flow.

“While it is never a comfortable experience, the feelings of rejection can actually help us access our
more creative selves. Free from the expectations of group norms, we can push the limits of novelty.
Moreover, we can enhance that ability by changing the way we respond to rejection. Instead of
dwelling too much on the pain of being turned down or turned aside, consider the freedom you now
have to explore new possibilities and less mainstream options.”

image credit: rejected image from bigstock

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Drew Boyd is Assistant Professor of Marketing and Innovation at the University of Cincinnati and Executive Director of the MS-

Marketing program. Follow him at www.innovationinpractice.com and at http://twitter.com/drewboyd.

What is the Missing Cost of Not Innovating?
Posted on December 11, 2012 by Paul Hobcraft

We can often be asked “what is the ROI on this particular innovation or alternatively, on our

innovation activity”? This questioning increases particularly when there grows even more

uncertainties in marketplaces, when you are forced into making tougher investment decisions, in

allocating resources, in adjusting a strategy to meet changing circumstances. Then you get the

“well, what’s the payback period then?” Often we struggle to offer a half-decent reply as most

innovation has stayed mired in incremental approaches and so becomes fairly complicated in

identify the new part from the old that is already the invested part, or it remains uncertain, as it is

often exploring the unknowns.

Perhaps we should reverse this question or be ready to beat them to the question before they ask.

Two specific ways to think about this come to mind. The first was suggested in a post back in 2005

by Ruth Ann Hattori called “the cost of not innovating” and I like this one. The other came from a post by my innovating friend and

collaborator, Jeffrey Phillips “what are the opportunity costs on not innovating?” Jeffrey is still not residing on a tropical beach as he still

has not got the complete answer to that one. Both are tough questions but well worth reflecting over.

Merging both of their thoughts here and adding a dash of my own spice let’s explore this a little more

To quote from Ruth Ann’s article “What is the cost of not innovating?” What can happen when you don’t innovate but your competition does? If

management’s evaluation of the cost of innovation is only focused on ROI and doesn’t account for the cost of not innovating, they are only

seeing half of the picture and may be missing the half that’s strategically critical for the future.

Well how would you answer the following questions?

Again Ruth Ann nicely raises a few uncomfortable ones with some small adjustments on my part.

1. In the past couple of years, have any of your competitors brought to market an innovative product/service that you had the capability to create

but failed to bring to market? Why?

2. Has someone recently entered your market/industry with a new or novel new business model that is placing your business at a higher risk than

in the past?

3. Have any of your competitors found a way to streamline or reinvent processes that you still struggle with, to become increasingly open and

find new collaborative ways to speed innovation to the market?

4. Have your customers begun to drift away in search of a completely new solution to an old irritation as they continue to experience frustrations

with existing products?

The cost of not Innovating is the estimated dollar value your competitors have gained and that you have failed to capture through your own

innovation efforts and this strikes more at the core of the need for ensuring innovation is well-managed and supported. The cost of not

innovating includes everything you miss when your innovation efforts aren’t focused on your entire business process.

Can we compare the value of the missed opportunities to the opportunities we chose to pursue?

Jeffrey thinks the answer is a qualified “yes”. He suggests “that is, we innovators should attempt to place a value on every innovation or every

good idea, and suggest that the avoidance of innovation means that we miss out on new customers, new markets and most importantly, new

revenues streams and new profits. Those missed opportunities come at a cost – usually in disruption or product or service obsolescence. This

analysis requires a number of assumptions – that we can create a new product or service, that it has value or benefits to customers, and that

we can assert some knowledge about the downstream revenues or profits that will be missed if we don’t innovate”.

Jeffrey puts it really well, do managers ever ask “what is the size of the opportunity we miss if we avoid innovating?” You should consider not

just the short-term costs but also the longer term implications if you choose not to innovate by investigating and exploring all the options,

otherwise someone else will slip into this ‘void’.

What needs to be recognized by all is that measuring ‘returns’ is really hard

Often the person asking the “what is the ROI on innovation” has never been involved in creating, designing or managing innovation. They can

often be the ‘bean counter’, the hard-nosed CFO out to drive up the short-term performance, imposing short-term deadlines on getting the

innovation launched within a given calendar year to meet much of his performance measures. They also often do not really appreciate that

there are real disparities on time, investments and resources for managing an incremental project against one that leads to discovery or

disruptive innovation and why these are dramatically different.

Of course we need to measure, including ROI, by attempting to qualify and quantify investments and their returns. ROI on innovation is just that

much more complex. It is actually where you start in any discussion on returns. We should always start early; keep the dialogue going as

thinking becomes validated by new data, by new understanding.

The most valuable return comes from creating ‘something’ that separates you from competition and has the potential for a sustainable

advantage. We should actually start here. Achieving this outcome raises the bargaining power; it raises the perceived value of future attraction

from investors. Innovation that is different from other offerings in the marketplace gives you a clear space from the route that most travel, that of

commoditizing the marketplace, often through everyone just pursuing incremental innovations.

Sadly, many within organizations are only given the one choice within their innovation hands are just the incremental cards to play with. These

cards are the only ones dealt out by a leadership that often simply do not understand, or allow others to dictate, as they are not fully engaged in

innovation and what it can truly offer. We need to raise the stakes, play innovation poker perhaps and ask the question of them “what is the true

cost of not innovating? “What is the true cost of not engaging in innovation?”

Recently I’ve been making the case for closing the leadership gap on innovation.

So before I even get into asking “the cost of not investing in innovation” I’d look at the leadership gap or engagement with innovation as that

gives a “fair” indication of where innovation truly fits, beyond just simply jargon and talk. We have to ask constantly where else do you grow a

business, besides extending into new geographical areas – and tell me what is the investment in years and resources before you see returns

here? Or you safely continue to incremental-away as your contribution to having a comfortable and safe life. That just might be one comment to

far but might lend its self to being rephrased in a way that is palatable.

No, until we change much of the prevailing thinking, innovation is our only primary source of new wealth- of a country or organizations growth-to

get true engagement, that is our real imperative to achieve. Innovation primary aim is to strengthen profit, not weaken it, to build on what we

have with something that advances benefit and many often fail to recognize its place here also. We all wish to be part of something truly

exciting and certainly can’t get that much excited if we are asked just to engage with innovation simply as ‘appropriately’ or without any real

understanding of what is being asked but not supported. I wish we could get a greater innovation engagement.

Sadly the leadership tends to push innovation down the organization and in so doing is handing over their future, our future, and no wonder we

are seeing shorter tenures at the CEO level. Investors and stakeholders can only live with this level of perhaps, at best, ‘steady’ performance

for a limited time as this approach is increasing allowing for others to seize opportunities, chosen to be ignored often by current management or

not fitting with their prevailing attitudes and tenure. It is time innovation sits ‘squarely’ in the middle of each board room, well represented and

searching constantly in linking innovation to the strategy. I’ve outlined much on this alignment in different articles but start here to get into these

previous articles.

So often too little too late

Just look at the attempted turnarounds left far too late because the warning signals were ignored or not wanted to be attempted, as they would

have threaten the existing ‘core’ of what had been achieved and invested in, often build for different times. By taking a more evolutionary

approach, they would see emerging the rising stars of tomorrow where the organization will, over time, become their new core businesses.

Emerging new business help answer the “not investing” question

These emerging innovations or businesses may be step-outs from the core or more related extensions that simply need new capabilities and

time to build. They might be completely new areas to invest in. Building successful future businesses requires much seeding but then the

questions on “when do we get returns” rises up again-

A leadership team simply focusing on their short-term performance makes choices others never know about that are the real stakeholder, the

real investors that take an equity stake. Why do investors often remain ‘blind’ to innovations that have horizons that are not within the annual

review; even external board members often lack an innovation clarity that covers all the three horizons that innovation should be actively

worked across.

The missing engagement for innovation at the top

A clear lesson or message lies at the heart of this missing engagement gap at leadership level. Either we invest and engage, to be beyond

“average to good” in performance and drive the business with a “no compromise on innovation” mantra to get you above the majority and work

hard at managing the risk and return equations this needs. I believe this is the pathway to a healthy, sustaining future and we need more of this

“quest” for real growth.

Or you hanker down and become “frugal” and continue to par back to “good enough” where the majority of organizations wish to be, so they

can safely draw down their ‘result package,’ You try to keep the majority of the ‘passive’ shareholders happy to receive a steady return on their

investments. To achieve this often there is a need to sacrifice employee’s for the short-term and throw away their knowledge, trim away the

products that don’t fit, divest in assets that don’t yield immediate return, attempt geographical expansion on a “foothold” strategy and with

products simply adapted but not built from that markets understanding up. The final straw is the announcement of buy back schemes instead of

investing in the future by committing to innovation. Risk and investment in the future has got lost completely. This is the pathway to eventual

destruction but often the leadership choosing this path are not around to see the “bitter fruits” of these decisions.

This is our real innovation dilemma, our innovation blind spot when we look at where innovation fits within organizations, often we really do not

know what is actually taking place. I believe innovation roadmaps should become part of the reviewing process to give a better indication of the

areas of future promise.

Those that do constantly ask “what is the return for this innovation” really know this is hard but are often I feel defending the (their) status quo,

wanting to maintain the existing practices, denying in themselves by ignoring what is going on around them and re-affirming short-term

performance as the focus, at whatever cost. Those that look at innovation differently, across different horizons are searching for opportunity,

for new innovation pathways to a better, sustaining future. I very much subscribe to the three horizon approach to innovation where you operate

in different mindsets and scenarios.

We do need to ask constantly “what is the cost of not innovating” and “what is the lost opportunities we missed” by avoiding or reducing

innovation down to meet these short-term pressures. These that do want to engage in answering these two questions I feel, are really keen to

explore and embrace the future through innovation. They recognize uncertainty and risk-taking are necessary needs in today’s more

competitive environment and have to be a fair slice of the ‘investment pie’ going forward in managing.

Perhaps these are the perfect questions to ask each time - it begins to sort out the visionaries from the plodders. Those engaged in innovation,

those going through the motions. Then if you are still having difficulties in receiving replies then ask “well, what actually becomes the final cost

when we are forced to respond, often when it is too late?

Let me know how you get on in your personal investment return by asking others about a lack if innovation investment. Be ready for a spirited

discussion perhaps and look for a positive outcome. It improves everybody’s innovation rate of return.

image credit: shawnmccadden.com

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Paul Hobcraft runs Agility Innovation, an advisory business that stimulates sound innovation practice, researches topics

that relate to innovation for the future, as well as aligning innovation to organizations core capabilities.

Ask Not What Your Customers Can Do For You
Posted on December 8, 2012 by Jeffrey Phillips

I was pondering recently the risks associated with innovation. No, not the risks a

firm bears to create a new product or service, but the risks that a customer bears

when acquiring and using a new product or service. I wonder – do we realize what

risks we ask a customer to endure to use a new product?

After all, innovators are experts at risk. Any new product or service that actually

makes it to the market has been through the risk wringer. A good innovation

process has examined the new idea for financial risk, intellectual property risk, the

risks associated with the actual use of the product, reputational risk, and many

other types and forms of risk. By the time the product actually emerges from the

swamps of product development and legal review, it is often a pale shadow of

what it was at conception. Most businesses are more sensitive to the risks associated with launching a new product or service than they are to

the potential benefits of the new product.

But what’s interesting about all this fascination with risk is the seeming inability to understand risk from the customer’s perspective. If it is risky

to create and launch a new product or service for a business, imagine how risky it is for a customer to acquire and use a new product or

service. In most cases a completely competent product already exists and is widely used. It may not be the most effective or valuable solution,

but it is known and trusted. Further, the introduction of a new product or service introduces change, which most people dislike and avoid if

possible. There’s also the matter of distrust. We tend to distrust the new and untested, and rely on historical data and accepted products and

services. Sometimes that distrust is based on good reasons, and sometimes it is based on outdated assumptions. But what a world of trouble

we create for a customer when we introduce a new product.

Ask not what your customers can do for you

It’s usually just after the release of a new product when the grumbling starts. “Don’t they realize the benefits our product creates?”or “Can’t they

see the value our new service provides?” Every new launch is accompanied by a litany of complaints about potential customers, who don’t

share our enthusiasm for the new product. In many cases, that’s because the ideas have been shorn of any interesting features and attributes

as they were processed through the internal “risk wringer” in the business. Further, many ideas were off-target from the beginning, having been

birthed as a concept that was never tested and never fully validated with customers before becoming a new product. Too often ideas become

products without a full investigation of customer needs and expectations. We expect customers to adapt to our way of thinking about their

problems, rather than we adapting to their needs and expectations. What are you asking your customer to do?

Ask what you can do for your customer

Before the risk of launch, before the financial risks associated with developing a new product, before you strip out all the risk of a new product,

there’s a risk you’ve overlooked. That risk is that you’ve become so confident understanding what your customers want that you neglect to ask.

Or that you are so confident in market research that you neglect to dig more deeply. Or that you simply impose a new technology and assume

customers will adapt and adopt. You see, the biggest risk of all in a new product or service isn’t intellectual property, or financial risk, or that

your product will cause someone to lose an eye or a limb. No, the biggest risk is at the conception, when your team fails to engage with

customers in a meaningful way to understand their true challenges and needs. When you fail to perform deep customer interaction, the risk in

your product is baked in, and cannot be removed. No amount of de-risking or marketing can make a product that started life as unnecessary

and unattractive more attractive to customers. What can you learn from your customers about their needs?

The best products and services don’t ask customers to change and adapt, so much as to engage and embrace. The biggest barriers to any

new introduction are the amount of change necessary to adopt, the risk of an investment that does not provide benefits and inertia. What can

your product do for your customers that cannot be accomplished by what exists, or substitutes? What is so compelling that they will overcome

inertia to adopt? What are the key unmet needs or gaps that your product fills, and do those matter to customers enough to make them

change?

Ask not what your customers can do for you, ask what you can do for your customers.

image credit: colorful barcode image from bigstock


Jeffrey Phillips is a senior leader at OVO Innovation. OVO works with large distributed organizations to build innovation teams,

processes and capabilities. Jeffrey is the author of “Make us more Innovative”, and innovateonpurpose.blogspot.com.

Career Thinking at 20+
Posted on December 7, 2012 by David Paschane

This is a much different post for me. I get asked a lot about career advice from

20 something folks inside and outside the government. Then my cousin Jay

Saunders asked me. I thought a blog that is personal like this may resonate with

Innovation Excellence’s twenty-something readership.

Jay,

In response to your letter: You will be a highly valuable asset to any company

that appreciates hard work and determination.

You asked for advice, and mine is based on making a few mistakes, mentoring several 20-somethings, and vetting many resumes.

First, keep a healthy attitude. Make sure you are dedicated to being the person who makes work a great experience for others. Employers

need employees with integrity, grit, and kindness. Do what you commit to do. Overcome barriers. Treat people well.

Second, always innovate. You don’t have to invent something new, just try to gain deep awareness of the work structure, and earn the

discretion to make it better. Care about the outcomes, and think clearly about the creation of those outcomes.

Third, educate wisely. Throughout your career you need general knowledge about government, economics, business, and behavior; and you

need a tool box of skills that you perfect over time. Too many school topics seem to add no value to work.

Fourth, show leadership of your own life. Your career is made up of proof points about how you managed resources – time, money, and

relationships. Concentrate your time. Avoid debt. Do not take people for granted. Career growth is based on leading with increasing

responsibility of these resources.

Fifth, don’t fool yourself. If your career plan is based on ideas of saving people, traveling the world, or getting praise from others, you are

fooling yourself. These may happen in your life, but they are merely self-tempting illusions. A career is based on the value you bring to others in

very practical terms.

Sixth, pick a team you like. Your career is basically a team of people who trust you, enjoy working with you, and appreciate the value you bring.

Start seeing your current and future network as your career team – help them and they will help you.

So, build on your strengths and find those who appreciate them.

- David

image credit: imdb.com

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David Paschane, Ph.D. is the Government Editor of Innovation Excellence. He is an Organizational Architect from the

Washington D.C area. He is an Associate Research Professor at UMBC; a Founder and Volunteer at Military Alumni

Transition Career Headquarters (MATCH) and the Director of Strategic Initiatives at U.S. Department of Veterans Affairs.

Why You Need to Ask Why
Posted on December 9, 2012 by Mitch Ditkoff

Some years ago, there was a big problem at one of America’s most treasured

monuments — the Jefferson Memorial in Washington, DC.

Simply put, birds — in huge numbers — were pooping all over it, which made

visiting the place a very unpleasant experience.

Attempts to remedy the situation caused even bigger problems, since the

harsh cleaning detergents being used were damaging the memorial.

Fortunately, some of the National Parks managers assigned to the case began

asking WHY — as in “Why was the Jefferson Memorial so much more of a

target for birds than any of the other memorials?”

A little bit of investigation revealed the following:

The birds were attracted to the Jefferson Memorial because of the abundance of spiders — a gourmet treat for birds.

The spiders were attracted to the Memorial because of the abundance of midges (insects) that were nesting there.

And the midges were attracted to the Memorial because of the light.

Midges, it turns out, like to procreate in places were the light is just so — and because the lights were

turned on, at the Jefferson Memorial, one hour before dark, it created the kind of mood lighting that

midges went crazy for.

So there you have it: The midges were attracted to the light. The spiders were attracted to the midges.

The birds were attracted to the spiders. And the National Parks workers, though not necessarily attracted

to the bird poop, were attracted to getting paid — so they spent a lot of their time (and taxpayer money) cleaning the Memorial.

How did the situation resolve? Very simply.

After reviewing the curious chain of events that led up to the problem, the decision was made to wait until dark before turning the lights on at

the Jefferson Memorial.

That one-hour delay was enough to ruin the mood lighting for the midges, who then decided to have midge sex somewhere else.

No midges, no spiders. No spiders, no birds. No birds, no poop. No poop, no need to clean the Jefferson Memorial so often. Case closed.

Now, consider what “solutions” might have been forthcoming if those curious National Parks managers did not stop and ask WHY:

1. Hire more workers to clean the Memorial

2. Ask existing workers to work overtime

3. Experiment with different kinds of cleaning materials

4. Put bird poison all around the memorial

5. Hire hunters to shoot the birds

6. Encase the entire Jefferson Memorial in Plexiglas

7. Move the Memorial to another part of Washington

8. Close the site to the general public

Technically speaking, each of the above “solutions” was a possible approach — but at great cost, inconvenience, and with questionable results.

They were, shall we say, not exactly elegant solutions.

Now, think about YOUR business… YOUR company… YOUR life.

What problems are you facing that could be approached differently simply by asking WHY…. and then WHY again… and then WHY again..

until you get to the core of the issue?

If you don’t, you may just end up solving the wrong problem.

THE FIVE WHYS TECHNIQUE

1. Name a problem you’re having

2. Ask WHY it’s happening

3. Get an answer

4. Then WHY about that

5. Get an answer

6. Then ask WHY about that — and so on, five times


Mitch Ditkoff is the Co-Founder and President of Idea Champions and the author of “Awake at the Wheel”, as well as the very

popular Heart of Innovation blog.

The Microsoft Delusion (with apologies to Henry Blodget)
Posted on December 10, 2012 by Greg Satell

2012 is a pivotal year for Microsoft. They launched Windows 8, possibly their most

ambitious product ever, as well as the Surface tablet, their biggest ever foray into

hardware. So how’s that going?

Reviews have been lukewarm, sales for Windows 8 are lagging compared to the

Windows 7 launch and even Steve Ballmer has described the Surface tablet sales as

modest. In the past, I’ve been very optimistic about Microsoft’s future. How do I feel

now? Well, I’m doubling down.

Henry Blodget at Business Insider calls people like me delusional, but I don’t think so. What I think is really going on is that, while the pundits

are pointing out that Microsoft missed out on the last trend toward social, local and mobile computing (SoLoMo), they are probably the company

best position to take the lead in the next phase of technology.

The Case Against Microsoft

There are multiple narratives about Microsoft’s demise. Mostly, they look something like this one from Jay Yarow, who works for Blodget at the

Business Insider.

It starts out by pointing out, quite rightly, that the post-PC revolution greatly diminished Microsoft’s dominance. Where they used to control

95% of connected device operating systems, that share has fallen to the mid thirties. Next, Microsoft will lose hold of the workplace and Office,

their most profitable business, will falter as well.

From there, the downward spiral becomes inevitable. Microsoft loses developer support, their back office “servers and tools” business begins to

suffer and in the end, Ballmer and company are left with a third rate mobile operating system and no “killer app.” Microsoft, in effect, becomes

the new Nokia.

It’s a compelling story. Microsoft did indeed miss the Post-PC trend and has not been a factor in the huge SoLoMo wave that followed it.

However, there are no signs that the Office franchise is at risk and the Servers and Tools business is relatively new and continuing to grow.

What’s more, Ballmer and Co. are aiming at something else entirely.

Choke Points

In truth, Microsoft has never been a great consumer facing company. Nobody ever thought that they had the best products. In fact, they’ve

been bashed in tech circles for years, decades even. Yet, despite handwringing, we continue to buy Microsoft products because they are

essential to our working life.

In other words, they don’t succeed by dominating the consumer mindset, they succeed by dominating industry choke points. Through owning

small but important parts of the total ecosystem, they have been able to exert undue leverage on the entire industry. They have also been able

to partner well, extending their influence even further.

Dr. William Putsis, who studies industry choke points, likes to tell the story of SoftSoap, who managed to win and maintain dominant share

through buying up a 6 month supply of cheap plastic pumps, giving them a head start over deeply entrenched and well-heeled competitors.

Clearly, Microsoft has lost that kind of strategic control over the mobile environment and Windows 8, a solid product despite the naysayers

gripes, is not nearly good enough to win it back. However, it is also clear that they are have been busy, preparing for years to regain

dominance.

The Web of Things

The next phase of computing, from the consumer end, is undoubtedly the Web of Things, which is a vast array of sensors, devices, server

farms and big data techniques that will bring ubiquitous computing into the physical world. It has four pillars and Microsoft, to a degree

unmatched, has ensconced themselves in each one:

Smartphones: Here as I’ve already acknowledged, Microsoft has gotten a late start. Nevertheless, they’ve built a viable product as well as an

innovative, intuitive interface. They are now a serious player, they weren’t before and they will certainly gain market share, although how

much is anyone’s guess.

Smart Homes: While Apple and Google are making inroads with their smart TV efforts, Microsoft is far out ahead with xBox and Kinect. XBox

live has over 60 million subscribers and strong developer support, while Kinect is arguably the most exciting interface in the industry. They

are now integrating Kinect into Windows 8.

Smart Cars: Our cars are becoming an integral part of the new Web of Things as well and again, Microsoft has gained a strong advantage

here with their smart car initiative, which includes Ford Sync, Kia Uvo and Fiat Blue & Me

Smart Retail: I’ve written before about the future of retail and it’s clear that the Web of Things is already transforming the shopping

experience. Here again, Microsoft is making headway in retail solutions and have built a joint retail innovation lab with Razorfish, the digital

agency. Neither Apple nor Google has any offering to speak of in this area.

Besides all of this, there is the immensely powerful Office franchise, which neither Apple or Google have been able to get to work right on their

tablets. So Windows 8 is far more than a standalone product, it is a single, unified, touch, voice and gesture platform that will the Web of Things

on every screen. Nobody else has anything like it.

The Advantages of Modular Organization

It’s no mystery why Apple is a darling of tech pundits. Buy an Apple product and you are buying one integrated vision, where everything, from

hardware to software to look and feel are designed to work together seamlessly. This is especially important in the early stages of technologies,

when things tend to be a bit clunky. However, there is a price to be paid.

Go outside that vision and you’re bound to be disappointed. Many of Apple’s products, such as iCal, don’t work well with others. They are about

the only mobile device maker that hasn’t integrated near field communication (NFC) into any product. The list goes on. If Apple’s vision

conflicts with your needs, you’re out of luck.

Microsoft’s products will never work as well, because their products depend on dozens of hardware manufacturers to be delivered to the

consumer. There will always be something lost in translation (Android has the same problem). Yet Microsoft has been so successful over the

years because there are important advantages to a modular architecture.

While Apple does one major launch per year, per product line, the rest of the industry is a hotbed of innovation: New convertible laptops,

which integrate the productivity of a traditional device with the tablet experience best suited for media consumption; phones with countless new

features not available on Apple, plus a lot more to come.

In the final analysis, it’s not Microsoft vs. Apple, it’s Apple vs. every other hardware manufacturer in the world. Google, with their purchase of

Motorola, is in a dangerous middle ground.

The Truth: Microsoft Is Not Going Away

So let’s forget about the hyperbole for a minute and talk about facts. As a recent Businessweek article points out, we’ve heard about

Microsoft’s demise before. Still, after nearly 40 years it remains an incredibly strong company, with over $21 billion in operating profit during the

last fiscal year and over $60 billion in cash. They’re not going away.

Add to that their impressive lead with enterprises, two of the most popular consumer products on the market with xBox and Kinect, some of the

coolest technology on the planet, a set of smart alliances that have put them on the forefront of the Web of Things along with a new

operating system to integrate it all and Microsoft’s best days might very well be yet to come.

None of this is a knock on Apple or Google, both of which are fabulous companies in their own right. However, the argument that Microsoft is

on death’s door simply because Windows 8 and Surface, two of the most ambitious products in the company’s history haven’t become

breakaway hits in their first weeks, simply does not hold up to scrutiny.

We are entering a new phase of technology and Microsoft will be at the center of it. Anybody who says otherwise is just not thinking seriously.

image credit: phys.org


Greg Satell is a consultant who concentrates on media, marketing and innovation. Check out at his site, Digital Tonto and

follow him on twitter @digitaltonto

Time to Search for New Strategic Growth Opportunities
Posted on December 8, 2012 by Rowan Gibson

It had to happen. After several years of solid growth and blue sky thinking, we now have a big,

dark cloud hanging over the global economy. So what do we do next? Many companies are

likely to put the brakes on strategic growth initiatives, reasoning that money is getting too tight

to invest in innovation. It’s the usual knee-jerk reaction. And it’s totally counterproductive. In a

stalling economy, companies need to find new opportunities for pushing up revenues, not just

focus on cutting costs.

Judging by all the long faces at 2009′s World Economic Forum in Davos, the party is definitely

over (at least for a while). I may be sticking my neck out here, but I’m not entirely sure I want

to join the pessimists. In the past, the mighty U.S. economy has proven to be incredibly

resilient, despite all the prophets of gloom and doom. In this decade alone, America Inc. took

severe beatings from the Dotcom bubble, the 9/11 attacks, and financial scandals like the

Enron meltdown, yet it came back stronger than ever.

Clearly, we experienced a significant slowdown in 2008 and 2009, but I’m far from convinced that America is the new Japan, destined to spend

the next decade in the economic doldrums.

When the world’s dominant economic player (the U.S. accounts for 22.5% of the global economy) starts sneezing, it’s obvious that everyone

else panics about catching flu. But let’s not forget that, taken together, Europe and Japan also account for about 25% of the global economy.

And while recent stock market turbulence indicates that decoupling from the U.S. economy is still mostly wishful thinking, there remains some

hope that China, India and other developing markets can somehow continue to drive global growth, even as America stalls.

Some of the world’s leading companies are already a lot less interested in the U.S. market. Take Nokia. Most of the company’s revenue growth

is currently coming from China, Asia Pacific, Middle-East and Africa. For the Finnish mobile phone giant, North America and even Europe

represent yesterday’s growth opportunities. Or consider U.S. based Yum Foods, owner of the fast food chains KFC, Pizza Hut and Taco Bell.

Today, 50% of the company’s profits come from overseas markets where business is booming (Yum is particularly focused on China, India and

Russia), compared with U.S. sales which grew by a mere 2% in 2007.

The big question is whether these emerging economies, which are still highly dependent on

exports (especially to the U.S.), can continue to grow their domestic markets if consumer

spending in the West – and thus demand for their products – starts to plummet. Only time will

tell.

One thing’s for sure: now is not the time to start mothballing your company’s innovation

initiatives. Innovation is not a luxury reserved for the good times. It’s the mainstay of revenue growth and company value and market share and

competitive advantage, whatever the state of the economy.

Recessions aren’t forever – the current slowdown is likely to last maybe three or four quarters at the most, which is nothing in product

development terms. When the economy returns to growth, your company needs to be ready with innovative new offerings on the marketplace

with which to attract current and future customers. If you put the brakes on innovation now, you won’t be able to come out swinging once

growth takes off again.

To illustrate the point, do you think for a minute that a company like Apple is going to stop innovating because the economy is in a downturn?

Not on your life. As Bruce Nussbaum pointed out in his BusinessWeek article, during the last recession Apple got busy working on iTunes, iPod

and its retail stores. When the economic skies cleared up, Apple took off like a rocket. By the same token, hands up if you think the Chinese are

going to relax their innovation efforts while America tries to get its economic act together. I don’t think so, do you?

This, then, is not the time to pull the plug on innovation. If the growth rate in

your industry is slowing down, what you need now more than ever is new

sources of revenue – new products, new markets, new customer segments.

Otherwise you’ll be faced with ever-declining revenues and profits from

your existing business.

The thing to do now is engage your whole organization in the search for

new strategic growth opportunities – and ways to make more out of the

business you already have. This doesn’t call for huge innovation budgets.

One of the most inexpensive methods for generating lots of new ideas is

simply to ask for them. Another is to look outside your organization, and involve suppliers, partners and even customers in the search for new,

value creating opportunities. This kind of ‘open innovation’ is what my colleague Gary Hamel would call “innovating on the cheap”.

By all means, take a careful look at your innovation investments and try to manage them just as efficiently as any other in the company. But

don’t let innovation become the victim of a shortsighted focus on bottom line results. Instead, continue to build and maintain your company’s

foundation for long term growth, which is centered on its capability to innovate.


Rowan Gibson is widely recognized as one of the world’s leading experts on enterprise innovation. He is co-author of the

bestseller Innovation to the Core and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

Re-inventing Corporate Learning to Spark Innovation!
Posted on December 7, 2012 by Janet Sernack

All great achievers start out as individuals with a vision that ultimately impacts the realms

they care deeply about!

They may not initially intend to, yet they all have the ability to shape an entire industry or

market.

In our uncertain and turbulent world, we all have the power to tune into and harness this

creative energy to make a significant difference within the realms we care deeply about.

It is possible to expand our ideas in unexpected ways that create and harnesses the

power of entire industry eco-systems to shape innovative new industries and markets, especially to meet the needs of the emerging Gen-Y

generation.

“Small moves, smartly made can set big things in motion.”

An example that stunned me recently was stumbling across Seth Godins’ Education Manifesto where he demands that “we stop stealing

dreams (what is school for?)”.

He states that “top-down industrialised schooling” is not enabling children to understand, never mind develop the mindsets and skills to meet

the needs of, and flourish in the emerging “internet and connection economy”.

He challenges the very nature of our industrial age education system, how it deprives

children of their imagination and creativity and “steals their dreams”. He states that

most schools are still churning out safe, “predictable, testable and mediocre factory

workers.” Who then become productive and dependent workers in affluent countries

that can no longer afford them if they want to compete in a globalized world. He

challenges the purpose and roles of schools and demands that we re-invent

schooling, stating that we do not need schools to “create compliance, to cause

memorization, or to teach students to embrace the status quo”. He demands that

schools teach children to be “fast, flexible and focused”. He states that the real shortage is in “dreams, and the wherewithal and the will to make

them come true”.

This is definitely one of those “small moves” that has sparked a global debate on the nature and role of schools and education in a globalized

and diverse world.

Reading this made me realize that I have been at the effect of this “rational, assembly line approach” to education for the past 30 years in my

career as a corporate consultant, trainer, global facilitator and executive coach.

I have sat next to, stood in front of, and shared audiences with a wide range of both passive and aggressive managers and leaders, who are so

accultured to “not rock the boat” and “play safe” that even the mention of the words “disruptive innovation”, creates enough fear and trepidation

to cause the shackles to rise on their necks!

I realized that the same principles Seth Godin is applying to reinventing schooling also applies to the need to re-invent corporate education, a

realm I care deeply about!

This is a billion dollar global industry in need of a massive re-invention process to meet the needs of an emerging generation of new

managers and leaders as well as an internet and connected world!

We need to enable leaders to recover from their inadequate industrialized schooling so that they can dream and create new ways of

flourishing in this new world.

This was further reinforced, by my recent participation in an Innovation Lab, called

“Gen Y Entrepreneurship – Reinventing Leadership and Learning” at the Presencing Global Forum in Berlin in July this year. Our group, which

comprised of delegates from South East Asia, Middle East, US and Europe, understood that the emerging Gen Y workforce embodies values

and aspirations that call for a re-evaluation of the way things are done in organisations. Some of the key questions we dialogued over two days

included:

 How is Gen Y tackling our current social and organisational challenges with new ways of leadership and learning?

 What are the opportunities for Gen Y to help the current system shift and move towards a better society?

 How can we create enabling spaces for Gen Y to innovate and be even more effective in bringing such transformation into being?

Within our Lab, there was acknowledgment that the industrialized system, as described by Seth Godin, was both inadequate and inappropriate.

There was a real sense of urgency for the development of new forms of learning, which were perceived as being largely experientially and

playfully based.

 Gen Y contributors expressed a deep desire to be shown ways that help them see themselves within the current system to effect

ways to shift it from within.

 They sincerely want to contribute through entrepreneurship, to feel connected, to be creative and authentically themselves.

 They want to be awakened, think for themselves, be heard, be part of a collective and realize their potential.

 They want the corporations they work for to positively impact the communities, governments and societies they operate in by role

modelling a different way.

This requires the development of a new skill set based on the Presencing principles:

1. The quality of our results in a system is a function of the awareness that the people in that system operate from; the essence being “I attend

this way, therefore it emerges this way.”

2. The new reality emerges from the opening of the mind, heart and will to connect ourselves to our deeper sources of wisdom, creativity and

humanity.

3. In order to bring about profound change around us, we first have to go through a profound inner opening not only as individuals, but also

collectively. It’s about to linking people to each other, to themselves and to their own journey.

I have spent the last six years developing a deep understanding of the practical applications of the Presencing Process, as well as two years

researching, designing and prototyping my own innovative global corporate learning consultancy, I hope that ImagineNation™ is just one “small

move” that has been smartly made re-inventing corporate learning to spark innovation. I hope that it will contribute towards creating an

innovative new approach to corporate learning that will inspire the Gen-Y emerging leaders, as well as meet the needs of cross generational

and diverse leaders to shape a new and connected corporate world. I hope that some of the provocative and disruptive, iterative and

generative, experiential and playful concepts, principles and techniques that I have developed will inspire peoples’ innovative and

entrepreneurial sparks.

I hope that collectively, we can enable people to learn how to dream again and develop the wherewithal to shape the profound change that is

so needed by organisations today and model a new way.

image credit: squidoo.com; myprettypennies.com; presencing.com


Janet Sernack is the Founder & CEO ImagineNation. She is an ICf certified executive coach and experiential learning

specialist with expertise in adaptive leadership and team effectiveness. Janet facilitates a weekly business network in

Zichron Yaakov, Israel, for English speaking business owners and entrepreneurs.

Are You Ready to Win in 2013?
Posted on December 7, 2012 by Holly G Green

Did you blink and 2012 zipped right by? Don’t worry, it happened to me too.

Which means it’s time to start getting ready to win in 2013! Here are the top

five things you can do to prepare your organization to win in the year

ahead.

1. Get clear on winning (your destination).

Specifically, get very clear on where you’re going and why. When faced

with adversity or opportunity, having a crystal-clear definition of winning

keeps you from going off in too many directions. It enables clear and

consistent decision-making, and makes the best use of your time, talent,

and resources.

When things change very quickly, as they do in today’s hyper-fast markets, it can be easy to fall into a reactive mode. A new technology enters

the market… how do we respond? A competitor introduces a new product that easily tops ours…how do we respond? An innovation from a

completely different industry suddenly disrupts our business model….how do we respond? Having a clear definition of winning serves as your

north star from which to navigate these critical strategic decisions.

2. Stay focused on winning.

Today’s world is full of opportunity and distractions. To stay focused on the goal, start by making a list of all the major initiatives that no longer

fit your definition of winning. Then shut them down! Help employees stay focused by setting clear individual goals that link directly to the

organization’s key strategies for winning. Then give ongoing feedback on how they and the organization are doing. You’ll know you’re focused

when every employee can answer these questions without hesitation:

 What are my top priorities?

 What are the three primary objectives I need to achieve this week/this quarter/this year?

 How will I know I have been successful after I have worked so hard this week/month/quarter?

 How will we know when we have won as a team? As an organization?

3. Determine what it looks like when you win.

With as much specificity as possible, answer the question: what will it look like when we have won?

Start by identifying the key operational and financial metrics you will have achieved. Then ask: what attitudes, beliefs, and core values will the

organization be living by? What skills, knowledge, tools, technologies, and abilities will we have acquired or enhanced in order to win? What

organizational structures will be in place?

What new products or services will we have brought to market? What new customers will we have acquired? Who will our #1 competitor be

(and think beyond a company to market forces, regulatory factors, changing customer wants and needs…)? What will be our greatest

competitive advantage and threat? How will we be known in the market? What will our brand stand for?

4. Ask the right questions.

Once you have a clear picture of what winning looks like, use “success visioning” to guide you to your destination. This involves asking a series

of future, active, past tense questions that presume the target has already been achieved.

For example, suppose your definition of winning includes 20% sales growth for 2013. Ask, “When we have increased sales by 20%:

 How did we conduct outreach to our customers?

 What channels did we use?

 What products did we sell most effectively?

 What words or phrases did we use to clearly differentiate ourselves?

 Who did we build the strongest relationships with in the market?

 What systems did we use to track and support our progress?

 What testimonials did we leverage?

 How did we deepen our contacts at each client?

 How did we monitor and respond to changing market conditions?”

Remember: it’s not about if you get there, but when you get there.

5. Play to win!

Today’s markets reward boldness, so dare to take risks. Look for opportunities that offer huge upsides with minimal downside, and outline ways

to mitigate or minimize the risks if the opportunities don’t pan out. At the same time, get comfortable with a certain amount of failure. When you

take risks, you will fail much of the time. They key is to make it safe for people to fail, to fail fast, and to learn from your mistakes.

Shake up the status quo by developing new sources of data and new ways of looking at your customers, your market, and your industry. Most

of all, get rid of the idea that what made you successful today will continue to make you successful tomorrow. Your competitors are constantly

striving to get bigger, faster, and stronger. To stay ahead, your products, services, and ways of doing business must continually evolve.

If you’re not playing to win, you’re playing for second best…or worse. Where do you want to be in 2013?

Call to action: Get focused on winning – now!

image credit: successful businessman image from bigstock


Holly is the CEO of THE HUMAN FACTOR, Inc. (www.TheHumanFactor.biz) and is a highly sought after and acclaimed

speaker, business consultant, and author. Her unique approach to creating strategic agility, helping others go slow to go fast,

will change your thinking.

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Innovation Excellence Weekly - Issue 11

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