Connected Collective Innovation

Mass Innovation

2007-11-16T10:07:00.000-06:00

Great article in the October 11th issue of The Economist entitled "The age of mass innovation". The article talks about the real threat America faces in terms of loosing its innovative edge to countries like India and China. This is not unlike the threat American manufacturers faced in the early 1980's when Japanese companies were winning the war on cost and quality. Edward Deming warned us, but it was the Japanese who listened. Will history repeat itself when it comes to innovation? My experience has been that the creative potential and talent exists within most countries and organizations, but few are successful at harnessing this potential. I think this has allot to do with complacency that comes with prolonged success. History has taught us that there is no finish line and countries and companies must always be adapting if they don't want to become extinct. The article quotes Elon Musk whose equation for success is "talent times drive times opportunity". How we as a nation can more effectively link the people with talent and drive with the opportunities will determine our future success.

Five Common Mistakes in Innovation

2007-10-23T09:05:00.000-05:00

Below is a summary of an interesting article about how companies that do not have both a clear plan for and commitment to sparking innovation can get into trouble.
“Five Common Mistakes in Innovation” by Dev Patnaik
http://www.businessweek.com/innovate/content/oct2007/id20071019_786269.htm

• Over-reliance on pilot initiatives
"We'll be more innovative if we do more brainstorming sessions."
In an attempt to have a quick win, some companies initiate projects that focus on delivering a near-term improvement. Alternatively, they latch on to a single innovation technique, such as brainstorming. However, companies that are successful innovators are taking a portfolio approach to innovation, working with multiple consultants and using multiple methods so that innovation evolves from the integration of various ideas collected from multiple ideation methods.

•Unhealthy fascination with unique charismatic examples
"Steve Jobs is so cool: We need to be more like him."
Charismatic visionaries such as Steve Jobs or Sir Richard Branson are nonexistent in most companies. So, the catalyst for innovation efforts within companies can not be dependent upon one charismatic individual.

• Misapplication of other companies' approaches
"P&G is using a 'Connect and Develop' strategy, so we should, too."
It can be dangerous to emulate the approaches of other companies. P&G implemented what they call their "Connect and Develop" strategy, whereby P&G connects with promising entrepreneurs in the hopes of commercializing the ideas they present.
"Connect and Develop" is a sound strategy for P&G, because of the categories they play in, and the DNA of the company. Just because something works for P&G doesn't mean it will work for everyone.

• Descent into a cycle of self-recrimination
"Our people just aren't creative enough."
Innovation planning teams often benchmark other companies only to come away feeling that their innovation efforts are not effective.
Companies such as 3M are instead looking internally and focusing on returning to what has made them great in the past. They are examining past moments of greatness, determining which activities spawned these moments of greatness, and then figuring out how to do more of that. In short, capitalizing on their organizations' strengths to create approaches to growth appropriate to their culture.

• Resignation to superficial changes
"Let's just paint the walls purple."
After benchmarking several Silicon Valley companies, one firm noticed that many companies it admired had yellow and purple walls. The team went back and painted the walls of their offices yellow and purple, thinking this might actually make them more innovative. While the environment can affect creativity, such initiatives alone usually aren't enough to change the DNA of the organization.

The Power of Observation

2007-10-18T14:41:00.000-05:00

An article in the Autumn 2007 issue of Strategy+Business entitled “See for Yourself”
http://www.strategy-business.com/press/article/07301?pg=0 discusses the importance of managers spending time in the field. This is especially important from an operational perspective for understanding what’s working and what’s not working within your own company. However, it is also important, from an innovation perspective, to take time to observe competitors as well as the customers who currently use or potentially could use your product. Successful innovators become true students of their industry.
One example of this is when Honda engineers visited the guest parking lots at Disney World to observe guest behavior and potentially uncover problems. They noted that people were struggling to lift awkward items such as baby strollers into and out of car trunks. Inspired to solve this problem, the team lowered the trunk opening to be flush with the car bumper. The lower opening is now a common feature among sedans, but in 1989, innovations such as this helped the Honda Accord move to first place in U.S. unit sales.

Managing Innovation

2007-10-17T10:32:00.000-05:00

The following is a good article about managing innovation. http://online.wsj.com/article/SB119023924039732943.htm
In order for innovation to work in any company, a culture of innovation must exist. Smaller companies inherently dive innovation because that is what’s required to survive. But as the smaller companies begin to change the ecosystem, can larger companies adapt or are they destined to become extinct? Anyone with an entrepreneurial spirit who is attempting to make changes within a large established company that does not sense the urgency for change will undoubtedly feel frustrated. Changing the culture to be receptive to innovation is not easy, but the article outlines four main factors that need to change in order to help a corporate culture become more innovative:
1.Have an awareness of attitudes – You have to have a certain degree of discomfort in your business to be willing to make the changes that are necessary.
2.The ways you think – Most people are trained to think analytically, but analytical thinking isn’t very good for trying to envision a new future. Consider “design thinking” instead.
3.Processes and tools – It’s not enough to just think differently, you have to build processes and support people by providing time for them to think on their own.
4.Managing risk – You have to have a tolerance for risk if you are going to try to be innovative. A lot of companies just do not have that tolerance.

Scenario Analysis

2007-10-16T13:46:00.000-05:00

I came across this article about preparing for the future and think it provides a good basic framework for performing scenario analysis. This is a tool that is often underutilized as it pertains to strategy and innovation efforts.

http://www.shambhalainstitute.org/resources.html#

Step 1. Refining our sense of purpose

Scenarios provoke genuine learning when they answer genuine concerns; otherwise, they are merely an academic exercise. The concerns should be compelling, shared by the entire group and beset with uncertainty.Articulating our focus is not a trivial task, especially because the participants are, ideally, diverse people with a common interest. As with a vision exercise, it requires moving past the concerns that people think they have to the concerns that truly motivate them.

Step 2. Understanding Driving Forces

Scenarios are built upon the distinction between two types of driving forces. Predetermined forces are reasonably predictable. We all know, barring unforeseen calamity, how many 20-year-olds will exist in any country nineteen years from now. We can assume that the pace of technological growth will continue, with costs of new devices falling at a fairly predetermined rate.

But the vast majority of forces at play are uncertain. We can't know the answer, but we can become far more aware of the reasons that events might move in one direction or another, and the implications of their movement.

Step 3. Scenario Plots

Developing scenarios involves considering "classic stories" in terms of the current situation. (Indeed, a few researchers are discovering that system archetypes and this stage of scenario planning are devilishly complementary.)

As participants, you create several stories of your own, trying to make each evoke a future that pulls you past your own blinders. As you talk, you enrich the plots, developing sketches of what might plausibly happen.

You don't care how likely or unlikely each story may be. You care about whether it illuminates your understanding. In fact, if a substantial drop in the demand for your product or service is undeniably plausible - even though the chances against it are 100 to one - you owe it to yourself to create a story around that event, to spark the necessary creativity and preparation that you might or might not need, but which is worth developing in any case.

Step 4: Strategy, rehearsal, and conversation

This may be the most important step, and, regrettably, the most often ignored. Having developed two, three or four scenario plots, you now consider each of them. What strategies would be effective no matter which of those futures came to pass? What would it feel like to live in those worlds? Some groups go so far as to rehearse the scenarios, as though they were pieces of improvisational theatre, with each participant taking the part of a different key actor. It's also important to describe the scenarios to others-to get insights from the rest of the organization that may make your pictures of the world richer.

You may find that your scenarios themselves go through several iterations. That's all for the better. When you are done, you will have a language you have created, in which collective assumptions can be voiced. "How will we know this particular world is coming?"

Most importantly, you will ask: "What decisions can we make now that are robust- so that no matter how the future unfolds, we will be glad we made that decision?" Because you have anticipated several possible futures, you can ask that question of your imagination.

Mass Customization

2007-10-08T15:05:00.000-05:00

What’s one thing sophisticated, discerning consumers have in common? They don’t want to be perceived as being common. Mass customization is defined as the use of flexible manufacturing systems that allow customer-designed products to be produced at costs comparable to mass produced items; and companies who can execute this model can offer their customers truly unique products. Two companies that recently caught my attention are Inmod (http://www.inmod.com/modern-bedding.html) and Water Werkz (http://www.waterwerkz.co.uk/). Inmod has a service which allows customers to design their own duvet covers. Customers choose from a growing variety of embroidered patterns as well as colors and fabrics to design their duvet just the way they want it.
Water Werkz has a vending system that provides drinks that are blended on demand, thus allowing customers to create their own distinct mixes.

Innovation Archetypes

2007-09-28T08:23:00.000-05:00

A new report from two leaders in the study of innovation argues that companies can not acehive sucessful innovation by simply replicating the approach used by other successful innovators.
http://www.innosight.com/research_papers.php#documents/InnovatingonYourOwnTerms.pdf
The reseach indicates that there are a small number of cultural and operational factors that companies use to drive innovation. The authors of the report call these combinations the "archetypes" of innovation. The four archetypes are:
1. The marketplace of ideas - a bottom-up approach in which employees generate new concepts, lobby for support, and then test a new product in the market. This is the Google approach, which works because its staff are creative and work in an encouraging environment.

2. The visionary leader - This model revolves around a senior executive who understands the future better than customers may. An example of this is someone like Apple's Steve Jobs, who spots and champions high-potential concepts, processes or products.

3. Innovation through rigor - Companies under this archetype create processes designed to produce results systematically. Samsung is one example, where organisational emphasis is on design strength, R&D spending, and cross-functional teams. The firm succeeds through a mix of senior executive proritization and tem processes. GE would be another example where the firm has a dynamic innovation portfolio review process. They actively manage their innovation pipeline with senior management and determine which ideas to continue funding and which to cancel.

4. Innovation through collaboration - This archetype is more externally-oriented, featuring companies that team with outside firms to evaluate opportunites, and quickly select the one to bring to trial. Collaboration organizations seek to gather "innovation intelligence" by building formal relationships with other firms that can help them shape the innovative concept and possible help to implement the solution as well.

Innovation out of Necessity

2007-09-26T15:41:00.000-05:00

General Motors and the United Auto Workers union are closing in on a new labor contract that could alter the way the Detroit-based carmakers provide healthcare benefits for their workers. GM is proposing to transfer about $55bn in future healthcare liabilities to a union-managed fund, known as a Voluntary Employees' Beneficiary Association (VEBA.

Benefits for retirees alone makeup more than half of the $20 per hour gap between wages and benefits paid by the Detroit carmakers and their rivals based overseas.

GM has pushed hard for the creation of the VEBA as a replacement for an open-ended guarantee of benefits for UAW retirees. Instead of relying on the auto makers for retirement benefits, the UAW would oversee billions of dollars provided for retirees, and it would have to decide to trim benefits if the fund was running low on money. VEBAs were created to pre-fund retiree health obligations for people covered under collective bargaining agreements. Employers could form these for other employees as well, but they would not receive a tax deduction, so nobody is doing that.

Given the recent GM/UAW discussions, I was curious as to what other organizations are doing to control healthcare costs. In addition to VEBAs, two additional healthcare provider options are emerging:

Competing Managed Care Programs
As health-care costs continue to rise, many companies are turning toward managed-care to help them control their medical-benefits costs. The majority of companies that engage these methods for their active work forces extend them to their retiree population as well.

However, the Ohio Retirement Systems,has implemented a managed-care plan that uses two competing health-care networks to deliver high-quality, cost-effective care to retirees and their dependents. For this particular plan, not only must the health-care networks—Aetna and Blue Cross/Blue Shield—compete in the initial selection process, they must continue doing so in the day-to-day care of plan participants.

The plan, which covers non-Medicare, nonprescription-drug claims in Ohio, uses the point-of-service model. Health-plan participants have the choice of staying within their chosen network or going outside the network each time they seek care.

The two networks provide identical benefits. They compete for plan participants on the basis of quality, access, service, and cost. As a result, participants receive both cost savings and improved quality. Approximately 85,000 retirees and their dependents participate in the managed-care plan.

Healthcare Coalitions
Instead of waiting for federal health-care reform to address the critical issue of soaring costs, employers in many communities are joining forces to reform the system by forming healthcare coalitions. Through their combined purchasing power, these coalitions are changing the way that health care is purchased and delivered in this country.

In Minneapolis, for example, the HR executives of several large, self-insured companies have pressured local providers to put greater emphasis on the quality and cost-effectiveness of care. A major aim of the coalition is to cut back on the care delivered by expensive specialists, and instead to rely more heavily on primary-care doctors.

At last count, there were close to 100 of these employer-driven coalitions, according to the National Business Coalition Forum on Health in Washington, D.C.

I'm Back

2007-09-25T12:51:00.000-05:00

I took a break, but now I will be back to posting regularly.

I had an opportunity to attend the 2007 Frost & Sullivan Growth Innovation and Leadership Conference last week and was a featured Though Leader. Here are some key takeaways from the conference:
•Look for mega trends. Listen to for the “weak signals” on the periphery

•Combine the data (market research, voice of customer, etc.) and look for possible intersection points – what are the possible impacts?

•Need to understand the customers’ ecosystem – How do they measure value?

•The best opportunities for growth and innovation come from seemingly unrelated industries or from the convergence of unrelated technologies

•One definition of innovation is “significant movement along a main parameter of customer value”

•Customers know what they want, but they don’t know what’s possible. Therefore, the voice of the customer should be only a small part of what influences innovation decisions

•The reason to innovate is to affect the business result

•HP has a Center of Innovation which proves the viability of new ideas through market and customer validation. Once they determine how the company will make money with the new product or service, they then begin to solicit sponsorship and funding as they continue through the validation process. This helps to facilitate the handoff from ideation to product development

•GE has a dynamic innovation portfolio review process. They actively manage their innovation pipeline with senior management and determine which ideas to continue funding and which to cancel. They have a relatively open set of criteria for determining if projects will continue to receive funding. They feel comfortable taking a long-term approach and depending on the situation, it may be acceptable to be investing in a product that may not begin to generate revenue for ten years. They also allow for flexibility and can adopt new projects mid-budget cycle.

•Several companies talked about experiencing failures due to “rushing to innovate”. They were not in touch with the marketplace, could not demonstrate the value proposition to the customer.

•Several leaders cautioned about anticipating what will occur after the product/service launch

Ten Types of Innovation

2007-08-17T07:58:00.000-05:00

Doblin, an innovation strategy firm based in Chicago, has a list (www.doblin.com) of what they deem to be the Ten Types of Innovation.

I like this list because they include process and delivery as innovation categories. I think too often the term innovation is heavily associated with products and technologies. However, companies don’t need to be designing and or producing cutting edge products to be innovative. A company’s competitive advantage can come through innovations in the less glamorous world of operations and logistics. Wal-Mart is an example of this. They have innovated in the area of inventory management. This has allowed them to place the correct products in the stores, at the right time, for the least amount of cost.

Amazon Fresh

2007-08-07T16:08:00.000-05:00

Amazon.com has launched a grocery-delivery service called Amazon Fresh. Currently, the service is limited to serving select areas of Seattle. Webvan,an earlier online grocery delivery company, previously serviced the Seattle market along with eight additional major metropolitan areas. The company had plans to serve at least 26 cities before going bankrupt in 2001. Webvan burned through close to a billion dollars chasing an aggressive and poorly planned growth strategy. Other online grocers such as Peapod based in Chicago and Fresh Direct based in New York City have pursued more metered growth within limited markets. Slowly proving and perfecting the business concept has allowed these companies to understand the intricacies of the local markets.

I believe there is still a great deal of untapped potential in the online home delivery market. The trend for the majority of the aging population is to stay as independent as possible. That means staying in their homes versus moving to a more expensive assisted living facility. Home delivery of groceries and medications may be a tool that caregivers will adopt. Additionally, the delivery of prepared meals for people with dietary restrictions could be incorporated into this model.

Corporate Open Innovation

2007-08-01T14:33:00.000-05:00

I came across an interesting article about open innovation by David Simoes-Brown entitled “Corporate open innovation – if it's so good why isn't everyone doing it? “ http://www.nesta.org.uk/informing/articles/corporate_open_innovation.aspx

He talks about how Corporate Open Innovation (COI) enjoys high profile proponents, such as Procter & Gamble, Philips, the BBC, Nokia, and Apple. Technology companies such as IBM, HP, and Cisco are starting to adapt their internal product lifecycle and development to accommodate open innovation. All these companies explore external collaborators to originate or develop innovations. This is different from traditional 'closed' innovation, where in-house research and development (R&D) is the primary catalyst behind the introduction of new products and services. However, these companies are in the minority when it comes to the adoption of COI practices. Why is that?
The following are some of the reasons most often cited:
Intellectual property. Who will gain reward from the exploitation of patents?
Complexity. Managing diverse teams is a key issue for open innovation projects.
Interdependence. Understandably, many companies are reluctant to place their futures in the hands of others. The emotional issues of power and control.
Culture and tradition. Companies have much invested in their innovation processes which are tried and tested.
Psychology. It can be difficult for a business steeped in the principles of competition to embrace cooperation. There is a suspicion of outsiders and a habit of secrecy.

Through much of the literature I have read, it appears that the results for early adopters of open innovation have been favorable. However, in order for companies to feel more comfortable utilizing COI, there will need to be a supporting infrastructure designed to reduce the complexity of coordinating efforts within a collaborative environment and address legal considerations pertaining to intellectual property rights. Regarding the issues of interdependence ,culture, etc., companies will perhaps need to reexamine their assumptions around what they believe their core competencies are. Companies who believe R&D differentiates them may be correct to a point, but I would suspect that their ability to market and implement the ideas generated internally is what truly gives them a competitive advantage.

“Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats.”
Howard Aiken
US computer scientist (1900 - 1973)

InnovationJam

2007-07-31T08:17:00.000-05:00

Open innovation is gaining acceptance as companies realize they need to look beyond their own research labs for great ideas. One of the companies embracing open innovation is IBM. Their InnovationJam held in 2006 brought together 150,000 people – including representatives from 67 external groups - from 104 countries to spark and build ideas. “Innovation today requires a collaborative, transparent approach - not building walls around your own company and seeking ways to keep others locked out,” says IBM Vice President Communications, Exploration, David Yaun. "By in effect running the largest focus group ever, we benefit from unprecedented shared insight. It helps us to be smarter, to ensure we anticipate, not react” “Ideas go round the globe in seconds anyway, whether you like it or not. Companies today compete on the basis of their ability to execute these ideas.” “It means that the nature of innovation has changed. The winners will be businesses that are collaborative, open, global and multi-disciplinary in their approach.”

How the InnovationJam worked:
Phase One: Idea Generation - In 72 hours, IBM employees, clients, business partners and even family members came together online and produced 46,000 ideas.
Phase Two: Idea Refinement - Jammers discussed how to improve and validate the top ideas, rating which ones had most impact and potential for near-term success.
Phase Three: Development - IBM invested $100 million to incubate the top 10 ideas.

InnovationJam builds on a highly successful series of internal "jams" IBM has held with employees annually since 2001, as well as the company’s collaborative Global Innovation Outlook process, which brings together hundreds of organizations worldwide to identify key innovation opportunities in select business and societal areas.

Social Networks

2007-07-30T14:24:00.000-05:00

Ron Burt is Professor of Sociology and Strategy at the University of Chicago, and an expert on collaborative networks and how they lead to innovation. Professor Burt argues that social networks are key to innovation, and personal and commercial success. People are not yet competent in how to take advantage of the capability of social networks because we continue to work in organizational silos.

Informal relations have always been with us, and they have always mattered. However, what is new is the range of activities in which they matter. Coordination through networks of informal relations creates competitive advantage. The advantage is visible when certain people or groups enjoy a greater degree of personal and financial success. People do better because they are better connected with other people; they are obligated to support others and are dependent on trusting and exchanging with others.

People that live at the intersection of various social networks:
• Have a greater chance of innovation
• Are predicative of who does well
• Are more likely to get ahead than their peers
• Are exposed to a broader range of ideas.

Vator.tv

2007-07-25T10:11:00.000-05:00

Online company www.Vator.tv describes itself as “a catalyst for innovation”.

Vator.tv is a professional network and marketplace for ideas and businesses. People pitch their ideas, businesses, skill sets or needs, such as capital, partner or staffing requirements, mainly through video. The site acts as a network to exchange knowledge and collaborate with other people who can help to take ideas to the next level.

Users sign up for a free account. They then create pitches for their ideas, projects or businesses by uploading video, images, PPT or PDF files. They can choose to share their pitches with a personal network or with the entire Vator.tv community.

The site also has a competition section which is a place to find and search for business or product ideas submitted to the latest contests held by Universities, venture capitalists, angel investor groups, conferences, and companies. Competitions typically last for three months and are designed to attract a particular type of business or product idea.

NESTA

2007-07-24T07:45:00.000-05:00

NESTA is the National Endowment for Science, Technology and the Arts based in London. http://www.nesta.org.uk/index.aspx NESTA is the largest single endowment devoted exclusively to supporting talent, innovation and creativity in the UK. Their mission is to transform the UK’s capacity for innovation. NESTA invests in early stage companies, inform innovation policy, and encourage a culture that helps innovation to flourish.

They believe what sparks innovation is “a clash of ideas, a fresh perspective, and a fusion of expertise. Innovation occurs at the point where disciplines, organizations or cultures collide”. NESTA wants to encourage the collisions that can stimulate innovation.

NESTA is focusing on three core themes.
• Interdisciplinary collaboration - focusing on academic or industrial research activity that creates innovation through the interaction of two or more disciplines or sectors.
• Corporate innovation - working with big companies to stimulate innovation by collaborating with small companies or individuals.
• Online communities – harnessing the participatory culture of the web, in particular through open-source knowledge networks and social networks, for social good.

"Everything we know about innovation tells us that it is not an isolated experience and that partnerships are essential...” Jonathan Kestenbaum, NESTA CEO

The Holy Grail of Technology Innovation?

2007-07-18T08:56:00.000-05:00

An article in the July 18, 2007 edition of the Wall Street Journal entitled “Batteries in Gadgets Can’t Support All The Gee-Whiz Adds” talks about how batteries aren't keeping up with the rest of electronics. Experts believe that things are unlikely to change anytime soon and they may get worse before they get better. Ever increasing improvements in computer chips have allowed the consumer-electronics industry to add features to products much more quickly than the battery industry can accommodate.

The Lithium-ion battery, used in consumer electronics for the past 10 years, is the best solution thus far. Though it appears there are no eminent technological breakthroughs, battery makers are working on achieving smaller advances. For example, efforts are under way to engineer lithium batteries so they generate less heat. Excessive heat build-up can lead to battery fires.

Although Lithium-ion batteries have been commercially available for some time, their use in applications that demand high current flows has been hampered by temperature related problems. Thermal Management of Lithium-ion batteries plays a significant role in large power applications. One of the side effects of exposure to high temperature is fast aging and accelerated capacity fade of the Lithium-ion battery pack.

Researchers at the Illinois Institute of Technology Technologies (IIT), Chicago, IL, have proposed and demonstrated successfully a passive thermal management system using what they call a phase change material (PCM) for Lithium-ion batteries. Start up company All Cell Technologies, LLC http://www.allcelltech.com has licensed the IIT PCM technology and is currently working with MicroSun Technologies, LLC on developing high power Lithium-ion battery packs for various portable and transportation applications. The thermal management system absorbs the heat from lithium ion batteries, rendering them safe and effective for a variety of applications.

Disruptive Innovation In Action

2007-07-17T16:33:00.000-05:00

An article in the July 16, 2007 issue of Crain’s Chicago Business talks about Chicago's biggest doctors' group pulling out of a deal with Walgreens to oversee in-store clinics. Oak Brook-based Advocate Health Partners signed with Walgreens last year to supervise the Deerfield-based pharmacy chain's Illinois clinics. The pact, which was supposed to bring more referrals to Advocate's 2,900 physicians, appears to have fallen short of expectations and has caused bad feelings among some of the doctors.

While Advocate claims the move was due to lower than forecasted patient volumes, I tend to believe this is more of a defensive move because the doctors fear a loss of patients to this disruptive innovation.

In St. Louis, SSM Health Care, with eight hospitals and nearly 2,000 staff physicians, had agreed to help supervise Take Care clinics in the area and review medical records to ensure care was appropriate. Take Care was to refer patients with more serious healthcare issues to SSM doctors. However, It appears physician pressure pushed SSM Health Care to terminate its patient records review agreement with Take Care. "In every market we go into, we face a small, vocal minority of doctors who are frankly -- largely for economic reasons -- concerned with our convenient care centers," said Peter Miller, chief executive of Take Care. "They're worried we'll hurt their practices, but experience says we won't. Still, SSM's doctors made a lot of noise, and out of respect to the physicians, (SSM) had to listen."

Mr. Miller, estimates about 20 percent of local physicians support retail clinics, 70 percent “don't love” the concept though they recognize its importance, and 5 percent to 10 percent are threatened by them.

Service Innovation

2007-07-16T08:57:00.000-05:00

Service innovation, the less popular sibling of product/technology innovation, is receiving more attention as companies are shifting their focus from products to services. The latest data from the Bureau of Labor Statistics (published in December, 2005) projects that the service-providing sector of the U.S. economy will see the highest employment growth by 2014.

In March of 2007, the Service Research & Innovation Initiative (SRII) was launched. http://www.thesrii.org The SRII is a Silicon Valley nonprofit founded by executives at IBM and Oracle.

The SRII is striving for the following commitments:
•Corporations – Commit to funding a permanent service R&D budget; active involvement in the SRII community and work with government and academia to develop service research.

•Governments – Sponsor research in universities and applied research centers; get involved in the SRII community; work with industry and academia to develop service research.

•Academic Institutions – Increase core research in services, establish curricula, programs and degrees for service disciplines (e.g. management, operations, design, etc.); collaborate with industry to develop research in commercially relevant areas; get involved in the SRII community.

There is definitely a need for breakthroughs in service innovation. A recent Bain & Company survey documented the extent of the customer service problem. The customers of 362 companies were asked to rate their customer experience. Only 8% of them described their experience as “superior”, yet 80% of the companies surveyed believe that the experience they have been providing is superior. It appears there is quite a disparity between the company’s’ perception of service and the customer’s.

The Ultimatum Game

2007-07-10T09:00:00.000-05:00

This next topic may be a bit of deviation from the topic of innovation, but I think there may be a connection here; and this blog is all about making connections. The July 5, 2007 issue of The Economist contains an article entitled “Money isn’t everything” which deals with the ultimatum game. The game is played between two people. One person has a pot of money they divide between the two players. If the offer provided by the first player is not accepted by the second player, then neither player gets to keep any of the money. The player with the money decides what percentage of the pot to offer the other player. If the player with the money decides to split it in an equal or close to equal amount, the second player usually accepts the offer. If the offer is considerably less than half of the pot, then the second player usually rejects the offer. Why would the second person reject free money, no matter how little? The conclusion of the study is that people really strive for “relative rather than absolute” prosperity. The second player would rather accept less themselves then allow a rival to get ahead.

This reminded me of the topic of swarm theory I discussed last week where I questioned whether a group of individuals could work collectively to achieve a common goal with no oversight – a self-organizing organization. This study seems to support my suspicion that unless the rewards were equally distributed, greed or the instinct to achieve social dominance would derail the collaborative efforts. I think organizations as a whole tend to exhibit these behaviors as well – perhaps leading to a less than optimal solution than could be obtained through open innovation. Could collaborative innovation between say three pharmaceutical companies be possible to develop a drug that would immediately stop the progression of cancer? I think it’s possible if we take into consideration human motivations. Perhaps a consortium of the resources from the three companies could be organized under a separate stock where each would own an equal share of the new venture. What are your ideas?

Research Dollar Allocations

2007-07-09T16:00:00.000-05:00

The July-August 2007 issue of Harvard Business Review discusses the results of a recent study conducted by the Industrial Research Institute (IRI). The IRI found that although U.S. companies are spending more on R&D, they are putting that money into new project development rather than basic research. The article defines basic research as “exploration of fundamental principals that’s guided by the organization’s strategic goals”. The IRI surveyed 99 firms that do research. While more than a third said they are increasing expenditures on new projects by at least 5%, only 14% reported plans to increase basic research. In other words, companies are not investing in the types of research that are important to long-term innovation efforts. Discoveries made during basic research, although not necessarily applicable to current projects, open up avenues for further investigation which in turn may seed future projects. For the last five years, companies in the study cited “growing the business through innovation” as their biggest problem. However, their allocation of R&D dollars does not support a healthy balance between short-term and long-term growth through innovation. It would be interesting to see a similar study done with non-U.S. companies. I would suspect that European and Asian-based companies would have a better balance between long-term and short-term goals. Do the results of the IRI survey reflect the allocation of R&D dollars in your company?

Swarm Theory

2007-07-02T10:30:00.000-05:00

An individual ant or bee isn't smart, but their colonies are. The study of swarm intelligence is providing insights that can help humans find solutions to complex problems. The June 2007 issue of National Geographic has an interesting article on swarm theory.

The article quotes Deborah M. Gordon, a biologist at Stanford University. "Ants aren't smart," Gordon says. "Ant colonies are." A colony can solve problems unthinkable for individual ants, such as finding the shortest path to the best food source, allocating workers to different tasks, or defending a territory from neighbors. As individuals, ants might be tiny dummies, but as colonies they respond quickly and effectively to their environment. They do it with something called swarm intelligence.

One key to all of this is that no one's in charge. There are no leader ants directing workers. The queen plays no role except to lay eggs. Instead of a formal management hierarchy the colony relies instead upon the interactions between individual ants, each of which knows its role and executes independently. Scientists describe such a system as “self-organizing”.

Swarm intelligence is a problem solving technique based around the study of collective behavior in decentralized systems. Swarm intelligence systems are typically made up of a population interacting locally with one another and with their environment. There is normally no centralized control or leadership structure to dictate how individual members of the group should behave. It is the accumulation of all the local interactions between individual members that often lead to the emergence of global behavior.

I have a couple of thoughts about this. First, utilizing swarm intelligence as a method for solving complex problems such as routing trucks or scheduling airlines is another form of biomimicry. Nature will become more of an inspiration for human innovation as we take the time to uncover the solutions to problems nature has already solved.
Second, I wonder how close human organizations can come to achieving self-organizing structures. The program Best Buy implemented may be a step in this direction. The company has invented a system called ROWE — Results-Only Work Environment — in which you go to the office only when you want to. The end result — how much you get done — is all that matters. So, each individual worker knows what they need to accomplish and does so with minimal oversight.

However, the ants and bees always have the same basic missions-find/produce food, find/build shelter, and reproduce – all in an effort to sustain and grow the colony. A human organization can essentially be broken down into those same basic elements. A company has the mission to produce/provide a product/service in order to sustain and grow the company. With that basic framework in mind, could individual workers form a consensus on the direction of the company? Would a self-organizing organization be possible? I think this would be possible to a point. Perhaps with a small group of like-minded people who share equally in the rewards? One aspect of human behavior that probably does not exist among the ants and bees is the existence of greed. Humans typically want to maximize their personal well-being over that of the community. Perhaps with the proper incentives, acting in the best interests of the collective and the individual would be one in the same. It would be an interesting experiment.

Characteristics of Successful Innovators

2007-06-28T08:41:00.000-05:00

A recently published white paper by futurethink http://www.getfuturethink.com/innovation/index.php?cPath=180_186 talks about the four capabilities for effective innovation based on their study of successful innovators across a variety of organizations. Here are the four capabilities and the ways in which organizations demonstrate them:

1.Ideas. The best innovators develop a stream of original ideas based on their business objectives.
a.Think Forward. They look to the future to leverage macro trends.
b.Enhance. Make improvements to existing solutions.
c.Discern. Identify unmet needs of customers.
d.Break the Rules. Develop new industry paradigms.
e.Partner. Collaborate with third parties

2.Strategy. Successful innovators lay a clear foundation for innovation objectives.
a.Define. Determine what innovation means to their organization.
b.Aim High. Develop a vision around the role of innovation within their organization.
c.Select Governance. Assign ownership and establish accountability
d.Establish Metrics. Select metrics to measure innovation efforts.
e.Mobilize. Chart specific initiatives to foster innovation.

3.Process. Successful organizations know how to move their best ideas forward.
a.Coordinate. Ensure consistent facilitation of innovation projects
b.Invite Ideas. Create methods for capturing ideas from diverse sources.
c.Objectivity. They utilize consistent criteria and tools to identify the best ideas.

4.Climate. The best organizations make innovation efforts sustainable for the long-term.
a.Lead by Example. Senior management plays an active role in innovation.
b.Experiment. Cultivate a climate of risk-taking.
c.Fuel Thinking. Encourage new and alternative perspectives.
d.Energize. Develop meaningful ways to reward and recognize their workforce.

A Very Sticky Wicket

2007-06-26T15:27:00.000-05:00

Another open innovation website you may want to checkout is www.ideawicket.com
The site provides a portal for individuals to provide ideas and innovations to corporations.

Here is a brief overview of how it works:
What a user can do:
•Submit ideas, product designs, industrial designs, process improvement techniques, service innovations, business solutions
•Mark your content as 'Public' which is visible to all or 'Private' which permits
access only to the people you choose
•Suggest corporations that could benefit from your idea
•Share ideas and innovations with friends
•Comment on and rank innovations

What corporations can do:
•Run Innovation contests.
•Registered corporations can contact innovators.
•View 'Private' innovations shared specifically with them by users

There are some interesting ideas posted. I like the pizza in a cone suggestion. I think they may have gotten the idea from the movie The Jerk where in one scene they talk about a product called "Cup'O Pizza" which is pizza in a cup.

Spotlight on Solar Power

2007-06-26T09:18:00.000-05:00

Solar energy is becoming hot again. California and other western states are requiring utilities to obtain more electricity from renewable sources. Solar energy is being sold to public utilities under 20-year contracts from companies such as Stirling Energy Systems of Phoenix. They have signed agreements to provide up to 900 megawatts of solar energy to San Diego Gas & Electric and another 850 megawatts to Southern California Edison.

However, solar power only accounts for 1% of world-wide electricity generation due its cost over fossil fuels. It costs 35-45 cents to produce a kilowatt hour of electricity from solar panels versus 3-5 cents burning coal. A new approach to collecting the sun’s rays known as concentrator photovoltaic systems use arrays of mirrors to track the sun. While more efficient, the cost is still more than coal, 9-12 cents to generate one kilowatt hour.

The following are considered to be the three next-generation solar technologies:

Heliostat Concentrator Photovoltaic – Fields of mirrors beam sun rays onto a receiver containing photovoltaic cells which generate electricity.

Distributed Power Tower – Mirrors focus sunlight on a water-filled boiler to create steam which in turn drives a turbine. Natural gas can be used to power the turbine when the sun is not shining.

High-Concentration Photovoltaic – Mircrodishes track the sun and concentrate the rays on small solar cells. Each platform holds 176 dishes which can be placed near a city to provide additional power during periods of peak demand.

According to a recent RBC Financial Group report, the demand for photovoltaic power will grow about 40% by 2011, making it an attractive market for venture capital.
Sol Focus is one company that is currently attracting the interest of venture capitalists The Company is working to create a solar cell that produces electricity both cheaply and efficiently.

Some innovative applications for solar energy are emerging. Solar Roast Coffee, based in Pueblo, Colorado, catches rays of sunshine directly on a drum roaster filled with beans. The roaster is capable of reaching temperatures upwards of 550 degrees Fahrenheit, and swivels and tilts allowing it to track the sun throughout the day.

As the use of solar power becomes more efficient, it will be interesting to see what other types of applications or methods for collecting solar energy will emerge. I know that flexible sheets of solar collecting cells exist today. Maybe one future application, once it becomes more cost effective, would be to stretch sheets of the flexible solar cells across farm fields during the off season. So, when the land is not being used to grow crops it can be used to generate power.

To Eat or Not to Eat

2007-06-25T07:19:00.000-05:00

Diabetes is fast becoming one of largest health problems facing the American people. A recent Government study found that one out of every eight U.S. federal health dollars is spent treating people with diabetes. A report by Medco Health Solutions (a large prescription benefits management company) last month found that the growing diabetes epidemic could result in soaring costs to treat the disease over the next three years. Medco’s 2007 Drug trend report shows that spending just on medicines to treat diabetes could soar 60 to 68 percent from 2006 levels. Over the next 30 years, diabetes is expected to claim the lives of 62 million Americans. Some people contract Type I diabetes, or what is commonly referred to as juvenile diabetes, at an early age. However, the vast majority of Americans are contracting what is known as Type II diabetes. Type II diabetes commonly results from obesity caused by a combination of poor diet and lack of exercise.

Some unique services are now available to assist people who do not have the discipline or interest to track their daily caloric intake. Canadian company MyFoodPhone.com provides one such service. Users of the service can send pictures of the meal they are about to consume via their cell phone. Nutritionists then analyze the meal and follow-up with advice on necessary adjustments. The site also allows users to track their progress by logging biometric data and connect with other users to get advice and support.

Services like this will fast become the rule rather than the exception. Employers and managed care companies looking to maintain and hopefully lower their total healthcare spend will increasingly be enlisting the services of nutritionists and disease management programs. Overweight people will be closely monitored and their level of insurance premium (and perhaps coverage eligibility) will be tied to how well they maintain their health. Be prepared for innovations not only in terms of medical advances for the treatment/prevention of diabetes but also products that will be demanded by the payor community designed to control their costs.

The Semantic Web

2007-06-21T23:07:00.000-05:00

Humans are capable of using the Internet to carry out tasks such as finding restaurants in Chicago, booking a hotel room, or searching for the cheapest HDTV and buying it. However, a computer alone cannot accomplish the same tasks without human direction because web pages are designed to be read by people, not machines. Semantics is the branch of linguistics concerned with meaning. The semantic web is an evolving extension of the World Wide Web in which information on the Internet can not only be read by humans, but is also understandable by computers or software agents, thus permitting them to find, share, and combine information on the Web. The Semantic Web is not a separate Web but an extension of the current one, in which information is given well-defined meaning, thus better enabling computers and people to work in cooperation. To achieve the Semantic Web, the information contained on the Internet will need to be converted into data that a machine can read and evaluate on its own (resource description framework, RDF is the leading standard). Startup companies such as Radar Networks are pioneering the next phase of the Web, sometimes referred to as Web 3.0.

The advent of online shopping for products and services has greatly increased price transparency. Car shoppers, for example, can receive quotes from several dealers within a specified geographical area and then further research the spread between what the dealer paid and the quote to determine if the markup is appropriate or there is room for further negotiation. However, this all requires your time and effort to research the various dealers and obtain the quotes. Under the Semantic Web, this work would be done for you. With ease of use would come greater user adoption, ultimately resulting in even greater price transparency. Now, the price of a product or service listed on the Web is generally considered to be a piece of factual information. If greater price transparency occurs, then price becomes more of a commodity and less of a differentiator between suppliers. If this happens, consumers will rely more on additional factors (besides price) to base their buying decisions. Other factors will be available, such as the supplier's record of customer satisfaction. But, how accurate or believable will these other pieces of information be? Would a greater reliance on this data drive initiatives to validate and certify the accuracy of all Web-based qualitative data? Perhaps this could spawn a whole new industry. Maybe someday there will be the Web equivalent of Underwriters Laboratories that instead of certifying product safety would certify data accuracy.

Health Informatics

2007-06-20T10:57:00.000-05:00

Health informatics or medical informatics is an emerging discipline defined as “the study, invention, and implementation of structures and algorithms to improve communication, understanding, and management of medical information”. The objective of health informatics is to collect and organize data and knowledge so that it may be applied during the decision-making process when a medical decision must be made. These systems are designed to help doctors have access to the latest information in order to provide quality care.

Google is in the process of developing an online platform that would allow patients to access to the same types of data as doctors can through the informatics networks. The idea is that anyone would be able to search online and learn about the generally recommended treatments and tests are for a specific condition. The patient would also be able to access guidelines for things such as preventative care measures or potentially harmful drug interactions.

Empowering the patient with the types of information Google is suggesting is another step towards the decentralization of health care. The general argument for decentralizing health care is the potential for improved service quality and coverage. What do you think? Will decentralized health care provide a more effective/efficient model of patient care?

The Eyes Have It

2007-06-19T11:08:00.000-05:00

The June 12th issue of Wired contains an article about the eyebox 2 from Canadian company xunk. The eyebox 2 is a palm-sized video camera designed to track a human’s eye movement. The camera contains light-emitting diodes that can record eye movements within 15 degrees of accuracy at a distance of up to 33 feet. When someone’s eyeballs are aimed at the camera, the light from their eyes reflects back to the camera, which detects the reflection and registers the fact that someone is looking at it. Xunk is targeting the outdoor billboard industry for the initial application of this device. The eye-tracking gear provides a more scientific means for measuring the reach of billboards and plasma displays. The company eventually wants to use the device in hearing aids that amplify the voice of the person you are looking at or television sets that turn off when they are not being watched. I think a device like this could have even more practical applications. For example, a quadriplegic could look at a screen to type messages or control the wheel chair. Or, it could be incorporated into automobiles and sound an alarm if a driver takes their eyes off the road too long.

Any other ideas?

The Doctor is In

2007-06-18T08:47:00.000-05:00

Another website whose concept I find interesting is www.Sermo.com. The site is a social network for medical doctors. Doctors make blog-like posts to the site when they have questions/comments about a particular drug, form of treatment, etc. The other doctors provide feedback, and in some cases this exchange may provide an early warning to potentially harmful drug reactions/side effects. This is important because it allows the medical community to work collectively. Access to the site is free to doctors and there is no advertising. However, the site is pulling in about $500,000 in revenue every month by charging institutional investors for the opportunity to “listen in”. The investors monitor the site, identify information/patterns that may eventually move the market, and then act before their speculations are confirmed and become common knowledge. I can envision this type of private information exchange platform being utilized for other types of applications. One that comes to mind is giving market researchers access to consumer conversations regarding specific products or types problems they are encountering.

A Innovation for Open Innovation

2007-06-15T08:30:00.000-05:00

A new website was recently launched called Fellowforce.com. This site provides companies with a platform for open innovation. The way the site works is that companies can post the problem they need solved on the “challenge board”. Registered “fellows” can then post their “pitch” to the company and receive a reward if their idea is selected. Only you and the organization that is challenging you can view your postings. Every party participating with Fellowforce has to commit not to use any idea, innovation or solution they have not rewarded. If a pitch is rewarded by an organization, then the organization receives the rights to your idea. Any organization in the world now has the ability to tap into outside resources for ideas and solutions. This new website is the epitome of connected, collective innovation.

Check it out!

Strategy Innovation

2007-06-14T23:53:00.000-05:00

In their book The Power of Strategy Innovation, authors Robert Johnson and Douglas Bate discuss the differences between strategic planning and strategy innovation. They argue that most companies have processes in place for doing strategic planning but not strategic innovation.

They make the following points:

Strategic planning in most companies is less about creating effective new strategies than it is an exercise in perpetuating and revising the current strategy every year.

Strategic planning typically focuses on issues facing the company in the present, extending out into the short-term future and not considering what is happening at the periphery of the business/industry and what impact it may have five to ten years out.

The strategic planning process typically starts by looking at the known and then planning for the unknown. A strategy innovation process instead involves looking first to the future and then planning backwards to the present by identifying the key strategic milestones between the two points in time.

Johnson and Bate recommend that a company should first perform opportunity identification and creation (strategy innovation) and then move to opportunity evaluation and integration (strategic planning).

What do you think?

Prior to strategic planning, do you believe there should be a strategy innovation process that attempts to envision strategies for markets that currently do not exist?

Connected Heathcare Data

2007-06-13T16:18:00.000-05:00

What is a RHIO?
Regional Health Information Organizations (RHIOs) are proposed information entities that supposedly will form a community of data sharing among competing healthcare providers. RHIOs are a specialization of Health Information Exchanges (HIEs). A health information exchange is defined as the ‘mobilization of healthcare information electronically across organizations within a region or community’. The HIE provides the capability to electronically move patient information between disparate healthcare information systems. Because healthcare systems utilize multiple information technology systems and vendors, a patient’s medical information often becomes isolated within silos of individual systems, unable to be shared with the healthcare community. As healthcare costs continue rise, aggregated data will become a key point of negotiation with payors. Providers will need to utilize the data to show improved health and better outcomes. As more people begin participating in a consumer-driven healthcare environment, patients will demand upfront price transparency and bundled pricing for care that requires the coordination of various service providers (i.e. Surgeon, Hospital, Rehabilitation) On August 6, 2006, President Bush issued an executive order for the development and implementation of a nationwide interoperable health information technology infrastructure by 2014. Depending on your definition of an RHIO, there may be as many as 300 RHIOs already in existence. These consist of centralized repositories of patient information supplied from decentralized databases owned by RHIO-member organizations at both the state and local levels. Coordinating data among corporate payors, insurers, healthcare providers and patients is no doubt a significant challenge. However, if medical data becomes increasingly transparent, the more patients will become empowered to make informed decisions and drive waste and excessive cost out of the U.S. healthcare system.

Product Life Stories

2007-06-12T09:40:00.000-05:00

Dole Organic now lets their consumers “travel to the origin of each organic product”. By entering a fruit sticker’s three digit Farm Code on Dole Organic’s website, consumers can visit the country, the farm, view photos, and learn more about Dole Organic’s products and people. By providing more transparency, consumers gain access to background information which helps them learn about the products they shop for. By providing this level of transparency, Dole Organic is working towards creating brand loyalty in the following two ways:

1.Providing Peace of Mind. Dole Organic lists certifications, awards, and recognitions for the farm. This provides the consumer with some assurance that the products they are purchasing are truly grown organically and under humane conditions.

2.Creating an Emotional Connection. Never underestimate the power of human emotion. When it comes to commodity items (such as bananas) a potential key differentiator (and probably a largely untapped one) can be assigning a human element to the product. Dole Organic also lists “testimonials from the fields” on their website which outline the hardships and struggles of the workers and how the jobs that Dole Organic provides is helping to lift them out of poverty and provide a more promising future. After reading their stories, how could you buy your bananas from any other producer?

What other products/industries would benefit from increased transparency?

Apple on Innovation

2007-06-11T08:25:00.001-05:00

The June 7th issue of the Economist has an article about Apple and why the company consistently ranks first in polls of the world’s most innovative firms. There are four lessons the company has learned that has allowed them to prosper by just keeping ahead of the current trends.

Lesson One: Innovation can come from without as well as within. Apple’s real skill lies in combining its own ideas with theologies from outside and then packaging the product with stylish design. Apple is an integrator of technologies, unafraid to use ideas from the outside but always incorporating its own ideas as well. The article calls this approach “network innovation” and has been utilized by other companies such as Proctor & Gamble.

Lesson Two: Design new products around the needs of the user, not the demands of the technology. Many companies believe that a clever new technology is enough to sell their products. Apple however has consistently combined clever technology with simplicity, thus making the use of the technology more intuitive and enjoyable.

Lesson Three: Smart companies should sometimes ignore what the market says it wants today. A company should listen to customers but not allow feedback from customers to dictate the design of new products.

Lesson Four: Fail Wisely. Learn from mistakes and try again. The company must provide an environment where failure is tolerated and then learned from.

I think Apple is another example of where collective innovation is more powerful than going it alone. Apple did not invent the digital-music player or the mobile phone, but by taking existing technologies and applying their own inventiveness they have taken the utilization of these technologies to a whole new level.

"Experience is the name everyone gives to his mistakes." - Oscar Wilde

The Innovation Gap

2007-06-08T08:03:00.000-05:00

The global economy continues shifting away from mass markets towards more segmented local ones. Companies are increasingly challenged to understand how to service these new customer segments. Companies know how to make just about anything; the problem is determining what should be made. The Director of the IIT Institute of Design , Patrick Whitney, calls the gap between what produces know how to make and what consumers actually need the “innovation gap”. According to Whitney, design can bridge the gap by discovering users’ needs and translating them into new offerings.

Here are a few ways in which deign thinking can help companies innovate:
•Discovering what users value and linking it to business value
•Illustrating new value with compelling stories and scenarios about user experience
•Communicating and visualizing complex information
•Exploring innovation options quickly and cheaply through rapid prototyping
•Integrating physical products, information technology, services, and environments into holistic user experiences

Tools of the Trade

2007-06-07T21:48:00.000-05:00

Strategic designers have a number of methods they use to develop new ideas. Here are a few examples:
POEMS Framework – ‘POEMS’ stands for People, Objects, Environments, Messages/Media, and Services. It’s a framework for organizing user research data, such as photographs. This tool is particularly useful when comparing research about users from different locations and cultures and can provide insight into how to tailor products and services for different markets.

Disposable Camera Studies and Ethnographic Interviews – Disposable cameras are given to users and told to create a photographic diary of their daily activities pertaining to a particular area of interest. The photos are organized according to the POEMS framework and researchers later conduct ethnographic interviews (a holistic research method) with the users in order to reveal insights about areas where new product/service offerings could add value.

Experience Scenarios – This tool helps to enhance a new business concept by demonstrating its user experience. Experience scenarios create a story that captures the experience of using the end product/service over time. By visualizing these scenarios, clients are better able to evaluate concepts.

User-Centered Case – This is a framework for teams facing complex problems to keep focused on the user’s perspective by doing the following: 1) making factual observations about user behavior, 2) making judgments that illustrate the problems of the current situation, and how users are being “harmed”, and 3) establishing a link between the harm and the users’ value(s) in order to generate success criteria for new designs.

Supermarket Evolution

2007-06-06T22:51:00.000-05:00

An article in the Wall Street Journal today discusses how supermarkets are competing against Wal-Mart. The traditional grocery retailers had been losing market share to Wal-Mart’s low price operating model. Knowing they could not compete on price alone, companies such as Safeway and Kroger began focusing on consumers who value shopping in less crowed, more convenient, better stocked stores. They compete on price for the staples but supplement those low priced items with higher-margin fresh produce, higher-quality meats, wine, and easy to prepare foods. The supermarket chains have also learned to pick their battles and focus on their strengths. They are reducing the number of drugs and beauty products, which are Wal-Mart’s strengths, stocked in their stores.
Supermarkets have also come to understand they can no longer appeal to all types of shoppers with a single type of store format. For example, Kroger now has four different formats that range from urban stores that stock a limited number of items at ultra-low prices to stores targeted towards wealthier shoppers who value prepared meals and gourmet items. All of these efforts appear to be making a difference. Last year, sales at supermarkets that had been open at least one year rose 4%, which is the largest increase in five years.

This is a good example of companies getting creative in the face of change and evolving to survive. It also demonstrates the importance of knowing the market in which you compete and understanding how the market can be segmented. One market in particular that I can see becoming further segmented is the market for health care. As consumer-driven healthcare gains traction, it will become a catalyst for individual consumer demands to play a more significant role in shaping the types of healthcare services made available. One example of segmentation that has already begun is the introduction of concierge medical services where a patient who can afford the fee can essentially have a personal doctor on retainer for consultation whenever needed. This is in contrast to the low-cost retail clinics popping up that service a limited set of needs with minimal consultation usually with a nurse practitioner verses a doctor. What other types of markets are poised for further segmentation?

Innovation at Toyota

2007-06-05T21:19:00.000-05:00

The summer 2007 issue of strategy+business contains an article entitled “Innovation Agility”. The authors outline the foundations of Toyota’s product development system that the company has perfected over a 60-year period and is a key element of Toyota’s competitive advantage. The process encompasses the following six interrelated elements:

1. Structure and Organization – Development teams at Toyota have a balance between their program and functional organizations. A chief engineer runs the program while department managers run each of the various functional teams. The chief engineer has no direct authority over the department managers; Toyota relies not on positional authority but on its culture to make it work.

2. Development Process – Each program at Toyota essentially has a custom-designed development timeline that incorporates intensive coordination among the functional groups. This allows for management of design and engineering trade-offs, and ensures flexibility while significantly lowering overall project risk. They start the development process by focusing on the value target rather than focusing primarily on the cost target like many companies do. This allows the product development teams to focus on product details that customers truly value rather than simply adding features that are easy (cost-effective) to include but that customers may ignore.

3. Extended Enterprise – Long-term suppliers with whom Toyota has invested innovative capability handle product development for critical components.

4. Institutional Learning – Toyota heavily relies on capturing and sharing the knowledge and experience of its people. The Company makes systematic efforts to capture and institutionalize this knowledge.

5. People Development – The Company invests great time and effort in developing its best people in part through a strong mentoring system.

6. Culture – The success of the product development system ultimately depends on Toyota’s strong culture which values personal accountability, continuous improvement, collaboration, and the elimination of waste.

Most Western companies take a process-driven approach to product development and focus too much time on compliance and reporting, and not enough time on experimentation and problem solving. Toyota holds their engineering teams accountable for meeting various objectives at specified times, but leaves the methods for tracking their progress to the team’s discretion. Resources that would otherwise be dedicated to oversight are instead available to help the team make better technical decisions based on data analysis and experimentation. However, this only works when the company has confidence in the system.

Efficiency vs. Creativity

2007-06-04T10:37:00.000-05:00

The June 11th issue of Business Week contains an article about 3M’s struggle between efficiency and creativity. In December, 2000 James McNerney, former GE executive who was in the running to replace Jack Welch, was selected as 3M’s next CEO. McNerney was the first 3M CEO to come from outside of the company and brought with him the GE playbook for achieving operational efficiency. One of his key initiatives was introducing the Six Sigma program, a series of management techniques designed by Motorola in 1986 to reduce production defects and increase efficiency. For the most part the implementation of the Six Sigma program was successful as it pertained to the operations (manufacturing/logistics) side of the business. However, when the folks involved in 3M’s R&D efforts were asked to adopt Six Sigma processes, the results were less favorable. While established operational processes like manufacturing require strict monitoring, measuring, and a regimented set of procedures, the innovation process curls up in a ball and dies under such micro-management. Researchers at 3M felt stifled by the new structure and pressured to produce more new products faster. The result was a greater number of incremental product-line extensions then true new product innovations. Traditionally, 3M drew at least one-third of sales from products released in the past five years, but currently that fraction has fallen to one-quarter of sales. In 2004, 3M was ranked No. 1 on the Business Week/BCG list of Most Innovative Companies. In 2007 the company dropped to number seven.

After four and a half years at 3M, McNerney left to take the CEO position at Boeing. Now his successor, George Buckley, seems to recognize the negative impact the process-focused program had on the company’s creativity. Many of the workers say they feel reinvigorated now that the corporate emphasis has shifted back to growth and innovation from McNerney’s focus on process and short-term profits.

The struggle between efficiency and creativity is one many public companies face. The market values of company stocks are impacted more by shot-term results rather than long-term prospects; and executives have an incentive to drive those results. I agree that programs such as Six Sigma are highly valuable and necessary to keep operations efficient and cost-effective. It is also important for researchers to design for manufacturability. However, how can public corporations foster creativity without being penalized for allocating capital that may not produce a quick return? Perhaps new “innovation effectiveness” stock evaluation metrics should be developed. As part of their overall evaluation, analysts would have a method to formally account for a company’s commitment to R&D and their projected effectiveness at bringing new products to market.

The lesson here is that there are no easy answers and the best solution most likely lies somewhere between the two extremes of having a corporate culture solely based on either process control or open-ended innovation.

Too Much Innovation?

2007-06-01T10:32:00.000-05:00

HP Labs is developing an in-store kiosk called the Retail Store Assistant (RSA). The idea behind the RSA is to make shopping easier for buyers and selling easier for retailers. The way the RSA is envisioned to work begins with the consumer entering their shopping list online. Any information entered online will be added to the user’s online profile. When the consumer arrives at the store, they will either swipe their store club card or enter their phone number into the kiosk. The RSA will then create a printed list of the items on their shopping list, identify any special retailer discounts or manufacturer coupons currently available, and on the back will be a map of the store and the location of all the items on the list. If shoppers don’t want to carry around the printout, the information could also be transferred via Bluetooth technology to a mobile device.

HP says the RSA is about making shopping “a delight” for customers and will help eliminate the frustration of not being able to find a salesperson to assist in locating an item. But when it comes to improving customer service, is the introduction of more innovative technology the best approach? In our quest to quest to streamline processes are we actually overlooking what’s most important to the customer?

Researchers from Bowling Green State and Penn State universities studied the impact of positive human interactions between retail employees and customers. The study concluded that the bigger the employee’s smile, the happier the customer and the more likely customers were to view that person as competent and the encounter—averaging just two minutes—as satisfying.

Having good products, nice stores, great convenience and fair pricing is the price of admission to compete. What can be a true differentiator is consistent, friendly customer service. When it comes to delighting customers, I think it’s difficult to improve upon the power of positive human interactions.

Innovation Planning Toolkit

2007-05-31T09:37:00.000-05:00

Vijay Kumar is an Associate Professor at the Institute of Design, Illinois Institute of Technology. He has published a white paper entitled “Innovation Planning Toolkit” and told me he is in the process of writing two books on this topic. The toolkit provides a model for approaching the innovation planning process and has the following eight modes: 1. sense intent, 2. know people, 3. know context, 4. frame insights, 5. explore concepts, 6. make plans, 7. realize offerings (prototype, pilot, and launch), 8. foster uptake.

1. Sense Intent: See changes, diagnose conditions, and form the initial innovation intent

Innovation planning begins with an initial intent or rough goal. The first mode is characterized by three primary activities – see changes, diagnose conditions, and form initial strategies. The focus is on seeing the changes impacting people’s lives and understanding opportunities for innovation based upon these changes.

2. Know People: Look for people’s unmet and unarticulated needs

Observing people in their own environments during their normal routines reveals a more accurate set of insights about their needs than what can be gained from traditional market research and focus groups.

3. Know Context: Look at the big picture and learn about opportunities

In this mode, innovation teams perform contextual research usually looking at entities like companies, competitors, industries, networks, markets, technologies, products, services, and brands. Here it is useful to begin creating “overview visualizations” that show relations among the parts of the context at a high level. A context map is one tool used to organize contextual elements and create overviews.

4. Frame Insights: Find patterns in research data and extract insights

Here the goal is to analyze the data generated from the previous three modes. Innovation teams use a variety of data-organizing tools to uncover defensible general patterns. By analyzing the problems faced by people in their daily lives, patterns about their unmet needs emerge.

5. Explore Concepts: Explore point concepts to systems to platforms

Here teams need to focus on relating the analysis to ideation. There should be a transition from insights to concepts. Focusing on the right ideas (ideas that are driven by the insights) is key.

6. Make Plans: Make roadmaps for the future through actionable plans

To make concepts actionable, innovation teams develop a working plan. The actionable plans developed chart out innovations that will provide a strategic advantage to the company. Stories are developed and used to explain to stakeholders both the initiatives and the effects. The plan, along with the concepts, helps to clearly identify the changes needed in the company to create new offerings.

7. Realize Offerings: Realize concepts through iterations—prototypes to pilots to launch

The success of concepts depends on their adoption by users. Testing concepts in real situations early on is an effective way to ensure success. The use of prototypes helps to identify problems and issues and allow for further refinements prior to a pilot offering is created. In this mode, the focus is on the design of the prototype and determining meaningful evaluation criteria.

8. Foster Uptake: Foster an environment for successful adoption

This mode is an overlap between innovation planning and implementation where the transition from planning to implementation occurs.

The mode which I believe is key to successful innovations is Knowing People. During conversations with people in the design and R&D industries they have told me that there is a disconnect between what people say they do and what they actually do. Through observation, researchers can discover unmet needs that were unrealized by the person being observed.

Innovation Value Chain

2007-05-30T09:00:00.000-05:00

The June issue of Harvard Business Review contains an interesting article entitled “The Innovation Value Chain”. The authors propose that managers need to take an “end-to-end” view of innovation efforts and view the process of transforming ideas into commercially viable outputs as an integrated flow. According to the authors, the “innovation value chain” offers the necessary framework for achieving an integrated system of innovation. The value chain is a three-phase process involving 1. Idea Generation, 2. Idea Development, 3. Diffusion of Developed Concepts.

Idea Generation - Generating ideas either in-house (creation within an internal group), through cross-pollination (collaboration across internal business units), or externally (collaborate with parties outside of the firm).

Conversion – Screening and selecting the best ides, securing initial funding, and then moving into development to achieve the first result.

Diffusion – Companies must get relevant groups across the organization to support and spread the new products, services, or practices across targeted channels and customer groups.

The authors argue that utilizing the innovation value chain approach will enable managers to more selectively select which innovation approaches to implement and better focus their resources to improve the company’s overall innovation capabilities.

Nature, The Ultimate Innovator

2007-05-29T09:36:00.000-05:00

Have you heard of Biomimicry? Biomimicry from bios, meaning life, and mimesis, meaning to imitate) is a design discipline that studies nature’s best ideas and then imitates these designs and processes to solve human problems. Biomimicry has become a methodology for finding answers to design questions. One of the most famous examples of biomimicy is Velcro. In 1941, Swiss engineer George de Mestral investigated how the seeds of the burdock plant attached themselves to his wool socks. After more than a decade of experimentation he had designed an effective product which he named Velcro after the French words velours, meaning 'velvet', and crochet, or 'hook'.

Some examples of projects in the works include the following:

New types of adhesive tape are being developed based on geckos’ feet
Self-cleaning garments inspired by the lotus leaf
More effective ventilation systems based on the designs of termite mounds
Super strong glue based on an epoxy with adhesive properties produced by the mussel foot

In the June issue of Business 2.0 there is an article that profiles three case studies in which engineers developed products inspired by nature.

Informing the Healthcare Consumer

2007-05-25T10:19:00.000-05:00

Biomedical and health informatics has to do with all aspects of understanding and promoting the effective organization, analysis, management, and use of information in health care.

The American Medical Informatics Association is an organization in the United States dedicated to the development and application of biomedical and health informatics in the support of patient care, teaching, research, and health care administration. AMIA was founded in 1990 through the merger of three existing health informatics associations. Since that time, AMIA has grown to more than 3,000 members from 42 countries worldwide.

This week, Adam Bosworth, VP, Google, Inc. gave a keynote speech at the AMIA Spring Congress. Google’s vision for the future of healthcare is that consumers should own their own personal health data. Google envisions that consumers require the following three core abilities:
· Discovery – Consumers should be able to discover the most relevant health information possible learning about their condition and who can treat them.
· Action – Consumers should have direct access to personalized services to help them get the best and most convenient support and have access to their personal health records.
· Community – Consumers should be able to learn from and educate those in similar health circumstances. They want comfort and to know how others are coping with the same problems they are experiencing.

This week Medco and Revolution Health announced they are joining forces to make the promise of personal health records a reality. http://medco.mediaroom.com/index.php?s=43&item=260
Medco Health Solutions, Inc. is one of the leading pharmacy benefit managers (PBM) serving about 60 million Americans, and Revolution Health is a consumer-centric health company created by AOL co-founder Steve Case. Under the agreement, the two companies will deploy an online suite of tools that are designed to be action-oriented with the goal of empowering consumers to make more informed decisions about their personal healthcare. The portal will offer consumers access to their personal health record which will automatically be populated with prescription claims data. The companies plan to begin marketing the integrated portal to Medco clients by early 2008.

The cost of providing quick, convenient, and effective healthcare in America is one of the greatest challenges facing our nation. Rising cost is always a strong incentive for innovation. When it comes to controlling the cost of healthcare, consumers will increasing be enlisted to take personal responsibility for maintaining their health and efficiently allocating their allotted healthcare dollars. By providing the proper set of tools and resources, I believe that consumers will rise to the challenge.

Predicting the Future

2007-05-24T14:10:00.000-05:00

Prediction markets are markets for contracts tied to the outcome of an uncertain future event. Prediction markets are designed to aggregate information so that market prices forecast the outcome of future events. The role of predictive markets is different from that of the financial markets. Financial markets primarily act as a mechanism for resource allocation while predictive markets instead work as a forecasting tool.

Prediction markets are already being used in a variety of contexts. One of the oldest is the University of Iowa’s Iowa Electronic Market (IEM). The faculty at the University of Iowa developed the IEM to be an Internet-based teaching and research tool. It allows students to invest real money. Here students can trade "shares" of political candidates where the payoff depends on the election results. Students may also trade in contracts whose eventual payoff depends on a future event such as an economic indicator or a movie's box office receipts. Since 1988, the IEM has predicted the results of American presidential elections more accurately than traditional polls 75 percent of the time. The IEM is an experimental market operated for academic research purposes and is not regulated by the Commodity Futures Trading Commission or any other regulatory authority.

This month a Statement on prediction markets was released by the AEI-Brookings Joint Center for Regulatory Studies. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=984584
Currently, it is very difficult to set up a real-money prediction market for U.S. participants. In the statement, a council of academic advisers argues that U.S. regulators should lower barriers to the creation of prediction markets. The council members believe that their proposed change has the potential to stimulate innovation in the design and use of predictive markets, and the use of predictive markets would ultimately result in data that could improve decision making in the government and private sector.

Prediction markets are being used internally by companies such as Microsoft, GE, and Abbott Labs to help generate new business ideas. Often, corporate innovation programs/departments are short lived due in part to poorly managed expectations but also partly due to input being limited to a select few. When deciding where to focus a companies innovation resources, collective input from a larger group will increase the probability of focusing on the most promising projects.

Nine More "Cs"

2007-05-23T09:14:00.000-05:00

In Lee Iacocca’s latest book Where Have All The Leaders Gone? , he provides his list of what he calls the “Nine Cs of Leadership”.

Curiosity – Read voraciously, step outside of the comfort zone to consider new ideas.
Creative – Willing to go out on a limb and try something different.
Communicate – Facing reality and telling the truth.
Character – Knowing the difference between right and wrong and having the conviction to do the right thing.
Courage – Doing what’s right even when it’s unpopular.
Conviction – Have passion. Have to want to really get something done.
Charisma – The quality that makes people want to follow you. The ability to inspire.
Competent – You have to know what you are doing and more importantly surround yourself with people who know what they are doing.
Common Sense – Deal in the real world

Mr. Iacocca states that having innovation within a company is important because as companies grow they tend to become sluggish. He writes: “It takes a constant infusion of fresh ideas and leadership to prevent that." I definitely agree with that. Unfortunately, I also agree that many of today’s leaders (whether in politics or business) are lacking in many of the Cs listed above. However, from an innovation perspective, it is my opinion that a change leader must overall be creative. Mr. Iacocca writes “Leadership is all about managing change. Things change and you get creative." Well said.

The Seven "Cs"

2007-05-22T08:28:00.000-05:00

In 1995, Pfizer started down the path to innovate the heath system by creating Pfizer Health Solutions (PHS). PHS is a subsidiary of Pfizer dedicated to improving health and healthcare delivery through innovative, coordinated services.

Their stated mission and vision is as follows:

Mission
"We develop and implement innovative health improvement projects through collaborations with those responsible for, or vested in, the wellness and health outcomes of consumers and communities."

Vision
"We believe that consumer-focused, proactive health management increases the ability of consumers to manage their health. When consumers are more informed, involved, and empowered, they interact more effectively with healthcare providers and strive to instill those behaviors, which promote healthier outcomes."

Currently, PHS is working to achieve their mission by working in partnership with government, health plans, and physician organizations.

PHS uses the following list of Seven “Cs” to guide them in their work:

1. Collaboration – Working with multiple players and healthcare stakeholders delivering care.

2. Collection and analyzing – Utilizing sophisticated data mining firms to develop knowledge management tools for gathering and tracking business trends.

3. Creating and testing – Developing innovative care delivery models that will assist in changing the fragmented U.S. healthcare delivery.

4. Concentrating – Focus on promoting health and wellness education to help prevent the pain, suffering, and cost of debilitating medical conditions.

5. Coordinating – Working towards improved outcomes by coordinating care for patients with medical conditions among all stakeholders.

6. Committing – Investing in information technologies resources to implement evidence-based guidelines, improve process efficiencies, and reduce costs.

7. Cooperating – Working with political leaders to launch health initiatives for improved health in clinics, hospitals, and pharmacies.

This is a good example of a model that can be used to help begin moving away from operating silos and connecting to collectively innovate.

Healthcare's Retail Solution

2007-05-21T12:41:00.000-05:00

A recent article entitled “Health Care’s Retail Solution” draws on insights gained from a 2006 Booz Allen Hamilton study of 3,000 consumer and 600 physicians. The article sates that to make competition and innovation among payers and supplier possible, the U.S. healthcare system will require the following:
•Consumers who live healthy lives and plan for their future health-care needs
•A fundamentally restructured supply side that provides consumers all the information they need to make wise choices and is quick to respond to changing consumer demands
•New kinds of intermediaries to help align the supply and demand sides and help consumers navigate the complex system.
•Competitive environment that encourages innovation and competition

One of the interesting points is that although most doctors believe consumerism will have the greatest impact on their practices in the near future, few plan to alter the way they serve their patients or share data. With the advent of retail clinics, physicians who are reluctant to adapt to the emerging healthcare model will be at a disadvantage within the new competitive environment.

Retail health clinics are not exactly a new concept. Health Stop attempted something similar in the mid 1980’s. Backed by venture capital, Health Stop began developing a chain of conveniently located, no-appointment needed healthcare centers in the eastern and Midwestern United States. Their target was patients who were seeking fast medical treatment and did not require hospitalization. Health Stop was designed to serve people who had no primary care physician or who were in need of treatment during off-hours. However, the company found itself competing with local community doctors and hospital emergency rooms for business. As a result, the community doctors criticized Health Stop’s quality of care, and the hospitals made claims in the media that they could not survive without the income from the relatively healthy patients Health Stop was targeting. Because the chain had not anticipated this level of opposition, Health Stop had not worked in advance with the local physicians and doctors to resolve the issues. Although Health Stop had more than 100 clinics and generated more than $50 million in revenue at its peak, the criticisms from the doctors and hospitals had tarnished their image. The company was never profitable and was dissolved after a decade.

Some experts believe the retail clinics are now a more acceptable alternative because of the declining number of family physicians. According to Dr. Richard Cooper, a professor of medicine at the University of Pennsylvania, “Retail clinics may have happened anyway—there was a failed attempt to establish ‘store-front clinics’ in strip malls some years ago—but the success of the new retail clinics (now) is more likely because there's a doctor shortage,” he said. “[The spread of retail clinics] will mean that [family physicians] will have to evaluate how convenient their practices are for patients, and will most likely need to make some changes to be more user-friendly,” said Dr. Larry Fields, president of the American Association of Family Physicians.

Also arising from 2006 Booz Allen Hamilton study is the concept of “solution providers”.

Solution providers are emerging to bring evidence-based treatments to consumers, especially to those with difficult, chronic, or expensive conditions. We can see the outlines of a “bundler” role: Instead of offering services a la carte for diseases like diabetes, providers could handle the entire treatment of a disease over a person’s life.

Companies that have not traditionally been health-care players are leveraging their capabilities to create new offerings that enable the move toward healthcare consumerism. I can foresee retailers with in-store clinics becoming more involved in wellness and disease management programs in order to partner with payers to help manage healthcare costs.

Healthcare Innovations - Retail Clinic Overview

2007-05-20T15:22:00.000-05:00

One of the recent transformations in healthcare services has been the advent of the retail-based clinic. Most in-store or retail-based health clinics focus primarily on noninvasive procedures and typically measure between 200 and 500 square feet in size. The retailer works with the clinic company to ready the space to be used for the clinic. Most clinics are staffed with nurse practitioners who are supervised by an off-site physician. The clinics use proprietary software systems, referred to in the industry as “expert systems”, which serve as diagnostic tools as well as a checklist to identify the types of conditions to be treated at the clinic. Many clinics advertise that a visit takes about 15-25 minutes and does not require an appointment. Clinics typically post their prices, which range from $40 to $70. Blue Cross Blue Shield of Minnesota analyzed 22,956 visits by its members to Minute Clinics from June 2004 to June 2005 and found the clinics cost about half that of an office visit, $43 versus $87, and less than half for other related costs such as lab services. The potential for savings is substantial. A service that costs $40 at a retail health clinic could cost as much as $109 at a doctor’s office, $120 at an urgent care facility, and $325 at a hospital emergency room. In early 2006, nearly 200 in-store health clinics existed in retail practice. By early 2007, there were approximately 400 clinics in operation. Peter Miller, chief executive officer of Take Care Health, estimates that the number of clinics in the U.S. could grow to nearly 10,000 by 2010.

Price transparency and choice are two of the driving factors in the push toward the consumer-directed healthcare model. Consumer-directed health care is an emerging element of many commercial health plans that can take many forms, such as spending accounts or health reimbursement arrangements. Retail clinics have addressed both factors in their business strategies.

Some large regional healthcare systems are starting their own clinics directly with retail partners, while other medical groups and doctors’ offices are signing contracts to supervise clinic staff, and striking up referral arrangements with retail clinics. In southeastern New Jersey, for example, AtlantiCare, the region's largest healthcare system, with about 450 staff physicians and a network that includes two hospitals and a health plan, opened its first in-store HealthRite clinic in a Somers Point, NJ, ShopRite supermarket. It is the first of seven initially planned, and the company may also franchise to other health systems. Geisinger Health System of Danville, PA, with hospitals, physician practices and other health services, is opening its first CareWorks Convenient Healthcare clinic in the Weis Markets grocery chain. Memorial Health system in South Bend, IN, is operating Medpoint express centers in local Wal-Mart Super Centers.

Twenty-two states and the District of Columbia currently allow nurse practitioners (NPs) to treat patients without physician involvement, while 28 require documented physician involvement (in the form of a doctor’s presence some or all of the time, availability for consultations by phone or written protocol agreements). States also vary as to whether they require supervising physicians to reside in state or not. The clinics are licensed as physician practices in many states, and so state medical boards regulate them. Most states allow the nurses to prescribe the vast majority of drugs, with the exception of controlled substances. NPs who bill independently of doctors submitted $1.4 billion in charges to the Medicare program in 2005, a 19 percent increase from 2004. Currently, in the United States, there are approximately 115,000 nurse practitioners. Twice as many as a decade ago and one for every eight doctors.

What is clear is that retail health clinics will require modifications in consumer behaviors. Patients will have to adapt to receiving their care at a different location, and from a different type of provider. Making a good first impression among the early adopters of retail health clinics is imperative. Whether or not these patients recommend clinic services will depend on the cost and convenience compared to their family physician, and most importantly, how effective the treatment is.

A 2000 study in the Journal of the American Medical Association concluded that for patients who receive primary care from nurse practitioners there were no differences in satisfaction ratings following the initial appointment between the nurse practitioner and the physician. Satisfaction ratings at 6 months differed for 1 of 4 dimensions measured (provider attributes), with physicians rated slightly higher (4.2 vs. 4.1 on a scale where 5 = excellent).

An online Harris poll conducted in late 2005 found that out of the 2,245 adults polled, only 7% had used the retail clinics. However, those that had used them were largely satisfied: 92% said they were satisfied with the convenience provided by such clinics, and 89% said they were satisfied with the quality of care. The poll also found that of the people who have not used a retail clinic, 41% said they would be likely to use an onsite clinic for basic medical services. Among the concerns noted, 71% said they would be worried about the qualifications of the staff and 75% would be worried that a serious medical problem may not be correctly diagnosed.

Collaborative Musicians

2007-05-20T15:20:00.002-05:00

On NPR this morning there was a story about on-line music collaboration. There are various websites that allow musicians from around the world to play live with one another. The sites also allow a musician to place his or her work on the website and then have it enhanced by another musician or singer than happens to come along. This is a true example of collective, collaborative innovation at work. Besides music, what other human endeavors could benefit from this type of collaboration? I was recently told a story from a colleague about a gold mine operator who was having difficulty locating new gold deposits. He decided to post his geological survey data on the Web and hold a contest to see who could best analyze the data to help him find new gold deposits. Well, after receiving feedback from several participants, the operator was able to find new gold deposits yielding profits well in excess of the prize money he paid. Could this form of collaboration become mainstream? Maybe companies will begin outsourcing their R&D and strategy formulation and accept the best of a collection of ideas received from the masses. Picasso said "Bad artists copy...good artists steal". I don't advocate stealing ideas, but perhaps the truly innovative ideas will need to be taken from a collaborative effort coming from outside of the organization.

Welcome

2007-05-20T15:20:00.001-05:00

Why connected collective innovation? Well, it has been my experience that nothing brilliant develops in a vacuum. Collective thought is much more powerful. However, collective thought alone does not produce breakthrough thinking. The key to innovation is finding the new and relevant connections within the mass of ideas generated.

There are many blogs dedicated to innovation, but my hope for this blog, in addition to general discussion about innovation, is to also spend some time identifying the collective input that exists on key issues and then determining if new connections can be made to discover fresh/innovative solutions. Let's see what happens.