“Nova” Ratings (out of 5):

• Uniqueness              3
• Clarity                       4
• Readability                4
• Innovator’s Value     4 (Could provide real value to an innovator)

Synopsis: Tushman (business administration, Harvard Business School) and O’Reilly (Stanford U. Graduate School of Business) provide managers with the key principles of managing both for today’s requirements and tomorrow’s possibilities, to enable an organization to maintain long- term success. This reprint of the 1997 text includes a brief new preface by the authors, noting some of the dramatic changes in technology, markets, and competition over the past five years. Annotation ©2003 Book News, Inc., Portland, OR

Review:
The book makes the normal assumption ‘innovation involves unpredictability, risk taking and non-standard solutions’. The authors then attempt to manage the randomness of innovation by developing new management processes, incuding cultural and organizational change.

a) Innovation is random
pg 111 “innovation involves unpredictability, risk taking and non-standard solutions”
b) Organizational change
pg 82 “Innovation in organizations always involves reciprocal interdependence.”
c) Cultural change
pg 35 “Organizational culture is key both to short-term succcess and, unless managed correctly, to long-term failure”
d) Management processes
pg 82 “Managing innovation demands linkages among customer requirements, technological possibilities, and manufacturing capabilities.”

Book Category:
- Innovation through management processes, cultural change, organizational change

Key Concepts:
- Congruence model – ‘congruence among organizational building blocks’
- Dynamic conservatism – ‘alignment that made them successful created the resistance to change that prevented them from adjusting rapidly’.
- Streams of innovations – incremental and discontinuous innovations – ‘handle existing products and services even as they create new ones’ – ‘exploit the past and discover the future concurrently’
- Ambidextrous structures and management – evolutionary and revolutionary change – managers and projects – decisions
- Organizational alignments – ‘short term success is a function of alignment’. Long term success requires multiple alignments.
- Innovation is incremental, architectural or discontinuous.

Writing style:
- historical examples of failure to implement new innovations

Table of Contents:
Preface and Acknowledgments
1 The Tyranny of Success1
2 Ambidextrous Organizations: Leading Evolutionary and Revolutionary Change
3 Defining Problems and Opportunities: A Foundation for Success
4 Managerial Problem Solving: A Congruence Approach
   A Practical Guide to Using the Congruence Model
5 Leveraging Culture for Innovation and Competitive Advantage
   A Practical Guide to Diagnosing Culture
6 Shaping Organizational Culture
7 Managing Innovation Streams in Ambidextrous Organizations
8 Implementing Strategic Change
9 Winning through Innovation
Notes
Bibliography
Index
About the Authors

The key is that proponents of a new invention and potential innovation do not approach the executives with a sufficient business plan that reflects the value of the innovation to the customer, the impact on new and existing markets, the internal and external costs and the impacts on future revenue streams.

Unfortunately, answering these questions about a future innovation is extremely difficult unless the invention has been founded in a innovation process that starts with market recognition and then moves into invention, productization, marketing and innovation. The process today is all too often completely backwards and is driven by existing customer feedback.

The key is to follow a clearly defined invention/innovation process that starts with recognizing a target market and attaching resources based on potential and not based on random results from existing management processes.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

In this case, “radical innovation” means innovating a new product or a new market, whereas incremental innovation would be adding innovations to an existing product/market. Radical innovation is often referred to as “disruptive” innovation because the innovation disrupts existing products and markets.

All companies follow a similar lifecycle that eventually leads to:

1) Commoditized products
2) Destructive incremental innovations
3) Internal instead of external innovations (costs versus revenues)

ALL companies must do disruptive (“radical”) innovation if they want to continue to succeed. Utilizing targeted innovation techniques it is possible to deliver disruptive innovations in far less time than the standard 3 to 7 years. This standard, multi-year time frame is a reflection of the normal randomness of most innovation processes. Targeted innovation, the process patented by Innovate the Future, Inc., eliminates the randomness and allows a clear analysis of market potential, revenue potential and minimization of risk. Delivery of innovations to market can occur in weeks instead of years.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

All of the “innovation processes” proposed today by innovation consultants, except those used by Innovate the Future, seek to:

1) Increase the frequency of random creativity by ‘empowering employees’
2) Increase the odds of ‘catching’ a random innovation by changing management style
3) Telling executives to take more risk with potential innovations

All of these merely wrap the current randomness of discovery and innovation. They don’t actually drive targeted innovation.

The book The Innovation Equation by Jacqueline Byrd proposes the equation:

Innovation = Creativity x Risk Taking

This is a perfect reflection of the pure randomness of innovation today. Increase the number of people randomly creating and increase taking risks and you will eventually find a viable innovation from random events.

Innovate the Future’s patented Targeted Innovation process does not require more people, a change in management or an increase in risk taking. It is driven by targeting your market, creating targeted inventions and deploying targeted innovations. Deployment can occur in weeks or months, not years.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

There are several problems that are driving the apparent dirth of new innovations:

1) All current innovation techniques have an underlying assumption that innovation (and by inference, invention) is a random process. The concepts of expanding the number of innovators, driving management teams to recognize innovations and forcing executives to take more risk are a reflection of this randomness. More innovators=more random events. Better innovation management=recognizing unexpected events. Risk taking executives=taking a chance on an unplanned innovation that might succeed.

2) As companies age the shift is from external innovation to internal innovation. To create new markets and expand revenues companies must create external innovations. Companies instead focus on internal innovations to reduce costs.

3) With an unsure financial market there are fewer startups and fewer risk takers that are driving disruptive innovations. Countries like China, that, until recently, have huge incoming funds to invest appear to be far more innovative than the U.S. because there are more startups and companies that are driving external innovations rather than internal innovations.
 
To address these problems, companies need to:

1) Drive targeted invention, targeted marketing and targeted innovation. Eliminate the randomness.

2) Recognize the need for both internal and external innovations. Ford Motor company did. GM did not.

3) Understand that following the right innovation approach it is not necessary to spend huge sums of money to be a creative, market disrupting company.

David Croslin
President, Innovate the Future, Inc.
david@innovatethefuture.com
www.innovatethefuture.com
www.davidcroslin.com

As you read this you can see my picture off to the side of this posting. You might see me as a healthy, white, male American business man. But am I really? Perhaps I am blind and I used an audio interface to create this posting. Or maybe I am a convicted felon trying to start a new life even before my release. Maybe, I am an octogenarian woman that was raised to be silent to the world around me and am now trying to find myself even as time marches on.  I could be a teenaged orphan among many others located in a village in Africa with a generator as the only power source? 

Horace Mann said “Education then, beyond all other devices of human origin, is the great equalizer of the conditions of men, the balance-wheel of the social machinery.”. He strove for an equal education for children of all diversities. He fought agressively to create a standardized education system, provided by the government for all. He stated: “A house without books is like a room without windows.

No man has a right to bring up his children without surrounding them with books, if he has the means to buy them.” 

Earlier this year (January 2009) the number of Internet users worldwide surpassed one billion. People are not just playing games or sending business reports. They are interacting. They are studying. They are sharing. They are learning. And they are doing so at a pace and a volume that is difficult to comprehend. 

The Internet provides access to information in ways that could never have been dreamed of before. People in the farthest, most remote locations on Earth can still access the Internet and can access virtually any information located anywhere on the planet. 

Thomas Huxley wrote “The medieval university looked backwards; it professed to be a storehouse of old knowledge. The modern university looks forward, and is a factory of new knowledge.” If Huxley were alive today, I think he would extrapolate even further about the potential of the modern virtual university. It is a place of diverse peoples in distant lands. It can educate in multiple languages simultaneously and share information that was previously only available to specialists and scholars. It is a factory not only of knowledge, but of culture and society itself. 

Albert Einstein spent years working out mathmatical problems that had already been solved over 50 years before his research. The rarity of books and the problems of language translations made it almost impossible for even a leading scientist and scholar to know of the works of talented people before them. The Internet has changed that.

If I want to write a book on the battles of the Civil War, I can reference materials over the Internet today that were unavailable in the past. I could produce a work just as scholarly as many professors. 

Publishing a book is no longer just for the priviliged or the lucky or the rich. Websites like www.lulu.com make it easy and affordable for anyone, anywhere to publish a book on any subject with on demand printing and distribution provided through the Internet. 

Starting a business no longer requires a loan from the bank or a storefront on Ninth Street. For less than $50 a month anyone, anywhere can create a web based storefront and sell their products and wares. 

First graders have homework that REQUIRES using the Internet. Those without the ability to access the Internet will have an even harder time competing than previous generations before the Internet. It is no longer a matter of getting a book at school in order to remain competitive. It is now a matter of accessing the libraries of the world at a fingertip. 

Yes, there are one billion people on the Internet. What about the other almost five billion? Even in the US, a majority of the population does not have high speed Internet access. 

The Internet and the new cyber economy that is flourishing across it make no requirements or distinction concerning age, sex, race, ethnic background, religion, wealth or any other categories that previously limited access and competitiveness for new opportunities. 

It is time for the great equalizer of the 21st century, the Internet and all its riches, to be made available to all.

David Croslin
InnovateTheFuture.com

]]> http://innovatethefuture.wordpress.com/2009/03/03/the-great-equalizer/feed/ 0 David Croslin http://innovatethefuture.wordpress.com/2009/02/25/staggered-stream-content-delivery-serving-the-millennials/ http://innovatethefuture.wordpress.com/2009/02/25/staggered-stream-content-delivery-serving-the-millennials/#comments Wed, 25 Feb 2009 19:36:30 +0000 David Croslin http://innovatethefuture.wordpress.com/?p=21 ]]> I was a hippie. I guess that I still am one, deep down. I am proud to admit it. I had hair down to the middle of my back, listened to some very weird music and sat around talking about ‘the guru’ and ‘peace’ and ‘the war’. Sadly, at least to my teenage mind, the sexual revolution had already been overthrown.

CDs didn’t exist. We had 8 track tapes. DVDs, even VCRs, didn’t exist. We had TVs and movie theatres. Cell phones didn’t exist. We used the house phone. Calculators were brand new and cost a weeks pay. We used a slide ruler in engineering class. Computers were massive machines the size of a house. We wrote our notes on paper and typed our reports on typewriters.

I saw my friends every day. I talked to them; I could physically touch them. My friends that had moved away could have been on another planet. Using the phone was an expensive privilege. Long distance calls would cost an hours pay for every minute you talked. We wrote letters. On paper. With envelopes and stamps. Long distance relationships rarely, if ever, survived.

As I grew older, both in years and experience, the world grew with me. It expanded. It accelerated. Technology continued to explode.

I was one of the first people in the world to connect from home. It was in 1977. I paid $120 a month. That’s like $2000 a month now. ATT called it a ‘dedicated data line’. It was fast. A screaming 300 baud dial up line. That is about 30 characters per second. Characters. One more time, characters. I could work from home.

My first PC had 128K bytes. Not Gig. Not Meg. K bytes. It had a floppy drive. Small hard disk drives didn’t exist yet. A 10Meg drive weighed 120 pounds and was the size of a one drawer filing cabinet. Lights would dim when you accessed a file.

The world wide web was born without any content. It just connected you. It wasn’t the Internet yet. It was expensive to hook up to the web. It was slow. We did email. A lot of email. But only to business people. Consumers played games on their computers. Phone calls were a little cheaper because of satellites. We had to talk slow. VCRs were for recording TV and not much else.

The Internet allowed us to do more than email. But not a lot more. We still wrote letters on paper. We still printed everything. We still talked slow on the phone.

The bubble came. The new economy. Companies didn’t need to have a business plan or a product. They just needed customers. Internet users. Billions were made. The bubble popped. Phone calls were still expensive.

Cell phones were big and clunky. They were called ‘portable phones’, not cell phones. They cost a lot. We used pagers. We ran for a pay phone when beeped. We used quarters.

And then something amazing happened. 16 Gigabytes in a memory stick. Digital cameras with a quality like the Hubble Space Telescope. Cell phones with hundreds of features. Ipods the size of a quarter. Touch screens. Huge TVs 1” thick. Computers for $2K that could outcompute all the computers in existence in 1978.

A magic year. 1978. Millennials are people born after 1978.

The Millennials are the first inherently mobile, digital natives. They grew up with technology so powerful, that it can do whatever is needed. Machines so fast, they can do any job. Devices so small, they can go anywhere. Digital content so pure that you want to pick it up and feel it. The Internet connected the Millennials. The websites tied them together in social groups. The phone companies worried. The phone companies changed their names to service providers, thinking that would help.

A Millennial’s best friend is most likely someone they have never met (at least physically), who lives in another place (another planet?) and is a young (old?) man (woman?) who is just like them. They don’t talk, they text. They are immersed in technology. Immersed in communications. Immersed in content. In response, service providers offered free long distance.

This is just the tip of the ever-changing Millennial communication iceberg. The Millennials are so different from previous generations that they don’t fit the old communications model at all. Charging for minutes won’t work.. Charging for sessions won’t work. Charging for messages won’t work. Charging for services won’t work. How do you make money?

Service providers have become commoditized. Transport is a commodity. Services are a commodity. Talking, viewing, downloading are all commodities. Device features are a commodity.

Service providers must create a flexible, high performance network environment that can support consumer and market evolution measured in weeks instead of years. Networks must provide full convergence. Not just of devices or services, but of lifestyles.

Convergence of lifestyle information, lifestyle content, and lifestyle activities can never be a commodity.

I like Millennials.

Let’s make money.

David Croslin
InnovateTheFuture.com

It is worse than that though. I really, and I mean REALLY, love to watch my favorite shows and actually HEAR what is being said. I’m one of those engineering people who believe that the devil is in the details. I mean, how can you watch an episode of Lost and afford to miss the 15 seconds where they talk about the sky turning purple? So, when people start talking, I pause my movie. But, I can’t pause first-run TV without recording it and coming back to it later.

Ok, so now you know how anal I can be about my TV. It’s the same as reading a book. I don’t skip every 10th page. You would never know who shot Mitch Rapp in a Flynn novel, and you would really be lost in a Stephen King novel like Lisey’s Story where they are jumping between worlds.

So, to make up for the noise, hustle and bustle, and interruptions of our world, we have already sought compromises.

In the beginning, in another galaxy, TV shows came on always at a particular time. You knew when because you looked in the TV Guide. You made yourself an appointment to sit down, be quiet and relish this hour of your favorite show. This is the traditional appointment, broadcast model. As far as content delivery is concerned, it is a continuous stream model: shows are delivered at set times, people show up and watch.

The PPV, DVR and digital download models allow consumers to shift the appointment, but it is still restrictive and doesn’t fit the new Millennial generation’s habits. The Millennials run around zipping from one thing to the next, texting this, IMing that, sharing content and blogging away. These are the young people, born after 1978. They shift from one device to another as they Twitter here and show their Facebook there. The current appointment model, even with the shifted stream of DVRs, have forced them to watch a 3 minute, compressed, Cliff Note version of their favorite shows.

The problem is that the delivery models have not shifted to match the shifts that have occurred and are still occurring within our lives. If you asked me when my favorite show Lost is on, I would have to plead ignorance. I now wait for the full season to come out on DVD, buy it and watch at my leisure.  Kind of like how I read a book. I carry the book with me wherever I go, read a couple pages, put it away. If I don’t like it, I recommend it to a friend and give it to him. If I like it, I eventually finish it.

Soon, content delivery will shift into this ‘book-reading’. It will be more like what I call a ‘staggered stream delivery’. We should be able to go to a database of movies or other content and add them to our viewing library. We should be able to watch anything in our library on any device we have – be it a TV, a computer, a phone or a player in the car. And, if we don’t like it, we shouldn’t have to pay full price for it; we should be billed for the amount of content we absorb, not the fact that it is hanging around waiting for us to view it.

This type of delivery model has many advantages for service providers. The first is bandwidth management. Since content is not being bulk downloaded, the Internet won’t be buried at night when everyone downloads and steals movies and songs.

Second, controlling Digital Rights is significantly easier. Since content is being delivered in pieces to specific devices with JAVA applets managing the presentation, it is much harder for someone to steal first-run content. We can get back to studios, actors and distributors actually getting paid for all the views of their content.

Third, and most important, is the vast amounts of money to be made by service providers! Service Providers could offer first-run content initially free with an ‘amount used’ fee. So, I could put Run, Lola, Run in my online video library for free. But, there is a catch. In exchange for getting free access to it, I have to allow commercials/ads to wrap the presentation.

If you think about it for just a few minutes, you will start to do the math of how many times the staggered stream model gives a service provider the power of ads. Instead of a single commercial as is tacked on the front of many online viewings, the SP could push as many commercials as I have viewing sessions. If I watch Run, Lola, Run over a four day period with 10 different sessions on multiple devices, then there are at least 10 opportunities to wrap my session with ads.

And tailoring the ads is now totally flexible. If I am viewing content on my phone, then wrap an ad related to a store near my current physical location. If I am watching on my notebook, then dig into my most recent search terms and pop up ads relative to those. If I am watching on my TV, then show ads that fit the time of day like food at dinner time or infomercials for late night.

The consumer wins too! No disks to lose or break. No excess fees if I don’t like it. The right to watch it again for reduced or no fee. The ability to view it wherever I am on any device.

The potential is staggering! (Get it…”staggered stream”) But, it will only be possible for service providers that have the flexibility in their converged networks to manage, maintain, sell and deliver content across multiple devices.

David Croslin
InnovateTheFuture.com

If you were born after 1978, you are part of the Generation Y, also known as the Millennials. I, unfortunately, am a little older than you. But, I do have a handful of kids that fall in that range, and I love watching how they communicate.

I am a hard core email user; I also Instant Message (IM) when I am on calls. But, I rarely text. I do have Blackberry thumb, but not from texting. And I have a big tendency to actually TALK to people on the phone. Millennials seem to look at communications completely differently than I do.

My daughter was whacking away on her cell phone one evening, so I asked her, “Are you IMing?”. She looked at me and said “No, I am texting”. Hmmm.

Later that night she was in AOL Instant Messenger on one of our many computers and I asked, “So, are you texting your friends?”. She again looked at me, this time seemingly a little concerned with my obvious lack of knowledge, and said “No, I am IMing”. Once again…Hmmm.

To me, if I am on a device and I am exchanging messages with someone in real time, it is always IMing. When I carry on a conversation, be it email, phone, or IM/Texting, I react to an incoming message as if I have been thumped in the head. I feel obligated to reply ASAP.

But, to the Millennials, there is a vast difference between IMing and Texting. IMing is when they are locked down in one location and people know they are there. So, like me, they feel obligated to reply fairly quickly. But, texting on a mobile device is completely different. The sender doesn’t know what the receiver is doing, where they are and even whether they have their phone. So, the receiver feels safe in not replying until they want to.

The average Millennial (at least the ones born after 1990) don’t seem to like to talk to people. They will IM like crazy with people all over the world; they will comment on blogs; they will post their life stories; they will exchange text messages to the tune of literally thousands every month. My 16 year old daughter texted over 7000 times in one month! And a 13 year old in California texted 14,528 times in one month. Assuming time out for school, meals and sleeping, that is an astounding text message every single minute of every single hour of every single day!

My teenagers have flip phones. Every time they receive a text, they flip open, reply and flip closed. Every time they send, they flip open, send and flip closed. I swear I can actually hear the hinge begging for death.

And how many minutes a month do my kids actually TALK on their cell phones? About 60 minutes per month, at least half of which is to or from their parents.

Oh, and what about email? They swear they have dozens of email addresses spread across MSN, Hotmail and all the social cites. But, they never actually read or write anything. I sent my kids a message titled “READ THIS NOW”. In the text, I offered them $20 each if they would come to me within THREE DAYS and tell me they read it. No winners! I kept my money. To make sure they were still alive, I texted them 3 minutes after sending the email. They were in school, in class. They replied within 1 minute each.

What does all this mean? It means that the types of communications are drastically shifting. That means that the types of networks that are needed are drastically shifting. The bandwidth requirements are totally different. It also means that enhancing voice based services is probably not a long term money maker.

But this isn’t the only thing that is different about the Millennials. More to come.

David Croslin
InnovateTheFuture.com

If these sound familiar to you, OK. If they sound right to you then stand up, turn toward the wall and bang your head soundly into the sheetrock until you are crying.

Why? Because, if you are still thinking in any way other than globally, you are missing out on your company’s true potential, and you SHOULD be crying.

People call it the Internet. It was originally called the ‘world wide web’. That’s what that little ‘www’ in the front of a website’s name means. But, now, even the ‘www’ is starting to be dropped. Because every site, unless it is blocked by a parent or government, is visible to EVERYONE in the entire world. We no longer need to distinguish it by using ‘www’.

I am sure you know who Stephen King, the author, is. One of the best selling authors of all time. He likes to experiment with new ways to deliver his personal content to his readers. He was one of the first with his own e-book. His own e-site. He does audio, movies and new video formats like for his story “N” (http://www.stephenking.com/n). He even has his stories now appear in comic books.

Can you guess who the largest seller is of Stephen King comic books in the world? Not Amazon. Not Barnes and Noble. It is my wife. From our home. While raising six children. She has sold in over 20 countries. She ships to soldiers in war zones. She has shipped to some places I had to look up in Wikipedia because I had no idea where they were.

My point is that she sells globally. She has a website (www.endworldcomics.com). She has never physically spoken to a single customer. They search. They find. They buy. They Pay. She ships. Nice!

The global customer is already here. Now.

The next generation of communications networks is coming, and they will have the speed and convergence needed to make service delivery transparent and to take full advantage of the global customer. It will converge lifestyles. A global suite of products will blend with individual lives. Forget about the triple play, the quad play and the quintuple play. I predict the coming of the ‘lifestyle play’.

The Lifestye Play can include any kind of services, not just communication services. Imagine: A person is traveling the world. As he travels he watches his digital content on any machine and any device. He reads e-books on his cell phone. Or maybe his cell phone reads to him through his bluetooth earpiece while sitting on a train watching the countryside fly by. In each new location he is presented with local ads for local products that fit his agenda, fit his personality, fit his lifestyle. If his train is late, his hotel reservation is changed. His tickets for the local concert are moved to a later time. Automatically. Because his service provider has a network that is integrated with his lifestyle. The network manages external influences like a concierge.

The service provider makes fees from the consumer for acting like a lifestyle firewall. The service provider also charges the advertisers. And the hotels. And the local vendors. And the content providers. Fees, fees and more fees.

Lifestyle convergence. I can’t wait. Cha-Ching.

David Croslin
InnovateTheFuture.com