Show me the money!

Innovaro, an innovation consulting firm, shows that companies performing well in their innovation assessment have also performed well in terms of share-price performance:

In 2005, 75% of the companies identified by Innovaro in January of 2005 as those making the most of their innovation capability have significantly outperformed their sector peers and, as a portfolio, have delivered a return of 18%, better than that of the FTSE, NASDAQ or Dow Jones.

You can read more about how the company assesses how well a company innovates here. The metrics that the firm uses to measure innovation are very interesting in that the firm considers many areas that are not so obvious. Innovating in less-obvious, behind-the-scenes areas is important because it produces outcomes that are harder to copy.


[Tags]: Innovation in Asia, innovation management, Joseph Schumpeter, ageing populations, product development, Innovation in China, Innovation in Taiwan

Faces of innovation

Came across an interesting article via Rediff.com, an Indian Web portal, on the 10 faces of innovation. What is really interesting about this article is not so much the labels attached to the people described, but their behaviors -- the things that they do. This article includes yet another definition of innovation, "People implementing new ideas that create value."


[Tags]: Innovation in Asia, innovation management, Joseph Schumpeter, ageing populations, product development, Innovation in China, Innovation in Taiwan

I've tried to identify the "components" of a generic innovation process as best as I can. Many of these components will play a bigger or lesser role depending on context, but most of these components should be present. This is what I have so far (if you can think of any more, please add them):

+ A will.
+ A sense of urgency.
+ Availability of resources.
+ Energy/vitality/motivation.
+ Chaos.
+ Creativity.
+ Insight(data and information subtracted).
+ Ideas.
+ An idea collection system.
+ Information.
+ A strategic filter (an innovation strategy: against which selections are made from all the "good" ideas collected. Knowing what you won't do and why.)
+ A formal, written innovation/New Product Development process.
+ The creation of value.
+ Profits, which leads to a realization that innovation works, which in turn drives the will.





There is an excellent audio snippet at the Businessinnovation2005.com site regarding urgency. The speaker, John Hagel, makes reference to Asia, suggesting that the best way to create urgency in U.S. firms is to come and take a look at what's happening over here. Great stuff!

[TAG]::innovation, innovation management, China, Taiwan

Improving success rates

The success rate of new product offerings is dire (and that includes those developed by Apple). It's difficult to get an accurate figure on new product success rates because there is not one universal definition of success within and between firms. Plus, firms often don't like to talk about their failures. The exact figure isn't that important anyway, because all firms want to do is improve their current success rate.

What are some of factors that contribute to product "failure"?

Many recurring themes occur in the literature, such as: a failure to listen to the voice of the customer; poor up-front pre-development homework; unstable product definition; poor quality of execution of key NPD tasks; and poorly structured, ineffectual project teams (Cooper, 1993; Montoya-Weiss and Calantone, 1994; Song and Parry, 1996).

So there's another check-list that you can use:

- Are we really understanding customers? (e.g. Do old people really value a phone with a camera? Do people really want to look at photos on their MP3 player?)

- Have we observed the way people use these products as they solve their day-to-day problems?

- What is the real function of the product? What problem does it solve for customers?

- Are we good at getting things done? How much energy and how many resources do we have for this product development project? Are we spread to thin?

- How are our teams structured? Are they knackered?

Often, one of the best ways to improve product success rates is to just cut down the number of products that are currently being developed. It takes a lot of guts and confidence to say no to a product that, on the surface, seems to be perfectly good.

Which ones, though?

innovation, innovation management, China, Taiwan

Taiwan's Quanta to make/design notebook for the poor

A big hats off should go to Quanta for taking on the job of designing/making the US$100 laptop. Quanta, a Taiwan-based firm, designs/makes millions of notebook/laptop computers for some of the world's best-known brands. Present and past Quanta cutomers include firms such as H-P, Dell, Sony, NEC, and Gateway, and many, many more.

For the kids and adults that will use these, the $100 computer will perform fantastically, relative to what they used before, which was nothing.

[Link to Businessweek article on China and India.]


innovation, innovation management, China, Taiwan

Fuzzy Front End of Innovation

The fuzzy front end lies at the initiation end of the innovation process. There tends to be more thinking going on than doing. Koen et al. (2002) describe the following tasks:

1. opportunity identification
2. opportunity analysis
3. idea generation and enrichment
4. idea selection
5. concept definition

These tasks/activities are carried out at the same time and iteratively. This type of list can be very useful for firms thinking about formalizing their innovation activities because it provides a quick check-list against which firms can see what they do and do not do. People often criticize check-lists like this, but I think they are great because they add a much-needed "concreteness" to what is often a very abstract concept. We don't need any more pronouncements on the importance of innovation, we want to know how to do it!

Koen at al. (2002) maintain that these activities are driven and complimented by the leadership, culture, and structure of the firm. In terms of innovation, these factors are either an asset or a liability.

I'd add that having a sense of real urgency is also important. Everybody has heard of the famous "Only the paranoid survive" quote from Intel.


innovation, innovation management, China, Taiwan

Will it work?

This is a question that comes up a lot in business when people have an idea. I don't know why, but when I ask this question, the reply is often a, "Ooh, I don't know about that," which in essence is a "No." My father asked me about a business idea he had and I had to stop myself from defaulting to this "No." I basically told him that he will never know if it will work until he tries it. Markets are funny things. There is a lot of uncertainty.

Theory can help in reducing some of the uncertainty in business. Clayton Christensen, author of The Innovator's Dilemma and co-author of The Innovators Solution, maintains that our understanding of innovation is fairly unsophisticated at this moment in time. He does, however, argue that there are many predictable forces in business that can help the innovating firm succeed, and that this "theory" can be studied and learned.

One such force is the force that influences a middle manager's promotion trajectory. If his promotion is contingent on this year's sales (or this month's); he is most definitely going to say "No" to any idea that will send things off course. So when somebody says something won't work; you have got to think about who's saying the "No" and why.

[Entrepreneurs often ask this question, because a "No" for them is often the green light. Remember that the entreprenur is driven not by money, but a desire to prove himself better than others.]

[Link to interesting article] Money isn't everything from Booz, Allen, and Hamilton's Strategy + Business.




innovation, innovation management, China, Taiwan

Monday in the "Renegade Province"

The Economist has had a lot of articles in the past few weeks on ageing populations. This week's edition stated that by 2015, one in four people in Japan would be over 65. An article on robots was also included. However, there was no article on Schumpeter, or his thesis that capitalism will inevitably be replaced by a form of economic socialism.

"The true pacemakers of socialism were not the intellectuals or agitators who preached it, but the Vanderbilts, Carnegies and Rockefellers." – Joseph Schumpeter (1942, p. 134)


[Link] I came across an interesting article here on blogging.

[Trivia] Just found out that Donald Trump of The Apprentice has Scottish roots. His mother came from the Isle of Lewis in the Outer Hebrides.



innovation, innovation management, China, Taiwan