Monthly Archives: June 2010

Innovation 2010 – from BCG – now available

The Boston Consulting Group has recently released their seventh annual global survey of senior executives on their innovation practices. It covers the full suite of activities in turning ideas into financial returns, including such issues as portfolio and life-cycle management, organisational alignment, and demands on leaders. It discussed what works and what doesn’t and the actions companies are taking to make innovation happen. Further, the report offers pragmatic advice for individuals who want to make a difference in their organisation.

Key findings include:

  • Companies have recommitted to pursuing innovation in 2010, pushing it to the top of their priority list, planning to boost their innovation spending. Seventy-two percent of respondents said their company considers it a top-three priority, versus 64 percent in 2009. Sixty one percent of respondents (versus 58 percent in 2008) said their company plans to boost spending
  • A new world order in innovation is taking hold, one in which rapidly developing economies, led by China, India and Brazil, will increasingly assume more prominent positions
  • Companies’ satisfaction with their return on innovation spending continues to edge higher – but remains relatively low. Fifty-five percent of respondents said their company is satisfied, versus 43 percent in 2008 and 52 percent in 2009
  • Reflecting lingering caution about the economy, companies continue to ramp up their emphasis on innovation geared toward minor improvements to existing products and services, as opposed to, for example, innovation targeting the launch of new products
  • Executives identify a risk-averse corporate culture and lengthy product development times as the two biggest factors holding down the return on their innovation spending
  • The majority of companies are dissatisfied with their innovation measurement practices. Only 41 percent of respondents said their company is measuring effectively
  • For the fourth straight year, respondents ranked Apple and Google the two most innovative companies, with Apple the hands-down winner
  • Less than half of survey respondents believe that the US companies will remain the most innovative over the next five years

A full copy of the report can be obtained here.

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The Benefits of Incorporating Ideation in an Open Innovation Strategy

Ideation has recently become very popular. Many companies are looking to ideation as a tangible starting point for implementing an open innovation strategy. I continue to be involved in ideation projects. Indeed, I have now become very familiar with the WebStorm product from BrightIdea Inc, and like it a lot.

But is ideation worthwhile? Does it deliver value? It certainly appears to on the surface. However, in my experience, it all comes down to a robust strategy – not just for idea collection – but a strategy that determines how ideas will be handled, evaluated and funded in the back-end.

The road to success must include:

  • CEO sponsorship of the ideation process – the launch email should come from the CEO (or someone very high up in the organisation)
  • Strong governance – Innovation Board ideally
  • Well defined back end structure – not just a few ppt slides, but every aspect thought through
  • Dedicated funding put aside in the budget for those ideas that look to show promise
  • A structure to enable business-case development for promising ideas – this is an excellent HR opportunity for high-potential team members
  • Constant reporting back to idea generators as to progress
  • The definition of categories for the ideas as they are posted
  • Ensuring that the evaluation of the ideas is not centrally focused, but spread around to people who have no baggage in properly evaluating the idea
  • The ability to distinguish between disruptive and incremental ideas, and deciding on how each type will be managed – end to end

You might like to read an interesting paper by Cesar Castro who worked at Innocentive as VP of Business Development. It sheds some light on this interesting Innovation practice.

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IDEO and Steelcase innovate on classroom chair for the future

I am a huge fan of Ideo. I like their thinking, their philosophy, and their drive for execution.

The case that is often cited when talking of IDEO is the work they did with Shimano in developing the coasting bike. Now they have done it again. Steelcase Design Studio worked with IDEO to design a classroom chair that would provide quick and seamless transitions from one teaching mode to the next. The swivel seat allows students to easily rotate and view information being shared throughout the classroom. The open seat design enables them to change postures and positions, offering comfort in multiple settings. Its mobile base offers the ability to move back and forth from lecture mode to teambased learning, without interruption.

Steelcase research shows a variety of teaching modes occur in today’s classroom, such as group discussions, team collaboration, and lecture — all of which contribute to more effective learning and instruction. Educators are turning to multiple teaching modes to support multiple learning styles. However, while teaching methods have evolved, the classrooms themselves are not designed to support multiple activities or the transitions required to employ them efficiently.

Many traditional classrooms actually inhibit current teaching methods by creating physical and social barriers between students and teachers. They have been designed for one-way learning with tight rows of desks and chairs that inhibit movement and interaction, keeping instructors confined to the front of the room, where there are few opportunities to connect with students. Students are confined to chairs that are secured to the floor or are difficult to move, forcing them to struggle to adjust to see the instructor, fellow students or content displays.

“Students today expect a more active learning environment that supports co-learning and group discussion, similar to their everyday interactions; but the classroom has remained largely unchanged for decades,” said Sean Corcorran, director of product development and marketing for Steelcase Education Solutions. “

The node classroom chair provides key features like its swivel seat to maintain open sightlines, casters for mobility and quick mode change, backpack storage and a large adjustable worksurface that supports laptops, textbooks and notebooks.”

My only question is: if this is a chair for the classroom of the future, in the future, do we need classrooms at all?

Classroom for the future

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New Survey on Innovation from National Science Foundation

Companies located in the United States reported worldwide sales of $11 trillion in calendar year 2008 and spent $330 billion on research and development (R&D). Nearly $234 billion of the R&D expense was for R&D conducted in company facilities located in the United States. This is according to new figures from the National Science Foundation’s first ever Business R&D and Innovation Survey (BRDIS) developed jointly with the U.S. Census Bureau.

The new survey results from a 2004 recommendation to redesign NSF’s previous industry R&D audit instrument called the Survey of Industrial Research and Development. The National Academies’ Committee on National Statistics made the recommendation to cope with dramatic, fast-moving changes in the way R&D has been conducted during the last 50 years.

Conducted as a full-scale pilot, the BRDIS replaces the previous survey, which had been carried out every year since 1953. “Our world has changed a lot since 1953 and so has the way R&D is conducted,” said Arden Bement, director of the National Science Foundation. “This new survey addresses those changes.”

According to initial BRDIS survey results, companies with R&D activity reported that 68 percent of their worldwide sales came from domestic business operations. The pharmaceuticals and medicines industry reported that 67 percent of their worldwide sales came from domestic operations.

Other industries reported similarly high domestic-to-worldwide sales ratios. Data from scientific R&D services industries revealed that 85 percent of their sales came from domestic operations; computer system design and related services reported 79 percent; aerospace products and parts reported 74 percent; motor vehicles, trailers, and parts reported 62 percent; software publishers reported 58 percent and semiconductor and electronic components reported 53 percent.

In other statistics on sales, BRDIS survey results found that worldwide R&D expense and worldwide R&D costs funded by companies with 5-499 employees accounted for $1 trillion of the total worldwide sales. These companies had worldwide R&D expenses of $64 billion, or 19 percent, of the total expenses for R&D worldwide. Small businesses also performed $63 billion worth of business R&D in the United States and $5 billion abroad. They paid others $11 billion to perform R&D.

The data was taken from a representative sample of about 40,000 U.S.-owned businesses and U.S. affiliates of majority-owning companies located outside the United States that are carrying out research and development activities. Surveys were mailed to companies in January 2009.

Data from the survey can be found on NSF’s website. These data are preliminary; final statistics from the pilot will be available in early 2011. Two additional reports scheduled for release in 2010 will present preliminary 2008 statistics on worldwide and domestic employment, including R&D employment and innovation, respectively.

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The Next Generation is unprepared for Globalization

Today’s university students are extremely concerned with issues of globalization and sustainability, but only four out of 10 believe their education has prepared them to address these issues, according to a new IBM study designed to gauge the attitudes and opinions of the next-generation global workforce and business leaders.

This survey — which asked university students the same questions posed to global business leaders in IBM’s 2010 Global CEO Study — finds that both students and CEOs believe creativity is the most important emerging competency of future leaders; and reveals clear confidence about the ability of information technologies to address looming issues in business or society.

Conducted through IBM’s Institute for Business Value, the Study, “Inheriting a Complex World: Future Leaders Envision Sharing the Planet,” reflects the consolidated view of more than 3,600 students in more than 40 countries.

The study reveals a discerning and decidedly optimistic new ethos — based on an integrated view of globalization, sustainability and belief in technology as a path to solutions to emerging and existing problems. Almost 50 percent of students said that organizations should optimize their operations by globalizing, rather than localizing, to meet their strategic objectives.

At the same time, these students describe a gap in this generation’s training to cope with issues that will arise in an increasingly interconnected and complex world, but a strong belief that information technologies can bridge the gap.

Within four years, this “Millennial generation” will make up half of the global workforce. Despite the economic environment and the challenges students may face entering the current job market, the findings from this study were characterized by an unmistakably optimistic outlook about what’s ahead – and their capacity to affect change in the world they will inherit.

Students surveyed indicated that they will lean more heavily on data analysis — over gut instinct or existing “best practices” — to reach their strategic and operational goals as business leaders in their own right. And as fact-based decisions begin to prevail, they may need to pioneer an entirely new management style — one that continually enriches personal experience and education with new sources of insight based on a new ability deal with the explosion of real-time information.

The study revealed broad-based confidence that increased access to information, analysis, and the resulting insight can reduce uncertainty about the future.

Clearly, the students’ experience regarding globalization is different.  Growing up more connected globally, students see the shocks and threats, but are more prone to view globalization as an opportunity to solve increasingly global problems. They are strongly committed to a global view of shared responsibility for both environmental issues and societal prosperity.

Given students’ concerns about globalization and sustainability, the Study found a gap in educational experiences, as well as business expectations. Asked how well their education has prepared them in a number of areas, only four out of 10 students believe their education has prepared them well to address these issues.

In China, 76 percent of students value global thinking as a top leadership quality, more than students anywhere else. Yet, only 38 percent of students in China believe their education has prepared them for global citizenship, which is lower than students in any other region.

Only 17 percent of students in Japan, less than any other region, believe their education has prepared them well to benefit from the growth of emerging markets.

Understanding these and other sharp differences emerging by geography is increasingly important as economies and societies become more closely linked. Students will confront these differences as they increasingly become the future leaders of business and organizations.

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Collaborative Innovation in the packaging industry

Open Innovation can be be found everywhere.

DuPont has announced the winners in the 22nd DuPont Awards for Packaging Innovation, including the first fully compostable snack bag from Frito Lay and new PET bottles from Coca Cola that incorporate plant-based renewable polymer.

“These winners demonstrate that collaborative innovation has no boundaries. It crosses disciplines, markets and geographies,” said William J. Harvey, president — DuPont Packaging & Industrial Polymers. “The collective ingenuity of these business partnerships has yielded innovative new solutions that address pressing consumer needs.”

DuPont sponsors this long-running awards program to recognize innovation, provide learnings to the industry and highlight the importance of collaboration among value chain participants.

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Open Innovation and TSMC

Do you know who TSMC is? I had the great pleasure about two years ago of visiting TSMC and speaking to some of their management. TSMC is the world’s largest dedicated semiconductor foundry. Its corporate headquarters are in Hsinchu, Taiwan.

Today, TSMC announced that it is extending its already hugely successful Open Innovation platform. TSMC originally launched the Open Innovation Platform in 2008 as an industry-wide design enablement initiative. To date, the Open Innovation platform has accelerated time-to-market, improved return on design investment and reduced design infrastructure duplication. It includes a set of interoperable ecosystem interfaces, collaborative components and design flows that efficiently empower innovation throughout the supply chain thereby enabling creation and sharing of newly-created revenue and profitability.

The Open Innovation Platform’s Alliance programs collaborate with EDA, IP, software IP, systems software and design services partners. The objectives are to deliver accelerated system-level design, reduced system design cost, a faster system-to-IC implementation design cycle, and faster time-to-market.

“The design ecosystem must move beyond its current bounds and embrace the systems- level challenges that are at the heart of every design consideration. The Open Innovation Platform began setting the standard for ecosystem collaboration two years ago. TSMC continues to answer the market’s call and will build that same collaborative spirit on a system-level basis,” explained S.T. Juang, senior director, Design Infrastructure Marketing at TSMC.

The Open Innovation Platform’s global Ecosystem Alliance programs have grown to include 30 EDA partners, 38 IP partners, 23 Design Center Alliance (DCA) partners, and 9 Value Chain Aggregator (VCA) partners. All partners participate in one or more of the Open Innovation Platform collaboration programs. TSMC also begins to work collaboratively with industry organizations, such as IPL Alliance and Si2, to promote the interoperability standards based on TSMC interoperable EDA formats.

“TSMC’s Open Innovation Platform delivers comprehensive and innovative design technology services that remove advanced technology adoption barriers. It helps lower design costs and improves time-to-market,” said Dr Fu-Chieh Hsu, Vice President of Design Technology Platform and Deputy Head of Research & Development. “The Open Innovation Platform will now begin addressing system-level design’s cost and complexity and enable packaging of entire electronic systems onto multi-chip packages.”

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