Tag Archives: Innovation

PwC Innovation Survey in Global CEO Report

Excellent survey of global CEOs by PwC. Not only does the survey focus on emerging markets, but it contains a significant section on the importance that CEOs attribute to innovation as a key driver of their growth strategy.

The 1,201 chief executives in 69 countries polled were nearly as confident in their outlook for revenue growth over the coming 12 months as in the boom years before the global financial crisis

Innovation is very high on the agenda for CEOs globally. 78% expect that their development efforts to generate significant new revenue opportunities over the next three years. The report shows that CEOs are “putting the customer first”, reinforcing the view that the best ideas come from customers, partners and suppliers. Further, CEOs are really trying to co-create products and services with their customers.

The full report can be found here and is available for download.

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Cultivating Organizational Creativity in an Age of Complexity – IBM Report

“Why are some organizations consistently good at innovating and adapting while others seem to be blindsided by change? Is it because of their disciplined innovation process or the knowledge and skills of their people? Or is it their determination to build a culture where challenging assumptions is not only encouraged, but expected? The IBM Creative Leadership Study found that leaders who embrace the dynamic tension between creative disruption and operational efficiency can create new models of extraordinary value.”

To gather the data for the IBM Creative Leadership Study, IBM conducted open-ended interviews with 40 leaders from around the world. Five of the participants are acknowledged experts in the area of creativity and innovation, five are senior HR officers from companies of various sizes, and the remaining 30 are creative leaders as defined by their peers.

Individuals in this last group represented a range of business and creative disciplines and were selected without regard to their formal leadership role in the organization. The interviews sought to answer three basic questions:

• What are the key capabilities of a creative organization?

• What are the catalysts of these capabilities in leaders?

• How can these capabilities be scaled across the organization?

To download and read the full report click here

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China and Innovation – Now Overtaking Japan

It’s not that long ago that a colleague told me that innovation would come out of China two generations hence. I did not believe him after seeing a little of what China was doing first hand.

Interesting to read this article today in the Start Advertiser:

As a result, China is expected to overtake Japan soon as the world’s second-largest R&D investor, although it still remains far behind the U.S. China’s domestic doctorate awards in science and engineering have also increased more than tenfold since the early 1990s, and its share of the global pool of researchers has grown from less than 14 percent in 2002 to more than 20 percent today. 

Only a few years ago, China’s approach to innovation hardly played a role in international economic diplomacy. Today, it is a hot topic in U.S.-China economic relations, adding further to contentious disputes about exchange rates, trade and foreign direct investment.

The article continues:

Rather than fearing China, we need to focus our research and policy debates constructively on how this relationship can be improved.

I could not agree more. The entire article can be found here.

And now this in the Harvard Business Review Blog on August 4 for another perspective.

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P&G – Extraordinary Results from Innovation Acceleration

Many of you will know that Procter & Gamble is one of my favourite companies when discussing innovation acceleration. The latest Harvard Business Review (June 2011) contains an extremely important article on the impact that innovation has had on P&G recently. We all know of the Connect and Develop program that was kicked off some years ago, but where is P&G now, and where are their innovation efforts? To be honest, I was unbelievably excited when I read this article, and I think you will be as well.

Here are some of the facts reported by HBR that really impressed me:

From 2004 to now, P&G looked to carry out the following:

a) Teach senior management and project members the mind-sets and behaviours that foster disruptive growth

b) Form a group of new-growth-business guides to help teams working on disruptive projects

c) Develop organisational structures to drive new growth

d) Produce a process manual – a step-by-step guide to creating new-growth businesses.

e) Run demonstration projects to showcase the emerging factory’s work.

The challenge that they found in 2008 was that they were burdened by a number of smaller projects that were not necessarily disruptive. This scenario is very common – the organisation establishes an Innovation program and soon people ask – “So where are the Big Ideas?”. So Bob McDonald (then the COO) and Bruce Brown (then CTO and coauthor of the article in HBR) drove three critical improvements:

a) Increase emphasis on an intermediate category, transformational-sustaining innovations, which would deliver major new benefits in existing product categories

b) Strengthen organisational support for the formation of transformational sustaining and disruptive businesses. P&G created several new business-creation groups whose resources and management are kept separate from the core business – dedicated teams with a separate General Manager. What is really interesting is that there is one group, FutureWorks, solely dedicated to enabling different business models. This to me is tremendous and a lesson for other companies – while “tiger teams” might be formed to boost sales and win deals, it is rare that they are formed specifically for new business models.

c) Revamp its strategy development and review process. Innovation and strategy assessments had historically been handled separately. Now the CEO, CTO, and CFO explicitly link company, business, and innovation strategies. What a great lesson!

Lessons learned include:

  1. Closely coordinate the factory and the core business
  2. Promote a portfolio mindset
  3. Start small and grow carefully
  4. Create new tools for gauging new businesses
  5. Make sure you have the right people doing the right work
  6. Encourage intersections – successful innovation requires rich cross pollination both inside and outside the organisation.

There are other significant lessons learned from the above cited in the article. And many more initiatives that you should read for yourself that are truly remarkable. Here, though, are some of the business impact metrics cited:

  • In 2000 only 15% of its innovation efforts met profit and revenue targets. Today the figure is 50%. The past fiscal year was one of the most productive innovation years in the companyʼs history, and the companyʼs three- and five-year innovation portfolios are sufficient to deliver against their growth objectives. Projections suggest that the typical initiative in 2014 and 2015 will have nearly twice the revenue of todayʼs initiatives. Thatʼs a sixfold increase in output without any significant increase in inputs.
  • In 2009 P&G introduced the wrinkle-reducing cream Olay Pro-X. Launching a $40-a-bottle product in the depths of a recession might seem a questionable strategy. But P&G went ahead because it considered the product a transformational sustaining innovation. The cream and related products generated first-year sales of $50 million in U.S. food retailers and drugstores alone.
  • In 2010 P&G refreshed its C+D goals. It aims to become the partner of choice for innovation collaboration, and to triple C+Dʼs contribution to P&Gʼs innovation development (which would mean deriving $3 billion of the companyʼs annual sales growth from outside innovators). It has expanded the program to forge additional connections with government labs, universities, small and medium-sized entrepreneurs, consortia, and venture capital firms.
The HBR article can be found here. I seriously urge you to read it, digest it, look at what your organisation is NOT doing, and gather senior leaders of your organisation together in a war room to form an action plan to close the gap. NOW!.

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Reigniting Innovation in the United States

Interesting article by McKinsey on how the US is slipping further and further behind in innovation. McKinsey conducted a series of interviews with CEOs of advanced industrial companies, and as they say there is “real cause for alarm. Seems the issues are:

Cutting-edge technology: the United States is competing against or even catching up with foreign companies and engineers
Demand: more than 50 per cent of the global middle class lives outside of North America
Talent: Significant scientific talent is building outside of the United State
Entrepreneurship: There is an increase of risk aversion towards new ventures in the United States, with large US corporations being most affected

McKinsey goes on to provide a set of remedies:

1. Clear the way for the cutting edge industrial technologies of the future
2. Rebuild infrastructure
3. Attract and retain talent
4. Reenergise the entrepreneurial spirit in the large US companies

The article can be found here

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Digital and Printed books collide

The time people spend reading on a digital screen is now almost equal to the time spent reading printed paper text, according to a recent survey by Gartner, Inc. The huge majority of tablet and iPad users say they find screen reading either easier than reading printed text (52 percent) or about the same (42 percent). However, 47 percent of laptop users find screen reading harder than reading printed text, and 33 percent reported it was about the same.

In the fourth quarter of 2010, Gartner surveyed 1,569 consumers in six countries – the US, UK, China, Japan, Italy and India – about their subjective experiences of reading on screen versus reading printed paper text. The survey included a mixture of online, face-to-face and computer aided telephony interviews.

“There are concerns that digital media will cannibalize print media, based on the general decline in newspaper sales and take-up of online news services in many parts of the world, but the evidence from our research is that print and online are not generally regarded as direct substitutes by consumers,” said Nick Ingelbrecht, research director at Gartner. “Something more complicated than a straightforward substitution of print to digital media is taking place.”

“Trying to sell the same basic content to the same consumer in different formats risks alienating the consumer, who will balk at paying twice for the same thing,” said Ingelbrecht. “The survey results confirm that multichannel content distribution is essential for reaching consumers who are consuming near equal amounts of print and digital text. Content, publishing, and media organizations should market the synergies of multichannel products to consumers, stressing the benefits of having both print and online access, rather than selling competing stand-alone products.”

According to the Gartner survey, across the demographics, screen reading is now virtually on a par with print consumption. Survey data showed that younger age groups are happier to read on screen than older respondents, with the 40 to 54 years cohort least satisfied with their screen reading experience. In terms of gender, men typically reported screen reading easier than women, but both sexes said screen reading was generally the same or harder than reading printed text.

Gartner analysts said the shift from paper to screen-based consumption is not a straight substitution of one medium for another. There is no single paradigm for screen reading, because reading a short piece of text on a mobile phone screen is a different proposition from the reading experience with an e-reader.

The survey research indicated that around 40 percent of respondents had no experience of using e-readers, such the Amazon Kindle, Amazon Kindle DX and Barnes & Noble Nook, and this was even higher in India (75 percent), the U.K. (56 percent) and the U.S. (57 percent). Urban Chinese respondents had the highest familiarity with e-readers and also had the highest number reporting that e-readers were easier to read. This reflects the relatively high income and education level of the sample in China.

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Wharton and Wipro Innovation Tournament

Knowledge@Wharton, the online research and business analysis journal of the Wharton School of the University of Pennsylvania, along with Wipro Technologies, has identified 15 confirmed finalists for the second global Wipro-Knowledge@Wharton Innovation Tournament. The finalists have proposed bold new ideas and implemented solutions, ranging from using hair to clean up oil spills to using software to track students’ progress. Four subcategories will serve as the final themes: new ideas in the area of sustainability; implemented solutions related to sustainability; new ideas in the area of customer-centric innovation; and implemented customer-centric solutions.

Karl Ulrich, professor and Vice Dean of Innovation at the Wharton School, said, “An innovation tournament begins with a large set of opportunities. The ideas and solutions the finalists are proposing could have, or already have had a major impact on business and society as a whole” he added. Wharton professor Christian Terwiesch agreed, saying, “Sustainability and customer-centric innovation are two of the most important topics of concern today. We’re looking forward to the final presentations and evaluating their potential contribution.” Terwiesch and Ulrich co-authored the book Innovation Tournaments: Creating and Selecting Exceptional Opportunities.

“We are pleased with the range of entries that the tournament received. This year, we had over 160 submissions stretching from all corners of the globe, from America to Tanzania. Forty semifinalists were selected, and now we have drilled down to the most promising submissions,” said Mukul Pandya, Executive Director of Knowledge@Wharton.

Judges from Wipro and Wharton selected finalists based on the novelty, feasibility, track record for established solutions, and overall potential. “Judging the semifinalists was challenging due to the vast number of high-quality entries. We are excited for the final presentations, and believe that society will benefit from the ideas and solutions generated from this year’s Innovation Tournament,” Pandya added.

On Wednesday, April 27th 2011, during a live event at the Wharton School in Philadelphia, USA finalists will conduct presentations before a panel of judges. The event will be streamed live on Wipro TV beginning at 8 a.m. EDT. Five cash prizes will be awarded — $20,000 for the grand prize, and $5,000 for each of four innovation subcategories.

Read more: http://www.benzinga.com/press-releases/11/04/p1032029/wipro-and-wharton-post-innovation-tournament-videos-select-finalists#ixzz1KjOKLn8P

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HP Survey on Innovation

HP has announced new global research that demonstrates the important role that innovation plays in the success of the Enterprise. According to the new study, 98 percent of business and government executives said that innovation will be critical to the success of their organizations over the next five years. When asked about their current views on innovation, 95 percent of CEOs, CFOs and CIOs and their public sector counterparts indicated that innovation is important to the success of their organizations.
The study revealed the importance and measurement of innovation. According to respondents:
— Seventy-nine percent of business executives and their public sector equivalents said innovation is very important to the future growth of their organizations (the most important reason to innovate overall).
— For the private sector, 74 percent of executives said innovation is very important to support their organizations’ profitability (the second most important reason to innovate in this sector), while in the public sector, reputation was the second most important motive for innovation with 59 percent of respondents selecting that option.
— Sixty-five percent of all executives (equally split between sectors) said that their organizations actually measure the success of their innovation initiatives.
— Sixty-eight percent of executives indicated they are a leader in innovation in their industry. CEOs are most confident in their innovation leadership (74 percent), followed by CIOs (67 percent) and then CFOs (63 percent).
CEOs are perceived as most responsible for driving innovation by the 1/3 majority of business executives surveyed. Responsibility for innovation differs in the public sector, with almost a tie between heads of divisions and CIOs.
The study also revealed the goals and barriers to innovation. According to respondents:
— Twenty-nine percent believe that the primary goal of innovation is to meet changing customer or citizen demands; 24 percent feel it is to produce higher quality products and services; while 23 percent voted for increased efficiency. When combined, these goals were selected by more than three-quarters of the executives surveyed and indicate the top three objectives of an Instant-On Enterprise.
— More than three-quarters of the respondents identified limited funding as a challenge to overcome for their organizations to become more innovative. Inadequate technology also was recognized as a key barrier by one out of two CEOs interviewed.
To drive innovation, the first area where business and government executives would invest is in applications and software that enable more flexible processes. In addition, almost two-thirds of all executives strongly agreed that the speed of technology delivery is critical to innovation.

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Thoughts on Innovation Acceleration

I recently shot a short video on innovation acceleration as a thought leadership piece.
I wanted to share this with you.

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Taking on-line Shopping to a new level of Interaction and Personalisation

Have you seen what the telecommunications company 3 is doing with user interaction? Their 3LiveShop offering is a great example of product innovation to deliver an innovative service. Through the new user-experience portal, they are taking the real and the virtual and blending them into an integrated experience.

I feel strongly that today’s on-line purchasing experience will morph in the next few years into this sort of blended approach. The reality is that all of us like face-to-face interaction. While it is true that Telepresence and similar systems give the potential of high-definiteion interaction, applying this interaction in a meaningful experience such as choosing a mobile phone, shopping, or having a product demonstrated makes it very very real. And useful. And time saving. And customer centric.

Watch the video:

3 from B-Reel & B-Reel Films on Vimeo.

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Innovation in Mid-Market – a Resurgence

It’s great to see that the enthusiasm for innovation is not just limited to large corporations, but is filtering down into the mid market as well.

A report just released by IBM, Inside the Midmarket:A 2011 Perspective found that in 2009, midsize businesses (53%) were mainly consumed with reducing costs and increasing efficiencies. The progress and momentum gained from these efforts continue to yield critical benefits and advantages for midsize businesses. Because of this momentum, they are now in a position to turn their attention to more forward-looking aspects of their business. This is demonstrated by the significant increase in focus on customers (+20 pts), innovation (+7 pts), and revenue growth (+5 pts).

18% are tapping into new and innovative business processes and models to help them transform into more agile and formidable competitors. With the economy continuing to strengthen, companies are looking for breakthrough innovations and new markets that will drive new revenue streams to carry them into the next decade.

from IBM, Inside the Midmarket:A 2011

You can read the entire report here.

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Maybe Corporate Entrepreneurs Don’t Really Exist

We talk a lot about corporate entrepreneurship – how to stimulate entrepreneurship in the corporation, how to unleash that hidden and pent up entrepreneurship capability that is locked up somewhere in our organisation. I know it is there, I just do…….if we only we unlocked the capability…..

But maybe the idea of a corporate entrepreneur is absurd. Think about it. Entrepreneurship is about thinking outside of the box, speed, agility, lack of constraints, innovation, empowerment, execution. Does that sound like your organisation?

Last week I attended the Kellogg Innovation Network in San Francisco. It was an excellent two days. Outstanding to be honest. Run by Professor Rob Wolcott from Kellogg. And there was a panel of entrepreneurs talking about their experience of being entrepreneurial in the corporation – how they did it, what they thought was the secret sauce of success, etc etc. But not one of them is still within a corporation – they had all left to pursue interests back in “start up land”. So how come?

My theory goes something like this. Real entrepreneurs join a corporation for one reason or another, but very quickly either lose their entrepreneurial flair (it gets whittled away) or they leave. So you have a bunch of people who are entrepreneurial joining, or leaving, at any one time. Real entrepreneurs do not stay in a corporation. They just don’t.

And what about those in the corporation who say they are entrepreneurial, and want to unleash their entrepreneurial flair if only the corporation would let them? My hypothesis? They are just bored!

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FastCompany: The World’s Most Innovative Companies

FastCompany’s regular ranking of the world’s most innovative companies is out once more. So who wins?

01 / APPLE – For dominating the business landscape, in 101 ways
02 / TWITTER – For five years of explosive growth that have redefined communication
03 / FACEBOOK – For 600 million users, despite Hollywood
04 / NISSAN – For creating the Leaf, the first mass- market all- electric car
05 / GROUPON – For reinvigorating retail — and turning down $6 billion.
06 / GOOGLE – For instantly upgrading the search experience
07 / DAWNING INFORMATION INDUSTRY – For building the world’s fastest supercomputer
08 / NETFLIX – For streaming itself into a $9 billion powerhouse (and crushing Blockbuster)
09 / ZYNGA – For being the $500 million alpha dog of social gaming
10 / EPOCRATES – For giving doctors and nurses instant drug reference

One can debate the criteria to death – but it’s a pretty good list. The entire list can be found here.

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UK sees Broadband as Innovation of the Decade

Broadband and online shopping top The Foundation’s inaugural Innovation Index

• Britons rank home broadband as the innovation that has contributed the most to their lives over the past decade
• Online shopping follows in second place
• Functionality and the ability to save time and effort valued more widely than cost savings or cutting-edge technology
• Facebook and Twitter score poorly

Home broadband is the innovation UK consumers feel has made the biggest positive impact on their lives since the turn of the millennium, according to new research from leading innovation and growth consultancy The Foundation.

In its inaugural Innovation Index – compiled from a survey of 2,243 consumers, weighted to represent UK population* – respondents selected the products and services that had contributed the most and least to their lives.

Respondents were asked to rank their top three and bottom three in order, with 3 points scored for each percentage of the first rank vote, 2 points for each percentage of the second rank vote, and 1 point for each percentage of the third rank vote, producing a final score out of 300.

Most loved: the 10 products/services that have contributed the most to Britons’ lives over the last decade

(positive score out of 300 in brackets)

1 Home broadband (192)
2 Online shopping (94)
3 Google (54)
4 Chip and Pin (49)
5 Digital cameras/photography (39)
6 Online comparison sites (38)
7 Community Recycling (32)
8 Health labelling on foods, e.g. traffic lights (29)
9 Low-cost air travel (25)
10 Consumer GPS/Sat-Nav (24)

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The Rise of Generation C: Implications for Innovation Acceleration

Excellent report by Booze&co. on what they call Generation C: People born after 1990, digital natives, highly connected, living online, using social networking as second nature, being able to consume vast amounts of information, and living in what Booze calls a “personal cloud”. The premise is that by 2020 an entire generation will have grown up in a primarily digital word, with technology as we know it today just part of their life, rather than an add-on. Booze says the C in Generation C stands for Connect, Communicate and Change.

You can read the full article here.

What are the implications for innovation acceleration if this is the case? If you endorse the premise – as I strongly do – that innovation is powered by collaboration and connectedness – that innovation acceleration happens just by the fact that people are connected in an ecosystem, then we are in for a meteoric rise is the innovation capability of Generation C. Do you agree?

And if this is the case, what structures, if any, do we need to put in place to capture and harness this creativity? Can the corporation as we know it cultivate and environment where all of this innovation potential is harnessed and exploited?

The answer is – not today. Next year? or 2020?

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Apple without Jobs

What makes Steve Jobs the driving force behind innovation at Apple? Is Apple’s model of innovation broken, in that they rely so heavily on Steve, or is the rest of the world’s model broken, in that they do not have a “Steve Jobs” on board?

To me Apple and Steve are anomalies. The rest of the world is heading down the connected, open innovation path, and innovation@Apple still centres around Steve.

Look at the fuss made about the following email, sent out to Apple employees on Jan 17. Its all over the press, and an email like this can dramatically affect share price.

Team,

At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.

I have asked Tim Cook to be responsible for all of Apple’s day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.

I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.

Steve

It will certainly be interesting to see what happens to Apple once Steve retires permanently. Perhaps then we will have a better insight into the innovation engine that drives Apple – is it the ultimate innovation model we all need to adopt? Or not…….

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Changing the ATM Paradigm

Those of you who know me know I am a big fan of IDEO. They embody most of the characteristics in a leading edge company that I respect – innovative, deep customer centricity, and a passion for change. Now they have tackled a familiar sight for all of us- the ATM. You know, that dumb screen with the push buttons that does what you want – dispense cash – but not much more.

Financial institution Banco Bilbao Vizcaya Argentaria and global technology company NCR Corp. plan to roll out a new concept for Automated Teller Machines (ATMs) called ABIL. They are not only sleek-looking, resembling an iPad or other touch panel, but they also promise to be faster, easier, and more intuitive.

The touch panels boast a revamped interface that changes the traditional look and feel of the boxy ATM. Customers select choices via a touch screen, which can rotate 90-degrees to ensure optimum privacy while conducting transactions. (No doubt the company will also look to things like privacy screen overlays that block peripheral view.) A single slot accepts cash, checks, and passbooks, as well as distributes cash and receipts.

“BBVA is constantly looking for ways to strengthen relations with its customers, and the project was not how to further automate the terminal, but how to humanize the machine,” says Vicente Amores, NCR’s Global Director for BBVA. “The result is a new self-service device based on three qualities: simple, human, and flexible.”

Twenty of the new ATMs have been rolled out across Spain, and BBVA plans to install 200 more throughout this year.

NCR plans to work with additional financial institutions around the world to deploy the machines elsewhere as well, including the Sunbelt area of the U.S., and certain locales in South America.

The project is the result of a strategic partnership among BBVA, NCR, Fujitsu and the design consultancy IDEO. Watch the video below.

The Future of Self-Service Banking from IDEO on Vimeo.

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Are you one of the 250 Million in early stage entrepreneurship?

Two hundred million people between 18-64 years old are actively engaged in starting or running new businesses in 59 economies as the study released by the Global Entrepreneurship Monitor (GEM) reports. GEM is the largest and most comprehensive worldwide research study of entrepreneurial attitudes, activities, and aspirations.

The Global Entrepreneurship Monitor 2010 Report estimates 63 million of these early-stage entrepreneurs expect to hire at least five employees over the next five years; 27 million anticipate hiring twenty or more people to fill newly created jobs. The potential contribution of entrepreneurship in job creation across the globe is important to economic growth.

Entrepreneurship’s contribution to an economy is based on more than numbers of entrepreneurs, it is important to consider the impact small businesses have on economic growth, innovation, and internationalization.

For job creation, “policy makers need to look beyond simply the number of active entrepreneurs. They need to understand the contribution these individuals make to economic growth and national competitiveness. Are these entrepreneurs creating jobs? Are they building innovative, global companies? These are important questions to ask,” states Professor Donna Kelly, one of the report authors.
While economies can facilitate people in starting businesses as a source of income, particularly when there are not enough jobs to meet demand, employed persons also benefit from new business opportunities. A supportive environment can encourage many to venture into entrepreneurship.

Societies should contain a variety of business phases and types, led by different types of entrepreneurs. Women’s participation in early-stage entrepreneurship relative to men’s differs widely around the globe. In the Republic of Korea there are five times more men than women entrepreneurs, while in Ghana there are more women than men starting businesses.

In 2010, GEM surveyed more than 175,000 people and over 3,000 national experts in 59 economies around the world. The report covers over 52% of the world’s population and 84% of the world’s GDP. This research is accomplished through an international network of national academic research teams, with global sponsors Babson College, USA and Universidad del Desarrollo, Chile.

Read the entire report here.

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New Report shows Emerging Markets leading in Medical Innovation

The way we assess value in medical technology is changing radically. In Bangalore, the mantra “made in India for India” echoes throughout GE Healthcare’s John F. Welch Technology Centre and Philips’ Innovation Campus. These research and development facilities have spawned such revolutionary devices as low-cost, lightweight, battery- powered electrocardiogram machines to serve remote, rural areas with little access to healthcare. In Europe, Merck Serono is revolutionizing the delivery of human growth hormone with diagnostic screening, counseling, and monitoring services tied to its easypodTM wireless injection device. The company focuses on the individual needs of patients, providing support that encourages adherence to prescribed treatment, improving their chances for better health.

These companies recognize that the old dynamic of the physician as arbiter of value is giving way to a new one: Government and private insurers and “self-pay” consumers increasingly determine what sells and at what price. They refuse to pay for incremental innovations that add bells and whistles but do not signifi- cantly improve health or reduce cost. The faster, better, smaller, cheaper advances so common in consumer electronics portend the future of medical technology.

In addition, providers are assuming more of the financial risk in healthcare
as payers increasingly base compensation on quality and results. If a new technology doesn’t help patients get better at the same or lower treatment cost, providers might not be motivated to use it.

Emerging-market countries such as China, India, and Brazil, despite comparatively weak healthcare system infrastructure, are quickly taking the lead in developing lean, frugal, and reverse innovation. This type of innovation simplifies devices and processes, retaining essential func- tions while applying newer technolo- gies that are more mobile, customized to consumers’ needs, and less costly. Such innovation will enable these nations to leapfrog developed coun- tries in innovative healthcare delivery.

The PwC Medical Technology Innovation Scorecard explores the changing nature of healthcare inno- vation. The results show that the innovation leaders of today will find their position slipping during the next decade. Three trends are evident:

• The innovation ecosystem for medical device technology, long centered in the United States, is moving offshore. Increasingly, medical technology innovators are going outside the United States to seek clinical data, new-product registration, and first revenue.
• US consumers are not always the first to benefit from advances in medical technology and could eventually be last in line. Innovators already are going first to market in Europe and, by 2020, likely will move into emerging countries next before entering the United States.
• The nature of innovation is changing as developing nations become the leading markets for smaller, faster, more affordable devices that enable delivery of care anywhere and help bend the healthcare cost curve downward. These countries are free of the handicap of an entrenched healthcare system infrastructure that seeks to maintain the status quo. However, the difficulty of doing business in emerging countries and poor intellectual property protection could make these markets less attractive to multinational companies, despite their size, and could hinder these nations’ innovation leadership.

The full report is available here.

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Are you a fence-sitter? A Lost Soul? Or a Transformer?

Great video about life, change and who you really are.

Vineet Nayar and his team have committed HCL to a goal—reverse accountability. David Kirkpatrick, then Fortune magazine’s top tech writer, profiled the company in an piece entitled: The World’s Most Modern Management—In India. More recently, HCL has been the focus of a series of Harvard Business School case studies.

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What Conventional Wisdom about Innovation No Longer Applies?

Interesting article in the latest MITSloan Management Review. It addresses the question:

What conventional wisdom about innovation no longer applies?

It comes up with 5 Takeaways:

  1. Most innovation efforts fail not because of a lack of bright ideas, but because of a lack of careful and thoughtful follow-up. Smart companies know where the weakest links in their entire innovation value chain are, and they invest time in correcting those weaknesses rather than further reinforcing their strengths
  2. Online forums are not a panacea for distributed innovation. Online forums are good for capturing and filtering large numbers of existing ideas; in-person forums are good for generating and building on new ideas. Smart companies are selective in their use of online forums for innovation
  3. External innovation forums have access to a broad range of expertise that makes them effective for solving narrow technological problems; internal innovation forums have less breadth but more understanding of context. Smart companies use their external and internal experts for very different types of problems
  4. Rewarding people for their innovation efforts misses the point. The process of innovating – of taking the initiative to come up with new solutions – is its own reward. Smart companies emphasize the social and personal drivers of discretionary effort, rather than the material drivers
  5. Bottom up innovation efforts benefit from high-levels of employee engagement; top down innovation efforts benefit from direct alignment with the company’s goals. Smart companies use both approaches, and are adept at helping bottom-up innovation projects get the sponsorship they need to survive.

You can read the entire article here.

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Innovation Requirements in India

Interesting report on ZDNet on the Indus Entrepreneurs meeting recently held in Delhi. Key points of note are:

  • The India Prime Minister Manmohan Singh had approved the establishment of a National Innovation Council to prepare a 10-year roadmap
  • India does not need low-cost but ultra-low cost products,  The products need to be extremely affordability and that can only happen through disruptive innovation
  • Much of the innovation in India is emerging out of scarcity and aspirations

As an example of the sort of innovation coming out of India, a student in Kerala, Remia Jose, had a lot of household chores to do when her mother fell ill. She would return from school and wash clothes because her family could not afford a washing machine.

To cope, then 15-year-old Remia created a washing machine that ran on pedals and did not require electricity to operate. The machine cost just US$45 (INR 2,000).

Mansukhbhai Prajapati also invented an earthen refrigerator, called Mittikool, which is priced at US$77 (INR 3,500). The refrigerator has separate compartments for storing water and vegetables and also runs without electricity, making it ideal for rural areas.

Prajapati operates a small-scale industrial unit in Rajkot, which has been producing clay products since 1988. Besides the refrigerator, Prajapati’s company also manufactures non-stick pans made from clay, as well as Mittikool water filters, cookers and dinner sets.

There is no doubt that this sort of innovation is a powerhouse of opportunity as yet not fully realised in potential.

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Transforming Reading – from Ideo

So you think the IPad and the Kindle are the future of reading? The innovation and design company IDEO, which has just released a short film on “The Future of the Book”, blows the binding off conventional notions of how we consume the written word. In Ideo’s telling, tomorrow’s books will let you join online discussions, fact-check, and even dictate the particulars of a plot — all in a tablet-friendly format. They’ve come up with three distinct reading concepts: Coupland, Nelson, and Alice.

Nelson
Nelson is all about expanding how we understand text. Think of it as CliffNotes on steroids. You can link to current news stories about your book, read up on debates it has sparked, and vet its accuracy through a community-run fact-checking feature. You can even look up how the discourse around it has changed over time.

Coupland
This concept is the social network of publishing. Designed to help people “keep up with the latest must-reads,” to quote the film, it suggests books based on what people in your company are reading. It also has features for creating book clubs and online reading discussions

Alice
Alice is a cross between a video game and Choose Your Own Adventure. Among other features, you can add to the narrative, talk to characters, and find keys to unlock plot twists. The idea here is to blur “the lines between reality and fiction,” as the film says

Watch the video here

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P&G expands Connect & Develop – very significant

P&G has always been my “pin up” company, as it has pioneered ideation not only internally, but with customers and suppliers in a way that has been transformational for the company. It is therefore especially interesting for me to learn that Procter & Gamble is stepping up efforts to find new ideas – wherever they might originate. The wave of Open Innovation continues to build, but some skeptics feel that it is a bubble. Well, not for P&G.

P&G wants to triple the revenue it earns from working with outside sources, including competitors, universities and entrepreneurs. In five years, P&G wants to earn $3 billion in sales from its partnerships with outside companies and researchers, tripling the impact of a program that began in 2000 to find and adapt new ideas from small firms, inventors and others.

“Connect and Develop has created a culture of open innovation that has already generated sustainable growth, but we know we can do more,” chairman and CEO Bob McDonald said. “We want the best minds in the world to work with us to create big ideas.”

In a company that once took years, even decades, to bring new products to market relying on in-house research, the program has helped P&G quickly get new products on store shelves.

Examples of products found through Connect and Develop include Mr. Clean Magic Eraser, which came from technology licensed from German chemical company BASF, and Swiffer Dusters, adapted from a Japanese competitor called Unicharm Corp. P&G negotiated the rights to sell the product outside of Japan.

P&G will continue to look for similar opportunities, but will also step up its work with small- and mid-sized entrepreneurial companies, said Bruce Brown, P&G’s chief technology officer. The company plans to increase its work with universities, research institutions and government laboratories around the world, including “innovation hotspots” like California’s Silicon Valley, Boston, Israel and China, Brown said.

P&G employs dozens of international technology entrepreneurs whose job it is to find new products and technologies. The company already employs a small office in Silicon Valley and has employees working inside venture capital firms researching new businesses that P&G could invest in or even purchase outright.

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Two Giants feed Innovation in Journalism and Literacy

Why is innovation in literature and journalism becoming so important? Because the customer is demanding diversity and tailored products and services that meet their needs, and guess what? The traditional suppliers just cannot satisfy their requirements. So rather than producing more and more of the same, the clever companies are producing platforms that anyone can use to develop products and services.

It is interesting to see a bookseller like Barnes & Noble, and Google, almost on the same day, jumping on the journalism platform bandwagon. It is interesting because Barnes & Noble is a reseller – a bookstore that sells other people’s books – and so one might question why a bookstore is building a platform called NOOKdeveloper, a program that enables content providers and the developer community to deliver “new and innovative reading experiences using Barnes & Noble’s open eReading platform”. According the Barnes & Noble press release: “Developers can revolutionize how people read, beginning with NOOKcolor, the ultimate reading experience. Built on Android(TM), NOOKcolor opens up a whole new world of digital reading materials of all kinds with an unmatched selection of over two million digital titles a single search away on the Barnes & Noble NOOKbook(TM) Store.”

At the same time, Google has just announced it was donating five million dollars to encourage innovation in digital journalism.

“Journalism is fundamental to a functioning democracy,” said Nikesh Arora, president of Google’s global sales operations and business development. “So as media organizations globally continue to broaden their presence online, we’re eager to play our part on the technology side,” Arora said.

While Apple and Amazon fight it out on the hardware platform, both Google and Barnes & Noble are out there saying “we don’t have all the answers – perhaps you do”.

Will be interesting to watch these developments…

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Why does Israeli Innovation Contribute $2.4 Billion To The Massachusetts Economy?

A study has been released released at the New England-Israel Business Council’s 2010 Life Sciences Summit at Brandeis University in Waltham, Massachusetts revealed the scope and impact of Israeli related businesses on the Massachusetts economy. This is an astounding amount of money – imagine if this was scaled to other states and countries around the world. Indeed, imaging if the entrepreneurship spirit of Israel was also replicated in other countries! The impact would truly be astonishing.

The new study, “The Massachusetts-Israel Economic Relationship,” conducted by Stax Inc., an independent global strategy consulting firm, shows the impact of Israeli innovation and entrepreneurship on the Commonwealth’s economy, and underscores the importance of Israeli relations to the state, especially in the area of life sciences and high-tech.

Highlights of the study include:

* Nearly 100 companies in Massachusetts are founded by Israelis or offer products based on Israeli technology.
* These businesses generated $2.4 billion in direct revenue in Massachusetts in 2009.
* In total, the direct and indirect revenue impact on the Massachusetts economy was $7.8 billion.
* From an employment perspective, these businesses directly generated 5,920 jobs in Massachusetts.
* 50% of these businesses focus on information technology, 29% are in life sciences, and the remainder in other industries.
* Israeli entrepreneurs chose Massachusetts over other U.S. destinations to launch or grow their enterprises due to the deep talent pool of educated workers, the opportunity to be part of an industry cluster, world class universities and outstanding business infrastructure.

The Stax study, which surveyed Massachusetts business executives of companies based on Israeli innovation and entrepreneurship, also found that other states are aggressively pursuing linkages with Israeli businesses. The analysis also details ways that Massachusetts can strengthen its economic ties with Israel and compete with other states.

“The Massachusetts-Israel Economic Relationship” study was released at the New England-Israel Business Council’s 2010 Life Sciences Summit hosted by Brandeis International Business School. “The Massachusetts-Israel Economic Relationship” study was commissioned, in part, by the Combined Jewish Philanthropies.

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Open Innovation Assessment tool from NineSigma

NineSigma has announced the launch of their new online OI Scorecard for innovation and business leaders to quickly assess open innovation capabilities. The web-based tool provides an initial evaluation of a company’s ability to collaborate as part of their innovation process, both with internal and external partners. The tool also assesses the organizational structure and systems that are needed to effectively support collaborative innovation.

“Understanding where you are in your open innovation efforts is a critical first step to charting a path forward,” said Matthew Heim, president of NineSigma. “Companies at varying levels of open innovation maturity come to us looking for better results from their open innovation investments. We help them build on their strengths while addressing their needs for improvement. Using key indicators, the scorecard is a quick way to get a snapshot of a company’s capabilities. In addition to an OI “score”, the tool provides recommendations for how to address the gaps identified.”

Specifically, the open innovation tool measures a company’s ability to collaborate on innovation in three tiers: within and across the company, with the company’s existing external network, and with the global innovation community. Capabilities are evaluated on two axes that measure the extent to which the company engages with innovation partners and how well enabled they are to assimilate resulting knowledge and solutions into their organization.

The 3 tiers of collaborative innovation
three tiers

Business and innovation leaders interested in assessing their company’s open innovation capabilities can access the NineSigma OI Scorecard tool at http://www.ninesigma.com/OIscorecard.aspx. The web-based survey takes approximately 5-7 minutes to complete.

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Good ideas – do you know where they come from?

Here is a fun video from Steven Johnson that describes how the web can aid collaboration which will in turn improve ideas. I really like this.

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Tata, Innovation and Ideation

Most of us will have heard about the low cost car that is set to revolutionize travel in India. Many of us will have heard of its innovative model of distribution throughout the country. But not many of us have linked the innovation by Tata to ideation.

But it is.

An executive of an Indian conglomerate credited a corporate culture that encourages innovation with the creation of the world’s cheapest everyday car, a fuel-efficient, $2,500 four-seater that the company plans to export to Africa, Latin America, and Southeast Asia.

Sunil Sinha, an executive in Tata Quality Management Services, told a Harvard audience Tuesday (Oct. 12) that the car was the result of an unlikely — but public — promise that the company’s leader made in 2003, setting to work a team of engineers charged with rethinking how cars could be designed and made. The result, which went on sale last year, is the Tata Nano, a tiny, two-cylinder model that gets 55 miles per gallon and meets all of India’s vehicle emissions and regulatory requirements.

So where does ideation fit in? Sinha described a culture of innovation at Tata that includes employee-awards programs for both successful and unsuccessful ideas. What’s important, Sinha said, is that employees feel comfortable in bringing forward ideas, even ones that don’t pan out, and that they feel they work in a place that values fresh thinking.

The innovation culture has produced several notable products, he said. One is a water purification system that costs just $20 and produces enough water to keep a family of four supplied for more than a year.

Read the full article here. If I find a video of the talk, I will post it.

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China moves ahead with Patents and Innovation

So you think that China is behind in the innovation stakes? Think again. A recent article in The Economist indicates that more patents may be filed in China this year than in Japan for the first time, putting China in striking distance of America. Moreover, Chinese firms are forging into foreign markets. In 2008-09 Japanese geeks filed for 11% fewer “international patents” under the Patent Co-operation Treaty, while Chinese nerds filed 18% more, according to a recent report by the World Intellectual Property Organisation (WIPO).

I find this really interesting. Just two years ago a colleague spent significant time telling me how far behind China was in innovation, and how we would have to wait for the next generation to really drive innovation ahead.

Read the story here.

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Employees have the best ideas

The classic IBM CEO study of 2006 says it all – the best ideas come from employees, customers and partners. A recent article in the Wall Street Journal reinforces this hypothesis.

To quote
Most great ideas for enhancing corporate growth and profits aren’t discovered in the lab late at night, or in the isolation of the executive suite. They come from the people who daily fight the company’s battles, who serve the customers, explore new markets and fend off the competition.

In other words, the employees.

It goes on to list seven characteristics that are essential to the success of Innovation communities:

CREATE THE SPACE TO INNOVATE. Line managers and employees occupied with operational issues normally don’t have the time to sit around and discuss ideas that lead to cross-organizational innovation. Innovation communities create a space in which employees from across the organization can exchange ideas.

GET A BROAD VARIETY OF VIEWPOINTS. It’s essential to involve people from different functions, locations and ranks, not only for their unique perspectives, but also to ensure buy-in throughout the company afterward. Innovation communities focus on creating enthusiasm as well as new products.

CREATE A CONVERSATION BETWEEN SENIOR MANAGEMENT AND PARTICIPANTS. By definition, innovation communities can’t work in isolation: To create sustainable cross-organizational innovation, it’s important that ideas flow to senior managers. If they don’t, innovations will tend to have limited, local effects that don’t benefit the organization as a whole.

PARTICIPANTS SHOULD BE PULLED TO JOIN, NOT PUSHED. Members need to be enthusiastic about participating. Employees can’t be forced to reveal their thoughts or be imaginative.

TAPPING UNUSED TALENT AND ENERGY KEEPS PRODUCT-DEVELOPMENT COSTS LOW. One reason these forums are economical is because they tap into unused energy. An innovation community sends a message that senior management is listening and that employees will benefit from participating. In many cases, potential contributors are just waiting to be asked.

COLLATERAL BENEFITS CAN BE AS IMPORTANT AS THE INNOVATIONS THEMSELVES. Innovation communities promote learning on both a personal and organizational level by bringing people together to exchange ideas. The repeated discussions and problem-solving missions can give rise to valuable social networks that lead to further exchanges of ideas in the future.

MEASUREMENT IS KEY. Innovation communities are sustainable only if they can produce demonstrable value. Otherwise senior management loses interest.

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IBM’s Jam – a look on the inside

“Jam” is IBM’s term for a “massively parallel conference” online. IBM had developed its first in 2001 as a way to unite the organization. More and more employees were working at home or at client sites, rarely coming to IBM offices. The idea was that a Jam — a group of interlinked bulletin boards and related Web pages on IBM’s intranet, with systems for centrally managing everything and seeking substantive answers to important questions in three days or so — would give people a sense of participation and of being listened to, as well as generate valuable new ideas. From the beginning, the Jam process showed it could engage tens of thousands of people at a time. There were 52,000 posts in the 2001 Jam, addressing questions like “How do you work in an increasingly mobile organization?” and “How do we get IBM Consulting into the C-suite?” Subsequent Jams helped clarify IBM’s values and produced good ideas for improving IBM’s operations. A carefully designed system for reviewing huge numbers of posts enabled the company to initiate important courses of action.

This article explores this innovation effort, unique in size and unusual in the amount of management resources invested in it. The article is based on participant observation in the Jam itself, review of Jam Web pages and postings after its completion, online use of some of the emerging technologies and more than 20 interviews with Jam organizers, participants, idea sponsors, senior scientists, senior executives and others.

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The increasing importance of Innovation

Interesting article in the New York Times: “Innovate, Yes, But Make it Practical”
http://www.nytimes.com/2010/08/15/business/15unboxed.html?_r=1&ref=business

Key messages include:

  • LinkedIn found that more than 700 people listed their current job title as “chief innovation officer” and that nearly 25,000 had the word “innovation” in their job title
  • Innovation Managers are now senior executives in major corporations. Indeed, many smart companies now have VP-level Open Innovation Managers
  • These senior leaders need unfettered access to all parts of the organisation to be effective
  • Internal venture funds are essential for successful execution of Innovation activities
  • Innovation is certainly possible in the services industries e.g. Banking and finance
  • Customer-centricity is paramount
  • Incubating ideas that deliver scale is powerful

Thoughts:

  • Does your organisation need a VP for Innovation?
  • Indeed, should you have a VP for Open Innovation?
  • How are you breaking down barriers to allow “unfettered access”?
  • Do you have sufficient focus on customer-centricity?
  • Have you set aside sufficient funds for “internal ventures”?

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Innovation, powered by Collaboration, is essential for future success!

There is an excellent report of how collaboration in the workforce powers innovation. I have been unable to track down the orginal article for positing here, but I am going to replay the blog where it is cited, because I find it so interesting and relevant. It comes from HR Magazine http://www.hrmagazine.co.uk.

By 2020 the workplace will be transformed by the sharing and development of ideas, according to a study of 3,500 employees, 100 HR managers and 100 IT managers across the UK, France, Germany, the US and Japan, conducted by the Future Foundation on behalf of Google.

“It will be an ideas and innovation economy rather than knowledge economy,” says Future Foundation account director Judith kleine Holthaus, revealing the study finds an 81% positive correlation between collaboration and innovation across all markets. In the UK employees who are given the opportunity to collaborate at work are nearly twice as likely to have contributed new ideas to their companies.

As collaboration and innovation accelerate, thanks to new enabling technologies, elements of the HR and IT functions will integrate and HR and IT roles will shift as they adjust to the ideas economy. HR will need to ensure employees are motivated to collaborate and innovate, with the study finding that 34% of HR personnel agree they will need to learn new skills to foster a sense of corporate community and a third of chief information officers believing they will take on more responsibility for innovation in the future. Some 44% of HR managers say HR will need to have a better understanding of technology in the future.

“The HR director and IT director will have to come together,” believes Carsten Sørensen, senior lecturer in information systems and innovation at the London School of Economics and Political Science.

“They will have to manage issues such as how to balance IT infrastructure, which produces better functionality and productivity, with collaborative technologies and individualisation. It is inconceivable that the future will not be more forcibly brought about by insight, knowledge and information. Nothing can stop the process of collaboration but mess and contradiction will define the resulting relationships. Organisations are not good at paradoxes.”

In the world of HR this will translate through to the culture of the business, how to incentivise and reward ideas and innovation, where and how work is performed and policies and practices around social networking.

However, the research shows that businesses need to move more quickly to create an environment that encourages innovation. While nearly half of those surveyed believe new technologies will encourage innovation in the next five years and 42% think they will change current business models, one in five employees say there is no process in place for them to contribute ideas to their employer and that their employer does not encourage them to come up with new ideas. Only one in 10 think management will be the source of ideas in the business, with nearly a third thinking other employees will bring innovation.

“The need to innovate quickly is becoming more important to business,” says Robert Whiteside, Google head of enterprise UK, Ireland and Benelux. “But while people are used to collaborating through technology in their personal life, it is more challenging to enable them to do so in business.”

If businesses don’t change, though, they will face the consequences. “Any company that does not optimise innovation will be less likely to exist in five years,” kleine Holthaus warns.

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Pixar Embraces Collaboration to Power Innovation

Who amongst us does not love the work of Pixar? Very few I am sure. Pixar has succeeded as well as anyone in mastering the art of creativity. The company has produced one animated hit after another—including “Finding Nemo”, “Cars” and “The Incredibles”. Rather than being crushed by Disney, as many feared, Pixar has reinvigorated its parent company.

What is most interesting is how Pixar has embraced collaboration within the organisation, with a view, strongly supported by myself, that collaboration powers innovation. In his article in The Economist (June 17th, 2010), Schumpeter says the company devotes a lot of effort to getting people to work together. In most companies, people collaborate on specific projects, but pay little attention to what’s going on elsewhere in the business. Pixar, however, tries to foster a sense of collective responsibility among its 1,200 staff. Employees show unfinished work to one another in daily meetings, so get used to giving and receiving constructive criticism. And a small “brain trust” of top executives reviews films in the works.

Schumpeter continues that Pixar got the inspiration for this system from a surprising place—Toyota and its method of “lean production”. For decades Toyota has solicited constant feedback from workers on its production lines to prevent flaws. Pixar wants to do the same with producing cartoon characters. This system of constant feedback is designed to bring problems to the surface before they mutate into crises, and to provide creative teams with a source of inspiration. Directors are not obliged to act on the feedback they receive from others, but when they do the results can be impressive. Peer review certainly lifted “Up”, a magical Pixar movie that became the studio’s highest-grossing picture at the box office after “Finding Nemo”. It helped produce the quirky storyline of an old man and a boy who fly to South America in a house supported by a bunch of balloons.

Breaking down the barriers is key to successful innovation in any organisation. Pixar certainly sets an excellent example for others to follow.

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CPG Companies need to innovate to grow

CPG companies, especially those in the food sector, have been long-term investors in Innovation. The consumer is constantly looking for the next flavor, the next tasty biscuit, or the next interesting soft-drink. A new report by PriceWaterhouseCoopers and the Grocery Manufacturers Association has just been released, and highlights that, under a scenario of long-term lower net sales growth, CPG companies will need to rethink the largely defensive actions they took in 2008 and 2009 to preserve shareholder value: divesting non-core brands, conserving cash, cutting costs. To grow revenues, companies either have to raise prices or drive volume—and that’s where innovation comes in.

Innovation goes beyond technical advances. Many CPG companies are looking to innovate by reaching customers in more places—for example, by expanding their product presence in the workplace or targeting demographic groups like Generation Y through smart social media campaigns. Others are looking to tailor their products for local customer tastes in emerging markets.
Understanding customer priorities is central to innovation. Consumers in the United States are buying more carefully, buying different pack sizes, taking advantage of volume discounts, and trading down to brands with a different value proposition. Diamond Foods CFO Steve Neil explains that one key to innovation is a willingness to approach an old problem with a new perspective: “We have been successful at bringing product innovation to categories that historically have not been very innovative, and that has differentiated us,” he says. For example, “We work with our retailers to help them position their private label. We want them to be able to offer the bulk big-value proposition, since we are not going to price at parity with them.” Helping retailers help themselves is just one way that CPG companies can bring a different mindset to their business.

Suppliers are also racing to gain a foothold in emerging markets like China, Russia, Brazil, India and Southeast Asia, according to the report.

It was compiled from interviews with senior leadership of GMA members, publicly reported company financial data, government statistics, analyst reports and other published material on 152 companies in the food, beverage and consumer products sector.

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Ideas on Smartgrid, anyone?

Certainly interesting to see GE joining the crowdsourcing challenge community.

GE announced  a $200 million open innovation challenge that seeks breakthrough ideas to create a smarter, cleaner, more efficient electric grid, and accelerate the adoption of more efficient grid technologies. GE Chairman and CEO Jeff Immelt unveiled the challenge, the “GE ecomagination Challenge: Powering the Grid.”.

The global challenge invites technologists, entrepreneurs and start-ups to share their best ideas and come together to take on one of the world’s toughest challenges – building the next-generation power grid to meet the needs of the 21st century. The challenge is one of the largest ever and is open at www.ecomagination.com/challenge.

What is significantly interesting is that GE did this in partnership with a bunch of venture capital companies. Not sure if I have seen this before. The Challenge was launched in collaboration with venture capital firms Emerald Technology Ventures, Foundation Capital, Kleiner Perkins Caufield & Byer and RockPort Capital, and Chris Anderson, Editor-in-Chief, Wired magazine. So if the ideas are relevant, there is significant funding there from the VC community to power (no pun intended) them ahead.

An interesting twist! I wonder who owns the IP?

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Excellent series of podcasts on Open Innovation

There are an excellent series of podcasts produced on EnterpriseLeadership.org. I am bringing links to these here.

Dr. Joel West, Academician and Author, Talks about the Open Innovation Paradigm for Technology Development In this podcast, Dr. West explores what powers the concept of open innovation and how it differs from traditional innovation efforts, such as research and development.

Tom DeGarmo, a principal at PricewaterhouseCoopers, Makes a Case for Open Innovation in Economic Downturn DeGarmo provides insight from his research experience with open innovation, gives examples of open innovation communities, and gives CIOs and CTOs several takeways for using technology to carry out open innovation initiatives.

Steve Shapiro, InnoCentive’s vice president of Strategic Consulting, Talks about Using Open Innovation to Solve Tough Problems Shapiro explains the reasons for using open innovation to solve tough problems, InnoCentive’s business model for generating revenue, some of InnoCentive’s most successful challenges, the benefits of using InnoCentive, and the challenges the company faces in this economy.

How CIOs Can Reshape Their Company’s Business Model: C.K. Prahalad, Best-selling Author and Academic Prahalad provides specific examples of how senior IT executives can address new business opportunities for their companies, how new technology initiatives can drive business opportunities at the bottom of the pyramid, why companies should embrace the concept of open innovation, and what the CIO role will be like 10 years from now.

Dr. David Tennenhouse, partner at New Venture Partners, Talks about Different Approaches to Open Innovation In this podcast, Tennenhouse talks about the need for companies to turn to open innovation, the way open collaboration enhanced open innovation at Intel and other organizations, the emergence of innovation that venture capital firms are seeing, and the takeaways CIOs need to be aware of if they want to promote innovation and open innovation.

Former Air Products Research Executive Talks about Establishing Successful Corporate Innovation Programs Why are some major companies good at driving corporate innovation in technology? For some answers, Enterpriseleadership.org turned to Dr. Ron Pierantozzi, who built his entire career on driving corporate innovation in a technology-related company and doing research in this area.

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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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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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Internet Trends from Morgan Stanley

There is a great set of statistics from Morgan Stanley on Internet trends. It was presented at a summit in New York on June 7, 2010 by Mary Meeker.

Covers stats on the mobile Internet, innovation, online advertising, online commerce, communications, cloud computing, technology and what we could expect next from technology.

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OECD 2010 Innovation Policy Released

The OECD has recently released their 2010 Innovation Policy, together with a number of related documents on Innovation – all of them are really worth reading.

I am providing you the following:

  1. OECD key findings and Policy Message – excellent ppt deck
  2. OECD key findings – document
  3. OECD publication – Measuring Innovation – well worth reading
  4. OECD 2010 Innovation Executive Summary

All of these are a “must read”.

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Can we mix Rivalry and Innovation? McKinsey says we can.

In a world full of talk about collaboration, why would we consider rivalry? Interesting thought. McKinsey have just released a document around innovation and rivalry that is worth reading.

The notion is that we can learn from the past – in this instance, the use of rivalry. Indeed, McKinsey argues that rivalry does not preclude collaboration, but we should try and integrate rivalry and collaboration. Three principles are discussed:

  1. Forming Teams: competing teams are set up from different divisions, including a diverse array of experts, taking different approaches ot the same problem.
  2. Appreciating differences: The various solutions should be held up next to one another, with the opportunity for ideas from one to be integrated into the other.
  3. Conducting “market tests”: this involves bringing the solutions to an internal jury or group of customers to let them weigh and contrast the different solutions.

The article continues with a case study on GE, and how competition and collaboration has been used successfully to stimulate innovation in GE without disrupting a culture of collaboration.

In an era where collaboration is the catch cry, it is interesting to read and contemplate a hybrid model, especially one that has been pout in practice successfully.

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Obama offers $1m in prize money for Innovation

The Obama administration is offering up to $1 million in prize money to entrepreneurs that can come up with innovative ways to commercialize new technology.

The U.S. Department of Commerce Office of Innovation & Entrepreneurship’s i6 Challenge is offering the prize money to six winners who invent what judges think are the most innovative ideas to drive technology commercialization in their respective regions, according to a White House blog post attributed to Secretary of Commerce Gary Locke.

The challenge is part of Obama’s Strategy for American Innovation, which calls on government agencies to use prizes, challenges, and awards to help create new technologies that will make American industry more competitive globally.

“How well America moves ideas out of the research lab and into the marketplace will help determine whether we remain the most competitive and vibrant economy in the world,” Locke said in the post. “And we want to hear the best ideas from entrepreneurs, investors, universities, foundations, and non-profits across America.”

Entrepreneurs have up to July 15 to submit an application, and there will be a conference call on May 17 to provide more information about the challenge. The EDA Web site also has information about the award program.

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Great new book – Seizing the White Space: Business Model Innovation for Growth and Renewal

Kodak invents digital photography in 1975 but doesn’t successfully capitalize on its invention for decades. Xerox famously devises the mouse, the laser printer, and the graphical user interface but fails to commercialize any of them. The $2 billion Digital Equipment Corp. spends developing a personal computer turns out to be too little, too late.

What makes opportunities like these so difficult to grasp is that, so often, they require companies to move far beyond their core into uncharted territory — into their white space. That’s a scary place, one where many companies’ experience is (as one CEO put it) “unblemished by success.” But if the danger is all too obvious, its causes are not. The white space is hard to navigate not because it’s uncharted but because so many companies try to go there with the wrong map, the one they’re currently using — their existing business model.

And who can blame them? Every successful company is already fulfilling a real customer job with an effective business model. The problem is that few organizations can explicitly articulate what that model is. Day to day, they go along guided by implicit rules of thumb, metrics, incentives, and the odd success story. But without an explicit understanding of their business model — the premise behind its development, the way its various parts work together, its strengths and weaknesses when in pursuit of new growth — they don’t know whether they can use it to deliver on a new customer opportunity or if that opportunity is a move into their white space requiring a new model.

Seizing the White Space offers the path to that explicit understanding, starting with an eminently practical business model framework. It identifies the four fundamental building blocks that make your business model work: the customer value proposition that fulfills an important job a real customer needs to do in a better way than current alternatives do; the profit formula that lays out how your company makes money delivering the value proposition; the key resources that value proposition requires; and the key processes needed to deliver it.

A series of in-depth case studies then explores the circumstances when a new business model might be needed — to fulfill unmet customer jobs in your current market, to serve entirely new customers in new markets, or to respond to tectonic shifts in market demand, government policy, and technological capabilities that transform entire industries. A detailed discussion follows that lays out a structured process for designing a new business model and developing it into profitable and thriving enterprise, while investigating the vexing and sometimes paradoxical managerial challenges that have commonly thwarted unguided forays into the unknown for so many companies like Kodak, Xerox, and DEC.

With this book, you can turn business model innovation into a managed process and a more predictable discipline. To play a new game, on a new field, you need a new game plan. Seizing the White Space gives you a language and framework for understanding both the core space of your existing enterprise and the white space you hope to seize. Think of this as your playbook for conquering the unknown.

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Accelerating Innovation through Effective Supplier Collaboration

Exceptionally interesting document on the value of collaboration between an organization and its suppliers, resulting in co-creation. This surely has to be the way of the future. Nothing gets me more stressed than when I hear the word “vendor”. Its is a word that should be banned from our vocabulary. It certainly puts up the barriers, which is totally counter to Open Innovation thinking.

This document finds that accelerating innovation through effective supplier collaboration requires both an overall company wide innovation strategy and an integrated supply innovation strategy. An open innovation strategy requires executive leadership and culture change. This innovation strategy needs to be communicated internally/externally. Management must commit resources and processes (e.g. innovation portal and third party providers) to support the
strategy. Further, the innovation strategy must be linked to overall firm performance and assessed by objective metrics. Definition of innovation and establishment of innovation metrics requires a cross-functional consensus and alignment from top to bottom of the organization.

The innovation metrics with weightings based on innovation needs should be linked to company and supplier performance evaluation. Both hard and soft metrics need to be developed. Risk management strategies enhance the speed and likelihood of successful commercialization of new products. Risk must be defined as a combination of uncertain events and outcomes for both buyer and supplier during any new product development stage gate process. The companies should establish alternative plans if required innovation does not pass the stage gate risk/reward evaluation.

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Apple Tops Bloomberg BusinessWeek’s Sixth Annual Ranking of The 50 Most Innovative Companies

NEW YORK, Apr 15, 2010 (BUSINESS WIRE) — For the sixth consecutive year, Apple has topped the list of Bloomberg BusinessWeek’s annual special report, “The 50 Most Innovative Companies,” produced in collaboration with partner Boston Consulting Group. Google, Microsoft, IBM, and Toyota Motor round out the top five.

For the first time since the rankings began in 2005, the majority of corporations in the Top 25 are based outside the U.S. and 15 of the Top 50 companies are Asian–up from just five in 2006. China’s rise is biggest. A year ago its only representative was PC maker Lenovo Group, at No. 56. This year Greater China is tied with Asia’s postwar powerhouse, Japan, thanks to showings by BYD (8), Haier Electronics (27), Lenovo (29), China Mobile (44), and Taiwan-based HTC (47). Just ahead of General Electric in seventh and eighth places are newcomers LG Electronics of South Korea and BYD, with Korea’s Hyundai Motor claiming a spot at No. 22.

Boston Consulting Group’s annual survey of top executives, which provides the raw data for Bloomberg BusinessWeek’s list, suggests that the crucial factor of the drive of innovation is a mindset–a belief that innovation matters. In China, 95% of executives said innovation was the key to economic growth, while 90% and 89% of respondents in South America and India, respectively, agreed. In the U.S., only 72% said innovation was important. Similarly, 88% of executives in China said they were raising their innovation budgets this year, followed by 82% in South America and 73% in India. The rate fell to 48% in the U.S., ahead of only Japan, where just 34% of executives said their companies planned to increase innovation spending. All of which suggests the U.S. may not be dominating the list again soon.

Bloomberg BusinessWeek’s “The 50 Most Innovative Companies” special report is based on data from Boston Consulting Group (BCG). Last December, the consultancy e-mailed a 21-question poll to senior executives around the globe. The 1,590 respondents, who answered anonymously, were asked to name the most innovative companies from outside their own industry in 2009. BCG then factored in the financial performance of the top vote-getters. The final lists weights the survey results 80%, stock returns 10%, and three year revenue and margin growth 5% each.

Bloomberg BusinessWeek’s special report, “The 50 Most Innovative Companies,” is featured in the April 26th issue, on newsstands April 16th. BusinessWeek.com will also feature expanded content, including an interactive table of the full ranking and methodology, at http://www.businessweek.com/go/innovativecompanies.

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INSEAD Global Innovation Index released

INSEAD, the leading international business school, has announced the findings of its 2009-2010 Global Innovation Index (GII), a study which the school has jointly published with the Confederation of Indian Industry (CII) for the past three years. The GII evaluates the progress of innovation readiness in countries, highlighting the obstacles that prevent governments, businesses, and individuals from fully capturing the benefits of innovation.

“This year’s Report underlines the importance of innovation in country competitiveness and growth particularly at a time when the global economy is recovering from one of the worst financial crises it has ever seen,” said Soumitra Dutta, Roland Berger Professor of Business and Technology at INSEAD and primary author of the study. “The results confirm the crucial need for countries to focus on directed pro-innovation policies to jumpstart growth in the medium term and lead to development in the long term.”

‘The Global Innovation Index’, featured in the Report, examines how countries benefit from innovation through the use of enablers that stimulate innovation and their ensuing outputs. There are five enabling parameters which include: ‘Institutions’, ‘‘Human Capacity’, ‘General and ICT Infrastructure’, ‘Market Sophistication’ and ‘Business Sophistication’. The two output parameters – ‘Scientific Outputs’ and ‘Creative Outputs and Well-Being’ – provide evidence of the results of innovation within the economy.

Iceland topped this year’s GII ranking despite the difficult economic situation it has faced over the last two years. Sweden and Hong Kong follow in the second and third positions, respectively. Several of the most innovative countries from last year’s Report, including the U.S. (eleven), U.K. (fourteen) and Germany (sixteen) have fallen in the ranks.

The top ten countries in the overall 2009-2010 GII ranking include:

1. Iceland
2. Sweden
3. Hong Kong, China
4. Switzerland
5. Denmark
6. Finland
7. Singapore
8. Netherlands
9. New Zealand
10. Norway

Similar to the 2008-2009 Report, European economies performed particularly well, including the Nordic ones – Sweden, Denmark, Finland and Norway – which all ranked in the top 10 with Iceland. Some of the Eastern European countries such as Slovenia (26), Czech Republic (27) and Estonia (29) also performed well in this year’s rankings. Israel and the United Arab Emirates placed within the top 25 countries, followed closely by Kuwait (33) and Qatar (35).

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The 10 Top Reasons Why The 10 Top Reasons Don’t Really Matter

You have to love this……… from The Heart of Innovation blog.

10. Analysis paralysis.
9. Reason is highly over-rated.
8. If you need more data to prove your point, you’ll never have enough data to prove your point.
7. You already know what to do.
6. You’re going to follow your gut, anyway.
5. “Not everything that counts can be counted; and not everything that can be counted counts.” (Einstein)
4. By the time you put your business case together, the market has passed you by.
3. “Conclusions arrived at through reasoning have very little or no influence in altering the course of our lives.” (Carlos Casteneda)
2. The scientific method came to Rene Descartes in a dream!
1. “Time flies like an arrow. Fruit flies like a banana.” (Groucho)

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