Strategy. Innovation. Brand.
Which Country Is The Most Innovative?
Earlier this year, I wrote about the Global Innovation Index for 2012 (and its relationship to happiness research). The 2013 GII report was recently published and surveys 142 different economies. Here’s how the Top 10 countries shifted from 2012 to 2013.
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GII 2012 |
GII 2013 |
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Switzerland |
Switzerland |
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Sweden |
Sweden |
|
Singapore |
UK |
|
UK |
Netherlands |
|
Netherlands |
USA |
|
Denmark |
Finland |
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Hong Kong |
Hong Kong |
|
Ireland |
Singapore |
|
USA |
Denmark |
|
Luxembourg |
Ireland |
The first thing you’ll notice is that the same countries dominate the leader board. Luxembourg has dropped out of the Top 10 and Finland has moved in but, otherwise, the countries are the same. The second major item is that the Nordic countries — Sweden, Finland, and Denmark — rate quite well. (Additionally, Iceland is 13th and Norway is 16th — all the Nordic countries are in the Top 20). These countries also dominate the leadership slots in research on national happiness. Apparently, there’s a connection between happiness and innovation.
You’ll also notice that Switzerland and Sweden take the first two positions in both years. The GII uses 84 indicators to rank countries on their ability to innovate. Switzerland and Sweden score high across the board. In terms of innovation, both countries deliver very balanced performance.
With the theme, “The Local Dynamics of Innovation” this year’s report looks not only at national level metrics but also at very specific, local phenomena. Here are some findings:
- Innovation hubs – these are physical locations such as Silicon Valley, Baden-Württemburg in Germany, or the Mumbai region in India. Typically, large enterprises serve as “hub champions” but government programs and policies can also play a major role. The hubs provide ideas, capital, and connections and create a virtuous circle — success breeds success.
- Democratization of innovation – companies and governments all over the world are investing in innovation and innovation hubs. The Internet has democratized innovation as has the rise of English as the global language of business. The report suggests that the region that has made the greatest strides in innovation is Latin America, with Costa Rica leading the way.
- Open innovation is growing – this is the opposite of the not-invented-here syndrome. Ideas are open and shared. Companies grant their ideas to third parties and use ideas from multiple sources. Sources may include companies, universities, or government research programs.
- Innovation is recovering – after a sharp drop in 2009, companies and governments have resumed investing in innovation. For instance, worldwide patent applications grew 7.5% in 2010 and 7.8% in 2011, significantly higher than before the crisis.
I’ve always thought that innovations result from collisions. As people, ideas, and cultures collide, creative combinations emerge in the form of innovations. The Global Innovation Index seems to confirm this on a global scale. Democratization, openness, and the hub concept suggest that “collisions” are happening more frequently and more pervasively. If so, we should see an acceleration of innovation over the next decade.
Diets Make You Dumb
Eat some bandwidth.
Several weeks ago, I wrote “Does Poverty Cause Poverty?” based on a research report in Science magazine. The idea is simple but provocative: the shortage of money causes additional cognitive load. Worrying about how to make ends meet takes cognitive bandwidth. You have less bandwidth available to focus your mental faculties and make smart decisions. The authors compare it to trying to make informed decisions after going a night without sleep. Thus, poor people and poor decisions go hand in hand. Poverty causes poverty.
I’ve now discovered that the authors, Sendhil Mullainathan and Eldar Shafir, have written an entire book on the subject: Scarcity: Why Having Too Little Means So Much. It’s not just about poverty but about scarcity of all kinds.
When you’re faced with scarcity – whether it’s money, time, food, influence, or space – you spend some amount of your cognitive bandwidth figuring out how to deal with the issue. If you don’t have enough “pull” in the office, for instance, you’ll need to spend some amount of time devising a strategy. You may study the arts of persuasion, or form alliances, or give generously to the boss’s favorite charity. While you’re doing any one of these things, you’re not increasing your influence. You’re merely spending precious cognitive resources plotting how to increase your influence.
I’ve sensed this when I have too many things to do and not enough time to do them. (Sound familiar?) I used to agonize over which task to do first. What’s the highest priority? What should I do first? What should I do second? I might even make up a list. Then it dawned on me that, while I was doing all these things, I wasn’t accomplishing any of my priorities. I was using cognitive resources planning rather than doing. Now I just flip a coin and get to work.
Perhaps my favorite example is dieting. Generally, dieting to lose weight requires reducing your food intake. You’re creating scarcity. You’re constantly asking yourself, “If I eat this, can I eat that?” If you backslide a bit, you’ll ask yourself, “Now why did I do that?”
Instead of eating food, you’re eating bandwidth. You only have so much cognitive bandwidth and you’re using some of it to calculate calories, make trade-offs, and perhaps even chastising yourself. You have less bandwidth left over to make wise decisions.
Mullainathan also reports that lack of bandwidth can hamper your resolve to diet. In an experiment, dieters were divided into two groups. One group was asked to remember a seven-digit number, the other group only a two-digit number. They were then offered a choice between fruit salad and a cake. The first group – with less bandwidth – was 50% more likely to choose cake than the second group.
I suppose the moral is to preserve your bandwidth. And, in fact, if you don’t have a lot of bandwidth you don’t need to read all of Scarcity. You can preserve bandwidth by reading a nice summary here.
Innovation – The Wide View
Showroom Online
Suellen used to work for a company founded on a great idea – there’s a lot of information out there and, if you can organize it, you can sell the organized information for a lot more than the raw data. The company, Information Handling Services (IHS), got its start by organizing and re-selling government information and military and technical specifications. (Today, the company offers a whole range of analytic and forecasting services as well).
Though IHS is very successful, I’d like to use one of their less successful products to illustrate an insight about innovation. In the early 90s, IHS identified an underserved market: home furnishing suppliers and designers. The information about home furnishings – furniture, carpets, upholstery, cabinets, fixtures, etc. – was highly fragmented. Designers who wanted to buy furnishings had an extremely difficult time identifying, locating, and evaluating their choices.
It seemed a perfect market for IHS. After all, they were experts at gathering and organizing information and making it easily searchable. And that’s just what they did. They contacted furnishings suppliers, gleaned the necessary information, and put it into an electronic system – called Showroom Online — that designers could search in a variety of ways. (For instance, “Find all Louis XIV style chairs that cost less than $1,000 and are available within six weeks”).
Then the IHS designers made a fateful technology decision. They chose to store and distribute the data on 12-inch LaserDiscs. LaserDiscs were among the first optical/laser, random-access storage and retrieval media. They were way ahead of their time. And that was the problem. Not many people had LaserDiscs, or understood them, or could afford them.
From what I remember, Showroom Online was a well-designed system. It just had one flaw. It didn’t fit.
I thought of Showroom Online as I was reading The Wide Lens, Ron Adner’s new book on innovation. Adner argues that, all too often, innovations fail because we take a narrow perspective. We focus on what we need to do. Adner calls this execution focus: “What does it take to deliver the right innovation on time, to spec, to beat the competition?”
Adner argues that execution focus is what causes failures like Showroom Online. We need to take a wider perspective. Specifically we need to recognize two types of risk:
Co-innovation risk – “…the extent to which the success of your innovation depends on the successful commercialization of other innovations.” (This seems to be what took down Showroom Online).
Adoption chain risk – “ the extent to which partners will need to adopt your innovation before end consumers have a chance to assess the full value proposition.”
This all relates to the issue of framing (which I’ve written about before). If you define your frame narrowly, you’ll miss a lot of important information. Other people – politicians, salespeople, teachers – may try to define the frame for you but you can also frame yourself. The trick is to take a step back, look around, and broaden your horizons. That’s important to you personally. It’s even more important to your innovation.
Judge Mental
Did you use the rare medium that’s well done?
For the past two years, Colorado Healthcare Communicators (CHC) has asked me to be one of the judges for its annual Gold Leaf awards program. CHC provides a variety of networking and educational services to professional health care communicators in Colorado. It also likes to identify, publicize, and celebrate superb work through the Gold Leaf awards.
I’ve spent approximately two full working days evaluating and scoring 45 communication projects that were launched in the healthcare industry in the past year. That includes everything from insurance exchanges to dental care to “Mommy blogs” to traffic safety campaigns. It’s a lot of fun to see such creative work.
So what campaigns get the awards? Here are some of the common features of campaigns that I recommended for awards:
Listen before you talk – many of the best campaigns mentioned that they had identified members of the target audience and then polled them in one way or another. The goal was to find out what they know and what they need to know. Then, and only then, did they start to craft key messages.
Measurable metrics – on the whole, the best projects had measurable goals. They did not aim simply to “increase awareness” but to “increase awareness by x% as measured by XYZ.” They could easily tell if they were on plan or not.
Simplify – healthcare and healthcare insurance are very complicated topics at the moment. The best campaigns simplified the complexity. They used infographics, interactive websites, and relatively few words to guide the reader through a minefield of complexity. I could almost judge the campaigns by word count. Fewer words = better campaign.
The simplest way to simplify is through stories – some of the best projects told stories. Some were fictional; some were real. But they all helped me connect with core messages.
Design for the medium – the best thing about websites is that they’re interactive. The best thing about video is that it can create powerful emotions. The best thing about print is that it can convey a lot of information quickly and economically. The best campaigns took advantage of the medium. If they used more than one medium, they redesigned to take advantage of each.
Measurable evaluation – the best campaigns followed up with specific and quantifiable evaluations. They knew how many people had received the message, what they absorbed, and why.
What I’ve just written is a fairly standard description of how to develop an effective communication campaign. If you follow these guidelines, you’ll probably get my vote for an award next year. A nice bottle of wine might help as well.
Brand Is In The Eye Of The Beholder
Ironic or goofy?
The students in my branding class just reminded of one of the basic axioms of branding: It doesn’t matter what you think. It only matters what your target market thinks.
To demonstrate the impact of brands, I posted six picture of myself in shirts with different logos. I minimized other variables – using the same pose, the same background, the same facial expression, etc. All the shirts, save one, were “polo” style. The idea was to isolate the logos and their respective brands. I then asked the students what they thought of each version of me. Was one was more friendly than others? Was one more stuck up? Was one richer? Another poorer?”
As an afterthought, I tossed in a picture of me wearing a (non-polo) shirt with a dachshund logo (pictured). I bought the shirt on a whim because we have a dachshund (pictured here) and I like the breed. I thought my friends (my target market) would enjoy the (inside) joke.
Well, my students let me know that what they beheld was a lot different than what I beheld. I thought the shirt was cool in an ironic kind of way. They thought it was gaudy and generally inappropriate. (I guess I’m too old to be ironic). One student wrote, “I perceived that one to be more “stuck up” and rich. … plaid button-down shirts are often worn by wealthy Hamptons residents, it screams yacht club, country club to me.” Another student, wrote, “The shirt is crazy bright with pink and purple so he will stand out in a crowd. I barely notice the logo because the shirt screams I am here.” Yet another wrote, “As for the plaid… I’m biased against plaid. I think it looks goofy.”
So, I thought I looked cool but others saw me as stuck-up, rich, self-centered, and goofy. Yikes!
All of which brings me to Miley Cyrus and her recent re-branding at the Video Music Awards (VMA) ceremony. I’ve read a lot of hand-wringing articles about Miley’s twerking. Unfortunately, none of those articles were written by members of Miley’s target audience. In terms of branding, it doesn’t matter much what the parents of Miley’s fans think. In fact, horrifying the parents may be the simplest way to win the hearts and minds of the kids. Miley’s saying, in effect, “We’re in this together. They don’t understand.” That’s a message that always resonates with teens. It’s one of the reasons I liked the Rolling Stones as a kid. My parents thought the Dave Clark Five were just fine but that the Stones “went too far”. Message to me: cue the Stones.
What’s the message here? First, identify your target market. Second, understand exactly what your target market thinks, what they believe, and what they value. Third, ignore anyone who is not in the target market. It doesn’t matter what they think. Fourth, that includes you. You are not the target market. Forget yourself. Brand is in the eye of the beholder.
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