Strategy. Innovation. Brand.

engines of innovation

An Evolutionary View of Innovation

consistencyMy sister has a Ph.D. in biology. For her dissertation, she randomly divided fruit flies into two groups and treated them exactly the same except for one variable. She introduced a specific chemical to one group but not the other. Then she followed the effects through multiple generations. I don’t remember what she discovered but her method allowed her to conclusively link cause to effect.

Why did she choose fruit flies? Because she wanted to look at the effects of the chemical over multiple generations and fruit flies create generations quickly. She wanted to know not just how the chemical affected fruit flies. She wanted to know how the chemical affected the evolution of fruit flies.

Could we use evolutionary thinking to solve business problems in innovative ways? Well, there’s a theory that we could develop software more quickly and at less expense through evolutionary techniques.

First we identify a problem that we want software to solve. Then we create, say 10,000 identical sets of code. We introduce random variations into each set, execute the code, and then determine which set comes closest to solving the problem. We take the winner, make 10,000 copies, introduce random variations into each one, then execute the code. We pick the winner and repeat the process. It’s like breeding dogs, only less messy.

With modern computing power, we can generate thousands of generations in very short order. We could almost certainly solve the problem. Additionally, we might generate some very novel solutions. The random variation might lead us down paths that we never would have imagined on our own.

While I suspect we’ll make evolutionary software before long, it does seem a bit exotic. Are there ways we could apply evolutionary thinking to solve more practical, day-to-day problems?

Sometimes I think it’s as simple as asking the question. Too often we make yes/no, either/or decisions – whether-or-not decisions as Chip Heath calls them. But we can always ask the question, is there an evolutionary way of looking at the problem? We might find that there are multiple sub-decisions we could make along the way to the big decision. We can decide smaller issues, test the results, and repeat the process. Each time we do, we create a new generation.

A “generation” in this sense might be a set of market trials, a series of studies, or surveys, or focus groups, or trial balloons. We can find many ways to identify and/or validate market needs. But first we have to ask the question. So the next time you participate in a big decision – especially a big risky decision – be sure to ask yourself, could an evolutionary approach help us here? The answer may be no, but don’t close the door too soon.

Snails and Innovation

Snail - Big AssWhat does a huge snail have to do with innovation? It’s all about the platform.

The jungle – much like a coral reef – is an incredible platform for innovation. It creates an environment with billions of niches where flora and fauna can grow and evolve. There’s no particular plan, just a grand variety of nutrients. Ultimately, we get a cornucopia of life that we never could have predicted, even including a snail as big as your hand. (That’s Elliot’s hand in the photo, by the way, in the jungle of eastern Peru).

What’s the lesson here? We need to create more jungle-like platforms if we want to spur innovation. Platforms don’t have to be hot and steamy but they have to be rich in “mental nutrients” – food for thought. One of my favorite platforms, for instance, is the land-grant college system in the United States. It started small but grew into a “jungle” engendering a welter of useful (and sometimes bizarre) ideas and innovations.

On the other hand, if we tried to create a huge snail, we would inevitably fail. The trick is to create the platform that allows the snail to evolve naturally. Let’s focus on building jungles, not snails.

Platforms, Solutions, and Aggies

Typical land-grant graduate.

Typical land-grant graduate.

My father, who was the first in our family to go to college, went to a land-grant university (Texas A&M). My sister went to a land-grant university (Clemson). I went to a land-grant university (Delaware). My wife went to a land-grant university (Purdue). My wife’s parents went to a land-grant university. (Wisconsin)

Abraham Lincoln set up the land-grant system through the Morrill Act of 1862. The federal government granted land to each state. The state used the land to set up a college to teach the practical arts, including agriculture, engineering, and military science.

The system worked. Land-grant colleges became social elevators that allowed lower-and middle-class kids to pursue higher education affordably. They also became engines of innovation, fueling an innovation boom that catapulted the United Sates to leadership positions in multiple industries in the late 19th century. We’re still riding the echo of that boom. I’ve often wondered about the return on the land-grant investment. The economic value created by the system must be orders of magnitude higher than the original cost.

The genius of the system is that it’s a platform, not a solution. For instance, Lincoln didn’t identify the inefficient harvesting of cotton as a national problem and jump to the conclusion that the government should invest in the cotton gin. Instead, he created a platform that allowed many people to pursue an education, investigate problems, and develop solutions on their own.

I bring this up because we seem confused about what role the government should play in stimulating innovation. I hear it in my IT/innovation classes all the time. Some students argue that government should get out of the way and let private industry solve every problem “efficiently”. Others argue that government should have a role but they have a difficult time describing it.

Ultimately, I think it’s fairly simple. The government should invest in platforms, not solutions. The land-grant system allowed millions of people — including me — to take something from America and then turn around and make something for America. (It’s not true that we’re either makers or takers. We’re usually both.)

In the recent past, the best example of platforms that stimulate innovation are probably the Internet and the human genome project. The massive brain mapping project — the Human Connectome — that President Obama recently announced could become the next great platform. On the other hand, the government investment in the solar panel manufacturer, Solyndra, was solution picking rather than platform building. It didn’t work so well.

So, I’m all for government investment in platforms that can stimulate innovation. By the way, I don’t claim that this is an original idea of mine. Steven Johnson makes much the same point in his book, Where Good Ideas Come From. But I do think it’s an idea that needs to be popularized. That’s why I’m writing about it. I hope you will, too. In the meantime, I’ll give credit where it’s due by saying, “Thank you Mr. Lincoln for helping my family get an education.”



Marissa Mayer — You Go, Girl!

marissa-mayer-is-putting-the-kiboshnbspon-workplace-flexibilityMarissa Mayer, the new Mom who is also  the CEO of Yahoo!, recently announced that all Yahoos (that’s what they call employees) have to work at the office, not from home. Since then, the blogosphere has been all aflutter. A majority of the bloggers I’ve read suggest that Mayer is retrograde, dumb, and sexist. I have to disagree. I think it’s a very smart move and about time, too.

The arguments against Mayer’s decision have to do with productivity, convenience, women’s rights, and maybe even clean air. Stephen Dubner (one of the two Steves who created Freakonomics) wrote that an experiment at a Chinese travel agency shows that woking at home can increase your productivity and reduce health problems. Apparently long commutes raise your blood pressure. A recent article from Stanford (based on the same Chinese study) suggests that the productivity of those working at home is 13% greater than those working at the office. An article on (Work At Home Moms) argues that telecommuting shifts the employee’s emphasis away from politics and towards performance. Months ago, Slate wrote that Mayer doesn’t care about sexism. Grindstone calls Mayer’s decision a “morale killer” and a “giant leap backward for womankind.”  The Atlantic Monthly flatly declares that “Marissa Mayer Is Wrong”.

But is she wrong? It depends on what she’s trying to do. Raising productivity is generally a good idea. But if the price of productivity is reduced innovation, then the cost is too high. There’s a strong case to be made that working from home — while it provides many benefits — inhibits innovation. I’ve written about the mashup nature of innovation. Many of the best new ideas are mashups of existing ideas.

The same logic applies to people. Getting people together — and encouraging them to mix and mingle in more-or-less random ways — helps them mash up concepts and create new ideas. It’s why Building 20 — a ramshackle, “temporary” structure on the MIT campus — generated so many innovations. People bumped into each other and shared ideas and, in doing so, created everything from generative grammar to Bose acoustics. It’s why cities produce a disproportionate share of of inventions and patents (click here and here). It’s why reducing the number of bathrooms in a building will increase innovation –you’re more likely to bump into someone. It’s why I advise my clients to allow e-mail to flow freely between buildings but to banish it within a building. If you’re in the same building as the recipient, get together for a face-to-face meeting. You’ll get more out of it — maybe even an innovative new product.

So, what is Mayer trying to accomplish? In her memo to all Yahoos, she speaks of “communication and collaboration” and notes that “Some of the best decisions and insights come from hallway and cafeteria discussions, meeting new people, and impromptu team meetings.” She doesn’t use the word “innovation” but that’s exactly what she’s talking about. And, in my humble opinion, Yahoo! could use a healthy dose of innovation. So I think Mayer has got it right: PPPI — proximity and propinquity propel innovation. All I can say is: you go, girl!

The Most Innovative Companies of 2012

many small light bulbs equal big oneBoston Consulting Group just published its annual (since 2004) ranking of the 50 most innovative companies in the world. BCG polled 1,500 executives and asked them to rank companies by innovation. More importantly (from my perspective), BCG asked the executives about their company’s plans, strategies, and tactics regarding innovation. You can find the entire report here. I’ll summarize some of the key findings below.

Perhaps the most important finding is that investment in innovation has recovered from the turmoil of the recession. Seventy-six percent of executives said that innovation is a “top three” priority — the highest level in the survey’s history. And they’re putting their money where their mouth is — 69% said they plan to increase spending on innovation in 2013, the highest level in six years. Further, companies that emphasize innovation tend to generate superior total shareholder returns (TSR). The most innovative companies of 2012 generated TSR premiums (compared to less innovative companies in the same sector) of 6.3% over three years and 3.5% over ten years.

How did these companies become so innovative? BCG identifies six key factors:

Get customers involved early — innovative companies get customers involved to generate new ideas and to separate the wheat from the chaff. One of the key reasons to involve customers is to ensure that weaker projects “fail fast and fail cheap”.

Use data to drive tough decision making — it’s hard to make tradeoffs among promising projects. Which ones will succeed? Which ones will simply be distractions? The most innovative companies allow executives to make firm decisions for “the right reasons on the basis of the right data”.

Think strategically about tradeoffs — “Best practice companies do not make [tradeoff] decisions in reference to last year’s budget but rather on the basis of the size of future opportunities.”

Ensure senior leadership commitment — “The most commonly cited force driving innovation was the CEO.”  I don’t mean to brag but this is exactly what I found in my dissertation, a study of innovation in colleges and universities in 1984. It’s the person at the top who sets the innovation culture.

Envision innovation as a holistic system — don’t just try to optimize one piece of the puzzle. Create a strong vision for the need for innovation throughout the company and then build the enablers, including culture, processes, and organization.

Optimize intellectual property to create value — lots of companies have bright people. The most innovative companies also have collaborative processes and decision rules to create and capitalize on intellectual property.

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