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Keeping Pabst Blue Ribbon Cool

To this point the class has focused on techniques for generating new ideas and pushing those ideas through the innovation value chain, but we’ve talked little about the judgment required to decide which projects are worth pursuing.  Take Evan and Daren Metropoulos, the new owners of Pabst Brewing.  They appear to have many of the qualities necessary to influential managers and entrepreneurs.  They are enthusiastic evangelists for revitalizing the line of Pabst beer, but they are also poised to alienate the fedora-wearing-fixed-gear-bike-riding-ironic-engine of PBR’s 20% growth in 2009.  They’ve been handed a gold mine but they may destroy it through their innovative marketing schemes.  The question I have is how do you reconcile the need to innovate with a brand where loyalty is based on nostalgia?

http://www.businessweek.com/magazine/content/10_39/b4196062862199.htm

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The Game Layer

Seth Priebatsch is a hypomanic entrepreneur.  His quest for evolution is a master work of personal innovation.  Seth is in pursuit of creating “The Game Layer” for the internet.  He believes that Facebook has already built the infrastructure for The Social Media layer.  Next is the game layer.

Regarding the funding of Seth’s company one of the funders said this:

“It went well, but there are still skeptics at the firm. Mr. Maeder of Highland still wonders whether Scvngr is the scaffolding of a major business. At the same time, he regards the $750,000 investment as a bet on Mr. Priebatsch as much as a bet on his company.”

http://www.nytimes.com/2010/09/19/business/19entre.html?_r=1

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Beyond the electric car, a Better Place

Ipod has dominated the MP3 market because Apple went beyond the hardware and created an ecosystem where people could conveniently buy music legally online.  Then Apple topped itself with the iPhone and the App Store.  Similarly, Better Place promotes the adoption of electric vehicles (EVs) by building and operating the infrastructure and network systems to optimize energy access and use.  Instead of asking consumers to pay a premium for the EVs with the battery, a consumer can buy a EV and lease the battery separately.  Battery switching stations are provided for customers to swap out the low charge battery with a fully charged one.  Thus battery technology upgrade will be no cost to the EVs’ owners and the travel range is no longer an issue.  Israel and Denmark have already signed up.

Hopefully, this innovation will dispel the fears of consumers against the adoption of EVs.

http://www.betterplace.com/

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Zappos Insights: both divergence and disruptive technology

Zappos sells consulting business on good customer service and healthy corporate culture through Zappos Insights.  For as low as $47, anyone can pay a visit to the Zappos headquarter to get a sense of what makes the company so special.  Zappos is disrupting the consulting business by diverging from selling shoes to selling advices to small businesses whose cannot afford the expensive consulting fees.

http://www.zapposinsights.com/main/

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Challenge.gov rewards external innovation, but what about inside?

Challenge.gov is an attempt to address the gap in idea generation faced by the federal government.  Vivek Kundra’s (our first federal CIO) found success using prizes to recruit citizen programmers in Washington DC. Volunteer programmers would use the city’s data catalog to develop new services (i.e. DC Bikes, Historic tours, stumble home, etc).

The twist on the prize for innovation approach is that the ideas are not developed in-house. Many of the prize projects seem to focus on external development and deployment–not changing internal processes. Innovations take the form of novel use of government data or pilot deployment techniques.

For example, this challenge asks for “the development of web-based tools or applications to integrate cancer-relevant data from one or more of the following data resources with data available through the Community Health Data Initiative”:

http://challenge.gov/HHS/73-enabling-community-use-of-data-for-cancer-prevention-and-control

While this challenge looks to incubate novel classroom approaches:

http://challenge.gov/ED/60-challenge-to-innovate-c2i

Neither of these approaches seem to address the need for internal innovation. I think this approach is fantastic in terms of extending government resources at low costs, but it doesn’t appear to expose internal problems to new ideas.

Joy

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Projects

Everyone:

This is the time to start finding a project for the course. Here are some ideas. I would like to widen the set of possibilities;

1) Field study of one company/organization. This is what has typically be done in prior projects, as described in the syllabus. You need to negotiate access to one company/organization, focus on a relevant topic (e.g., online idea generation at Saleforce.com), interview 5-10 people.

2) Investigation of one relevant topic. You need to pick one topic, conduct a literature search (gather all written about it), use the frameworks in the course to analyze what you see and evaluate current practices among companies. This does not focus of one particular company. However, I would like you to interview about 5 people–people who have written about the topic, and managers in companies. Examples of topics you could pick:  use of prize money to spur innovation, how companies execute (convert) innovation, how companies use online tools to generate ideas, use of employee free time such as Google 20% to promote innovation, use of facebooks in companies to enable collaboration, use on analytics tools to make collective decisions, etc.

3) Analyze a particular company or industry challenge. For example: what must Nokia do to become successful in smart phones/online services?  What are the challenges of developing successful online education in a university (a disruptive model)?  How can a company develop a green business that is fundamentally different from existing ones (exploration)? For collaboration: how companies, government, and nonprofits collaborate (or fail to do so) to solve a social problem such as clean water for the developing world. For a topic you need to do a literature search, focus, and interview some experts.

4) Analyze a current online collaboration tool. There are many out there–socialtext, sharepoint etc. You can use the frameworks in class to evaluate one, and then propose solutions for how to improve it (or propose a new way of solving problems–a blueprint for a new tool). Hey, you may just create a new business!  You need to interview vendors/users of the tool you are analyzing.

5) Write a business case on a company. You can pick one company where a lot has been written about it. You need to do a literature search and write a case.  Example of companies with lots of information:  Cisco, P&G (for collaboration), Google (innovation), etc.

Options 1 to 5 are not dependent on you being able to negotiate access to one particular company.

Best regards, Morten

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Entrepreneur-in-Residence

Google Ventures, which is Google’s VC arm, announced last week that they hired an “Entrepreneur-in-Residence”. Craig Walker, who co-founded GrandCentral (which was bought by Google and turned into Google Voice), gets to develop his next project knowing that the Google will fund him. He also gets access to “user interface design, usability testing, back-end engineering, marketing and many other things”. Google gets access to a successful start-up entrepreneur. Will it solve the exploration-v.-exploitation dilemma?

http://bits.blogs.nytimes.com/2010/09/16/google-ventures-hires-an-entrepreneur-in-residence/?ref=technology

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Exerting the influence

In the Sep 17th class, we discussed how to spread influence around by managing up, down and across organizations. We also studied the influence tactics of being a good innovation managers. Walter raised a good question in class asking if we could actually learn to acquire those tactics.

Here is an interview of Marshall Goldsmith, who generally trains leaders to act differently and he also talks about some basic rules of managing up.

– It’s our responsibility to sell the ideas, not upper management’s obligations to buy.

– Focus on contribution to the larger good — not just the achievement of our objectives. (this is mentioned in class, where we talked about understanding others’ – decision makers’ or even opponents’ – concerns.

– Present a realistic cost-benefit analysis of your ideas — don’t just sell benefits. ( this basically requires a know-how expertise which would determine understandings of ourselves about the ideas).

Rosabeth also gave 7 hints for selling ideas up to the management group. To sum up here: seeking input from different parties, be an expert in what you know, make personal contacts to sell yourself even before selling the idea, and be specific about what is going to be expected, and what you can deliver.

http://blogs.hbr.org/cs/2008/06/how_to_influence_up_and_become.htmlHere
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The CEO’s Innovation Nightmare

This article from Business Week highlights many of the challenges to rebuilding a business for innovation that we discussed in class.  It provides advise to a turnaround CEO… much of the points align with our conclusions from class.  Namely:

  • Recruit Believers – As with Intuit case, the change required fresh talent with innovative thinking;
  • Hire Objective Senior Managers – creating the right metrics and accountability measures is critical (as we saw in Donnelly);
  • Fail Forward – encourage risk-taking; and,
  • Control the Framing – this is an interesting idea that we did not discuss: “If you control the language, you control the expectations.”

I think these points are warranted, even if unsubstantiated with real-life examples in the article.  I liked this perspective, because it is resonates with many of the themes we have discussed in class.

The article ends with some practical advise about immovable innovation obstacles — quit!  What do you think about the idea of quitting when the going gets tough in innovation?

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Microsoft Xbox

The article “The Innovation Value Chain” discussed about a safe haven for emerging businesses allowing them to be unfettered by the rest of the organization but enough ties to keep them from complete isolation.  When Microsoft ventured into the gaming software industry with the Xbox project, the VPs realized early that “while Microsoft was the right place to get the next Xbox built financially, it was totally wrong for it culturally.”  Unhindered by the formulaic approach of the established businesses, the Xbox team was nimble and unconventional.  Within 10 years, Microsoft has gone from zero to 30 percent in gaming console market where U.S. retail sales of videogames generated revenues of approximately $20 billion in 2009.

Read more: http://www.time.com/time/magazine/article/0,9171,1061497-2,00.html#ixzz0zlLFVMQE