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We certainly live in interesting times!

Here’s what I’ve noticed in this new era of hyper-turmoil and uncertainty — many organizations are turning off their innovation engines, waiting to see what happens next in a world in which volatility is the new normal.

bigbolddecisions

The New Yorker had a great article in 2009 after the financial meltdown, “Hanging tough,” that outlined  how some companies choose to ensure that they stay innovative in recessionary times – while others did not. In the context of the uncertainty of today, it’s worth a read. For example, they contrast two cereal companies: one that chose to focus on innovation despite uncertainty, while another did not.

“You’d think that everyone would want to emulate Kellogg’s success, but, when hard times hit, most companies end up behaving more like Post. They hunker down, cut spending, and wait for good times to return. They make fewer acquisitions, even though prices are cheaper. They cut advertising budgets. And often they invest less in research and development. They do all this to preserve what they have.”

My recent discussions with Fortune 1000 CEOs and senior executives in both UK and the US certainly indicate that this is happening again. Post-Brexit, uncertainty and aggressive indecision is roiling the C-suite in the UK — deferring decisions has become the norm. In the US, the never-ending election has placed a pause on most big decisions — inaction has settled in like a wet-sponge!

Big question – in this context, is the UK done? Can America innovate again, or is this a cultural and leadership ‘new normal?’ Here’s what I know – the winners and losers of the future are being determined right now!

Yet history has taught us, over and over again, that those who are aggressive with innovation, and who align themselves to future trends in times of uncertainty, are those who win in the long run. For years, I’ve talked on stage and in my leadership meetings of the key observation by GE’s Chief Innovation Consultant. Simple, powerful guidance: breakthrough performers manage to accomplish great things because of a decision to focus on innovation right in the middle of an economic challenge or an era of uncertainty– rather than waiting till they came into a recovery phase.

The research found that during the oil shock of 70’s, 80’s and 90’s recession, and the 2000 dot com bust, of those companies surveyed, 70% of companies barely survived, 30% died, but 10% became breakthrough performers. Noted the GE head of innovation: it was explicitly “…because of choices they made in the recession.”

So it really comes down to this: when do you innovate? Are you going to wait until you are comfortable that an era of uncertainty is over? Bad decision — because economic and political volatility is the new normal!

Everything we have learned has taught us that the winners were those who decided that it was an important thing to keep moving ahead despite massive amounts of uncertainty. Get out of your future-funk! Try this clip from a keynote I undertook on stage after the meltdown of 2008-2009. “Innovators get out in front of the recession“.

Consider this: the New Yorker article is pretty blunt with it’s findings on innovation-losers:

  • “numerous studies have shown that companies that keep spending on acquisition, advertising, and R. & D. during recessions do significantly better than those which make big cuts”
  • “a McKinsey study of the 1990-91 recession found that companies that remained market leaders or became serious challengers during the downturn had increased their acquisition, R. & D., and ad budgets, while companies at the bottom of the pile had reduced them”
  • “Uncertainty is always a part of business, but in a recession it dominates everything else: no one’s sure how long the downturn will last, how shoppers will react, whether we’ll go back to the way things were before or see permanent changes in consumer behavior. So it’s natural to focus on what you can control: minimizing losses and improving short-term results.”

Innovation winners?

  • “Kraft introduced Miracle Whip in 1933 and saw it become America’s best-selling dressing in six months; Texas Instruments brought out the transistor radio in the 1954 recession; Apple launched the iPod in 2001.”

Read the article. It’s powerful stuff!

Given that, what do you do? Change your culture and set out to achieve breakthrough results despite uncertainty!


Here is some more innovation-soup for your innovation-soul!

I’ve been quite priviliged through the years to be able to observe, within my global blue chip client base , some of the fascinating innovation strategies that market leaders have pursued.

What is it they do?

Many of them make big, bold decisions that help to frame their innovative thinking and hence, their active strategies.

For example, they:

  • make big bets. In many industries, there are big market and industry transformations that are underway. For example, there’s no doubt that mobile banking is going to be huge, and its going to happen fast with a lot of business model disruption. Innovative financial organizations are willing to make a big bet as to its scope and size, and are innovating at a furious pace to keep up with fast changing technology and even faster evolving customer expectations
  • make big transformations: I’m dealing with several organizations who realize that structured operational activities that are based on a centuries old style of thinking no longer can take them into a future that will demand more agility, flexibility and ability to react in real time to shifting demand. They’re pursuing such strategies as building to demand, rather than building to inventory; or pursuing mass customization projects so that they don’t have to compete in markets based on price.
  • undertake big brand reinforcement: one client, realizing the vast scope and impact of social networking on their brand image, made an across the board decision to boost their overall advertising and marketing spend by 20%, with much of the increase going to online advertising. In addition, a good chunk of existing spending is being diverted as well. Clearly, the organization believes that they need to make bi broad, sweeping moves to keep up to date with the big branding and marketing change that is now underway worldwide.
  • anticipate big changes: there’s a lot of innovative thinking going on with energy, the environment and health care. Most of the organizations that have had me in for a keynote on the trends that are providing for growth opportunities have a razor sharp focus on these three areas, anticipating the rapid emergence of big opportunities at a very rapid pace.
  • pursue big math: quite a few financial clients are looking at the opportunities for innovation that come from “competing with analytics,” which offers new ways of examining risk, understanding markets, and drilling down into customer opportunity in new and different ways.
  • focus on big loyalty: one client stated their key strategic goal during the downturn this way: “we’re going to nail the issue of customer retention, by visiting every single one in the next three months to make sure that they are happy and that their needs are being met.” Being big on loyalty means working hard to ensure that existing revenue streams stay intact, and are continually enhanced.
  • focus on big innovation: one client stated their innovation plan in a simple yet highly motivating phrase: “think big, start small, scale fast.” Their key goal is to build up their experiential capital in new areas by working on more innovation projects than ever before. They want to identify big business opportunities, test their potential, and then learn how to roll out new solutions on a tighter, more compact schedule than ever before.
  • thinking big change in scope. One client became obsessed with the innovation strategy of going “upside down” when it came to product development. Rather than pursuing all ideas in house, they opened up their innovation engine to outsiders, looking for more partnership oriented innovation (with suppliers and retailers, for example); open innovation opportunities, and customer-sourced innovation. This lit a fuse under both their speed for innovation as well as their creativity engine
  • innovate in a big way locally: we’re in a big, global world, but that doesn’t mean that you can’t innovate locally. One client in the retail space pursues an innovation strategy that allows for national, coordinated efforts in terms of logistics, merchandising and operations, yet also allows a big degree of freedom when it comes to local advertising, marketing and branding.
  • share big ideas. One association client pursued an innovation that was relentless on community knowledge sharing. They knew if they could build an association culture in which people shared and swapped insight on a regular basis on how to deal with fast changing markets and customers, that they could ensure their members had a leg up and could stay ahead of trends. Collaborative knowledge is a key asset going forward into the future, and there’s a lot of opportunity for creative, innovative thinking here.
  • be big on solving customers problems. Several clients have adopted an innovation strategy that is based on the theme, “we’re busy solving customers problems before they know they have a problem,” or conversely, “we’re providing the customer with a key solution, before the customer knows that they need such a solution.” That’s anticipatory innovation, and it’s a great strategy to pursue.
  • align strategies to the big bets. There’s a lot of organizations out there who are making “big bets” and link innovation strategies to those bets. WalMart has bold goals for the elimination of all packaging by a certain date; this is forcing a stunning amount of innovation within the packaging sector. Some restaurants aim to reduce food and packaging waste by a factor of dozens; this is requiring stunning levels of creativity in the kitchen.

These are but a few examples and the list could go on; the essence of the thinking is that we are in a period of big change, and big opportunity comes from bold thinking and big creativity!

The CEO’s are starting to notice.

That is, a lot of my clients (I do a lot of private, corporate off sites with major companies in addition to my conference and association keynotes) that the speed of change in their industry is increasingly being dictated by the speed of innovation of companies in the technology space.

I spoke about this on stage during my keynote for the Human Capital Institute Conference in New Orleans in 2010, in a clip, “When Every Company is Like Apple,” and spoke about the need to align our workforce for increasing speed.

The CEO’s are starting to notice, in that I’m getting an increasing number of bookings – leadership meetings and Board of Director meetings — that are focused on  the theme of ‘how do we align ourselves for faster change.’ My role — I do a full on keynote that outlines the trends impacting the organization, and then a series of interactive discussions in a workshop setting around the biggest opportunities and challenges faced by the organization.

I was quoted on the essence of this trend in Mashable in 2012 in an article, 9 Bold Predictions for the Digital World of 2020.

By 2020, if not before, most industries – health care, agriculture, financial – will have found that they have been transformed by the velocity of Moore’s law. Mobility, wireless, pervasive connectivity – everywhere we look, we see that the big trend for the next eight years is that technology will drive the pace of innovation in every single industry.

Credit cards will be replaced by smartphone transactions systems; auto insurance will be forever changed through GPS-based monitoring devices that reward good driving performance; hospitals will become virtual through the extension of bio-connectivity, involving remote medical monitoring and management.

The big trend is that as tech comes to change industries, change in those industries will occur faster than ever before. The winners will have been those who understand this reality, and adjust their innovation engine to keep up with this new speed of change.”

Jim Carroll, Futurist, Trends & Innovation Expert

I use the tag line “the future belongs to those who are fast” in many of my keynotes, whether on stage in Las Vegas or in small corporate settings with 20 senior executives. It’s not supposed to be just a snappy tag line (and the name of my latest book.) It’s also very much the reality that every industry finds itself in.

Is your organization positioned to be fast? Is Moore’s law and technology accelerating the rate of business model change, customer interaction methods, allowing the emergence of disruptive new competitors, and driving down profit margins? Then you had better be thinking about the role of innovation in order to assure you can align your organization to an increasingly fast future.

A clip from a recent keynote, in which I’m outlining how organizations can fire up their “innovation engines” — through the simple process of “redefining innovation.”

It’s all about “running the business better, growing the business, and transforming the business.”

 

So I was on the phone today with the CEO of a major global organization headquartered in Canada. I’ll be opening a leadership meeting for the company in early 2013, and this was a call to begin planning for the structure of my talk.

During the call, comments by Prime Minister Stephen Harper of Canada about the US economic relationship came up. Clearly, this is a country that is seeing it’s share of challenge due to fast-paced challenges in it’s “special relationship” with the US.

I mentioned to the CEO that  as far back as 2009, I was already predicting that Canada would likely have challenges in selling it’s oil in the future into the US market. And many other challenges! And that it would have to re-orient its economy further away from the US and take on much more of a global view!

This was plainly evident to me back then — and look where things are today. What are serious people and politicians and everyday folk in Canada suddenly talking about that no one really took seriously just a year ago?“…a Pacific energy pipeline….”  “…. aligning more natural resources and commodities with long term Asian contracts….”    “…… a serious free trade relationship with Europe that goes beyond NAFTA.”

With that in mind, I just dug out an old post I wrote way back in 2009 that was written as a bit of a joke at the time — surmising that Canada would see many reasons to reorient it’s global economy in the future. It’s a press release written very much tongue-in-cheek. It was briefly posted to my blog. (I removed it after a short time, since I thought that many people might find it offensive. But back then, it was covered in Bourque.org and a few other breaking-Canadian-news blogs….)

I now find it remarkably prescient, though some of it is still very clearly written for fun. For example, the border wall!


Canada announces end of economic relationship with US, & a bold new strategy to 2020

Ottawa, May 14, 2009

The country of Canada today announced the end of its centuries long relationship with the United States, and a bold new seven-point “Canada Transformed!” strategy that will re-orient its economic, cultural, societal values and innovation engine towards the world economy of 2020.

“It has come to the point that we can no longer rely on the United States as a reliable economic partner,” stated Canada at a news conference. “It is time that we adopt a bold new strategy that will align our economy away from the US, and towards the growth economies of the 21st century in Asia, the Middle East and Africa. As well, we will immediately begin working to enhance our long standing relationships with reliable partner nations in Europe.”

The massive scope of the plan was not lost on Canada in the emotional conference. “We aim to reduce our role of being the largest trading partner with the United States, to becoming a marginal partner at best. We believe that this is the only right way forward.”

Bold new thinking is required Canada spoke bluntly at the news conference of the need for bold new thinking. “Our relationship with the US is one that has become, through no fault of our own, increasingly abusive. We’re honest, faithful, and do our part to provide to the relationship. We have been the largest trading partner to the United States for over a century. And yet, in return, we find ourselves taking on an increasing amount of abuse, neglect, and ever more hostile actions. We’re sad that it must come to an end, but we believe that it is time.”

Canada cited a long list of complaints and grievances, ranging from ongoing trade disputes, “downright hostile treatment” of Canadian citizens by US border guards, and increasingly aggressive use of a “Buy America” policy by state and local governments in the US — despite a promise in Ottawa by President Barak Obama that he did not believe protectionism was the right way forward.

Canada Transformed!

At the press conference, Canada announced a significant 10 year, 7 point plan, branded “Canada Transformed!”, that will re-orient it’s economy away from the United States to the AEA (Asia, Europe and Africa) markets, by the 2020, with a number of key goals:

  •  Energy & oil: Canada will invest in a massive infrastructure project that will allow it to deliver the bulk of it’s significant energy/oil resources to Asia, Europe and Africa within 5-7 years. The infrastructure project will consist of a number of significant pipeline projects that will direct Canadian oil, natural gas and other energy sources to east and west coast ports, as well as shipping and marine infrastructure, that will provide for a “ocean railway of energy” destined to the AEA countries.”Today, Canada is the largest supplier of energy to the United States. By 2020, Canada aims to provide almost no energy to the US,” noted Canada at the news conference. “We wish them well in their efforts to solve their energy crisis. We do not intend to help them any further.”
  • Food & agriculture: Global food production must double to meet world population growth, and Canadian grain, beef, pork and other producers will work to achieve an AEA target market of 90% by 2020. “Quite simply, the rest of the world beyond the US needs a stable, reliable food supplier, and Canada intends to become the leading global brand in that regard.”
  • Resources: Canada will seek investment from major Asian and mid-East sovereign wealth funds in an ambitious effort to re-orient the target markets for at least 80% of Canadian mineral commodities to AEA nations by 2015.”Quite simply, Canada has the natural resources — iron, nickel, copper, uranium and just every other type of metal — that the newly industrialized world in Asia needs. As we witness a continued declined in US economic power, particularly in the manufacturing sector, we must ensure that we pursue growth opportunities elsewhere in the world. As China re-industrializes with the economic recovery, we intend to be their partner of choice.
  • Manufacturing: Since the advent of the US-Canada free-trade agreement in 1994, Canada has shared in one of the modern world’s greatest economic successes — the highly integrated Canadian-US manufacturing network supply chain. However, the collapse of the US manufacturing sector, as well as continuous suffocation of the border flow of goods, it is clear that Canada must re-orient itself to the new realities of the 21st century.”A nation does not move forward suffering from the ongoing implementation of economic choke points,” noted Canada. “We will re-align ourselves to economies that believe the way forward is through intelligent, smart-border policies that encourage the free flow of goods and people; not a nation that has a border policy that is driven by  politics. We will immediately provide strong incentives for Canadian manufacturers to re-focus on Canadian markets, as well as the establishment of significant new markets in AEA countries. There are over 2 billion people in these markets, and but 280 million in the US.””Clearly, our future lies outside of North America, and we will align our manufacturing sector to this reality.
  • Immigration-based knowledge factories: Canada is the envy of other nations throughout the world for its’ open, welcoming culture towards new immigrants. It plans to build on this reputation by establishing itself as the world’s dominant source for high-level, specialized knowledge expertise in almost every single professional field.”We believe that we are entering the second era of off-shoring,” noted Canada, “with the next wave going far beyond customer support call centers. Nations around the world will need access to high level talent in the fields of medicine and health care, scientific research, agricultural and architectural skills, legal and professional services — and will seek to access that knowledge through the global communications networks that will dominate the economy of the 21st century” said Canada. “We will welcome global knowledge experts in every field of human endeavor to relocate to Canada, enjoy all the attributes that our nation has to offer, and provide their skills to a massive offshore groups of clients in AEA nations. In doing so, we will establish Canada as the global hub for the knowledge economy of the 21st century. Quite simply, Brand Canada will become the most widely recognized phase when it comes to the need for access to knowledge.”
  • Immediate border construction: Finally, Canada announced that it would immediately begin construction of border that would prevent unauthorized entry into Canada by US citizens. “We will immediately begin planning construction of a 4,500 mile physical border along our common frontier with the US,” noted Canada. “We increasingly view the US health care system to be in peril — within a decade, some US states will be devoting more than 60% of their GDP to health care. Clearly, many US citizens will plan to flee to Canada to take advantage of our world-class universal health care system. We must prevent this mass migration of Americans into Canada, and believe that significantly enhanced border structures are the only means of doing so.”

At the close of the news conference, Canada stated that it was taking these actions with reluctance, but with conviction that it was the right thing to do.

Nations have always achieved continued economic success by making bold leaps. We believe, given the continuing deterioration in our relationship with the US, and the ongoing and continued lack of respect that they provide to us, that it is time to move on.

Canada is the most resource rich, tolerant, energy abundant, agriculturally advanced, second largest country in the world, with a massive base of skills, energy, commodities, food, and capabilities. We intend to assert our place in the economy of the 21st century with a sense of pride, purpose, and clear direction,” said Canada at the conclusion of the press conference.

Besides that, we’re just plain nice,” said Canada, blushing, in a closing comment.

We are excited about our future, and believe that we have made the right decision at the right time for the right purpose. Canada Transformed! will see our nation emerge as one of the leading economies on the world stage by 2020, and we embark on this voyage with a sense of courage, enthusiasm, and certainty as to its’ impact.”

The United States was not immediately available for comment.

Next Monday morning, I’ll deliver the opening address for WEFTEC 2012  New Orleans, LA; it will be the kickoff for the  Water Environment Federation’s (WEF) 85th annual technical exhibition and conference, a five-day event that is expected to draw thousands of water quality professionals and exhibitors to the New Orleans Convention Center.

It’s going to be an interesting talk – there’s a tremendous amount of potential for innovation the sector, and I’ll be speaking to the theme of a “new direction.”

Last week, I ran a blog post  for the WEF ; it’s on their site via that link, and also reprinted below!


Water’s Worth It – and So Is Initiative!
by Jim Carroll 

To many, it could seem that the phrase “Water is the oil of the 21st century” is one of the most common phrases in use today. After all, there does seem to be a widespread recognition both in industrialized countries and emerging economies that going forward into the future, water is certainly going to be one of our most important resources.

That’s why, when I walk up on stage to keynote the 2012 Water Environment Federation’s annual conference, I’m hoping to see a sea of faces, each bearing a look of confidence that echoes a bright future for abundant and sustainable water resources worldwide!

After all, if water IS the new oil, then it’s the folks in the room at WEFTEC 2012 who have the potential to take us to a world in which water REALLY is worth it. It is those folks in the room who will play a huge role in pursuing the opportunity for deep transformative change that is possible in the industry. It is the folks in the room who will be able to undertake the big ideas, the big strategies, the big initiatives — and the big risks — to ensure that society can best preserve, protect, recycle, and reuse water.

Should they choose to!

Even with my limited exposure to the industry so far, it is clear that with accelerating science, the rapid emergence of a new slew of water treatment methodologies, potential for chemical and metallurgical extraction and more– that there are all kinds of new opportunities for innovative thinking in the industry of water. That’s what I encounter in many industries today — the world is full of opportunities – if we choose to pursue them.

Yet it can be difficult to do so. An environment of municipal, state and federal government cutbacks makes the pursuit of big ideas ever more difficult. Many days it is simply important to get through with what you have in terms of resources, funding and ideas, rather than taking big, bold steps into the future. Ever increasing complexity of the technology and science around water makes it more difficult to source and access the right skills often necessary to pursue bold new initiatives

It’s easy to fall into a state of inertia when it comes to pursuing the future. Yet water’s worth it now and even more for the future. It’s the folks at WEFTEC 2012 who can and I hope will use the conference as a spark to turn their innovation engines on, and align themselves to the opportunities of the future rather than the challenges of the past.

Mashable just ran a post, “9 Bold Predictions for the Digital World of 2020“.

I’m quoted in point 5 – Virtual Hospitals”.

9 Bold Predictions for the Digital World of 2020

Here’s what I said: “By 2020, if not before, most industries – health care, agriculture, financial – will have found that they have been transformed by the velocity of Moore’s law. Mobility, wireless, pervasive connectivity – everywhere we look, we see that the big trend for the next eight years is that technology will drive the pace of innovation in every single industry.

Credit cards will be replaced by smartphone transactions systems; auto insurance will be forever changed through GPS-based monitoring devices that reward good driving performance; hospitals will become virtual through the extension of bio-connectivity, involving remote medical monitoring and management.

The big trend is that as tech comes to change industries, change in those industries will occur faster than ever before. The winners will have been those who understand this reality, and adjust their innovation engine to keep up with this new speed of change.”

There are a few ways to put this into more detail, through various posts and videos on my site where I talk about this trend:

  • Major 10 year trend: The Future of Every Industry to be Controlled by Silicon Valley Innovation  
  • A report on my keynote for the 2011 T. Rowe Price Investment Symposium  
  • Video – When Silicon Valley Takes Over Your Innovation Agenda  
  • Silicon Valley Innovation Velocity Set to Dominate Every Industry 
  • Video: Healthcare 2020: Moore’s Law, Genomics and Velocity 

At the T. Rowe Price 2011 Investment Symposium in Baltimore on Friday, I listened to the technology panel that preceded my luncheon keynote.

It was a fascinating discussion as a number of their leading analysts spoke of the trends that they saw unfolding with consumer and other digital technology companies, such as Apple, Amazon and Samsung.

Name any industry – auto, health care, manufacturing, energy, banking — and the big trend over the next five years is that Silicon Valley is coming to control the pace of innovation in the industry. And it’s speeding it up!

But I thought that the crowd was hungering for a bit more — where are the next big trends, and the next big transformation opportunities that are going to unfold which are going to provide for the birth of new industries, fast growing companies, and billion-dollar market opportunities?

And so I outlined that reality: the next big areas of growth will come from the transformative change that occurs as Silicon Valley comes to drive the pace of innovation in almost every other industry. As it does so,  it will speed up the rate of innovation.

The impact of this trend is that it will also shift control from any particular industry – insurance, healthcare, banking, auto — to the technology companies. The result will be massive business model disruption as new, faster, more nimble competitors who understand technology based disruption, cast aside their slower, ingrained counterparts.

The future belongs, in other words, to those who are fast. Tech companies and tech based innovators certainly understand this! And the key issue is speed : Apple, for example, could innovate much faster with new credit card financial systems than any bank could. Google and it’s tests of automatic car navigation technology will certainly evolve faster than any auto company in Detroit, Japan or Germany could. Unless leaders in those organizations increasingly learn to focus on speed as a metric, and fast-innovation as a core capability.

Consider just a few of the trends:

  • Banks and credit companies risk losing control of their future as our mobile devices, cell phones and iPhones become credit cards
  • the energy industry and home construction is impacted as a new personal energy infrastructure management, in the form of such devices as the NEST Thermostat, provide for a significant change in the way people use energy
  • health care will be transformed by medical device connectivity and bioconnetivity — allowing hospitals and nursing homes to extend the reach of their medical professionals to an increasing number of remote locations
  • the auto industry will face trendmeondous change as an intelligent highway infrastructure emerges as the same time as intelligent, self-guiding cars and trucks become a regular part of our daily world
  • the world of insurance is upended as we head to a world of predictive insurance modelling through the use of sophisticated technologies such as on-board GPS devices which monitor driver behaviour

These are but just a few examples. I can go into any industry today and point out how Silicon Valley and technology is going to cause significant change and upheaval within the industry. I can spot the smart executives who understand the message and realize that right now is the time for aggressive innovation and big thinking.

And then in other clients, I can see this observation pass right over the heads of some of those in the audience, and realize we’ve got folks who are like deer in the headlights — the trends are blinding in their reality, but they are frozen by their inability to do anything.

I spoke about this trend in a recent keynote.



There are a whole series of related posts in which I’ve commented on the significance of this trend and the speed with which it is occurring. These are just a few.

  • Silicon Valley innovation velocity set to dominate every industry 
  • When Silicon Valley Takes Over Health Care Innovation 
  • This ghost town in New Mexico could turn into one of the most important innovation engines 
  • Reinventing the future with transformative technology
  • Silicon Valley: Is Innovation Dead? 

Two years ago, I was the opening keynote speaker for the 14th Annual Portfolio Management for New Products & Services Conference in Fort Lauderdale, an event sponsored by the Product Development and Management Association.

In the blog entry I wrote at the time (The Hollowing Out of Big Corporate R&D), I noted that “I spoke to the broad theme of  ‘innovating faster,’ but also challenged the crowd to think about how the “source of innovative ideas” has changed.”

It was a pretty interesting conference — it was right after the financial crisis of 2008, and there were quite a few folks in the room — long time R&D professionals — who had just been let go. Others were seeing their budgets cutback; many more were in a state of absolute shock and uncertainty as the economy was still contracting. It seemed as if the entire room was in a state of shock. I spent a good part of my time working to help them understand there were deep, transformative changes occuring in how “big” R&D was conducted, and if they were to survive, they would have to adapt to these realities. Those point are covered in the blog post.

While undertaking some research in the last few weeks for upcoming keynotes, I’ve come across a few interesting articles that have an R&D spin, and which can help to put into perspective the many ways in which R&D is evolving:

Two sides to nanotechnology – huge opportunities, but all offshore?

From the article Nanontechnology: We can rebuild matter atom by atom, The Observer, 2 January 2011

  • New ways of making solar cells very cheaply on a very large scale offer us the best hope we have for providing low-carbon energy on a big enough scale to satisfy the needs of a growing world population aspiring to the prosperity we’re used to in the developed world.”
  • “Given the huge resources being directed towards nanotechnology in China and its neighbours, this may also be the first major technology of the modern era that is predominantly developed outside the US and Europe.”

Nanotechnology is clearly going to change our world and is probably the hottest area in R&D right now (aside from genomics). And yet, many of the solutions that emerge might not emerge within traditional first-world countries!

America universities continue to lead in patents over India

The title of the article says it all, but read the details (“Less than 1% of India’s GDP goes into scientific R&D, 19 December 2010, The Economic Times”)

  • Every year, American universities obtain an average of 4,000 patents, whereas Indian institutions fail to get past even the 100 mark

Why is this so? Because the R&D communityn in India is so small! Consider this quote from the same article:

  • “TC James, a former official of the department of industrial policy & promotion in the Union Industries ministry. James says that the “cutting-edge” researches in our country are restricted largely to IITs, IIMs, AIIMS and Tata Institute of Fundamental Research. “But these institutions cater to merely one percent of our student population.”

Clearly, the momentum must be on the Indian side, would it not, as more of the population modernizes and gets involved in R&D activities?

R&D Momentum in China continues

An interesting article , “China’s hi-tech industrial zones take lead in industrial innovation, 3 January 2011, Xinhua’s China Economic Information Service

  • China’s 56 leading hi-tech industrial zones have led the country’s industrial innovation, playing an important role in the nation’s social and economic development, a government statement said Saturday. The statement came from the Ministry of Science and Technology’s Torch High Technology Industrial Development Center.”
  • “The statement summarized the achievements of the 56 state-level hi-tech industrial zones, which are home to over 50 percent of China’s hi-tech firms and provide employment to over 8 million people. With over 700 research centers and laboratories, research and development expenditure was more than one-third of the national R&D budgets at the zones.”

The kicker?

  • Some 16,020 patents were granted to zone-based firms, accounting for nearly 50 percent of all patents registered to enterprises in 2009.”

Another kicker:

  • Half a tonne of standard coal energy-equivalent was consumed for every 10,000 yuan of GDP output in the zones, less than half the national level. Numbers for land-use efficiency, investment density and input-output ratios were also high in the zones.”

So the trends at work here? Clearly China has a lot of room to grow with pure R&D, just as with India. And not only that, there’s not just pure R&D innovation, but also innovation in other critical areas involving energy and community.

The trend of taking on an even bigger role in pure R&D is confirmed by the Monitor group (China entices scientists to return, 18 November 2010, The Wall Street Journal Asia)

  • “After eight years working in the U.S. at the National Institutes of Health, a major federal research center, cell biologist Li Yu decided in 2008 it was time to return to his native China and became a professor here at Tsinghua University.
  • Dr. Yu is one of some 80,000 Western-trained Chinese scientists who have returned to China to work in academia or industry since the mid-1980s. In a report published Wednesday, the Monitor Group, a consultancy, predicts the return will accelerate over the next decade, and says the trend, coupled with an outpouring of investment by the Chinese government and private industry, will help China become a leader in research discovery in the pharmaceutical and health-care industry by 2020.
  • China is already the third-largest pharmaceutical market and is expected to grow by 25% to more than $50 billion in sales in 2011, according to drug-industry tracker IMS Health. But until recently, the West was the source of innovation in the industry.
  • I think the big call to arms . . . is that the world is going to change, and China is going to be on many levels the leader, including life science innovation,” says George Baeder, head of Monitor Group’s life sciences practice in Asia and an author of the report.

But new business models will quickly change R&D

But don’t write off the industrialized world, yet, though, since the essence of the business model for R&D is quickly changing. Everyone has heard of Kickstart, right? If you haven’t, you’d better check it out.

  • “One year in, Kickstarter has already raised between $15 million and $20 million for projects, according to Chen. The recipients range from the prosaic (start-up costs to product a camera mount for iPhones) to the semiabsurd (funding a life-sized “Mouse Trap” game on a tour across the United States).” Creative idea? Kickstarter connects artists with online funding, 15 December 2010, The Christian Science Monitor

I recently participated in the funding of the TikTok watch kit ; the initiative raised almost $1 million in an extremely short period of time. Global cooperative R&D conduits could be a big thing into the future….

GE continues to invest heavily in innovation – maybe others will follow

Even as new business models are pursued, some research power-houses are renewing their focus on real R&D to generate profit, rather than through the manipulation of funny money. Here’s an article that talks about the role of GE’s Global Research center in Niskayuna, New York (from GE relies on its ‘geeks’ to drive innovate and generate profits, 13 December 2010, Daily Telegraph)

  • “The worst financial crisis since the Great Depression increased the stakes for a centre that, though it has changed location once since it began life in 1900, was America’s first and remains its biggest industrial research laboratory. During the recent boom, GE Capital, the company’s financial division, gorged itself on consumer lending and real-estate assets, taking centre stage in a company whose early years were built around the guiding light of Thomas Edison.”
  • “GE wants the division, whose woes cost GE its AAA rating, eventually to account for just 30pc of revenue. “The one piece of good news from the downturn for GE is that it was a bit of shock treatment,” said Shannon O’Callaghan, an analyst at Nomura. “It allowed them to reset.” If the crisis helped give GE a renewed focus on high-quality innovation and product development, experts say that has useful echoes for the whole of America.

What’s encouraging is the broad base of research that is being conducted

  • “Deng’s and Gerdes’s are a snapshot of the dizzying range of research pursued. There’s a team working on software designed to allow pilots to land using 10pc less fuel; a few corridors away there’s a lab dedicated to the development of so-called “smart” appliances that consumers can programme to come on only when energy is at its cheapest.”

Maybe other global powerhouses will get back to a commitment to pure innovation.

Accelerating innovation

And maybe it’s not just new business models and a refocusing on pure innovation that will “bring innovation back,” but a recognition that it needs to be done faster. In the article Hiring seen in NASA hookup Partnership could bring thousands of jobs to Colorado, 14 December 2010, Denver Post, it is noted that a joint project between NASA and the Colorado Association for Manufacturing and Technology:

  • This program seeks to engage Coloradans to work together to accelerate bringing new technologies to market in 18 months rather than the current norm of five or more years and to create 10,000 new jobs in the next five years,’ said Elaine Thorndike, chief executive of the manufacturing association.”

Agility, flexibility, and a change to how things are done – that’s innovation, and so there is innovation occurring with the process of innovation.

Clearly there continues to be a lot of rapid change and upheaval in the world of R&D that is having a big impact in the innovation engines of organizations around the world. Keep on top of this rapid change and learn from it in order to stay ahead!

Often, one of the best ways to discover ideas for doing things differently — of fuelling your innovation engine — can come from studying other organizations or industries that are excelling at dealing with fast market, business model, competitive and technological change. There are many organizations out there who aren’t innovative and are stuck in a rut; there are others who are extremely innovative, at the same time that there are a lot of laggards.

Seek ideas for innovation by studying those who excel at dealing with fast-paced change

One of the best ways to discover new and creative innovation ideas is by studying those who are moving forward at a really fast pace. They might be within your own industry; quite often, they will be in a completely different industry.

Organizations or industries that are subject to extremely high velocity are often the most innovative. They are busy working with the challenges that exist, and are being as creative as possible to deal with those challenges in order to turn them into opportunity.

Regardless of who and where they are, they share several things in common: they’re busy experimenting, adapting, evolving and changing. They’re working hard to make sure that the essential concepts of high-velocity innovation – run the business better, grow the business, transform the business – have become an essential part of their lifeblood.

If you can spot these organizations, you can learn from them, and become inspired by them. They can be a wonderful source of creative ideas!

So how do you find them? By looking for the telltale signs of companies or industries who are faced with all the challenges that the high-velocity economy can throw at them. Given the challenges, the organization or industry will tend to have people who are more innovative, realistic, practical, and open to new ways of thinking. They are likely to be more forward oriented and creative. They will be working to rapidly adapt to changing circumstances, and will be collectively seeking complex solutions to unique problems.

Several signs can provide you with insight as to whether the company is dealing with extreme velocity and is therefore a real innovator. Look for these characteristics:

  • They are significantly impacted by faster science. The fundamentals of the science within the industry are evolving at a furious pace as a result of the infinite idea loop. It is evident that the discovery of new knowledge within the industry is occurring at a faster pace than within other industries. Hint: look to genomics companies. Furious rates of scientific change here!
  • More competition. Business models are changing quickly, with a lot of new competition appearing on the scene as the industry begins to blur and change.
  • A faster degree of product/service innovation. The industry is widely known for being innovative, with a constant stream of new products or services coming to market.
  • More operational innovation. There is a lot of fundamental change within the industry in terms of business models, marketing methodologies, customer relationships and other unique changes. Organizations or industries that are subject to extremely high velocity – that is, significant amounts of fundamental change occurring at a rapid pace – are often the most innovative.
  • Shorter product lifecycles. Products are coming to market faster than previously, or faster than within other industries, due to the previous four trends.
  • Rising tides require fast change. Customer expectations are changing quickly in terms of the products or services being offered, because of the furious rates of innovation that are occurring. In addition, there’s heightened customer service due to hyper-competition; people know that they must absolutely excel in service levels.
  • A significant creativity capability. The organization or industry is dominated by creative thinkers; a workforce and management team that is fully focused on doing things differently, in order to respond to the reality of change that engulfs them. Those who kill ideas aren’t the dominant force; those who suggest how things could be done differently are at the forefront of action within the organization.
  • A partnership orientation. The organization or industry is constantly seeking outside expertise in order to help it go forward; it is willing to make use of complexity partners, nomadic workers, skills banks and other partners in order to grab on to ever more important change capabilities. They know they can’t do it all, and so they are willing to do what it takes to get access to what they need to get it done.
  • They’re plugged in. The organization or industry is linked into and is feeding off of the ideas from within the infinite idea loop. They are constantly scanning and sifting through the constantly evolving collective insight of the global discussion that is taking place; they are always eager to spot how innovation is occurring outside of their organization, and are busy interpreting what is being said in order that they can use this insight for their own purposes.

Organizations or industries that are subject to extremely high velocity – that is, significant amounts of fundamental change occurring at a rapid pace – are often the most innovative. They are busy working with the challenges that exist, and are being as creative as possible to deal with those challenges in order to turn them into opportunity.

You want to find these organizations, study them, and learn from them – since that will be one of the best ways to create your own innovation oxygen.

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