FTOTW123 – best links of the week ending 17-August-2014

Prolog

Here are the best links shared on my tweet stream this week.

Best Links

  1. /Via @KrishG surprising truth about increasing your IQ/Cognitive abilities by Andrea Kuszewski http://t.co/6d4qsBUFwv ~ ****ing brilliant – Original Tweet

  2. /Via @brainpicker if you win the rat race you are still a rat – Anna Quindlen’s commencement address http://t.co/HvTFr4zPQX ~ brilliant – Original Tweet

  3. RT @paulg: How to Be Polite: http://t.co/NOWjeP5QrP ~ brilliant – Original Tweet

  4. /Via @krishnarc: How to Learn Anything Better By Tweaking Your Mindset: http://t.co/zMqeO0iC6l ~ vv interesting – Original Tweet

  5. This article appeared Machine beats medics at predicting heart attacks ~ vv interesting /Via @sameermehta-email http://t.co/saMOmSeCviOriginal Tweet

  6. Don’t think you’re a genius just because you succeeded http://t.co/KSy24wgPGL ~ vv insightful /Via @SmartBriefOriginal Tweet

Epilog

Hope you enjoyed the links? Did you come across any good links you want to share? Please share in the comments below.

References

I use a certain ratings scale for my annotations which are explained here.


Apple’s Innovation Method? – Part 1

Prolog

As promised in my last post on Christensen’s Theory of Disruption, I want to share my findings on Apple’s Innovation Method (AIM). How does the planet’s most watched company come up with its string of ground breaking innovations?  Lots of books and articles have been written about Apple and its methods and I have read quite a few of them myself. Given how secretive the company is, we will likely never know what its methods truly are?  BTW, i have no connections to any one in Apple, nor do I have access to any internal Apple documents, unless they are in the public domain. Many of you that have worked with me will recognize many of the points that I will be mentioning.

Holy Grail of Innovation Management

Before I talk about Apple’s methods, I want to set the context. I am very lucky to have had the good fortune of running the Innovation program for a Fortune 500 firm for 5 years . As you can imagine, my job demanded that I look  at the top innovators in the world, which obviously includes Apple. I have also read scores of books on the topic of Breakthrough Innovation. One important & obvious inference is this -  Systematizing Breakthrough Innovation, is the Holy Grail in the field of Innovation Management.  If we could Systematize Breakthrough Innovation, sky is the limit, isn’t it? Obviously this inference triggered my passion to soak up a lot of material on the topic of Breakthrough Innovation.

Before I start, it may be useful to define Breakthrough Innovation and I will use my favorite innovation chart – the NASSCOM-BCG Innovation Matrix:

nasscom-bcg innovation matrix

Let me the explain the chart. On the X Axis – Area of Innovation – Any organization can be thought of, simplistically, to consist of 3 major functions – Input, Process & Output. Input – is the raw material, Process is the company’s process, Output is the product(s)/services the company sells in the market.  For example,  an IT/ITeS services firm, like the one I was working for, the Input is – people  & technology, Process is the company’s proprietary processes, and Output is the IT/ITeS services sold in the market.  On the Y Axis, the Extent of Innovation – Sustaining, Enhancing & Breakthrough – the 3 kinds of Innovations a firm could do. I think the words Sustaining, Enhancing & Breakthrough are self-explanatory. I have marked the Breakthrough Tier in Green.

Another interesting observation I made is this – most books on Breakthrough Innovation focus themselves entirely on Breakthrough Innovations in the Output category –  just 1 out of  the 3 potential areas for Breakthrough Innovation.

Why is Breakthrough Innovation so hard?

Some interesting factoids – IBM’s survey of Top CEOs says Creativity is the most important trait. Everyone talks incessantly about Breakthrough Innovation, The Global 1000 has spent over 2 Trillion $ in R&D in the last 5 years. But Apple is one of the lowest R&D spenders in the Global 1000 and Apple’s R&D spend is decreasing !

Looking back in History is one of my favorite methods of analysis. I looked at the history of Breakthrough Innovations and I realized how hard it is even for the reigning experts in the field to recognize and encourage Breakthrough Innovations:

 

“The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.” -– Charlie Chaplin,1916  

“The Americans have need of the telephone, but we do not. We have plenty of messenger boys.” — Sir William Preece, Chief Engineer, British Post Office, 1878.

“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” — A memo at Western Union, 1878 (or 1876).

“[Television] won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” — Darryl Zanuck, movie producer, 20th Century Fox, 1946.

“When the Paris Exhibition [of 1878] closes, electric light will close with it and no more will be heard of it.” – Oxford professor Erasmus Wilson

Above Quotes source: Listverse

“A rocket will never be able to leave the Earth’s atmosphere.” — New York Times, 1936.

“Heavier-than-air flying machines are impossible.” — Lord Kelvin, British mathematician and physicist, president of the British Royal Society, 1895. “

There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” — Albert Einstein, 1932

“Rail travel at high speed is not possible because passengers, unable to breathe, would die of asphyxia.” — Dr Dionysys Larder (1793-1859), professor of Natural Philosophy and Astronomy, University College London.

“Fooling around with alternating current is just a waste of time. Nobody will use it, ever.” — Thomas Edison, American inventor, 1889

          Source: Physics of the Impossible by Michio Kaku

If this is so hard for the reigning experts of the field, then how can the typical executive in a firm, recognize and encourage Breakthrough Innovations?

Neuroscience of Breakthrough Innovation

I decided to look at Neuroscience to understand why Breakthrough Innovation causes such reactions from people. A 2010 paper from a Cornell study titled “The Bias Against Creativity: Why People Desire But Reject Creative Ideas”  provided a brilliant answer:

Because we are motivated to reduce uncertainty in our operations, and the fact that Innovation creates uncertainty, we are subconsciously averse to Innovation, even though we may desire Innovation.

Epilog

Now that I have set the stage, I want to cover the Apple Innovation Method, more directly :)

 


FTOTW122 – best links of the week ending 10-August-2014

Prolog

Here are the best links shared on my tweet stream this week.

Best Links

  1. /Via @KKDUB: Why addiction isn’t always evil: “Where Tech Meets the Motivational Brain” http://t.co/uGqLSsBTPK ~ brilliant – Original Tweet

  2. /Via @lhakme Ramdass, the solar pushcart juice vendor from Villupuram – English version http://t.co/kACMafTkt5 ~ vv cool – Original Tweet

Epilog

Hope you enjoyed the links? Did you come across any good links you want to share? Please share in the comments below.

References

I use a certain ratings scale for my annotations which are explained here.


FTOTW121 – best links of the week ending 3-August-2014

Prolog

Here are the best links shared on my tweet stream this week.

Best Links

  1. RT @yarapavan: The paradox of Good choices? When It’s Bad to Have Good Choices http://t.co/KDQgZRxaoC ~ brilliant – Original Tweet

  2. Fly Delta Airlines sitting next to an Innovator and get mentored http://t.co/O2tpvOoU3N ~ vv interesting /Via Mark Newman of @hirevueOriginal Tweet

  3. RT @MindaZetlin: Great idea! RT @CNET: Hijack the movies with bespoke screenings of your favourite flick http://t.co/dhsTLaPKhl ~ vv cool – Original Tweet

  4. RT @rucsb: You Don’t Need To Learn To Code + Other Truths About the Future of #Careers http://t.co/1pHcZ8JTF8 ~ vv insightful – Original Tweet

Epilog

Hope you enjoyed the links? Did you come across any good links you want to share? Please share in the comments below.

References

I use a certain ratings scale for my annotations which are explained here.


Christensen’s not so Full House

I just realized that I completed 10 years of blogging on June 27, 2014. What a decade it has been! For me personally, blogging & twittering have added orders of magnitude more knowledge, more perspectives and more people connections than I would have managed otherwise. I decided to celebrate the occasion with a few posts on Innovation. Here is the first one.

—-

Prologue

Recently, Jill Lepore raised some serious concerns about Christensen’s theory and his research methodology. Christensen responded to Lepore’s criticism through a Businessweek columnist. Lepore’s article created a firestorm of articles from several people. If you had the time, read this Business Insider article that has a who-said-what on this issue.So what is my verdict  - Is Christensen right about the theory of disruption?

Innovator’s Dilemma

Ever since Clayton Christensen’s ground breaking Innovator’s Dilemma came out in the late 90s I have been a dogmatic follower of the theory of disruption and treated it as the gospel truth. I have also been fortunate to test out many methods/ideas in the field of Innovation through my work in Goto Market scenarios, KM, Innovation, running the IT Department etc. My experience shows that, it is a brilliant theory that explains many puzzling management decisions, which seemed correct in their context, but proved utterly bone-headed in the long run. For example, why did Western Union, then dominant in telegraphy conclude that telephony was not going to be big and chose to hand the market and all it’s telephony patents to the then upstart Alexander Graham Bell. Christensen’s theory captured the problem in this beautiful diagram [Fig I.1 pn Page xvi] in his book: Courtesy: cogmap.com

Per this diagram, telephony enters in the lower left, as the Disruptor’s curve, covering only the short distance market, whereas, telegraphy is the upper Incumbent’s curve, comfortably meeting or beating its long distance customer’s needs. When telephony started, it couldn’t do long distance and given that Western Union was a monopoly telegraphy business where long distance telegraphy was the main source of profits, concluded, perhaps rightfully so, that telephony didn’t warrant it’s attention. What we now know in hindsight is that Western Union made the blunder of not forecasting that telephony would evolve quickly to address long range and put Western Union out of the telegraphy business. Christensen gives several excellent examples in his book as well. It is hard to explain, what happened to Kodak and other once dominant icons which have fallen by the wayside without using the theory of Disruption. But what is wrong with this theory?

Fallacies

The problem is that there are a few fallacies in the book that I have come to realize over time. It has hindsight bias because it argues disruption can be predicted by analyzing a few examples like the Steel Industry, Discount Retailers, Disk Drive industry etc.  Did Neucor succeed because they are trying to disrupt the steel industry or  did they merely come up with a better way to make use of scrap steel?

Christensen also made the cardinal sin of Hasty Generalization by including a list of 24 disruptions on Page XXV, which encompasses major innovations in recent times – photography, telephony, telecom networks, notebook computers, desktops, electronic stock exchanges, credit scoring, retailing, greeting cards, electric utility companies, management schools, textbooks, bomber & fighter aircraft, medical doctors & hospitals, surgery, MRI & CT Scans.

Unfortunately, he didn’t include any research as to why these innovations were due to the phenomenon of disruption. For example, one of the items in the list of 24 – Internet Protocols/Java protocols disrupted MS Windows & Applications written in C++. Is this disruption or were they simply a different non-proprietary way of doing things and many firms adopted them. In other words, isn’t this just how things evolve?

If Lepore’s complaint is that Disruption is over-used, it could be attributed to this page in the book where every major innovation in recent times has been characterized by Christensen as a disruptive innovation. No wonder, everyone started talking about Disruption almost exclusively as the only form of innovation.

In Christensen’s book, the repeating theme is “products exceeding the requirements of its customers” which he calls Performance Oversupply. I think this is a great insight. However, he makes it to be the cause of Disruption as well as Commoditization, which I think is incorrect.  To provide just one counter-example – Why couldn’t commoditization occur simply because the process of making something is widely understood and replicable? Take the case of the humble pencil – pencil didn’t become a commodity because pencil manufacturing exceeded customer expectations, but because pencil manufacturing became easy to enough to  master across the globe. In other words, there could be many reasons why something gets commoditized, Performance Oversupply being one of them. Making Performance Oversupply the singular cause is – Fallacy of the Single Cause.

For disruption to be predictable, we should have tried to look for cases where the theory didn’t work – the notion of falsifiability in Science. Christensen didn’t do that in this book.

Christensen’s predictions

Christensen had a chance to prove the predictability of the theory of disruption. Unfortunately, he chose Apple as the target of his predictions. Both his predictions  - first, that the iPod is doomed to fail and second, that the iPhone is bound to fail – didn’t come true. BTW, I had also reacted to Christensen’s original iPod prediction as well as his original iPhone prediction.

Full House Hypothesis

Did the Wright Brothers invent the airplane to disrupt the Railways? What about the humble pencil or the humble bicycle- why hasn’t anybody disrupted them? Is there a better explanation for why Innovations happen in some industries?

I found a potential answer in Andrew McAfee’s article on Technology’s Value , where he describes the famous biologist Stephen Jay Gould’s brilliant hypothesis, which McAfee calls “The Full House Hypothesis”

“Complex systems improve when the best performers play by the same rules over extended periods of time.  As systems improve, they equilibrate and variation decreases.”

Markets/industries being complex systems, we could conclude that they too will reach equilibrium over time. Until some innovator somewhere decides to change that equilibrium by coming up with a new innovation which drives more rapid innovation and variation, the market will remain in equilibrium.  iPhone/iPad are good examples of how Apple changed the equilibrium.

Because we don’t fully understand what motivates innovators to attack a problem, it is going to be very hard to predict it. To illustrate the point, let us take the  case of the humble pencil again. The ecosystem seems to have reached an equilibrium, but no one seems to be out there trying to out-innovate pencil manufacturers. Perhaps the profits from such an endevour will be meager or maybe it is just not an interesting space to pursue for any Innovator?

Epilog

In sum, Christensen’s theory while accurate in many cases doesn’t adequately explain the complex field of Innovation.  Hope my thoughts on this subject are useful?  I plan to write next on my research around Apple’s Innovation Methods – I think I found their secret :)

P.S.  Just to be clear, Christensen is not the only management theorist/author whose work has major fallacies. If you read Bob Sutton & Jeffrey Pfeffer’s brilliant book Hard Facts, Dangerous Half-Truths & Total Nonsense on Evidence based Management, they explain why majority of the management books don’t give the correct advice. They don’t spare even the highly acclaimed books like Good to Great by Jim Collins.  Previously, the renowned organization behavior theorist Chris Argyris did a takedown of Stephen Covey’s 7 Habits of Highly Effective People in his brilliant, but hard to read, book Flawed Advice and the Management Trap.

The typical management book formula works like this – analyze a few successful companies, make up a pattern out of their methods and promulgate a new theory – the rigorous methods of science where control group studies, double blind experiments, falsifiability, peer reviewed papers etc are not necessary. And that is the biggest problem in the world of management theory.