Archive for December, 2007
Fujitsu’s e-Color Paper
A few weeks ago I blogged about Amazon’s Kindle and Polymer Vision’s Cellular Book, both devices leveraging black and white e-ink displays and 3G connectivity.
I just noticed that earlier in the year, Fujitsu had announced the FLEPia as the first device featuring flexible electronic paper capable of displaying color screens. What follows is two of the design concepts the company has shared at tradeshows to portray the potential of the technology, targeting 2010 for them to achieve mass market status. In the meantime, FELPia products cost between $1,200 and $2,100.
Media Dealer:
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The picture on the left shows the Media Dealer concept: “e-paper is used as sub-screen for the mobile terminals. The exchangeable display adapted for various applications will suggest a new style of Information Sharing”. |
Fab PC:
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“This is a concept design focusing on the flexibility of e-paper. Adjusted to the styles of use by the users from personal use to the use by many people at a meeting, the form of the display may be varied widely from PC scale to large sized display. It is an environmentally friendly mobile tool with the use of fabrics material”. |
- http://www.fujitsu.com/global/accessibility/premio.html
- http://www.frontech.fujitsu.com/services/products/paper/flepia/
- http://consultaglobal.wordpress.com/2007/11/20/usa-amazons-kindle-sprint-eu-polymer-vision-tim/
J. de Francisco 
Chicago. 22 December 07 
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“The Top 10″ at the time of uploading this article: [1] Design Concepts: Future Car. [2] Nokia’s Innovation Recipe: “There Is No Blueprint”. [3] The Economist & Technology Review: “Lessons From Apple’s Design”. [4] “The State Of Innovation” (Updated). [5] Apple’s Innovation Recipe: The Power Of Design Research. [6] “Visual Futurist: The Art & Life Of Syd Mead”. [7] The Top 10 Best R&D Companies In The World. [8] Mobile Phone Concepts: Egy Studio. [9] HP’s Innovation Recipe: “IPO”, The Innovation Program Office. [10] Project Ergofuturo: ErgoTrans (1991 Product Concept).
"Two Screen" 2.0 Applications
These days you can handle your email from your smartphone or PC. Moving forward, many other applications will leverage this dual screen approach, letting you use the device of your choice at any given point of time.
Manage your phone from your PC:
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With Dashwire you can use your PC to listen to voicemails, send and receive text messages (SMS), add and edit phone contacts, sort photos and videos, set Internet favorites, ringtones and wallpapers. There is a need for downloading and installing a small Windows Mobile client running on your device. The Dashboard is a Web 2.0 site so you just need a Internet browser. Dashwire has customization features such as click and drag modules. |
 http://www.dashwire.com/ |
Access your PC from your phone:
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You can use your phone’s mobile browser to access remote PCs. Soonr requires downloading an installing client software running on your PC, the so-called desktop agent. With Soonr your phone can help you search, view, share and forward files from any PC, as well as accessing Outlook or Mac Mail. Additionally, you can get it to run Skype on your PC while handling the actual phone conversation from your mobile phone. |
 http://www.soonr.com/ |
Access your web desktop from your phone or PC:
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The Glide OS let’s you access and work on your digital content online from either your PC or your mobile device. Glide provides a fair amount of productivity and entertainment applications. Glide Sync makes it possible to access all of your files from your mobile device and even create and edit files in which will be automatically synched and downloaded to your local computer. |
 http://www.glidenext.com/ |
J. de Francisco Chicago. 22 December 07
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“The Top 10″ at the time of uploading this article: [1] Design Concepts: Future Car. [2] Nokia’s Innovation Recipe: “There Is No Blueprint”. [3] The Economist & Technology Review: “Lessons From Apple’s Design”. [4] “The State Of Innovation” (Updated). [5] Apple’s Innovation Recipe: The Power Of Design Research. [6] “Visual Futurist: The Art & Life Of Syd Mead”. [7] The Top 10 Best R&D Companies In The World. [8] Mobile Phone Concepts: Egy Studio. [9] HP’s Innovation Recipe: “IPO”, The Innovation Program Office. [10] Project Ergofuturo: ErgoTrans (1991 Product Concept).
"The State Of Innovation" (Updated)
Jessie Scanlon and Reena Jana:
“This year, surveys from three leading consultancies—Boston Consulting Group, McKinsey & Company, and Booz Allen Hamilton—show innovation remains a high priority for most corporate leaders around the world (…) there’s consensus across industries that innovation is a key growth driver“.
“The surveys also reflect a broad belief that most companies don’t have the leadership, systems, or tools to successfully and consistently innovate”.
“[Companies] employ a range of metrics to measure their innovation success including customer satisfaction, overall revenue growth, and the percentage of total company sales from new products or services (…) the majority of respondents expressed dissatisfaction with the return on their innovation investment“.
“Most top managers feeling as if they don’t seem to think they have a lot of control over the innovation process (…) less than a quarter of respondents indicate that innovation budgets or targets are decided at the top (…) 40% of top managers say the problem is they don’t have the right employees (…) less than a quarter of top managers felt corporate culture inhibited progress”.
Read “The State of Innovation” on BusinessWeek.
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Since innovation is often represented by a light bulb, after reading the above article I did a search for a bulb that would better showcase the current state of affairs. By the way, if interested, you can actually buy this ‘melting lamp’ at propagandaonline. |
This year we have seen a number of books, articles, surveys and blogs discussing what works and what doesn’t when it comes the time to innovate. The fact is that most companies deal with highly competitive environments, therefore, the need to look into what’s next: new customers?, markets?, technologies?, products?, services?, processes? business models?
At minimum, they aim to continue to deliver value and to generate enough business to keep going.
At best, innovations help them take markets by storm, leapfrogging their competitors making a substantial return on investment (e.g. first mover’s advantage).
Innovation can come in different flavors and these days many say that the actual term ‘innovation’ is overrated. In most cases, those are thought provoking and well intended statements. For instance, quite a few enterprises aim to be good fast followers and/or focus on mass markets instead of higher end opportunities, niche markets and early adopters.
Their strategy is often based on letting others take up the risk and the cost of figuring out what’s next. The point I am trying to make is that corporate strategies should not look at innovating for the sake of innovating, but should assess what makes sense to do given the specifics of their business context and development needs.
The following links are about innovation surveys and information from leading consulting firms. Some require registering and/or subscribing:
- The Customer Connection: The Global Innovation 1000- Booth Allen & Hamilton.
- Mastering the Innovation Challenger - Booth Allen & Hamilton.
- Innovation 2007, A BCG Senior Management Survey - Boston Consulting Group.
- Measuring Innovation - Boston Consulting Group.
- BCG Innovation Institute - Boston Consulting Group.
- How Companies Approach Innovation - McKinsey.
- The McKinsey Quarterly, Strategy & Innovation - McKinsey.
- The Business of Innovation - IBM.
- Global Innovation Outlook - IBM.
These ones can be found in this blog and most also include links to related posts:
- The Globalization of Innovation.
- EU catching up with US in innovation.
- Denmark is now the innovation leader or is it Japan?
- The Best R&D Companies.
- Innovation Recipes.
- Innovator’s Dilemmas.
- Innovation Gaps.
- Cultural Differences.
- Partnerships between companies and business schools.
J. de Francisco Chicago. 20 December 07
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“The Top 10″ at the time of uploading this article: [1] Design Concepts: Future Car. [2] The Economist’s Annual Innovation Awards. [3] “Visual Futurist: The Art & Life Of Syd Mead”. [4] Nokia’s Innovation Recipe: “There Is No Blueprint”. [5] Innovator’s Dilemmas: Revenue vs. Value? (3). [6] The Top 10 Best R&D Companies In The World. [7] McKinsey’s Innovation Recipe: Innovation@Scale. [8] Sci-Fi Based Scenarios: The City Of The Future. [9] USA: “Amazon’s Kindle & Sprint”; EU: “Polymer Vision & TIM”. [10] Sci-Fi Based Scenarios: Minority Report’s GUI.
Innovator’s Dilemmas: Revenue vs. Value? (3)
“The most popular Web 2.0 revenue model is based on advertising. Publishers (blogs, media sites, etc) get paid by advertisers (…) More advertisers understand the benefit of online advertising and so, there are more ad dollars flowing into this space than during the Bubble”.
Source: Ask The VC
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It has taken me a few days to resume the discussion on revenue vs. value. My first post on this specific subject covered some of the paradoxes which might make undertaking a startup’s valuation a challenging exercise. The second post approached business models of interest.
The notion of strategic value, the quality of customer relationships as well as intellectual property play a role when deciding on acquiring a startup. This also relates to the fact that VCs and entrepreneurs aim to generate enough value to be able to sell the company to other investors and corporations, making a substantial return on their investment in the process. Note that many happen to be able to increase their company’s valuation without a corresponding increase in revenues, which reads counterintuitive to many based on emails and comments I received after uploading my previous posts. |
In any case, the following focuses on pricing models and revenue generation. One can purchase a given set of items based on what’s shown in a price tag or list, which might include all sorts of promotions and volume discounts (e.g. the more you buy, the lower the unit price). However, in 2.0 economics you are likely to experience a shift from traditional product pricing practices to service oriented models such as:
- Pay per item: e.g. iTunes’ 99c per song download.
- Pay per use: pay as you go, pay as you grow, utility pricing model; e.g. Movielink’s movie rental.
- Subscription based: prepaid on a weekly, monthly, seasonal, or annual basis; e.g. iTunes’ season pass for a TV show.
- Part of a bundle: tiered packages delivering alternative options and pricing levels; e.g. VCast video.
- Part of a combo: the so-called triple and quadruple play strategies, which might or might not involve product integration and discounts, but are designed to offer convenient payment: just one bill and a single point of purchase; e.g. Comcast’s triple play.
- Free for the end user while the service is funded by advertising revenues; e.g. Pandora.
- Free for one individual: commercial and group usage would imply licensing fees; e.g. Lavasoft’ anti-spyware software is free for home users but charges fees otherwise.
- Basic service free service and an option to pay for value added features, the so-called freemium model; e.g. LinkedIn offers premium features under a monthly subscription model.
- Referrals (see CPA below): users being directed to other sites, as well as recommendation engines based on long tail economics; e.g. Pandora’s relationship with iTunes and Amazon, enabling users to purchase the songs they are listening to.
- Voluntary contribution: most typically donations involving free open source products and services, but some commercial services are also experimenting with this; e.g. Radiohead.
- Any combination of the above, e.g. buying Norton’s software which also requires paying for an annual subscription involving regular product updates delivered online, all of which is also offered as part of bundles.
In this market, some business models also factor whether DRM, digital rights management applies. DRM is related to downloads and streaming media, it means some sort of limitation based on what pricing option you had chosen:
- the duration of the users license. e.g. setting a time limit (commonly found on try and buy offers)
- the kind of devices you can use - an issue of concern for three-screen-services leveraging digital content interchanging TV sets, PCs, and mobile devices such as a multimedia phone.
- whether you can make copies - often a portability problem when you replace your PC and consumer electronics for new ones and expect everything to work.
- whether you can share what you bought with others - meaning whether you got either an individual or a group license and the right to distribute.
With regards to the specifics dealing with online advertising, Matt’s article on Ask The VC provides the following insights:
“FeedBurner is an ad network and while it made some money off of licensing its platform to large publishers, most revenue came from the ads inserted into the feeds”.
“Some of the ads are CPM based (impressions viewed) while others are CPC ($ per click…a la Google). The publisher generally keeps 60-70% of the ad dollars and the ad network gets 30-40%”.
“If Motorola runs an ad campaign through an ad network like FeedBurner, they might pay $5-10/CPM (cost per thousand impressions)”.
“If the ads are viewed 1,000,000 times, Motorola would pay the network $5-10,000. The network would keep $2-4,000 and the publishers would get the rest”.
“CPC and CPA (cost per action) based revenue should hold up better than CPM based ones since there is a clearer ROI”.
Other innovator’s dilemmas:
- Revenue vs. Value? (1)
- Revenue vs. Value? (2)
- Do you really need to be disruptive?
- Who is the innovator?
- How do you demo innovative technologies?
- Do you really need business modeling?
- Innovators’ dilemmas
- Is innovation just about problem solving?
J. de Francisco Chicago. 19 December 07
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“The Top 10″ at the time of uploading this article: [1] The Economist’s Annual Innovation Awards. [2] Design Concepts: Future Car. [3] Innovative Mobile Phones: Objects Of Desire. [4] Innovative Design: Volvo’s XC60 Concept Car. [5] “Visual Futurist: The Art & Life Of Syd Mead”. [6] Nokia’s Innovation Recipe: “There Is No Blueprint”. [7] Project Ergofuturo: ErgoTrans (1991 Product Concept). [8] The Top 10 Best R&D Companies In The World. [9] McKinsey’s Innovation Recipe: Innovation@Scale. [10] Toyota’s Personal Mobility: MWV Concept.
The Economist’s Annual Innovation Awards
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The Economist’s Sixth Annual Innovation Awards Ceremony and Summit The Economist Technology Quarterly, December 2007 issue. |
Bioscience— Medmira and BioMedica’s fast HIV diagnostic testing in just 3 minutes: “Hermes Chan and Abdullah Kirumira’s work not only helps prevent the spread of AIDS, but also has great application for fast diagnosis of many medical diseases and conditions”.
Business process innovation— Infosys‘ offshore outsourcing model: “N R Narayana Murthy’s work not only led to the creation of a successful services outsourcing business—and industry—it led to the global presence in business that India enjoys today.”
Computing and telecommunications— Blacberry’s mobile email: “Mike Lazaridis gave us the ability to work and communicate with one, easy-to-carry integrated device that revolutionised—and truly personalised–computing”.
Consumer products— Nintendo’s video game products: “No one is more identified with Modern Video Games than Shigeru Miyamoto. His pioneering vision and creativity truly created a new category of entertainment”.
Energy and the environment— Philips Lumileds and Hewlett-Packard: “George Craford and Roland Haitz’s pioneering work on the development and commercialisation of LEDs means that the proportion of human energy consumption attributable to lighting will finally go down”.
Social and economic— Celtel’s mobile phone services: “Mo Ibrahim created Africa’s second largest cell phone company. But he wasn’t satisfied to just build a company: his new effort, the Mo Ibrahim Foundation, aims to build a strong continent through the recognition of African leadership”.
No boundaries—IBM’s GMR, Giant-Magnetoresistive Effect: “There are no boundaries to the work of Stuart Parkin, Peter Grünberg, and Albert Fert. Their work–essentially making the storage and of information far more efficient–has had great impact upon audio-video streaming, cell phones, digital photography and animation, low-cost digital video cameras–and, of course, the ubiquitous MP3 music player”.
Corporate use of innovation— Procter & Gamble’s open innovation model: “Procter & Gamble’s achievements in innovation are remarkable because of the skill with which the company has institutionalised processes and procedures that allow innovation to come from customers and partners, as well as researchers and marketers within the company itself”.
Note that the recipients of these awards are the individuals mentioned in each innovation category.
J. de Francisco Chicago. 18 December 07
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“The Top 10″ at the time of uploading this article: [1] Nokia’s Innovation Recipe: “There Is No Blueprint”. [2] Design Concepts: Future Car. [3] “Visual Futurist: The Art & Life Of Syd Mead”. [4] Innovative Design: Volvo’s XC60 Concept Car. [5] HP’s Innovation Recipe: “IPO”, The Innovation Program Office. [6] Innovative Mobile Phones: Objects Of Desire. [7] Mobile Phone Concepts: Egy Studio. [8] Mobile Applications (1). [9] The Economist & Technology Review: “Lessons From Apple’s Design”. [10] The Innovation Gap 3.
Innovative Design: Volvo’s XC60 Concept Car
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Volvo has traditionally delivered cars with a reputation for safety and reliability. Over the years, the company has also strived to be known for its design elegance leading to improvements in the user experience. The XC60 showcases that line of work. This is a concept car fist shown at the 2007 North American International Auto Show in Detroit. |
The following video features Steve Mattin, Design Director and his team:
Click here to access Volvo’s site. The following are links to other posts related to cars and design which I wrote earlier this year:
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J. de Francisco Chicago. 16 December 07
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“The Top 10″ at the time of uploading this article: [1] Nokia’s Innovation Recipe: “There Is No Blueprint”. [2] “Visual Futurist: The Art & Life Of Syd Mead”. [3]Design Concepts: Future Car. [4] HP’s Innovation Recipe: “IPO”, The Innovation Program Office. [5] The Economist & Technology Review: “Lessons From Apple’s Design”. [6] The Globalization Of Innovation. [7] Free Web 2.0 Meeting Tools: Vyew, Yugma, Dimdim, Zoho. [8] Innovative Mobile Phones: Objects Of Desire. [9] Transforming Your Old Laptop Into An “Internet Communicator” (2). [10] Transforming Your Old Laptop Into An “Internet Communicator”.
Nokia’s Innovation Recipe: "There Is No Blueprint"
Jarkko Sairanen, Nokia’s former VP of Corporate Strategy:
“If a formula existed that could deliver successful innovations on schedule, every company could be a winner. Most managers will agree that innovation drives success, but there is no blueprint to show them how to generate it”.
“Nokia has always been ranked quite highly in terms of being innovative (…) we think in terms of systems or platforms, which provide the opportunity for us and others to further innovate”.
“A product or a feature is just one incident - it might help you to increase your market share temporarily, but it does not necessarily create sustainable value. You have to continuously renew, and drive your paradigms from a perspective of sustainable value creation. Thinking in systems is long-term oriented”.
McKinsey’s interview from their Innovation@Scaled paper addressing insights on marketing and sales in the telecommunications market.
Nokia makes funding available for internal projects which would fall outside the focus of its business units. This model leverages corporate venturing (e.g. in-house incubator model) and venture capital practices (e.g. access to seed funding, legal and HR support).
The Venture Partners and Insight & Foresight’s Innovent teams work on joint development of new ventures and partnerships with third parties. By funding early stage ventures, the company becomes part of innovative enterprises: “Nokia has invested in Nokia Venture Partners to get venture rates of return in addition to real-time market feedback about new technologies and business models. Additional limited partners in the firm include Goldman Sachs, CDBWebTech, and BMC Software, among others”. Like.com is one of the supported ventures (above picture). Additionally, Nokia continues to develop their acquisition strategy, Enpocket (mobile marketing) and Navteq (maps) being two of the company’s most recent acquisitions.
What follows is my summary of McKinsey’s interview with Jarkko Sairanen focusing on the pricinciples behind Nokia’s innovation recipe.
- There is no magic formula: innovators have an appetite to experiment, to try new things and to iterate concepts. Jarkko states the need “to accept failure and an understanding that some overlapping work will take place in the organization (…). You need a small team that extends across the organization to put the next paradigm forward (…) I don’t think we are a textbook example of a systematic approach [to] managing a pipeline and portfolio of ideas where we rationally and analytically decide that we can afford seven out of ten ideas (…) a forum makes informed decisions based on analysis of data (…) if your strategic decision is clear, this is a more powerful way”.
- Systems approach: radical innovation goes beyond just planning features or standalone products, teams consider the context and the ecosystems in which the overall solution delivers benefits for those part of the value chain. This approach allows others to succeed while creating value that supports and promotes Nokia’s platforms. Jarkko’s answers emphasize the need for innovators to switch from a ‘feature’ to a ‘platform’ mindset.
- Sustainability: don’t limit your company’s opportunity to a one-off. Think of what it takes to become a serial innovator and the alternative evolution paths to achieve a given vision, “make what you are doing sustainable in the long term”.
- Agility: adapt, think of what it takes for your innovation to remain relevant over time, “being agile means continuously embracing the environment as it changes and grasping the opportunities it offers”.
- Innovation culture: network, decentralize and empower. “Don’t attempt to guide or drive everything from the top down. A lot of decisions occur deep in the organization (…) we don’t have a separate process or an incentive structure for innovation - it’s part of the work that people do (…) we are a networked organization that is connected to innovation (…) everyone is extremely interdependent (…) instead of thinking in terms of silos and separate kingdoms”.
- Forward looking view: develop a vision, look at trends across the value chain, including the competitive environment. Provoke strategic thinking and articulate missions and guiding principles. Leverage this understanding in the present: “we do vision work, which we call the Nokia World Map (…) the output is available for all our employees, so everyone can read it and people can discuss it. This stimulus is brought into the organization and people begin to act on it, and realization begins”.
- Emerging Business Unit: this is Nokia’s corporate venturing unit, leveraged to ‘incubate seeds’, involving different teams experimenting with potential innovations, “this unit has dedicated funding, so they can go to market fast and easily test things. And then we build seeds for deeper innovation at the Nokia Research Center”. As shared at the beginning of this post, there is another fund which focuses on investments on start-ups, this one being the equivalent to a venture capital fund.
- Timing: “we move things as soon as feasible into our core activities, but we shouldn’t move them too early. Finding the right time and having a low ‘burn rate’ so innovations do not die too early are critical things. Managers require insights and intuition if they are to understand what makes sense at what stage”.
- Be local and global: “A lot of innovation occurred in Europe because we standardized smartly (…) the Internet paradigm and the social networking innovation Web 2.0 (…) has been driven in the United States (….) look at China, which has its own model (…) take things locally or regionally where they are born, and deploy what can be deployed globally”.
- Go-to-market capabilities: for innovations to realize their potential, there is a need for a company’s ‘backbone’ that’s capable of producing, shipping, selling and delivering.
“Take the Internet with its open technologies and the open-end standards used. This will now be much more difficult for companies that don’t already have the right mentality and assets in place”.
Jarkko Sairanen, Nokia’s former VP of Corporate Strategy
“If there is something good in the world we will copy it with pride (…) if we are the inventor we take the inventor’s pride with the same rigor. It really doesn’t matter [one way or another]“.
Anssi Vanjoki, Executive Vice President and General Manager of Nokia’s Multimedia unit.
Click here if interested in reading about other company’s innovation recipes. See links at the bottom of that posting.
J. de Francisco Chicago. 15 December 07
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“The Top 10″ at the time of uploading this article: [1] “Visual Futurist: The Art & Life Of Syd Mead”. [2] The Economist & Technology Review: “Lessons From Apple’s Design”. [3] Design Concepts: Future Car. [4] Innovative Mobile Phones: Objects Of Desire, [5] Transforming Your Old Laptop Into An “Internet Communicator” (2). [6] Free Web 2.0 Meeting Tools: Vyew, Yugma, Dimdim, Zoho. [7] HP’s Innovation Recipe: “IPO”, The Innovation Program Office. [8] Mobile Phone Concepts: Egy Studio. [9] Transforming Your Old Laptop Into An “Internet Communicator”. [10] The Globalization Of Innovation.
McKinsey’s Innovation Recipe: Innovation@Scale
“Cracking the Code” by . Billing, A. Krieger, B. Maurer, C. Schorling and L. Stein of McKinsey:
“Strong innovators grow 13 percentage points more quickly than competitors and outearn them by 3 full percentage points. But 94 percent of all surveyed companies professed less than complete satisfaction with their innovation rates”.
“Innovation is clearly not a sequential process. It begins with aspirations (…) market insights are required to guide decisions”.
McKinsey has conducted a survey involving 800+ managers (mostly from Europe) to figure out how companies differentiate and succeed in the process. This research included both high and low performing enterprises, thus being able to compare results across the board. The following turns out to be their innovation recipe:
- Getting the basics right: there are some must-have and must-do type of items such as: forming cross-functional teams, embracing practices leading to strong ideation, transparent review and gate processes as well as setting up innovation networks involving third parties.
- Clear and challenging aspirations: this means defining the so-called “stretch goals”, prioritizing “a few big bets” coupled with market creation initiatives supported by strong marketing campaigns to reach and influence target markets.
- Well thought out innovation strategies: matching new opportunities with organizational assets and skills, being able to identify capability gaps and addressing whether these skills can be developed in-house and/or by engaging third parties (e.g. partnerships, acquisitions).
- Sources of innovation: high performers leverage (1) customer insights, (2) technologies and learn and influence (3) their value chain and industry.
- Differentiated radical innovation: adaptive processes with project specific decision making criteria, flexible timing, assessments going beyond just ‘go/no-go decisions’ such as: iterate, repeat, grow, wait. Most high performers have set up business development organizations with dedicated budgets focusing on radical innovation.
- Rollout plans: being able to clearly and easily communicate with customers and influencers compelling benefits for each innovation, coupled with business model innovation (e.g. pricing, channels, non-traditional marketing). The process includes capturing immediate feedback from the market to quickly adapt and, therefore, enhance the usability of the product or service.
- Breaking orthodoxies: becoming aware and overcoming any limiting conventions which might be in place to favor incremental innovation instead of radical groundbreaking product development. This requires strong, passionate and inspiring leaders being able to convey enthusiasm and to empower others to make timely decisions as needed.
- Innovation friendly culture: to become a serial innovator, successful companies display an inspirational and diverse environment, willing to experiment in an entrepreneurial fashion.
- The last frontier: incentives for those joining innovation teams should include specific compensation programs, as well as being adequately appraised in their performance reviews in light of the unique nature of the projects they work on. Otherwise, companies fail to attract leaders with risk taking and innovation skills.
“Companies need to have all innovation elements aligned and running. Few companies maintain the various elements well and even fewer keep all elements highly tuned - but those that do, generate the sustainable horsepower needed to meet their market head on and emerge as winners time and again”.
“This survey centered on what McKinsey characterizes as ‘Innovatoin@Scale’, which involves building new scalable platforms capable of discontinuous economic value creation (…) delivering value that is sustainable and financially meaningful to a major corporation or institution”.
Click here if interested in reading about other company’s innovation recipes. See links at the bottom of that posting.
J. de Francisco Chicago. 12 December 07
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“The Top 10″ at the time of uploading this article: [1] Design Concepts: Future Car. [2] “Visual Futurist: The Art & Life Of Syd Mead”. [3] The Top 10 Best R&D Companies In The World. [4] Project Ergofuturo: ErgoTrans (1991 Product Concept). [5] Sony’s Innovation Recipe. [6] 3M’s Innovation Recipe. [7] The Economist & Technology Review: “Lessons From Apple’s Design”. [8] NikeID Studio. [9] Apple’s Innovation Recipe: The Power Of Design Research. [10] Grocery Shopping: High Tech Carts, Mobile Phones And Online Services.
Sony’s Innovation Recipe
Associated Press’ article capturing recent Sony’s CEO statements:
“[Sony's new products] ‘bring back some of the wow factor’ that is a Sony trademark (…) ‘The next cycle is actual innovation’ (…) Stringer talked proudly about the OLED TV and Rolly”.
“You always have to pick your bets (…) We made the decision two and a half years ago when we were confronting negative margins in the electronics company that if something had to go in the short term, that was it [referring to Sony's robots business, such as the Aibo pet robot]“.
Sony’s OLED, and Rolly,
About four years ago, the Wall Street Journal published an article highlighting the need for Sony to regain its innovative spirit, exercising the willingness to bet on original new ideas involving new bold products in new markets. Most recently, Shekhar Chaudhuri talked about how Sony is now setting the example:
- Keeping innovative teams small to enable them to better communicate and work faster, coupled with a hands on management style.
- Setting a long time horizon based on forward looking goals and exercising persistence.
- Developing several innovative projects in parallel to diversify and minimize risks.
- Involving manufacturing people in the new product development team, cooperating early in the process and allowing for a faster technology transfer at the time of productizing.
- Acceptance of failure when involving learning, while showing very little tolerance when the same recurring mistakes take place.
Professor Joaquim Vila’s article quotes some of Sony’s policies from the company’s early days, such as:
“Sony typically started with a target price point for new ideas and figured ways to produce the product for that price. Market studies were largely ignored. As Ibuka said: “Merchandising and marketing people cannot envision a market that doesn’t exist”.
“Furthermore, Sony placed engineers and scientists in sales jobs to understand that new products also needed to be saleable”.
Two years ago, James Surowiecki wrote about Sony’s CEO replacement. Interestingly enough, departing from traditions and stereotypes, the company had chosen Howard Stringer to take the lead, the head of its entertainment business, neither an engineer nor Japanese:
“Companies often become victims of their own mythologies. Sony’s track record of game-changing inventions—the transistor radio, the Walkman, the Trinitron—led it to believe that success lay in self-sufficiency and absolute control”.
“Sony’s ideal future was one in which just about everything—TVs, DVD players, cameras, computers, stereos, handhelds, digital songs—bore the Sony brand. The company became an exemplar of what’s sometimes called the “Not Invented Here” syndrome: if it wasn’t invented at Sony, the company wanted nothing to do with it”.
Click here if interested in reading about other company’s innovation recipes. See links at the bottom of that posting.
J. de Francisco Chicago. 11 December 07
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“The Top 10″ at the time of uploading this article: [1] Design Concepts: Future Car. [2] “Visual Futurist: The Art & Life Of Syd Mead”. [3] The Top 10 Best R&D Companies In The World. [4] Grocery Shopping: High Tech Carts, Mobile Phones And Online Services. [5] The Economist & Technology Review: “Lessons From Apple’s Design”. [6] 3M’s Innovation Recipe. [7] Apple’s Innovation Recipe: The Power Of Design Research. [8] Sci-Fi Based Scenarios: The City Of The Future. [9] Transforming Your Old Laptop Into An “Internet Communicator” (2). [10] Free Web 2.0 Meeting Tools: Vyew, Yugma, Dimdim, Zoho.
NikeID Studio
“If you want to do it right, do it yourself. Customizing your shoes used to mean getting out the permanent marker and hoping you didn’t make any mistakes. Today, it’s simple- go to NikeiD.com, or have a personal one-on-one session at NikeiD Studio, where a NikeiD Design Consultant will work with you to create a custom design from your inspiration”.
Nike iD Billboard Invites Mobile Users:
“Nike launched an interactive billboard (…) The effort, supported by R/GA, lets people use their phones to design a shoe on the Reuters sign in Times Square”.
“Passersby use their phones to interact with the 23-story billboard, customizing and even directly purchasing their own Nike shoe. After designing a sneaker on the screen, the user receives a text message within seconds. That message contains mobile phone wallpaper showing the shoe along with a link to the Nike iD site where they can buy it. A PIN number provides additional security”.
Nike was ranked #5 as one of the most innovative companies of the year by Fortune magazine. NikeID is a service currently available online and offered at Nike stores in London, New York, Paris and Osaka.
Last night I visited the one in London. Quite a few people were using the Apple monitors provided at the so-called design studio on the third floor. While mostly self-service, there is a design consultant on duty. He let me know that it takes about four weeks for Nike to deliver the customized shoe and that the price range could be anywhere from £65 to 150.
From a marketing strategy standpoint, this is an example of a ”segment of one approach“. I first heard this term a bit more than 10 years ago as an MBA student. This means realizing the market potential of personalization by customizing products and services.
Most traditionally, “mass market” strategies are related to a the “one-size-fits-all” approach leveraging the economies of scale provided by serving a single product for a large number of buyers. “Market segmentation” is about identifying subsets of consumers who share a similar profile, so a given product can be economically designed, manufactured and positioned to meet their needs and expectations, enabling companies to differentiate, better serve and compete. We use the term “market niche” when market segments are rather small and/or highly specialized, often commanding a premium from a pricing standpoint.
My understanding is that the notion of a “market segment of one” delivering a customized yet affordable product for just one individual came about in the nineties with the emergence of e-commerce and in the context of digital goods. Translating that concept into the world of physical products is a bit more challenging and requires flexible manufacturing technologies. Nonetheless, some car manufacturers have deployed websites enabling buyers to select and combine different options to name one other example.
J. de Francisco Blogging from London. 8 December 07
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“The Top 10″ at the time of uploading this article: [1] Design Concepts: Future Car. [2] “Visual Futurist: The Art & Life Of Syd Mead”. [3] Apple’s Innovation Recipe: The Power Of Design Research. [4] Sci-Fi Based Scenarios: The City Of The Future. [5] Transforming Your Old Laptop Into An “Internet Communicator” (2). [6] The Top 10 Best R&D Companies In The World. [7] More Online Collaboration Tools. [8] Design Concepts: Future Car (2). [9] The Economist & Technology Review: “Lessons From Apple’s Design”. [10] Heliodisplay: Interactive Video Projected In Free Space.
