Tuesday, March 26, 2013

Leader's role in Fostering innovation.

In my previous article "Leadership for Innovation", I had written about the importance of leadership in creating innovative culture in an organization. Continuing on the same thought, this article is about the roles a leader should play to foster innovation in an organization.

Essentially, the success of the organization is determined by the leaders ability to attract, retain, and develop people with right knowledge and skills and build a work environment in which employees can innovate and thrive, thus making the organization more competitive.

Leader's role in innovation is more about people management and providing strategic inputs. This typically breaks down into the role of:

  1. Visionary
  2. Facilitator
  3. Assessor 
  4. Advisor
  5. Provider


The most important role of a leader is to be a visionary.  A leader should be able to see ahead and tell his organization of what he expects to happen in future - which is of importance to his organization. This could be market conditions, market needs, competition, etc. Leaders should blend this forecast with their vision for future and direct their team to prepare for that future.

Successful leaders are experts in seeing what lies ahead and communicating this on continuously to their organization while constantly accessing their strategy and monitoring their tactics.

Leaders must see beyond their operational level to access the business environment and provide information and resources needed for innovation. This requires a deep understanding of the business environment and organization's internal capabilities.

In short, Visionary leaders:

  1. Provide continuous information on the organization and marketplace to subordinates
  2. Constantly access organizational capabilities
  3. Continuously communicate their grand vision of the future.
  4. Ensure that the organization understands the vision.
  5. Never underestimate the impact of constant change.


The second most important role of a leader is to play a facilitator. Having a vision, hiring creative & innovative people is not enough, Leaders must facilitate an active discussions around how innovations can help the organization, what those innovative ideas need to become a reality etc., Leaders must initiate & practice open communication with active listening, and provide ongoing encouragement as needed. By drawing out information from people, leaders may uncover a new set of capabilities and strengths that was not previously recognized.

Leaders play a very important role here by initiating an active discussion centered around innovation - particularly on what new things (products/services) the organization should do to capitalize on the future opportunities. Care must be taken to keep the discussions away from debating on the leader's vision for the future and all discussions must be centered on innovation and developing new capabilities to enable the organization capitalize on future opportunities.

In short, a facilitator must:

  1. Get everyone involved. 
  2. Encourage and support active discussions
  3. Ask open-ended, probing questions, using words like "Why", "What," "where," and "when." 
  4. Avoid debates and discussion on the vision.
  5. Avoid telling people what to do.  


During the process of facilitation, leaders will get a whole lot of suggestions and ideas. The role of leader in such situation is to provide candid, constructive feedback to keep the innovation on track.

Leaders must have the skills to access the idea and give a developmental feedback - which helps take the idea forward.  However, there will be ideas and suggestions that must be rejected. But even when rejecting an idea, the feedback must aid towards further development of options and ideas.

The assessment process must be quick and decisive, good leaders do not dither around making a judgment. A long drawn out assessment will kill enthusiasm in the organization, so leaders will have to move quickly and positively.

This is a "reality check" process enables leaders and employees to see all opportunities for developing and advancing the organization. A positive developmental feedback is so crucial in the innovation process.

In short, a Assessor must:

  1. Assess ideas or suggestions quickly.
  2. Provide specific, concrete, constructive feedback with examples. 
  3. Keep the ideas/suggestions around the organization's strengths and developmental areas. 
  4. Constantly act as a reality check within the organization - to prevent fanciful, futuristic ideas.
  5. Must not provide wrong feedback just to avoid confrontation. 


Leaders need not be innovators themselves - but they must guide the innovation. As an advisor, leaders help organization to capitalize on opportunities that lies ahead with innovation. This involves goal setting - asking the organization to develop an innovative product/service within certain constrains: Time, Money and resources.

Leaders set multiple goals considering the dynamic nature of business today. The job of the leader is to set these goals and let the employees comment on the feasibility, blockers and limitations, and then facilitate the team to achieve the goal - by becoming a provider.

Once the goal is set, leaders must provide advice: direction and clarity when needed.

As an advisor, leaders should:

1. Guide the innovation process
2. Set hard but achievable goals
3. Make sure everyone understands the goals and the constrains.
4. Set multiple goals to meet the demands of market conditions
5. Provide direction and clarity when needed.


As the innovation idea gains ground, there will gaps identified in the organizational capabilities to meet the goals. As a provider, leaders must pitch in with useful resources, contacts, and connections as needed to help the organization achieve the goals set by the leader.

Leaders get the bigger picture and have a better tab on the available resources within the organization and even outside. So when the need arises, leaders will have to step up and provide the resources needed for innovation.

Leaders have connections outside their organization, so when needed they can open up collaboration with external partners and provide vital connections. At times, leaders may not have access to the needed resources - then it is the leaders job to step up and reach out to stake holders to help out. For example, a CEO may approach investors for additional capital.

As a provider, leaders should

1. Identify the need for resources for innovation activities
2. Identify internal and external resources
3. Provide links and connections needed
4. Step up and ask for external help when needed.

Closing Thoughts   

Successful Innovation needs a strong leadership. Leaders need to play multiple roles to enable innovation. The road for innovation starts with a vision for the future, identifying the right opportunities, building the right skills and capabilities  to providing the required resources.

Leaders role in innovation is neither simple or easy. It is tough and demanding one - which must be executed flawlessly to create a innovative organization to remain competitive and win.

OpenStack Vs VMWare - A Quick Thought

Recently, PayPal/eBay announced that they will be replacing VMWare software from some 80,000 servers with OpenStack. This must sound as a shocking news to VMWare. But not for me.

All this sounds like the good old story of Windows Vs Linux battle, where there were routine announcements of some big company replacing Windows with Linux. Even after a decade of Linux Vs Windows battle, both the systems are still going strong and Microsoft's revenue from Windows Server sales has actually increased enormously.

Being a product manager at EMC and knowing the IT infrastructure landscape so closely, I see that the real picture.

In actual world, OpenStack is not really free - one still has to pay tonnes of money to the "Consultants" who will implement & maintain the OpenStack   This is just like RedHat - which makes money from IT services and gives away Linux for free.

OpenStack is free - but it has several moving parts inside, so implementing and maintaining OpenStack is not easy or cheap. There will be costs involved and it carries risks - mainly security and IT infrastructure management risks for the end customers.

VMWare on the other hand offers a solid set of IT infrastructure management products - vSphere, vCloud Director, vCenter etc., and also has the latest cutting edge products - Software Defined Network (SDN), Software Defined Storage(SDS), Software Defined Datacenter products lined up, which will create a secure & seamless cloud scale, flexible IT infrastructure. Which in long run will lower the total cost of ownership.

VMWare along with EMC has a better road map for cloud scale IT infrastructure deployment and active management - to lower the total costs of IT.  VMWare also has the advantage of using EMC's technologies - such as RSA, GreenPlum, VMAX, VPLEX, VBLOCK, VNX etc., which makes managing large scale IT infrastructure easy and secure, and brings in the best technology in Big Data management.

OpenStack has its merits, It is free and for most part - easy to deploy. The main challenge with OpenStack is to maintain it - Both in terms of managing the upgrades/patches to the stack and the overall infrastructure management: Configuration, Availability, Performance, Security.

Companies such as Rackspace, Amazon, Google, Facebook etc - who have deep technical expertise and an army of IT engineers to manage their IT infrastructure, OpenStack can save money even in the long run. But most enterprises, don't have such capabilities and they are better off with an established VMWare solution stack for private cloud which can scale out to a public cloud when needed to create a hybrid cloud. See: VMWare Takes the Cover Off Its Public Cloud

Android PC - Is just around the Corner

Today, I did a test drive for Windows Tablet, ARM based Windows RT. Compared to my iPad, I found this to be sluggish and worse part is it lacks the choice of good cloud apps. Unless Microsoft puts its big guns behind Windows RT in marketing and get app developers and enterprise customers, Windows RT is heading for extinction. Right now, I see no value in Windows RT.

The x86 tablet - Acer Iconia W700   is better than Windows RT but sluggish - it lacks the CPU power and memory needed to run typical laptop apps - though I found it to be better in performance than the RT version. But when people compare the x86 tablet with the laptops - it lacks performance, and when compared with Apple iPad or Samsung Galaxy Tab, it lacks the cool apps. So in both ways the x86 tablet comes up short. If I were to choose, I would say the x86 tablet still does not make the cut. I would rather go with an iPad and ultrabook.

The Android Alternative

Few months ago, I reviewed the Android Mini-PC and based on my experience on Android, I think it is the right time to launch an Android notebooks.

Wintel has been dominating the PC market for last two decades and during that period, everyone has developed a strong need for a PC and there has been no real alternative to the Intel -Windows. MacOS is still a niche player and Linux is a non-starter for home PC. Android on the other hand has been a widely accepted platform. The user acceptance of Android plus new technologies - such as 64bit ARM processor & Virtual Desktops, will make Android PC a perfect solution for most home users and enterprise users.

Today's Tablets have few crippling limitations for a content creation - one is the limited data storage and lack of mouse/keyboard for user input & limited display size.

These limitations can be eliminated with a Android notebook: 32/64 Bit ARM processor. (See Big-Little ARM processor),  A 1TB Flash drive to store all local user files. Many users would like to have a BIG local off-line storage. A keyboard/mouse to quickly enter data, and ability to connect large external monitors, plus Wifi+4G connectivity.

Today, users are familiar with Android platform and are very comfortable with the apps. Android platform has a plethora of office/business Apps already available. For power users, Office 365, or the virtual desktop will be a perfect solution.

The Time is Ripe

For years, I have heard various manufacturers tout a low cost alternatives to PC - the thin PC, Sony Surfboard, Freescale smartbook etc. The time is now right for Android PC.

There is a general sense of disgust with the windows world and consumers are clamoring for something new. Personally I know a lot of people who have not upgraded their old laptops - because the newer laptops do not offer anything new. I also have a 6 year old HP running on Windows XP and I see no need to upgrade or buy a new Windows8 ultrabook.

The latent demand for an Windows alternative plus all the new technologies -  64bit ARM, Virtual Desktops, Solid State Flash Drives 1080p display screens - etc have created a perfect condition to launch Android Notebooks!

As on today, there is no Android PC in the market yet. Will Samsung be the first to introduce it? Lets wait and watch.

Thursday, March 21, 2013

Leadership for Innovation

As an product manager,  an engineer, teacher, & innovation coach - I get a lot of requests for tips on how to build innovation teams. Leaders in every organization are constantly calling on their staff members to be innovative, develop innovative products/services and build a culture of innovation.

Unfortunately, just talking about the need to innovate does not build an innovative culture. A common problem with organizational innovation is that - the leaders assume that innovation is a cultural issue (note the word "innovation culture") and then start off with a series of creative thinking skills training programs.

In one organization, Engineering director mandated all his team members to submit at least 10 innovative ideas in three weeks! After three weeks, there were hundreds of ideas submitted by the team and even after one year of idea submission not a single innovation idea got implemented.

From what I hear & know about in various organization, this story is quite common and repeats itself in different ways every year and this does not surprise me at all.

Many businesses do not innovate not because they lack creative people, it is the working environment and the leadership issues which prevent innovation.  Innovation starts and ends with the top leadership. Innovation in any organization is dependent on how the top leaders perceive innovation and that can motivate or demotivate people to innovate.

It has been observed that startups are generally more innovative - it is because these companies are often founded by creative people - best illustrated today by Facebook, Apple, Intel, HP, Zynga, etc. (I am giving examples of well known companies as it is easier for people to understand. But I urge you to look around and you will also observe the same)

In this article, I have written a few pointers on what leaders should and must do to develop an innovative organization.

1. Fuel Passion

Leaders in innovative organizations bring in passion to innovate. Yogish, CEO of Purpleframe - an elearning startup in Bangalore is always taking about doing things creatively, he never stops talking about creative solutions and innovation. He never accepts mediocre work. His passion for innovation and creativity paid off. In 2012, his company won the Brandon Hall award for the most innovative technology. Brandon Hall award is like the Oscar award for eLearning, and companies all over the world compete for it.

Every great invention, every medical breakthrough, and every advance of humankind began with passion. A passion for change and to making the world a better place. A passion to contribute and make a difference. A passion to discover something new. This passion must also have focus - a strong sense of purpose.  The purpose acts like a lens to focus all the energy, generated by the passion on creating something new.

The top leaders have a bigger purpose: Ratan Tata wanted to Build a $1000 car.  Such a grand objective will then spur local leaders to focus on areas which will lead to the bigger objective - like building the most fuel efficient engine etc.

Leaders must fuel the passion - to accomplish just about anything. Without which,  employees become mere clock-punching automatons.

2. Celebrate Ideas

Celebrating creativity is not only about handing out bonus checks for great ideas  (although that is a good start).  It should also be celebrated with praise (both public and private), career opportunities, and perks.  In short, if you want your team to be creative, you need to establish an environment that rewards them for doing so.  Rewards come in many forms, and often the monetary ones are the least important.

EMC, one of the leading IT technology companies organizes an annual event to collect innovative ideas. Employees are encouraged to submit ideas and all employees are vote on the ideas submitted. The most popular ideas are even rewarded. Top three ideas are incubated by the CTO office for further development & implementation.

Leaders should initiate and promote these ideation sessions and have a regular annual events to celebrate innovative ideas. The best reward for creative idea is to implement the idea. However, note that not all ideas are equal and only the best ideas needs to be implemented.

3. Fail Forward

In most companies, people are so afraid of making mistakes that they don't pursue their dreams. The simply follow the rules and keep their heads down, which drives nothing but mediocrity.

When Thomas Edison was interviewed by a young reporter who boldly asked Mr. Edison if he felt like a failure and if he thought he should just give up by now. Perplexed, Edison replied, "Young man, why would I feel like a failure? And why would I ever give up? I now know definitively over 9,000 ways that an electric light bulb will not work. Success is almost in my grasp." And shortly after that, and over 10,000 attempts, Edison invented the light bulb. 

Every major breakthrough innovation in history came after countless setbacks, mistakes, and "failures." The great innovators and achievers weren't necessarily smarter or inherently more talented - they are simply not afraid of failures and keep trying.  Successful innovators don't let setbacks or failures kill their enthusiasm and have the ability to maintain their curiosity and imagination intact.

Failing forward means taking risks and increasing the rate of experimentation.  Some bets will pay off; some will fail. The key is to fail quickly. The speed of business has increased dramatically and every minute counts. The best businesses try lots of ideas and drop the losers quickly.

Agile innovation is another formalized process and method that allows companies to do small experiments - without impacting the overall business. By trying out ideas in smaller bits, one can minimize risks and costs.

4.  Foster Autonomy

Creative people want to control over their own environment. The trick of successful leadership is to hire creative people, give them a challenging task and get out of the way. Leaders should intervene only to clear some blockers or to give a broad direction.

Michelangelo would not have painted the Sistine Clapel - if Pope Julius II were to be overseeing every bit of work, questioning his brushstroke techniques and demanding weekly reports - for the record.  There is a direct correlation between people who have the ability to call their own shots, and the value of their creative output. An employee who has to run every tiny detail by her boss for approval will quickly become numb to the creative process.

Autonomy and trust goes hand-in-hand. The key is to provide a clear end objective, and let the creative team solve it. Leaders need to trust the team and let them do their best work.  Let them know that they have full trust and support. This will create a highly motivated and more creative team.

5. Have Courage & Encourage others to be courageous

Innovation needs courage to face the possibility of failures. It starts with the top leaders. Leaders must show their courage to support innovative projects and allow individuals the freedom to take creative risks without that overwhelming sense of fear or judgment.

Leaders should encourage their employees to  say what they think, even if it is controversial. Leaders make tough decisions without agonizing excessively. Leaders take smart risks which is needed for innovation.

6. Be Small, agile and Innovative.

Smaller companies tend to be more innovative and nimble. They have a stronger sense of urgency and are not afraid to embrace change.  In contrast, larger organizations often exist to protect previous ideas rather than to create new ones.

The leaders who believe that being nimble, hungry, and entrepreneurial have the right ingredients for business success.  In recent times, large technology companies have been reorganizing themselves into smaller business units, so that each business unit stays small, innovative and nimble.

Agile innovation rests on the principle that smaller teams working in parallel will be faster to innovate and the smaller size helps to deal with failures. Agile innovation teams are nibble and are faster to embrace change.

Closing Thoughts 

Innovation in organizations starts with the leadership. Leaders need not be hands on innovators - but must be active facilitators.

Innovation requires active leadership, courage to trust others and let them experiment and the ability to manage failures. It is the responsibility of leaders to ensure that failures do not become innovation blockers. Instead leaders can convert these failures into stepping stones for future success.

The key leadership skill for innovation is not about developing creative skills, but to create a sustainable environment for innovation. To do this, leaders must develop organizational abilities to create and sustain a culture of Innovation.

Also See:

Why Small Companies are more Innovative?
Agile Innovation

Wednesday, March 13, 2013

Innovation - Fuel Cell to power Smart Phones

A common problem with smart phones is power. Most smart phones run out of power within a day. Therefore a common need is for an alternate to the standard battery - which can power the phone for days or even weeks.  Today, we are no where close to developing such a battery that can power cell phones for days. So one has to look beyond the battery - into fuel cell technology.

One company, Lilliputian Systems a pocket sized fuel cell - Solid Oxide Fuel Cell (SOFC) and micro-reformer on a silicon chip based on technology out of MIT and Lawrence Livermore National Labs. This Boston-based company is using Micro Electro Mechanical Systems technology from the integrated circuit industry to produce extremely high energy densities. They are targeting the battery replacement market for the next generation of portable electronics.

Their first product is quite impressive - a pocket sized charger which uses butane. According to the company statements - this can charge a smart phone for 10-14 times per butane cartridge. The fuel cell has a USB port and will be sold under Brookstone's own brand. The fuel cell is said to be about the size of a thicker smartphone and is powered by cartridges filled with lighter fluid about the same size as a cigarette lighter.

As these fuel cells use silicon chip based MEMS - and with ever improving nanotechnology, we can hope to see cell phones powered by fuel cells.

Also see: 

Nectar Power
Lilliputian Fuel Cell Gadget

Download the tech paper: "Powering the Wireless World"

Tuesday, March 12, 2013

Innovation from Assumption Smashing - An example of Roundtail Bikes

Bicycle frame design has remained almost the same for last 70 years, all the popular bikes still have the old triangular/diamond frame. The diamond frame has been around for such a long time, it was almost next to impossible to think of any other design for a bicycle.

As part of my innovation coaching exercise, I always ask the audience to challenge the current assumptions and that will help them think of breakthrough innovations. For example, it took Apple to think of Mobile Internet as the main application for the phone - which resulted in iPhone. This was against the standard assumption of that time that people will user PCs for Internet and cell phones for calling. In my innovation workshops, I conduct an assumption smashing exercise - to help people break out of their current assumptions and come up with radical ideas.

Canadian cyclist Lou Tortola applied the same sort of logic to the frame design of his Tortola RoundTail road bicycle. This is a revolutionary design of the bicycle frame that dramatically increases comfort, while retaining the lateral stiffness and pedaling efficiency of traditional diamond frame bicycles. This bicycle has been ASTM approved, is 10x greater in vertical compliance and 60x greater in vibration absorption, and helps reduce stress & fatigue to the riders spine.

When most other bicycles have a rear triangle consisting of straight seat stays, chain stays and a seat tube, the RoundTail simply has two shock-absorbing joined rings to create a radically new design - which can offer smoother and more comfortable rides. The round tubular frame was tested at Colorado's Microbac Laboratories and was found have sixty times better shock absorption than the traditional triangular frame design.

This is a classic example of radical innovation by assumption smashing.

Also see: http://www.roundtail.ca/

Has Apple lost its "Cool"?

Few weeks ago, a parent asked my opinion on which tablet to buy for his son - Apple's iPad4 or Samsung Note. As an Apple user, I recommended iPad and also mentioned the advantages of 'parental control' features in iPad. But the young boy's heart was set on Samsung and I couldn't change his opinion. So a week later, his parents bought him a Samsung Note 10.1" tablet for his birthday.

I was there at his birthday party taking my daughter along for the party - watching him and his young friends play with the new tablet. I just stood there watching and hearing them drool over the new toy. The conversations among the young kids was an eye opener.

One kid made it very clear: "iPad is for parents and is boring, Samsung is cool." It was that statement which made me think of Apple in a new way and what I learnt after this incident was truly enlightening.

I tested out the same observation in my weekend class. I teach Computer Architecture to Master's Students at Manipal University. In a class of 37 students, all of them had an Android phones, 32 of them had Samsung, 18 of them had Galaxy S3. Not a single user had an iPhone or a Blackberry.

In India, carriers do not subsidize handsets, so users will have to pay the full price for the phones.  So price premium could be one of the reasons why users are migrating to Samsung, but the real reason is that Apple has lost its "cool" factor. Young users see iPhone and Apple as products for older people. Even at office, I observed the same behavior, only people over 40 are using iPhone - while all the young engineers are using Samsung or Sony or LG.

The change in consumer perception implies that the day's of Apple's dominance is coming to an end.

The Change is Real

For more than five years, Apple has maintained the same marketing strategy. The iPhone design has also remained the same, worse still - Apple makes iPhones in two colors only! Its almost like Henry Ford's statement: "People can buy a Ford Car in any color as long as it is black", In case of Apple one can buy an iPhone in any color as long as it is black or white. Customer can choose between iPhone 4S or iPhone5.

While the strategy of offering limited options was good five years ago, but not now. People want more options and Apple just does not offer that. In other words, Apple as a brand is not appealing to young users in India (and elsewhere in the world)

Eons ago, iPod was "cool". So when iPhone was introduced, consumers flocked to buy the next "cool" gadget. Apple had positioned itself at the white hot center. (see: Apple's Market Positioning) With passage of time, and death of Steve Jobs, people at Apple have maintained the same marketing plan and product designs. Consumer goods are highly perishable. With passage of time, Apple's marketing has become stake and Apple has lost touch with consumers and is getting bumped out of the white hot center and Samsung is claiming that center position.

Today, the consumers perceive Apple differently. It is no longer "cool" to have an Apple product. I tested this out with a group of college students and new hires - who recently joined work. I asked people to associate the following words with brand names.

Brand Names: Nokia, Blackberry, Apple, Samsung

Words: Cool, Old, Expensive, Cheap, Manager, Young, Hip, Stone, Boring.

The results of this exercise was not surprising. Blackberry was tightly associated with words Manager & Boring,  Nokia was associated with Cheap and Old.

Very few people associated Apple with Cool. The most common association for Apple was expensive, followed by Old and only 3 participants called Apple as Cool.

Samsung got the honors of being strongly associated with Cool, Hip, & Cheap.

This simple exercise was an eye opener for me. Though the results could have varied with a different sets of demographic groups. But then I selected the group which could afford iPhones or similarly priced smart phones. I would point out that not a single user in the group had a Nokia Lumia or Blackberry phone. There was only two users who had an iPhone - while the rest had Android phones from various manufacturers. (Samsung, LG, Sony, Micromax, Spice)


Implications of these observations are enormous. Apple could be on a verge of collapse in sales - but not a very drastic drop in sales as there are no other alternatives (other than Samsung/Android).
Apple's current user market is getting saturated, so the growth in incremental sales will fall to single digits (not counting the handset replacement market)

Younger generation do not see the value proposition in Apple iPhone or iPad. Consumers are not getting the value for their money, considering that they have to pay a premium price for an Apple product.

Apple's product management and product marketing has gone stale. Its innovation engine has stalled. Customers are no longer as excited or happy with Apple products as before. Apple's pricing and product changes - such has the smaller lightning adapter, which forced whole lot of older customers to send ridiculous amount of money for simple accessories, has started to alienate its customers in India and elsewhere in Asia.

All this implies that Apple will no longer be the king of Gadget world. Apple may maintain its dominance in the US market for some more time, but in India and elsewhere in Asia, Apple is at a point of losing its customers for good - and that is bad news for Apple's investors and shareholders.

Closing Thoughts

No company can maintain an above the industry average returns for long, no company can maintain its industry dominance for long. Apple's long reign at the top is now coming to an end - unless Apple can surprise and wow the world with breathtaking innovations.

In India, which is a very price sensitive market, Apple is losing and losing fast. Loss of mind share and brand value will have long term implications for Apple. Fortunately, for Apple, there are not many alternatives in the market - which gives Apple some breather to get its product strategy together and retain its dominance.

Also see:

  1. Apple's Market Positioning
  2. Why Are People Angry at Apple?
  3. Apple is Losing its Innovation Edge
  4. Apple loses its way with Maps
  5. Apple in India: a lost opportunity?

Monday, March 11, 2013

Challenges of Big Data

Today, all most all marketing magazines, journals, seminars, blogs etc are talking about the benefits of big data. While Big Data promises the gold for a marketer - in terms of having real time customer insights and the ability to influence customer's decision, it is not easy. There are major challenges in implementing really good technology platform needed for Big data analytics.

Getting the vital customer insights is more like gold mining - you need to process 3-4 tons of ore and dirt to extract 5 grams of gold. Big Data analytics will also have to run through tones of data first - except that with advancing technology, it is possible to get that insights fast and cheaper than ever before. Companies must work out the major challenges of Big data first - before they can make use of the customer insights.

Challenge-1: Get the right data source

Today, in most organizations, data is distributed in multiple databases. It is common to see 50-60 different databases. In larger companies, it is common to see data scattered across 100+ databases. So identifying the right data sources for the big data anlytics is the first big challenge. Given the dynamic nature of business today - especially in high-tech world, with mergers and acquisitions, the number of data sources just keeps increasing.

Integrating multiple sources of data is still a big technical challenge and is yet to be solved by IT.

Challenge-2: Choose the right technology.

Another challenge is to select the right technology platform. Today there are several big data technologies in the market: Hadoop, Mongo, MIKE 2.0, NoSQL etc. These new technologies offer an opportunity to analyze very large amounts of unstructured data at a scale and speed that was simply not possible just a few years ago - but selecting the right technology platform is based on the type of analytics you need - which depends on the data sources (see challenge-1)

Challenge-3: Get the right storage IT infrastructure

Big Data analytics needs big data storage and networks to move the big data around. Since the data exists in multiple databases, consolidating data will require a much bigger storage capability and a faster network to move the big volumes of data around the corporate network. In many cases, the current IT infrastructure is inadequate to meet the demands of big data. Data storage & network bandwidth management is still a big challenge for most companies and this has to be resolved before companies can benefit from big data analytics.

Challenge-4: Have an action plan

Big data analytics is useful only if one can act on the analytics. Since most of the real time analytics need real time action, there must be a plan on what to do with the analytics. Today, Big Data is more like a technology hype than a complete business solution with a clear path to business value. So before companies can start on their big data project,  they have to separate the hype from reality and have a clear cut plan on what analytics to run and what to do with it.
Today, most companies don't even act on the customer feedback that is readily available. Marketers don't look at basic Web analytics to act on the insights that have been at their fingertips for years. In such case, should the company be willing to act on the insights you could generate from a Big Data initiative! And for that there must have a plan.

Challenge-5: Avoid the data trap!

Data analytics is not everything. Customers have emotional reactions too and in many cases, customers do not really know what they really need. Henry Ford once said "If I had asked people what they wanted, they would have said faster horses." Customer insights and marketing plans must not rely solely on analytics!

Closing Thoughts

Big Data analytics is a key resource for any marketer and can be a competitive advantage. There are several success stories of businesses using big data to improve the business. However, most companies will hit road blocks on the journey to this land of gold. Today, Big Data is more a piece of the technology than a complete solution with a clear path to business value. Only big technology companies have been able to exploit the benefits of Big Data.

Customer behavior is complex and customers are emotional. So no matter how robust the analytics  is, it can provide only a part of the picture. It takes human intuition - tuned by big data analytics to really make a difference and create a success story.

Sunday, March 10, 2013

Why Small Companies are more Innovative?

In my article Agile Innovation, I had mentioned how companies can increase their innovation capabilities, but this is easier said than done. Large companies cannot change their organizational structure to implement agile innovation. Big companies use acquisitions as path to innovation. This is very well explained by Steve Blank in his article titled: Why big companies cannot Innovate. In the article, he rightly observes that "It's not surprising that younger entrepreneurial firms are considered more innovative."

As an innovation coach, I have always looked at innovative organizations and observed that there are few things small and entrepreneurial firms do right - which makes them innovative. Essentially, startups have an ecosystem which encourages collaboration and innovation. In my previous article: Agile Innovation, I had mentioned that the first step is to create an Agile ecosystem for innovation. But then how do companies create an innovative ecosystem? Or what are the characteristics of an innovative ecosystem?

This article will highlight six aspects which create an ecosystem that fosters Innovation.

1. No organizational Silos
2. Value Diversity
3. Challenge existing Assumptions
4. Everyone will contribute
5. Identify, Nourish and exploit valuable resources
6. Hammer the message home

If one were to walk into any of the startups anywhere in the world - be it in Silicon Valley or Israel or Bangalore, you will see these six aspects.

No organizational Silos

Startups are often have flat organizations and do not have organizational silos. The lack of organizational structure creates a perfect ground for people to collaborate and innovate. Flat organizations also helps in eliminating beauracracy. With little organization hierarchy, ideas are measured on the inherent value. This eliminates organizational politics and faster innovation.

Value Skilled People & Diversity

Startups value skilled people. In places like silicon valley - there is wide diversity as people come from different parts of the world. So when you look at most startups, you will find people from different backgrounds, ethnic cultures and skill sets. This diversity creates a fertile ground for new ideas and challenging current assumptions. Diversity also provides different view points to the same problem and avoids group think.

Challenge existing Assumptions

Startups are often founded on the notion of an opportunity - which in many ways challenges the current status-quo. Challenging the currently held belief or assumptions will require new thinking and ideas. Successful innovation emerge with the older assumptions are proven wrong and new opportunities are identified. Founders of startups are also have rebel streak in them, and they tend to attract similar people so that they all can effectively challenge the current status-quo.

Everyone will contribute

In Smaller organizations everyone knows everyone else. So there is no room for slackers or freeloaders. The transparency in the organization, the collective work environment and a common message will make everyone contribute towards innovation and all contributors will be rewarded.

Identify, Nourish and utilize creative talent  

Small organizations often value of talent more than larger organizations. As individual's skills are easily known in a smaller organization, the leadership or founders are able to identify, nourish and utilize the creative talent of its people. As the individual's skills are better recognized, people are more motivated to do more and be more creative.

Hammer the message home

Founders at a startup are easily accessible and are constantly talking about the innovation objectives, the market plans and how their small company can win. Here all employees are constantly reminded on the importance of innovation and have targets to meet. The spirit of innovation is everywhere and employees become truly innovative.

In large companies, employees are mainly working on their main operations task & innovation becomes a part of annual leadership speech. Employees in large organization are often told to be innovative and work on innovation projects in addition to their regular day jobs. And just does not work.

Closing Thoughts

Smaller organizations are inherently more creative and innovative than larger organizations. This implies that large companies must reorganize into smaller innovation groups and that can help speed up innovation - particularly in Agile Innovation. Alternatively, big companies can buy innovation by acquiring the small, innovative startups and then provide the benefits of large organization scale and reach. Companies such as Cisco, EMC, Apple, Microsoft, IBM etc. have created special groups that are skilled in identifying and acquiring small and innovative companies.

Saturday, March 09, 2013

Challenges with Electric Cars - Tesla continues to struggle

In my previous Blog: Challenges with Electric Cars, I had outlined the main problems with electric cars an year ago. Even now, most of those problems exist - and can be seen with the troubles at Tesla Cars.

The fourth quarter results of Tesla motors showed a bigger loss - $89.9 Million and the new car sales are still not enough to break-even. Though Elon Musk gave a rosy picture on the fourth-quarter results - talking about record bookings and increased production & revenues, the troubles seems to be deep rooted and persistent.

To begin with, the company's financial position is messy, piling losses has converted Tesla into a  cash burning machine. Tesla has been racking up losses and burning through cash so quickly that it was forced to issue a secondary stock offering in the hopes of drumming up a rescue operation

Another problem, a deeper and more dangerous technical problems with battery technology still remains. Tesla cars use the same Lithium-Ion battery technology as Boeing used in 787 Dreamliner. Since the batteries are extensively used in commercial airlines, the battery problems were exposed faster.

The Lithium-Ion batteries have another major technical problem - popularly called as "Brick". Once the battery is ever totally discharged, the car becomes a "brick": a completely immobile vehicle that cannot be started or even pushed down the street. The only known remedy is for the owner to pay Tesla approximately $40,000 to replace the entire battery.

See: Tesla Motors' Devastating Design Problem

Given the high cost of  replacing battery pack, not all first time customers are likely to become second time customers and not all bookings are being converted into actual sales.

There are two other hidden challenges: Tesla plans to expand its network of super-fast, free charging stations along highways. The next charging stations will appear on the East Coast and in Texas, Washington, and Illinois. Building this network of charging stations will be a big drain on the company's financial position.

Another challenge for Tesla is the falling crude prices. With USA, Iraq, & Libya increasing crude oil production - the average crude oil prices are dropping. This coupled with countries dropping subsidy to solar power generation, implies that cost of green technologies will remain high and noncompetitive for years to come. So beyond the initial hype of a fast electric "green" car, Tesla will have no markets - which implies that the proposed increase in sales volume is unlikely to happen.

With increasing costs and lower sales, Tesla will eventually have to visit Chapter-11!

Also see: Challenges with Electric Cars

Friday, March 08, 2013

Agile Innovation

Continuing on the product review of Blackberry 10, and the possibility of Blackberry regaining its market leadership. It is clear today that even in the best case scenario Blackberry will have to compete for the third place! Even the race for third place will be tough - with Microsoft/Nokia, LG, Sony & HTC competing for the same third place. As the first & second place positions are already decided, the winner for the third place position will have to bleed in the brutal price war with HTC & LG, so even winning the third place will be a hollow victory. But then, Blackberry 10 and BES 10 are truly innovative products. So what went wrong? How can an innovative company introduce a truly innovative product and still fail?

The answers to these questions is: Speed of Innovation, or the lack of speed in innovation. By the time Blackberry developed Blackberry 10 OS, BES 10 and Z10 handset, Samsung released close to 30+ models of Smart phones and 10+ models of tablets. Apple released four new versions of iPhone and Tablets, developed Siri and iCloud and expanded its retail network globally. In other words, Blackberry was too slow for the market.

Today, Samsung has set the a scorching speed for introducing new products and Apple has set the high bar for quality and innovation. So for Blackberry to regain its market dominance, it must beat both Samsung in terms of new product launches or beat Apple in Total Customer Experience. Which is a tall order for any company, and hence Blackberry is forced to fight for third place.

Using Blackberry as an example, I want explain one of the principles of success with innovation called Agile Innovation.

What is Agile Innovation?

In a simplest terms Agile Innovation is innovating faster than the competition. But this is a lot harder and lot more complex than it sounds.

Innovation is an outcome of creative thinking (1% inspiration) and hard work (99% perspiration). So there is a built-in paradox with Agile Innovation! One cannot be fast and be creative at the same time. For example, if you try to write a creative poem in 30 minutes - I am sure, even with your best effort, it will be a lousy poem (or a copy of a popular poem/song).

The speed is spurred by competition and ambition to succeed, it is extremely difficult - except by sheer chance - to come up with a truly creative new idea under pressure.

Creative work needs time! Period.

But the market demands new & innovative products to be introduced faster than ever before.

So enter the world of Agile Innovation. A whole new process centric approach to innovation.

Agile Innovation is process of releasing new and innovative products at a regular intervals - while each release of a product has an incremental innovation over the previous release.

The concept of Agile Innovation has its roots in "Kaizen" the Japanese principle of continuous improvement and Agile product development.

With Agile Product development, companies can introduce new products at regular intervals and with Kaizen, the product is improved in each release. So Agile Innovation is method that ensures that each release of the product has innovations and it is possible to make course corrections - if the innovation is not well received. So instead of having one big-bang innovation - Agile Innovation splits it up into a number of smaller innovations spread over time, which enables market corrections when needed.

Another way to look at Agile innovation is to compare it with building a BIG Pyramid Vs moving one stone at a time. Each stone helps build the final pyramid - and in a phased manner - with the option of changing the plan if needed.

Need for Agile Innovation

Today, the markets and investors demand higher earnings and faster innovation. Companies have to cut the lead time required for innovation by 50% or more and offer differentiated products. Throughout business history, it has been noted that the first movers get the advantage of higher market share and higher returns. Also having multiple product releases leads to faster feedback from customers and enhances the learning cycle. Finally, Agile Innovation increases the capacity for innovation.

Agile Innovation is best suited for new product development - particularly in areas that has higher levels of uncertainty. Be it totally new technologies such as Cloud computing or renewable power etc. or in areas which is seeing massive growth and intense competition - such as cell phones.

For products that have long development cycles,  agile innovation is risky. Therefore it is best to try to break the long development cycle into shorter cycles - with the first cycle delivering the minimum features needed to release the product.

For stable & mature product areas - where there is little new development and products are mostly in sustenance mode, then Agile innovation is not the right choice - as the cost of release (& development) is often much higher then the incremental revenue.

How to implement Agile Innovation? 

As it becomes clear for companies that Agile innovation is the way to go, it raises the question: How to implement Agile Innovation. Implementing Agile Innovation is not easy. It takes a strong commitment from the entire organization - from the board of directors to front-line employees. The top management must commit to the required investments and organization changes. The front-line teams must be trained in agile methodologies and empowered to act independently. Top management must create adequate financial structures to closely monitor the success/failures of agile product releases. In short, the entire organization must be geared up for the agile world.

Its almost impossible to list and document all the steps needed, but here are the major ones needed.

Step-1: Create an agile ecosystem

Agile innovation relies on active interaction between users and developer. The first step is to create an  environment that allows for free interactions. Empowerment and collaboration are an absolute must. Rigid process or hierarchy does not help.

Creative ideas do not come from a lone inventor. Most of the creative ideas come constant interactions between creative people. Ideas take time to mature and evolve from a vague concept to something concrete that can be implemented.

Agile Innovation requires responsiveness to rapidly changing business environments and customer needs and so empower front-line product development staff to collaborate across organizations silos - this will encourage meeting the business objectives with a skilled, motivated, and self-organizing teams.

Step-2: Create an Innovation Pipeline

The long development cycle and long product life cycle requires  arduous research and development cycles which increases risks. With Agile Innovations, firms must shift their strategies to a more rapid understanding of customer needs and quick delivery of new products and services.

This means that firms must have more products and services in the innovation and development pipeline than ever before, and must launch more new products and services to keep pace with demand and competition.

With Agile Innovation, greater profits is possible with a shorter period of time as companies can respond faster to competition and deal with faster obsolescence of products. This, in turn, reinforces the need for the efficient use of ideas, which will drive new product and service creation.

Step-3: Focus on a single user persona

Since the basic principle of Agile Innovation is to opt for a larger number of releases instead of one big release, each release will have to concentrate on a small set of features. So each release must concentrate on meeting the needs of a particular user group. The first release concentrates on early adopters, the subsequent releases then concentrate on widening the market base by concentrating on features/innovations needed to please this new market segment. The second release concentrates on customers in the adjacent markets while retaining the early adopters and so on.

Main benefit of focusing on a single user persona is that the scope and hence scale of each release is minimized - which in turn lowers the risks involved and maximize profits. In many cases the exact requirements of a particular user group may not be well understood or known - say for example while the company is developing the product in the US, the target customer is in Japan. In such cases the new product releases may have to be tweaked in subsequent releases through focused experiments.

Step-4: Develop Focused Experiments

New product development is inherently risky. So when the user requirements are now clear or when the core technologies are not well developed, it is better to have some focused experimental products to test the market or core technologies. This way, the main product line is not impacted by a failure of an experiment. For example, Samsung released Galaxy Note - to experiment the market reaction to phablets - the hybrid between smart phone and Tablets. Developing a separate product and separating it from the main Samsung Galaxy S series was a great way to experiment.

Step-5: Iterate, Iterate & Iterate

Traditional product development tends spend a lot of time in defining a perfect product and then spend a whole lot of time and money executing it. By the time, the fist customer views the finished product - a while lot of time and money would have been spent. Like in case of Blackberry - which took about 2 years to develop. And by then, the market requirement could have changed or the competition could have changed the market landscape.

Agile Innovation calls for having multiple releases - releasing in shorter time and with each release learning from customer feedback - which is then applied to the next version of the product. This ensures that the product is at all times kept close to the needs of the customer. Which makes for a better product.

Agile innovation allows for several iterations to run in parallel - which in turn speeds up innovation. New technologies developed in each iteration can be applied in subsequent iterations. The parallel development increases the speed to innovation - while minimizing risks to other projects.

Agile Innovation is characterized by experimentation, and rapid prototyping. Each release is like a beta release which is used to test the product and improve on it. This approach allows the companies to experiment a lot and scale up on things that work.  Agile Innovation is inherently adaptive and allows for incremental development that minimizes risk, and keeps better control on costs.

Closing Thoughts

Agile Innovation has its roots in Agile project management - but it is not processes. It is a compete redesign of innovation, designed to help organizations react better and faster to changing market landscape.

Agile Innovation focuses more on outputs, outlining a product vision that has a strong customer focus  and minimizing the risks.

As a shining example of Agile Innovation, Samsung, Today, sells more mobile phones, and more smart phones, than any other company. It competes in all markets, from the high-end down, and is pouring its record profits into expansion and advertising. Samsung is now among the most valuable brands on the planet.

Samsung rose to prominence by out-grinding rivals in commodity markets, and it approaches phones and tablets the same way, by quickly pumping out handsets with incremental tweaks and improvements.

We are in the middle of a paradigm shift towards Agile Innovation. Any company that still relies on traditional innovation process will suffer. Companies will have to tweak its existing business models and methods to support agile innovation.  Now is the time to determine new business models, use of customer insights and feedback and to create new products and become more nimble, more agile and more innovative with Agile Innovation.

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Product names, logos, brands and other trademarks referred to in this article are the property of their respective trademark holders. These trademark holders are not affiliated with this blog or website. They do not sponsor or endorse this article.   

Sunday, March 03, 2013

Yahoo! - All Hands on the Deck

Recent memo from Yahoo CEO Marissa Mayer's - banning work-from-home and calling all employees to be in office has come under sharp criticism from media and experts.  I was initially surprised and dismayed by the news - but then I realized that it was the right think to do and I have full support to Marissa Mayer's decision. Over next few days I read lot of criticism on her decision. The worst one came in Networkworld.com's blog By Zeus Kerravala:  Marissa Mayer: CEO of the year 1955 

While experts and mavens criticize Marissa Mayer's decision, the same people will agree on the following:

1. Nature of Internet is changing from PC to Mobile world.

2. Yahoo is not a leader in Mobile Internet.

3. Yahoos's current revenue is tied to PC based Internet

4. Yahoo is at the risk of becoming irrelevant.

By the end of 2013, majority of Internet traffic will be from mobile devices - Smart Phones and tablets. In this new world, Yahoo faces several challenges. Today Yahoo does not feature in top ten Apps for iPhone or Android or Windows 8.0 or Blackberry. In short, people who use Mobile Internet do not need Yahoo! Thus making Yahoo irrelevant to the Internet.

Yahoo is also becoming irrelevant to the PC based Internet. Taking my life as an example, I have been using Internet ever since the days of Archie & Gropher. Initially, when World-Wide-Web was introduced, I was among the earliest to have a Web email - Rocketmail & Hotmail. Rocketmail was taken over by Yahoo. I also became a heavy user of Yahoo search (replaced by Google), Yahoo Photos (replaced by Piccasa), Yahoo Groups (replaced by Google Groups), Yahoo Finance (replaced by Google Finance), & Geocities (replaced by Blogspot). But then Yahoo decided to shoot itself on its feet  and killed Rocketmail, Yahoo Photos, & Geocities.  As a result, today, I do not use any of the Yahoo Internet properties at all. So for me Yahoo is irrelevant.

Yahoo's slow slide to irrelevance is seen in its decline of market share and revenue, and Marissa Mayer is acutely aware of this. She has been asked by the Yahoo board to turn things around and make Yahoo a leader of Internet once again.

In order to achieve such a challenging goal, Marissa has to navigate rough seas and take tough measures to transform Yahoo. As a leader of Yahoo, she has just called for "All hands on the Deck" - calling all Yahoo employees to act with deep sense of urgency.

Marissa has already laid out the next steps in the transformation of Yahoo.

Step-1: Create a sense of urgency

While there is no doubt that Yahoo is in a crisis. Yahoo needs to transform quickly to stay relevant and protect its revenues. Marissa is also leading the charge to create a bigger sense of danger within its employees. The recent announcement of plans to kill old products is the best way to kill any sense of complacency and create a sense of urgency. I would compare this to a old military strategy: "Burning your bridges to win the war"

See: Yahoo's new strategy - Kill Old Products (http://www.businessinsider.com/yahoos-new-strategy-kill-old-products-2013-3)

Once a sense of urgency is created, Marissa Mayer should ensure that all hands agree and work towards the transformation .

Step-2: Have a strong Moral purpose with empathy

Any change is hard, Marissa Mayer is driven by resolute purpose. She has a deep change insight - vision of what the future of Yahoo will be, and she must not let that insight stay with her - it must be shared by the entire organization. To succeed, she must be persistent with her vision and ideas - a leaders simply do not, and would never, give up in face of opposition to those ideas.

This requires empathy and respect to deep human values. In order to win over others, leaders have to possess the impressive empathy that enables them to understand why people disagree and then figure out how to relate to the objections and make them see things in they leaders see it.

So far, Marissa Mayer has been able to explain the real reasons for calling all employees to office and taking away the work-from-home option. I am sure, Marissa Mayer has articulated the reasons for her actions and have won over the internal critics. There are stories on web - about employees agreeing with her and some being delighted with this decision.

A leader cannot call for "All Hands on the Deck" without a strong purpose.  In case of Yahoo, the purpose is very clear and articulated in Yahoo's product strategy - A 21 page product plan for next three years which can be summarized into five main action points:

1. Infuse deep personalization using science and data into every consumer and advertising experience we build.
2. Delight our customers with best-in-class products, iterating frequently for constant improvement.
3. Build for connected devices first with localized, in-context, multi-screen experiences in mind.
4. Power real social relationships with features that enable conversations around content.
5. Build a digital media ecosystem that creates a premium marketplace for advertising and content and distributes Yahoo! experiences across the Web.

- See more at: http://allthingsd.com/20120927/what-will-marissa-do-heres-yahoos-2011-three-year-21-page-product-strategy-plan-that-reads-a-lot-like-mayers-new-vision/#sthash.d8z77ehG.dpuf

Once the purpose is articulated, the strategy is defined, the next step is to execute on it. It is crucial for Yahoo to stay on course against all odds and in early stages of execution, display empathy to opposition and win them over. Leaders in successful organizations focus on a small number of core priorities, stay consistent on the message, and develop people who convert the vision into reality, all the while making course corrections as necessary.

Step-3: Motivate People to Collaborate 

Once all hands are on the deck and their purpose is well understood, Leaders must motivate people to collaborate and be more creative to achieve greater results.

Marissa seems to have brought some ideas from Google. People tend to be more creative and successful when the collaborate with others. Once all employees are meeting face to face in offices, they can bounce off ideas from each other, feed on other people's ideas and create new things faster. Google spends enormous amounts of money to create the best workplace for its employees  - which is collaborative workplace and the results are obvious. I am sure that in next few months, we will see a rapid transformation in work place at Yahoo and soon Yahoo will be ranked as one of the best places to work.

Closing Thoughts

"Wisdom is the ability to act with knowledge while doubting what you know" - Pfeffer and Sutton

Leaders must always be confident of the outcomes. As a change leader, Marissa Mayer has displayed a strong confidence in her actions. She understands that failure is not an option for Yahoo and to succeed she must act wisely. Everyone at Yahoo knows that the future is unpredictable and yet Yahoo must hurl itself into this great unknown, solve complex problems in the process while exude confidence in the end result.

I would like to compare the situation at Yahoo with the original Star Trek's tag line - "Space: the final frontier. These are the voyages of the starship Enterprise. Its five-year mission: to explore strange new worlds, to seek out new life and new civilizations, to boldly go where no man has gone before."