Tag Archives: Innovation

All posts that talk about innovation theory and technological innovations

Restrictions Can Drive Innovation

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As a Lean process improvement guy as well as someone that really loves reading about innovation I’ve always taught my students that regulations, limitations, and restrictions on processes, equipment, and activities offer us an opportunity to innovate around those rules. The way that I describe it is that rules place you in a box, but within that box you can move up and down and diagonal and develop some really interesting ideas because of what you can’t do. However, you don’t focus on what you can’t do as much as focusing on how you can avoid that and what you CAN do.

I saw a picture to a great discussion about how gluten free diets are forcing, at least one chef, to be more innovative in their cooking. I’d post it, but the image is so large it’d take up the entire post, so I linked it above. Essentially the chef had a dish with polenta on it and a base that was all glutenous flour, but he figured out a way to make it all polenta, which actually created a unique dining experience that he felt offered a superior taste.

Another area where regulation has been the root of many innovation is the financial sector. They complain the most about regulations because it’s “bad for the economy” or something like that. However, CDO’s and everything that caused the last collapse was in response TO regulations. They figured out how to work around the regulations and make even more money than before. In fact, many banks started to follow suit because they weren’t able to post as high of profits and were getting hit by Wall Street for under performing comparatively.

This is one of the reasons why I personally don’t see value in fighting regulation other than to shape it in one direction or the other. The companies that are able to exploit the regulation the best are going to end up being first to market or extremely fast followers. Meaning they will make a great deal of money and likely dominate the market. If you look at regulation as a “disruptor” and an opportunity to disrupt the regulation, you’re going to do really well as a business.

The Innovation machine – This is a “how to” guide for Innovation management

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As many of my blog readers know I’m an innovation reading junky. I’ve read many of the books on how to manage, from a individual’s perspective, creating an innovation or even at a high level how to run an innovation project. However, this if the first book that looks at things in a very systematic manner utilizing a lot of case studies. The Innovation Machine by Rolf-Christian Wentz is a fantastic introduction into a series of case studies of the most innovative companies in the world.

Books like the Innovator’s Dilemma are a lot more prescriptive in what a business should do or how a given business has been disrupted. Typically they focus on the smaller entrants that enter a market and beat the incumbents. The Innovation Machine on the other hand looks at the incumbents and analyzes what the organization did culturally to enable innovation. I believe books like Innovator’s Method and the Lean Startup address a different need: how to take an innovative idea to market. This book touches on those things, but looks at how the whole organization can enable those Lean startups within the organization and use it’s size to maximize the results.

The Innovation Machine also touches on the portfolio management aspect as well as some of the best ways to fund projects, staff projects (2 is best, a small room is next, anything else is doomed to fail), and finally how to integrate the project teams back into the larger business as a whole. No book that I’ve read has really discussed how to do this. All these topics are covered with clear case studies of some of the most innovative companies. He includes discussions of Google, Toyota, GE, P&G, SC Johnson, BMW, Microsoft, Whirlpool, and a litany of others. The stories are referenced as he details the concepts that were leveraged by the companies in his case study.

I believe that this book is a must read for a CEO or a leader that values innovation. Especially since he calls out the massive differences between managing Incremental Innovation and Disruptive Innovation – he gives very clear practical examples and methods for managing them separately. I believe these are powerful and will help me identify projects I work on more easily as disruptive or incremental.

AMD, What Are You Doing?

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The past few months haven’t been kind to AMD. First Lisa Su, the first female CEO, ousted Rory Read. Now three leaders have left including the General Manager John Byrnes, CMO Colette LaForce and Chief Strategist Rajan Naik. Furthermore, it’s pretty clear that the remaining two leaders long term leaders, Mark Papermaster CTO and Devindar Kumar were sort of bribed to stay with restricted stock. This is on top of delays in their desktop, graphics, and mobile chipset and layoffs.

I think it’s pretty clear that AMD no longer has a clear strategy. AMD, while I was working there, was starting to put out some cool stuff that could really define the future of computing. Their APUs were best in class and could have been deployed in a lot of really cool applications. However, those never appeared to have materialized and now Intel is starting to attack the SoC market. While Intel’s Iris graphic chipset is way behind AMD in pure power, I think it’s going to play a serious role in the up coming years especially since Intel is leveraging a similar enough design that they are able to use the Open Compute Language that AMD championed.

Another area of concern for AMD fans is that John Byrne, shortly before his departure, announced at CES that AMD was steering clear of the IoT phenomenon. Which I found surprising considering that their strategy, only a year and a half ago, was to conquer the embedded computing space. Since they restructured again, that’s about 4 times in the past 4 years, they have clearly decided to forego that space. The IoT chipsets are likely going to be a disruptive technology to computing. For instance, this computer you can dock and upgrade every year for about $200, while Intel released a full Windows computer on an HDMI stick for $150. In the past I wrote that I thought that the dockable phone that would turn into a full computer would be the long term future, but these are the incremental steps to get us there.

AMD clearly doesn’t see these spaces the future. They are currently looking at where the market is now and not truly planning for the future. I was excited whenever AMD announced the partnership with Gizmosphere hoping it could compete head to head with the Raspberry Pi, but AMD is clearly failing to embrace that movement, since those devices would be powering the IoT and the maker movement. On the otherhand Intel is rushing to embrace these groups and sees these people as the way into attacking Qualcomm, Samsung, ARM, and Apple’s designs.

Low power is going to be vital for the future expecting a smaller and smaller niche of applications. In these applications, excepting graphics chips, AMD is getting crushed. Even in the graphics space AMD is starting to flounder with poor quality, as @NipnopsTV reported with his year old or so 7970 card.

All of these should be a concern for AMD fans. The company is not investing in the disruptive technology hitting their industry, their market cap is only $2.06B and their shares are at $2.66. They may be positioning themselves to get bought or could be at risk for a hostile take over for their IP or pushed into bankruptcy since their IP might be worth more than the company operating as it is. Look at Nortel to as an example where it’s IP was sold for $4.5B while everything else was just ditched.

Could we eventually see a Samsung R290 and a Samsung Kaveri processor? They gobbled up a ton of AMD’s engineers in 2013 definitely could happen.

Words, what are they good for?

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At work, I’ve recently been given the task of redesigning all my training documentation and plans for Lean process improvement to something else. Apparently, despite successes, some of my leadership team doesn’t believe in Lean. However, they fully expect improvements such as reduced turn around times, quality improvements, and reduced non-value add activities to just happen. That it’s simply expected to occur without any top down pressure or support. Without clear direction or proper tools to measure improvement or even productivity, how can anyone expect to drive improvement in their organization?

Lean is a tool to do that, but since some leaders don’t believe that’s the proper way to drive improvement, we’re having to monkey with the idea of what it means to be an efficient organization. Therefore, I’m going to be rebranding everything to Process Innovation because Innovation. This does an interesting thing, it forces us to change the language we use for continuous improvement. We can’t use words like Gemba (the place where work is done), Kaizen (continuous change), Jidoka (automation with a human touch), Poka-Yoke (idiot proofing). or Muda/Muri/Mura (waste, overburden, unevenness). Using these words isn’t just to try to force people to learn some Japanese. It forces people to slow down and think differently.

Regardless of your thoughts on Malcolm Gladwell, he raises some really valid points about language in his book Blink, where he discusses the example of Korea Air and the usage of English as a language in the flightdeck because it changes the way the first officer and captain think about each other. Lean emulates this idea by forcing English speakers to use Japanese words. It forces people to stop and think about what they are doing. Yes, it’s a foreign word, but the meaning drives a change in behavior simply because it forces the people listening to slow down and think. According to Daniel Kahnman, system 2, deep and introspective thinking, is lazy and lets system 1, Blink thinking, do most of the work. A change of language and specific words triggers system 2 to actually pay attention and not just accept what is said as fact.

Now with Process innovation, I’m going to have to invent my own language and rules to try to force a similar behavior. I’ll have to lean heavily on Lean, Six Sigma, and other improvement methodologies rather than just Lean. However, this might confuse Lean folks.

It’s amazing the impact of a few phrases on changing the way people behave and it’s amazing how they can cause people to react in a negative way. Figuring out how to work around other people’s language hang ups is key for a successful work life, unfortunately.

Comcast and regulation

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I believe that the 300 GB data cap that Comcast is tossing around is tomorrow’s 640k predictions from Microsoft. In 5 years when they are claiming to plan to implement it, 300GB will be woefully small. As it stands many games are 50GB and likely will only grow. As will the size of our movies we stream and other services that will develop in the next five years.

Comcast’s arrogant attitude towards it’s customers can only be described economically in one way: market failure.  If we had a strong competitive telecom market, Comcast would not be able to dictate prices in this way. We know this is true because we can see prices AND speeds that are significantly better elsewhere in the world.

There are two other results of this market failure, pushing regulation that prevents competition and preventing regulation that would prevent a foreclosure of another market. I’ll start with the regulation preventing competition.

In my last blog I mentioned an idea call private public partnership. This is the concept of a municipality working with a private enterprise to spread the risk of implementing a local high speed network because one of the big players won’t. Comcast and other telecoms have pushed and been successful at making these partnerships illegal in a few states. This means a small rural community can’t develop their own fiber network if comcast doesn’t do it for them. It also means a big city like New York couldn’t either. This type of regulation only hurts competition and helps comcast control the market. In the US these partnerships have worked well. Provo Utah sold theirs to Google.

The other way that Comcast is using this market failure is to push the idea that net neutrality is regilation. It is a bit, because it prevents comcast from using a monopoly to foreclose another market. This is what Microsoft got in trouble for with Internet Explorer.  Leveraging the monopoly of Windows to push out other browsers. In the EU the ruling against MS really help other browsers immediately. Comcast will likely try a similar tactic with their Xfinity platform by never having it count against your data cap. Pushing people to their platform and squeezing out Netflix.

The play to get Netflix to pay them is a long term play, hurts Netflix now, but essentially will be funding further development of Xfinity.  Don’t forget, Xfinity will likely get Universal content earlier as they own that conent. This will give their platform a distinct advantage over Netflix. It’s pretty obvious to everyone that the future of in home entertainment is streaming content. Hence, Google looking to buy Twitch.

Comcast is using the anti – regulation faction to fight net neutrality while leveraging that same group’s anti- government sentiment to prevent novel forms of competition to exploit customers and move into new markets. This is a dangerous problem because they will keep doing this to push out other competitors.