Making Phones Smart

I’d call it Mobile 3.0 but you’d accuse me of band- wagoneering. Maybe the Year of Mobile, but you’d say I was writing cliches. Describe it as you will, we’re on the brink of a new wave of innovation in mobile that, for the first time, will start to deliver services that adapt themselves to changes in place, mode and context. This new wave of services will put the smart into smartphone.

Mobile 1.0 was about communications, and its successor about apps. But the apps were little more than services designed for a desktop computer, yet squeezed onto a mobile. No surprise that it took a while to start to see the potential of mobile – new content forms always lag behind technological innovation. The first television broadcasts were nothing more than a camera placed in front of a radio announcer. The first films ever made were shot through a proscenium arch to replicate the theatre experience.

But now mobile is ready to come into its own. The next generation of services will combine understanding of place (where I am) with mode (work mode or relaxing mode, parenting or playing) and context (knowing what information is urgent in the mode I am in). They won’t just be apps that I need to direct my requirements at, they will be services that start to help me with my life without even being asked.

Imagine a service that amends my voicemail message according to what’s in my diary (telling callers that I am in a meeting now but am due to finish in 40 minutes). Or one that looks at transport congestion data periodically when my diary states that I have a short time to get across town for my next meeting (so it can warn me I need to leave my current meeting early to get to the next one on time). Could a smartphone service assess the outside temperature on a winter’s morning and know what time I always leave home, so turn on the car heater three minutes before I go out to get in the car? Or figure out which tweets or IMs are important enough to come through to me when I am in relaxing mode in the pub on a Friday?

Apps have transformed the way we regard the computer in our pocket. It’s time now to put that together with the increasing power of the smartphone to combine existing data sources with location, voice control and an ability for the phone to learn from feedback. And then watch as innovation allows the smartphone to become the intelligent agent that we probably all (and I certainly do) want it to be. The Third Age of Mobile is dawning and we could be in for an exciting 18 months.

Addressing ambiguity

Can large businesses innovate? Not ‘are they good at it’, but ‘can they’?

Businesses want to innovate to make money. So they do what comes naturally – offer their innovators financial rewards. But financial rewards undermine innovation. Not just prove unhelpful, but actually undermine it.

London Business School Professor Lynda Gratton has developed compelling evidence to show how innovation is hindered by extrinsic motivation – the possibility of a pay rise or a promotion, for example – because the individual will focus on how he will be evaluated, usually in direct competition with others: “Creativity is most free-flowing when people are inspired and self-motivated, and enjoying the process itself, rather than under pressure to deliver what someone else wants”, she points out.

So businesses aren’t good at rewarding innovation because they don’t understand the innovator’s motivation. But that alone doesn’t mean that businesses cannot innovate. Lynda Gratton has spent a long time looking at those models of internal competition so beloved by larger organisations, and how encouraging competition can suppress creativity and hinder performance. Gratton states “the best performance is actually proven to come through collaboration. If more than 32% of team members are competitive, collaboration will not work”.

Even if 32% sounds suspiciously precise, the principle is sound. Internal competition (such as competing P&Ls), almost always backed up by direct financial incentives, is consistently trumped by collaboration within and across businesses.

Last month New York Times columnist David Brooks said that businesses were architects of their own doom for promoting competition, arguing “competition has trumped value-creation and the competitive arena undermines innovation”. He pointed out that we shouldn’t be looking to compete – because we should concentrate on defining a niche market – creating and dominating that niche.

So it’s not just failing to understand innovators that large businesses are doing wrong, it’s their continuing reliance on internal competition to drive growth. But isn’t there still hope for businesses, provided they abolish internal competition and try harder to find the right motivational systems?

Here’s where it gets really tough for those larger businesses. They got to be that size by developing advanced systems to address uncertainty and volatility. As changes gathered pace, they deployed a range of traditional management techniques and increasingly algorithms to improve their ability to react to and evolve in a world increasingly marked by uncertainty and volatility. The entire management structure was built to improve the organisation’s ability to deal with uncertainty and volatility. And by being better at coping with these than their competitors, they got to survive and even prosper when uncertainty and volatility seemed to be dominant in a changing world.

But now it’s ambiguity that’s knocking businesses for six. Uncertainty is not knowing which number will come up on the dice. Ambiguity is not knowing how many dice there are, or how many faces on each dice, or even what the numbers mean on each face. Go back to David Brooks’ comments now and “concentrating on defining a niche market, creating and dominating that niche” becomes the new purpose for business. Now larger businesses’ ability to handle uncertainty and volatility don’t count for much. Because while they’re dealing with those threats, innovators are coming along redefining entire business sectors by creating and dominating those niches.

Entrepreneurs seek out ambiguity, because that’s where their agility, lack of corporate overhead and speed off the blocks allows them to spot, create and dominate niches. In a time of intense ambiguity, larger businesses need to get better at managing a portfolio of innovation, allowing their most innovative people to explore and define new niches. That’s going to require not only the HR department to re-examine reward systems, and the COO to re-examine a company structure of competing P&Ls, but also the whole Board to re-examine how the business is measured and the CEO to develop a tolerance or even a taste for ambiguity. We will need to innovate organisational structures and behaviours, reward systems and hierarchies at the same time in order to succeed. And we will need to finally bury the idea that internal competition is valuable.

So what we can we do right now? Let me finish on a pragmatic note – a few learnings from my time as an innovation catalyst in a large creative organisation as well as my time as an entrepreneur:

  • mix it up; move people around physically and organisationally; form and re-form teams with different disciplines; distribute HR and finance throughout the building; put left-brain people and right-brain people next to each other
  • provide official channels (like corporate social media channels such as Yammer) for ideas-sharing and internal communication; and let unofficial channels prosper; understand that some of these initiatives will fail
  • provide space and time and encouragement for groups to come together to think; look for new corporate strategy to come from these impromptu groups
  • implant “innovation catalysts” – events; people; or ideas; or stimulus to think differently
  • encourage different thinking in areas outside your core business focus; innovation often happens in the “white spaces” between what we think we’re supposed to do each day
  • openly celebrate the outputs of all this new thinking; praise the ideas and the innovators; show staff that their thinking is valuable and is contributing to new energy within the company
  • ensure the CEO, CFO and COO are seen to buy in to the approach