Innovation (on the) Super-Highway

Quietly, there was a gear change in motoring this month. A car drove onto the public road for the first time in California. No, wait, this gets more interesting. I actually mean the car drove itself, without a driver. Just a computer and a very large number of sensors doing the steering, braking and accelerating. OK there was a passenger there to grab the wheel in case a computer crash caused a car crash. But California has now joined Nevada in allowing cars to roam the public highway deciding when to stop and how fast to go.

For years, Google has been working on the first self-drive cars. For years, that work took place on old airfields and private roads. Now it’s all out on public view as the technology is tested to prepare the road (OK – no more puns) for commercial deployment. And that’s no longer too far away. Google co-founder Sergey Brin has said he wants to bring autonomous vehicles to the market in five years. Five years – it’s taken longer than that for European manufacturers to bring already proven hybrid (electric-petrol) engines to their brands.

This is fascinating on a number of levels. The car industry seems to be asleep at the wheel (sorry) on this one. The boss of a large UK marketing agency with whom I was talking last week had never heard of the driverless car – although his largest client is a major car brand. Then look at who is doing the innovating here. To be fair, Google’s not the only one researching the technology, but the rest are academic institutions, not the manufacturing giants of Detroit, Munich and Tokyo.

But for me what really stands out here is that for once, I am writing about audacious innovation. Not an incremental improvement or a new service idea. But something with the potential to transform our ideas about transport. With a driverless car, we could allow those with disabilities, those without licences, the very old or the young, even those who have stayed late at the pub, all to get home. We could set our cars to go back home after they’ve dropped us at work. We could have self-serve taxis and delivery vehicles. We could eliminate bad driving, drastically reduce road traffic accidents. Suddenly we can transform our roads and perhaps reclaim our cities.

Because for all the innovation that we’ve welcomed since the internet became a part of our lives, there isn’t much in the last ten years that transformed our day-to-day existence. I am reminded of the motto of Founders Fund, a venture capital firm started by PayPal co-founder Peter Thiel: “We wanted flying cars—instead we got 140 characters.” Last year Thiel told the New Yorker that he didn’t consider the iPhone a technological breakthrough. “Compare this with the Apollo space program,” he said holding up his iPhone. Twitter gives 500 people “job security for the next decade,” he says in the interview, but “what value does it create for the entire economy?”

It should be no surprise that Google is behind what I argue is a real example of audacious or disruptive innovation. Whether it’s culture, the founders, 20% time or freedom from VCs, they’re in an almost unique position of being able to invest time and brilliant thinkers in cracking some pretty interesting challenges. Of course driverless cars are not a cure for cancer or a solution to the world’s looming energy crisis, but they do have the potential to change a part of our everyday lives in a way which most, even today, might dismiss as a wacky sci-fi idea.

When I was at school (let’s just say a long time ago), the 21st Century was going to be an era of interplanetary space travel and bacofoil suits, an era of leisure where computers did all the work and humans did no more than a few hours of work a week. Somewhere amid financial crisis and short-termism, we replaced the dreams of a bright future with an era of political pragmatism. The driverless car might not be single-handedly take us off down an Innovation Super-Highway towards that bright future, but it feels more exciting than sitting behind the wheel in the traffic jam of incremental change.

This blog post was first posted on The Foundry’s blog. The Foundry is where I have the pleasure of spending my working hours.

Inspiration Guaranteed

I love working at The Dispensary. It’s a building with desks in it, but please don’t call it an office. I see it as a friend, art gallery, source of inspiration, incubator, place of collaboration. It’s a place of work that I really love going into each day.

Next to me is a science journalist, over there a songwriter then a photographer, across the way a product designer, downstairs an animator, there a graphic designer. It’s all the brainchild of Julie Rands and Peter Whitehead, who Julie calls a “strategic genius” who runs one of Bath’s most successful branding agencies, Radio.  They set out to create, in one of Bath’s riverside Georgian properties, an open-plan working space available exclusively to creative companies.

Rooms drift into one another, as do conversations, ideas and inspiration. There are people on their first start-up drawing on advice from people on their fifth. Collaboration has already moved into business incubation.  Simon Spilsbury, Simon Deshon and Mark Humphries got talking when they were each working independently at The Dispensary. Out of that conversation came The Creative Federation, an animation studio that makes branded content for online, internal comms, live events and broadcast. They produce some simply sublime work that I adore – work that has already been recognised for awards even though the company is less than a year old.

What makes The Dispensary a success is, at its most fundamental, what makes for successful innovation. It’s about putting together interesting creative people from different disciplines with different perspectives. Then stir and stand back to see what happens. It’s a recipe that keeps producing new ideas, fresh thinking and challenge. And it’s a model for the workplace of the future that presents a reason to congregate beyond a diary full of meetings.

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

Innovationeering 2.0 (and other buzzwords)

Incubation is suddenly hot again; accelerators are gearing up and hubs are the centre of the action. In the last week alone Telefonica (owner of O2) has launched its Wayra incubator space in London, while Orange and Publicis have launched a £250m OP Ventures fund to provide early-stage (start-up) and late-stage funding for tech companies. These arrivistes join an already established incubator “sector” from the pioneer and darling YCombinator, now arriving in London to replicate their huge success in the Valley, to locally-born and highly successful Seedcamp.

It’s not hard to see why multi-national giants like Telefonica and Orange want their piece of the innovation pie. Facebook’s IPO is set to be amongst the largest of the decade, Apple’s the largest company in the world, Google is still generating billions in profit. Whether you’re doing so to make money or re-vitalise your own in-company thinking, providing support to new start-ups seems to tick all the boxes. It should bring in fresh new thinking, attract new talent and re-invigorate existing talent, add to your share price and beats concentrating on the knitting.

But will it work – either for the multi-nationals or even for the start-ups? I can find no evidence that hosting start-ups re-invigorates a company’s portfolio. And listen to the “graduates” of YCombinator (the companies that have successfully grown since being incubated there) and they’ll tell you that it’s the energy and excitement of the YC founders as well as the environment, connections and alumni that make it such a uniquely valuable platform for a new company. Contrast that to the dominant logic of most large companies and I’d certainly argue they’re anathema to the vibrant, agile thinking that marks out successful start-ups.

I have never worked for Telefonica or Orange. They may be different; they might be able to make this work. But they will be the exception if they do. Generally, great new companies in the modern era are born of single-minded determination to beat the odds, driven by founders who won’t go through the hoops of investment committees and Board approval procedures, who just get on with it anyway. They do it because they want to bear the risk and reap the rewards themselves, not mitigate the risks and share the credit.

I am currently working on my fourth start-up. Of the first three, two were very successful and one much less so. But all of them were born of plans hatched over the kitchen table, in the breathless excitement of a couple of pioneers thinking they could beat the big guys at their own game. None of them was hatched in an incubator. None of them used VC- (or angel-) funding. What that meant was that we were free to focus where we saw the opportunity; able to spend our time building the business instead of looking for investment; able to act in an agile way. We made plenty of mistakes, and perhaps with different advice we would have made fewer, but the mistakes often went on to help us be successful.

In between those start-ups I have worked for large companies. And I have never seen the start-up mentality of the adopted child be taken on by the parent. Even where everyone in the parent company wants a culture change, it’s asking too much of the start-up to be anything more than a catalyst.

So my experience tells me that the culture of the large parent and the small start-up are and will remain mutually exclusive.

It’s not that I want the huge ambition of Telefonica and Orange to fail. I would dearly like to be proved wrong on this, because I agree with the sentiments that lie behind the plan: “We have an entrepreneurial deficit in the EU,” said José María Álvarez-Pallete López, Telefonica’s chairman and CEO, as he unveiled their incubator plan: “It’s not part of the mindset. If we do nothing, all the talented people will emigrate to the US and innovation is not going to happen in Europe. If you look at the biggest listed technology companies in the world, none of them are based in Europe. It’s worrying.”

It is worrying. And the problem needs a variety of solutions. My first start-up was in the US in 1986 and my entrepreneurial ambitions have never looked back. I, for one, would advocate sending more of our budding entrepreneurs around the work to stimulate truly global thinking. And then adopting a variety of solutions to seeding innovation here in Europe. Yes, we need specialist incubators and we need Angel investors and even VCs who can spot opportunities. But more than anything we need entrepreneurs who refuse to conform, who are motivated by cocking a snook at the established way of large companies. So let’s not assume that large companies can attract those entrepreneurs to work for them Let’s just not put all our eggs in one incubator.

Time for a punk film revolution

   

 

 

 

 

 

 

 

 

 

The BAFTAs and the Oscars are the views of the establishment of the film world. No surprise then that the big winner at the BAFTAs this week (and predicted to do well at the Oscars) was a film that revelled in the magic of movie-making in the heyday of film – The Artist. Lauded as an innovative modern take on the silent film, in fact it’s a cosy throw-back to a golden era. Stuffed with cine-literate references to the history of film in a context of Great Art, it’s a good film, even by my reckoning. But it’s not great. It isn’t shining a new light on the human condition or challenging our world view. It’s beautiful and perfectly-shot and, well, easy. It’s a view of the establishment – from the establishment’s point of view.

For the last eight years I have served as a BAFTA juror, assessing the relative merits of 50+ films each Christmas and whittling down longlist to shortlist and then to voting for award-winners in each category. And during that time I have seen good and bad years, but with the quality of films, I have to say, declining year-on-year. Now and then a vintage year has popped up, but the trend is unmistakable. This year I was left voting for pretty good films and performances – the first time I can remember having not seen a single film I was really excited by. Meryl Streep was good. The Help a good film. The Descendants better. Extremely Loud well worth seeing. But nothing stood out as a brilliant and deserving winner.

Look back to last year’s box office figures and I think we may have found the villain of the piece – the ‘franchise’. The top 8 films of 2011 ranked by box-office takings were all sequels or franchises – the latest Harry Potter, Transformers and Twilight Saga were the top three – a Pirates of the Caribbean franchise and sequels to The Hangover and Cars made up much of the rest of the list.  Sequels have been around for a long time of course, but never before have the top five of the year been all franchises, let alone the top eight.

Of course sequels aren’t all bad – take The Godfather Part II, or the Star Wars trilogy – and the latest Harry Potter has many merits. But if the purpose of film is to surprise and delight – to shine a new light on the human condition – then franchises are unlikely to provide the award-winning script. There’s long been an argument that studios need the revenue from the “Twilight” films and “Harry Potter” to fund more innovative – and risky – original films. But in these recessionary times, the franchise revenue seems to be going to the financiers rather than the studios’ innovation funds.

Film-makers will adapt. Innovation will happen, as so often, in the margins. But now is the time for rapid, transformational innovation. To get films like Pulp Fiction, Crash (Paul Haggis’ 2004 film), Fargo, Fight Club or American Beauty we need a new generation of punks prepared to throw rocks at the establishment and continue to do so even after they become part of it. We need this decade’s Tarantino, Coen brothers, or Pixar studios to step forward. We need film’s equivalent of the New York Dolls or the Sex Pistols. And we need them to explode upon the scene with such passion and fervour that it changes the way we view film. Then, we’ll have something to sit up for.

Sweet outlook for Raspberry Pi

The Raspberry Pi computer

The Raspberry Pi is going to change the world, says the influential Silicon Valley blog Business Insider. Even if you think that’s Valley hype, and I do, there’s a very strong chance that it could revolutionise the way we teach children computing.

I’m a big fan of the Raspberry Pi  – a very basic £15 computer designed to let your children play around writing code somewhere other than the family PC. I blogged about it when the first (alpha) release came out in September, so I am thrilled that the day is nearly here when the producers start shipping the finished article.
Business Insider has celebrated the arrival to market of the Pi in their typically breathless prose. But I agree that there is real reason for excitement, real reason to believe that this is a game-changer:
  • It’s not about the money, money, money: The Raspberry Pi Foundation is and will remain a not-for-profit organisation. The Foundation wants to open-source the technology so other producers can start developing Raspberry Pi devices for schools (and other bodies) in developing world countries
  • We just wanna make the world programme:  The Raspberry Pi been built with one aim in mind – to give children a platform on which to learn how to programme computers rather than merely to use websites or office programmes.
  • Don’t forget about the price tag: At £15 it’s acessible to schools and colleges across the world. But for that price you get a multimedia performance “substantially better” than the Tegra 3, a chip used in many modern smartphones, says Business Insider

Eben Upton, the Cambridge engineer who’s masterminded the Raspberry Pi, says that the first batch of 10,000 units will be available for sale within the next few weeks, following a successful test over Christmas. And that’s how they’ll continue to produce them, in batches of 10,000 units once or twice a month. I am cerainly going to be looking to buy one as soon as I can to teach my own son some of the rudiments of programming. And then I can see for myself whether this little device really could be a world-changer.

Here’s to the Crazy Ones

“Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes.

The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them.

About the only thing you can’t do is ignore them. Because they change things. They invent. They imagine. They heal. They explore. They create. They inspire. They push the human race forward.

Maybe they have to be crazy.

How else can you stare at an empty canvas and see a work of art? Or sit in silence and hear a song that’s never been written? Or gaze at a red planet and see a laboratory on wheels?

While some see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world, are the ones who do.”

The text is from the 1998 “Think Different” Apple ad that marked the beginning of Apple’s re-emergence as a technical giant thanks to the return of Steve Jobs. I don’t think it’s possible to over-estimate Steve Jobs’ impact on the worlds of technology and business. Not just in what he did, but in the way that what he did inspired or enabled so many others to make great things in whatever they did. The human body is fragile but the human spirit can, occasionally, soar to dizzying heights. RIP Steve Jobs.

Office Angles

Why do we come to work in an office any more? In an era of mobile computing and the virtual office, why don’t we just work from home? Well increasingly the point is collaboration – it’s because in communications, like in so many other sectors, joint endeavour is quite simply better than sole enterprise at getting to the best outcome.

But if the reason to struggle in to the city centre office is to co-create with our colleagues and clients, then is our current crop of offices fit for purpose? Looking more like call centres than creative collaboration spaces, serried ranks of desks still fill out most offices. As a result, offices look like the enemies of collaboration and innovation, rather than the catalyst for joint working.

Now the tut-tutting of disgruntled COOs is starting to get louder as more creative businesses sacrifice Optimized Space Utilization Strategies to pursue the longer term goal of collaborative working spaces that act as catalysts for creativity.

At Engine, where I work and head up innovation, we’ve been trying out a number of approaches. Half of the ground floor is dedicated not to desk space but to our Innovation Labs – three rooms where co-creation rules, laptops get to be laptops and people configure the room each hour to suit how they work together for that discussion. On the third floor we’re trialling “creative pods” in the middle of the floor where two people can go into a brainstorming cocoon.  We’re even involving contemporary street artists to bring the walls alive.

It’s self-evident that collaboration and creativity is going to happen more easily in a vibrant, colourful, open environment than in a grey, tedious one rammed with desks. But still it seems that most of our creativity in offices is focused outside – on sleek, glass and steel exteriors.  As the Shard brings another welcome change to the London skyline, we probably need to remember that the creative solutions to our current challenges are more likely to be dreamt up inside office buildings than outside.

Here is the Forecast for 2011 – Part 2

And here’s the rest of the 11 predictions for 2011:

6. Mobile. Each of the last 10 years has been heralded the Year of Mobile. What makes 2011 different is not reach (the UK already has more mobile devices than people) or even smartphone uptake (although that will accelerate), it is usage by most people, increasingly using mobiles to search, shop, research brands and prices. Brands that don’t understand the small screen will suffer, those that make it easy to connect and buy on the move will thrive.

7. Social commerce – coming together to buy in groups – will start to take off. Get your Facebook friends to buy the same thing, and the price for all will come down. Or try Groupon’s successful deal-of-the-day model. Facebook has become the new shopping mall, e-commerce changes all over again.

8. In an ever more pressured society, simplicity will win in communications as much as elsewhere.

9. 4G. No this isn’t the comedy item on the list. The next generation of mobile broadband is already rolling out across Scandinavia, the USA and  Japan, with O2 already having test areas up and running in the UK. So will 4G change your life? If you need Coronation Street in HD live streamed to your mobile, then yes. Otherwise, set your Sky+ like the rest of us.

10. Google’s absolute dominance will start to wane. Now there’s a foolhardy prediction surely? But I am not alone in thinking time is ripe for competition. Social search will come to mean much more – as our friends’ recommendations mean much more to us than the Googleplex’s views. And new search options (and I don’t just mean Bing) will start to gain critical mass – try Blekko or Yandex for a glimpse of the future of search.

11. Lists will be bigger than ever. Need traffic? Want readers? Seek acclaim? Write it in a list  and people will read. Lists hold readers’ attention – as you’ve just proved….

Have a great start to the New Year and here’s to a prosperous one for all who sail in it.

Here is the forecast for 2011

11 predictions for 2011 in marketing – part 1:

1.  The end of digital marketing. Yes, the end, not the continued growth, nor the high point. Because we’ve moved from digital marketing to marketing for a digital age. Because now digital is everywhere, it no  longer makes sense to bracket digital spend from other “channels”. The AAR reported that last year the number of digital pitches decreased by 33%, which compared to 21% across the whole industry. From now on it’s just marketing….

2. …. Which is why Integrated is my next theme of the year. Integrated pitches, integrated campaigns and integrated strategic thinking will define 2011, filling the vacuum left by “digital marketing” and defining effective communications. Success this year will be about ideas that work across platforms, making best use of mobile, or consumers’ use of social media, or understanding how people use radio today. Call it transmedia, cross-platform, multi-channel – winning marketing will be what engages people in the mood, mode and context of their day.

3. Honeysuckle. That’s the colour of 2011. Don’t take my word for it – this is why the Pantone Colour Institute reckons honeysuckle is setting the tone for the year: “A Color for All Seasons. Courageous. Confident. Vital. A dynamic reddish pink, Honeysuckle is encouraging and uplifting. It elevates our psyche beyond escape, instilling the confidence, courage and spirit to meet the exhaustive challenges that have become part of everyday life.” My feelings exactly.

4. Social media marketing spend will finally start to catch up with social media use. P&G’s Pepto Bismol is the latest brand to take a tonic to get over indulgence in offline media – switching from 80% of its budget focused on offline marketing to 80% on social media marketing.

5. 3DTV will move from the ridiculous to the periphery in 2011. That’s a long way short of mainstream, but it’s on the path towards becoming normal. There’s nothing normal about those glasses of course, so wait until 2012 and glasses-free 3D before it really hits its stride.  But start trying 3D marketing in the meantime.

Part 2 follows tomorrow, including social commerce, 4G mobile networks and the importance of lists …