Innovation and Jobs

The topic we return to again and again -- how to stimulate Innovation in medium-sized and larger companies -- was described in many forms at the recent Innovation For Jobs (I4J) conference.  Here's a YouTube video discussion conducted by Martin Wasserman with Curt Carlsen (SRI CEO) and David Nordfors, organizer of the I4J conference.  

See http://www.youtube.com/watch?v=OJpep5ZnTpQ

In this youtube video, published on Apr 26, 2013, Curt Carlson and David Nordfors discuss the purpose and objectives of the Innovation for Jobs Summit,  Both make the point that it is not "a given" that innovation will create as many new jobs as it will destroy.  More fundamentally, the skill levels required for new roles will inexorably rise, which for a nation with critically low math skills, etc. doesn't bode well for the future.

See what you think...

OUR VIEW

Our View of the World

With all the talk about innovation and its key role in solving many of our corporate and national problems, we believe there is very limited understanding of what constitutes impactful innovation and how those innovations occur. Much of our national conversation almost assumes that we can wish innovation into happening by talking about it and getting people together and urging them to unleash their creative energy.

In our view, that may be a decent start but it will hardly create the in-depth understanding necessary to achieve breakthrough innovations.

Both Chuck House and Ray Price bring industrial experience and industry analysis to the challenge of R&D effectiveness. We have worked in this space collaboratively for over 30 years. We keep returning to and evolving a set of ideas and principles for R&D management and new product leadership that we believe are needed more today than ever before. These ideas and principles are based on experience, observation, reflection, and analysis that we believe is unique in this business. 

First, Chuck House is recognized widely as someone who was actually responsible for achieving several breakthrough innovations. Plus, he has demonstrated ability to reflect on what is required both during and after the innovation process. He has examined innovation from individual, project, program, corporate, and national perspectives. 

Second, together we have examined in depth the innovation roots of one company (Hewlett-Packard) as described in The HP Phenomenon and are in the process of examining another iconic company (Cisco).  We have both written about Serial Innovators or Intrapreneurs and believe we understand who they are and what they do, and importantly, that they are critical to future breakthrough innovations. 

Third, we are committed to codifying what we have learned and putting those lessons into a form that is useful to current practitioners and the next generation.

INTRAPRENEURING MISSION

MISSION:

Our mission is to claim the rightful role of R&D and New Product Development as the primary source of competitive advantage in companies world-wide.

What that means is manifest in our Goals:

1. Support R&D teams in developing the perspectives and skills to lead company strategic directions;
2. Support R&D teams in ensuring outstanding execution to ensure credibility among all stakeholders;
3. Engage with and develop the capacities for overall R&D reviews from broadest corporate views to detailed project views.
4. Challenge corporate leadership teams on the levels of investment and the expectations associated with breakthrough initiatives;
5. Identify and develop potential serial innovators or intrapreneurs;
6. Participate in and frame corporate and governmental policy decisions on innovation and R&D investment.

And this is how—Our Products and Services:

1. R&D strategy, culture, program, and investment reviews;
2. Training Programs on: Innovator Development, R&D Strategy, Opportunity Identification; Political and Influence Skills for Innovation; and R&D Strategy in context of Business Strategy.
3. Keynote speeches;
4. Coaching for R&D managers and potential innovators;
5. Historical Analyses—to create memory and perspectives on breakthrough innovations and how they occur;
6. Policy analysis and recommendation projects for corporations as well as state and national governments;
7. Creation of articles, whitepapers, and books on important issues.
   
   

It happens to all of 'em

It happens to everyone.  It has even happened to the Sand Hill Road venture capitalists.

The problem?  Most ideas start small -- half-baked, my friends call 'em.  Small ideas might (emphasis on "MIGHT") become nice businesses, given proper nurturing and a little luck.  Most corporations can provide nurturing when they themselves are small to medium-sized.  Larger corporations, though, don't have time for 'small' -- hence, they cannot do the nurturing, and the small fresh ideas wither and die.

My talk yesterday to the National Academy crowd (this was to the UIDP branch, University-Industry Development Projects) stimulated much discussion during the evening, and then again today.  GE, Corning, HP, Bell Labs, 3M, Boeing, Weyerhauser, Deere, and Motorola all were cited in various conversations, with some vehemence on occasion.  An Intel fellow chimed in, along with a DuPont person and a Kimberly Clark guy, and so did a Cisco senior researcher.  By the time we were done, it seemed as though no company had escaped the plague.

Think of it this way: If you have a company of $200M revenue growing 10% per year, a 'new product area' that might yield $20M in two or three years is 'suddenly' 8% of your company, and might become twice that in three more years.  Nice.  But if your company is $20B, the new company idea must yield proportionately $2B in three years.  Hard to invent a $2B business from a standing start.

Similarly, a VC firm with $500M to deploy can actually do some $5M to $10M investments -- in fact ten or fifteen of those, with adequate second round reserves, is about all that should be invested early.  Manageable.  But if the fund is successful, the next 'raise' might be $5B, in which case only $50M investments can be made -- leaving plenty of room for 'angels', but not much likelihood of the VC getting involved anymore in seed rounds or even alpha rounds.

Lots easier for the big firm to 'wait and see' and then buy up the successful ones (at which time they'll starve the newbie and the kids it acquired soon leave to start yet another one).  Vicious circle?

PERMISSION DENIED

Always a satisfying moment when you complete a task, and SHIP THE PRODUCT.  Also scary for any engineer -- will it keep running, will people like it, will it do the job, what is it missing?

The NEW PRODUCT is called "Permission Denied: Odyssey of an Intrapreneur".  It essentially is MY STORY of becoming first an INTRAPRENEUR long before that word was coined, and then being asked to teach how to expand it across a large company called Hewlett-Packard at a time that HP innovation was feared to be declining.

I assert that it worked for a long time -- HP growth continued unabated for another fifteen years, becoming the fastest growing and longest sustained growth rate company of the 2,000+ companies on the NYSE board from 1958-1998.    But CEOs change, and so do practices, and just like so many other large companies, contribution and innovation lost favor by comparison with consistent quarterly results and small, incremental progress steps.  Sigh...

PERMISSION DENIED is a memoir of ten years at HP developing the Logic Analyzer business, with two sets of rules that will work just as well today -- sever rules for erstwhile entrepreneurs, and seven more for their managers.  We'll publish these rules and the two brief chapters about them separately.

It will be available from Amazon, searchable by Google, within about eight weeks.  List price $17.95.

A better (and quicker) way is via LuluPress, available today at 15% discount (plus any coupons, which can often be another 20-30%), at the following:
http://www.lulu.com/shop/charles-h-house/permission-denied/paperback/product-20948639.html;jsessionid=B0C5C3DB9190216C9217EC70FB88DB45

If you buy it, read it.  And let me know your thoughts!

Innovation and jobs conference

I just returned from a two-day intensive, called I4J, International Summit on Innovation for Jobs.  Hosted at SRI, initially sponsored by Vint Cerf, and supported by a veritable list of "who's who" in entrepreneurial circles, the group convened an 'invite-only' list of pundits, entrepreneurs, VCs, and government leaders to debate the issues of 'what's wrong' with the long-held assumption that innovation creates new jobs in unimaginable areas even as it destroys old jobs.  While that view is still held, the question facing the group was more subtle -- have we reached a place where the net job loss is higher than the gain, for maybe the first time in human history?

Without getting too far into that debate, the take-away for me -- for INTRAPRENEURING -- was simple.  Virtually every VC in attendance, and many serial entrepreneurs of very successful companies, said "THE PROBLEM IS" lack of management teams to carry fledgling companies to scale.  Managers at large companies, they all agree, lack the risk-taking skills and mentality, even though they can provide an exit path in terms of capital investment.  Entrepreneurial teams are GREAT at product or service innovation, but sorely lacking in how to build infrastructure and organization so that hundreds or thousands of people can work together to build a sizable enterprise.  And that great middle ground of innovative leadership seems to be missing.

Duh!!!

We've systematically shot 'em.  The folk who used to learn those skills, at companies like HP used to be, are grown up and retired.  The large companies we all admire -- IBM, P&G, Boeing, Motorola, Nike, Fedex, Qualcomm, Cisco, Intel -- have all quit growing, and have replaced their innovative leadership with MBAs and CPAs.

The newer companies have grown too fast, almost like the gawky fast-growth teenager who will be great at basketball when he figures out how to make his feet go in the same direction as his body.

Ummn, maybe that wasn't such a good analogy.  Sorry

But the point, for this group, was clear.  There is a missing link, and they're just now discoering that it is a big one, not just an incidental one.  I couldn't agree more.  It's called INTRAPRENEURING.

Serial Innovators

You might have missed the new book, "Serial Innovators: How Individuals create and deliver Breakthrough Innovations in Mature Firms," by Abbie Griffin, Raymond Price, and Bruce Vojak.  They made the mistake of using Stanford Business Press instead of Harvard Business Press, so the marketing effort was essentially non-existent.

I like the book, though in full disclosure, they did interview me for it, and a couple of passages include my name.  They are calling INTRAPRENEURS by another name, i.e. SERIAL INNOVATORS.  Works fine for me, especially since in Silicon Valley it has become fashionable for Venture Capitalists to talk about (and fund) SERIAL ENTREPRENEURS.

The irony of course is that an INTRAPRENEUR is almost by definition a SERIAL INNOVATOR, while an ENTREPRENEUR may well not be a serial type.   Dave Packard and Bill Hewlett were called ENTREPRENEURS (actually, this was well after the fact since the word didn't come into our vocabulary until they had retired from HP), but they more-or-less quit being entrepreneurs at some early point in the company history and became instead something else....  Packard became a manager/leader and Hewlett became a SERIAL INNOVATOR or INTRAPRENEUR.  The story of the HP 35 handheld calculator, with Hewlett as CEO and Packard off in Washington DC is a story of  a mature company taking an entirely new direction -- INTRAPRENEURING, not ENTREPRENEURING.

Ah, well, I quibble.

But this book by Griffin et al is really quite good.  It takes many case histories, including some great examples from Proctor and Gamble and other companies that usually don't make the Silicon Valley radar, and uses them to present the essence of a few guiding principles.

Significantly, the book develops an "hourglass" model for early break-through innovation that argues for patience, trial-and-error, and heavy investigative time -- all things that we know make a difference, and almost all are things that managers just cannot stomach for very long.  Managers are taught at business schools (and maybe from birth) to avoid risk; the safe play, not the 'long ball', is the game.

The book is available via Amazon.  It is hard to find in the Stanford campus bookstore, but that store doesn't even have Edward Tufte's new revised Visual Display of Quantitaive Information, which is an alltime classic, still selling in remarkably high quantity (and he speaks at Stanford regularly).

And then I found out that Stanford doesn't run its own bookstore -- it is outsoucred to another company who has essentially no connection with, or understanding of, Stanford faculty or whatever....

Hummn, I didn't intend to have this become a rant...