After site was hijacked, we’re back up again! Look for regular postings on innovation and leadership.

NPR interviewed Wilbur Ross this morning, in which he revealed that he had tried to be a creative writer in his student days. I found really interesting his answer to the question of what he had found useful from his creative writing training, however short-lived that was, to his work today as he takes over and revived failed companies. His answer was not ideation or any such thing, but “analytical skills” (!) When you have 1000 words to write a piece in, he said, you have to “organize your thought processes, organize your questions, and think through what your observations were.” He went on to say how these abilities are useful in any kind of activity that calls for analytical abilities, and especially in his work in the private equity space.

I won’t belabor how this fits the ISmarts-framework…..

The discovery of a sound recording made in Paris in 1860 has established that Edison was not the first to record sound. The BBC reports that:

The short song was captured on April 9, 1860 by a phonautograph, a device created by a Parisian inventor, Edouard-Leon Scott de Martinville.

The device etched representations of sound waves into paper covered in soot from a burning oil lamp.

Lines were scratched into the soot by a needle moved by a diaphragm that responded to sound.

However, as the BBC report says, these sounds were never meant to be replayed. Edouard-Leon Scott, perhaps owing to his being a printer by profession, seemed to be more interested in recording the human voice in a “printable” fashion, or in transforming the human voice into a visual form. Recently, scientists at the Lawrence Berkeley National Laboratory (LBNL) in California “read” very high-resolution digital scans of the original paper and reproduced the recorded sound. It is fascinating to hear an ethereal female voice from 150 years ago render a French folksong.

Scott died impoverished and frustrated that his invention was never recognized. As an interview with his great-grandson shows, it was a bitter irony for Scott that he had to be an assistant when Edison’s invention was demonstrated in Paris, and his own name was not even mentioned.

What went wrong with Scott’s phonautograph that we had not heard of it till now? Is it that it was a “partial” innovation–by this, I mean that it could only record but not reproduce sounds–while Edison’s could do both? One can argue that in a society that was print-oriented, a device that converted human voice into paper records might have been easy to accept. So, why didn’t Scott succeed? The answer to me lies in this: Scott lacked Communicative iSmarts. For instance, he could not persuade the Academy of Science of the value of his innovation. After the Academy expressed to him that it was not interested in audio-related invention given their focus on optics, I do not see much evidence that Scott tried to “market” his invention in other ways, or to other audiences. For example, there is not much evidence to argue that he tried to reach the general public with his “phonautograph.” In short, he did not demonstrate the flexibility in communication that is critical for innovation to succeed, a flexibility that Communicative iSmarts provides.

The phonautograph is but one example of a constant stream that we find of innovations that do not succeed, not because they are not good, but simply because the inventor(s) do not have or use communicative iSmarts. I find it heart-rending to picture this brilliant man, who had to stand before audiences in Paris demonstrating a machine from the USA, when he–and perhaps only he–knew fully well that twenty years ago, he had built something that recorded human voices. All because he lacked the critical intelligence of communicative iSmarts.

Along the lines of Michael Porter’s value chain in strategy analysis, it is possible to conceptualize an innovation value chain. Often companies get stuck in a rut by confusing innovation with ideation and not moving beyond idea generation.

Recently, researchers at INSEAD have pointed out that “The [innovation value] chain starts with idea generation, but then moves to prioritising and funding ideas, to converting those ideas to products and finally to diffusing those products and business practices across the company.”

It is interesting how this maps into the ISmarts framework.

The problem with an innovation value chain is that it can mislead us into visualizing the innovation process as linear, proceeding in sequential stages, whereas in reality, the stages spill over into each other. The innovation value chain reminds me of the waterfall model in software development. Further, such stepwise conceptions of innovation make it easy to compartmentalize the organization into hermetic silos by assigning ideation to one department, budgeting to another, and so on. In the ISmarts framework, a focus on the abilities needed for innovation rather than on processes and stages, allows us to break free of sequential mindsets and compartmentalized organizations. But by providing a organized framework, ISmarts helps to structure chaos, or as Tom Peters puts it, ISmarts helps to provide the “disciplined disorganization” necessary for innovation.

An article last week in the Wall Street Journal (March 18, 2008) about how drivers are beginning to blindly trust GPS devices caught my eye. The article reports that by letting the devices overrun common sense, these drivers are “getting lost, hitting dead ends, and even swerving into oncoming traffic.” This reminded me of my growing up years in India, a time when my grandparents used to complain about how “digital watches” were not letting us kids learn how to tell the time.

The problem of overtrusting technology, and becoming inflexibly attached to devices and technologies is an old one. Dorothy Leonard in her Wellsprings of Knowledge wrote more than ten years ago about “core rigidities” which are the twin side of “core capabilities”, arguing that the core strengths of the organization are simultaneously core weaknesses. An organization derives competitive advantage from its core capabilities now, but is unable to extract itself from them and do other things when there is a need.

An innovative organization must recognize this need to remain flexible, which is why I argue that ISmarts is essential to develop and sustain in any organization that seeks to be innovative.

Indra Nooyi, CEO of PepsiCo was interviewed on the 5 am program on BBC (The Interview) this morning. One of the things she said that struck me was this: CEOs should have a long-term perspective so that they can see the need for change much before the rest of the organization. But they should not try to create rapid change or “rip the organization” as Nooyi puts it.

“The challenge of the CEO is to anticipate the issues and nudge the organization toward action as opposed to galvanizing [it] into action.”

Interesting, especially when we put this in the context of all the talk we hear about innovation having to be “drastic”, “radical”, “discontinuous”, and so on.

I have never been convinced by Tom Friedman’s “Flat World” argument. The concept of a “flat world” has always seemed to me to be part of the fashionable jargon one bandies around over glasses of expensive wine at parties while the poor all over the world live in their deep holes untouched by digital revolutions. Over the last couple of weeks, I myself fell into the hollows of the flat world. First, my hosting service provided spotty service for two days, and I couldn’t update this blog. Then, on travel, I had turtle-speed access to the Internet, and the lesser I write about that frustration, the better. Finally, as I sat without Internet or wireless access in a fantastically modern hospital in Durham, NC, where my 5-year old daughter had taken us scared about her “strange” flu, I saw how rosy Friedman’s view of the world is.

Incidentally, here’s what I will be doing for 8 weeks this summer: helping my wife on a child literacy project in India.

Experience is getting a bad rap these days. No, I’m not talking about the election campaign. The February 2008 issue of the Harvard Business Review has an article called “The Experience Trap.” Two professors at INSEAD (France), using a simulation tool, tested how senior software project managers actually manage projects. They found that “managers with experience did not produce high-caliber outcomes“. In the simulation (which the participants rated as being very life-like), project managers did not revise estimates despite new data becoming available; they did not anticipate problems despite having handled similar projects many times before. The authors call this the “experience trap”.

However, the discussion points more to problems with learning: the managers had seen these same problems in the past, but acted as if they were seeing the problems for the first time. The researchers argue that it is a lack of learning that leads to these problems.

So, as I see it, this research finding translates to the project managers lacking “intelligence”: the ability to respond to new situations and to learn from them. More specifically, these project managers lack Operational ISmarts, and need to be trained to develop this aspect of innovational intelligence.

Following my previous post, I have been considering the question of how hope and innovation are connected. The National Innovation Initiative has this interesting statement in its report:

America, in the end, is all about hope. And innovation is the societal and economic manifestation of hope.

I agree. But what is it that makes the manifestation possible? I believe that the change-agent is ISmarts. Different persons may have the same hope, but the hope will manifest itself in different innovations because of the different kinds of intelligence-driven innovational capabilities that we discuss in the ISmarts framework.

So one can say, ISmarts transforms Hope into Innovation.

Design-driven innovation is suddenly in the news these days. Following last week’s article in BusinessWeek, today’s newsletter from the Harvard Business School in my mailbox describes a research paper that discusses the merits of design-driven innovation.

The claim of design-driven innovation is that it is spontaneous, radical, and does not pay attention to customer needs. Most importantly, it relies on a clear division between the “outside” of the firm and the “inside.” It is claimed that companies that engage in design-driven innovation create radical innovation because they do not “listen” to customers.

This is however a myopic view–a knee-jerk reaction to the market survey-driven innovation that companies overemphasized in the past. In reality, it is not wise to eschew one approach and embrace another. Good innovators let good thoughts and good ideas come from all sides.

There are two points that I’d like to make here. First, ideas always occur at interfaces. No change, no innovation, no invention happens in isolation. Humans are triggered into new thoughts because of our interactions with the world outside us–with other humans, with systems, with nature, and so on. Design-driven innovation also relies on ideas that come from an interface–between the designer(s) as designer(s) and the designer(s) as customer(s). To claim that design-driven innovation does not listen to customers is not true. Like the cook who dips his finger in the broth to taste it, at the point of design, the designer is also a customer. It just happens that design-driven innovation has only one customer in mind–the designer.

The second point is this: The best mousetrap will not succeed unless the market is ready for it. Credit cards–a fantastic financial innovation–were introduced in the 1930s. They did not take-off during the depression (surprise for design-driven innovation!). They were revived in the 1950s by Diner’s Club, and in the 1960s by the Visa conglomerate. But credit-cards had to wait for the 1980s to see real wide-spread acceptance. As I have done in some of my academic work at Wharton, from a microeconomics point of view, we can explain this phenomenon of slow growth on the basis of network effects–the credit card is a product whose success depends on the size of the network of users. But that’s the whole point–it is the customers who ultimately call the shots on “successful innovation”. A singular emphasis on design-innovation to drive all innovation blurs the difference between invention and innovation. From the definition we use at Vivekin Group, an innovation is a new idea or invention that is of value to a society. An invention that comes out of a design-driven approach may or may not have such value immediately. How often have we heard of inventions “before their time.”

In sum, I do think that being design-driven is important for innovation, but it is not all-important. To paraphrase the Hindu Upanishads, “Let good ideas come to us from all sides.”