Endless Innovation

Now at Big Think: Endless Innovation, More Beautiful and More Wonderful

Starting February 22, the Endless Innovation blog is migrating over to Big Think, a global forum connecting ideas and people: http://bigthink.com/blogs/endless-innovation. Endless Innovation will be joining an absolutely first-rate group of bloggers who are writing on topics ranging from design and the arts to geopolitics and economics. In addition, Big Think has cultivated an amazing cast of editorial contributors that includes national politicians, senior business leaders, and iconic artists.

I'm excited about blogging for Big Think as a new opportunity to discover and share new ideas. Big Think is in the vanguard of innovation and creativity that has been made possible by the creation of new digital publishing tools.

In keeping with the Darwinian theme of Endless Innovation, I've selected an image from the recent "Endless Forms" exhibit at Yale's Center for British Art -- Robert Farren's Duria Antiquior -- to symbolize the blog's move over to Big Think. Farren's imagery suggests a Cambrian Explosion of highly diverse species and organisms, all competing within the same ecosystem, in ways that are nearly impossible to comprehend. Ideas - just like prehistoric life forms - have always fought for supremacy throughout history.

I'm hoping that you will follow me on this brave new journey to discover endless forms, most beautfiul and most wonderful, over at Big Think: http://bigthink.com/blogs/endless-innovation

[image: Darwin's Endless Forms via The New York Times]

The New Way to Work: Top 5 Trends to Watch in 2010

Looking back at pivotal events that took place within the business world in 2009, it is becoming increasingly clear that there are five macro trends that will be shaping a New Way to Work in 2010 and beyond. Together, these five trends point to a New Way To Work in which creativity and innovation are more valued by employers than ever before and the traditional notion of work as merely an economic activity is being supplemented by ideas about happiness and well-being.

Here are the five trends that I feel are creating The New Way To Work and what they mean to me: 

(1) Organizations will embrace Design Thinking. In 2009, Tim Brown, the CEO of IDEO (arguably one of the most important design consultancies in the world), published Change By Design, which suggested that organizations must go even further in their embrace of right-brain, creative thinking. Design must become more than an aesthetic -- it must become an integral part of the overall process of how companies think about products, services and customers. By extension, "design thinking" must now become part of any worker's toolkit.

As Daniel Pink first suggested five years ago in his bestselling A Whole New Mind, right-brain thinking -- in the form of creativity, innovation and big picture contextual thinking -- is an increasingly important way for workers to demonstrate their value to their employers. Design thinking is, if anything, a stronger form of creativity and innovation that is focused around achieving specific business goals and objectives. As a result, design thinking will continue to play a key role in any organization's business strategy as it attempts to differentiate itself vis-a-vis competitors. The most obvious examples are companies like Apple and Target, which have made breathtakingly-beautiful design part of their core value proposition.

(2) Women will play a more important role in re-defining traditional notions of work. In 2009, Maria Shriver and the Center for American Progress published The Shriver Report, which attempted to catalogue the many ways that women are changing the U.S. workplace. In 2009, for the first time ever, women now account for more than 50% of all jobs in America. At the same time, women account for 57% of all bachelor's degrees and 60% of all master's degrees, making them the most important part in any company's talent pipeline. Quite simply, with women now a majority in the U.S. workforce, organizations will need to reassess how well they are responding to the needs of women in the workplace. This ranges from new thinking about customized careers and flexible work arrangements to fundamentally important notions of how to encourage managerial traits such as empathy and compassion.

The most successful organizations will be companies like Pepsi, which has made the recruiting, retaining and promoting of women a company-wide priority. At Pepsi, not only is the CEO a woman (Indra Nooyi), but nearly one-third of all executives are women. There's an economic payoff, too, from ensuring that women are members of your Board of Directors and members of your senior management team. Business school researchers at Pepperdine and Maryland have found that companies with women in these roles actually out-perform their rivals.

(3) Small business owners will become the new stars of economic growth. The "credit crunch" of the past 12 months, in which financial institutions systematically withdrew liquidity from the banking system in the hopes of stemming the tides of bad loans and foreclosures, appears to be coming to an end. As liquidity slowly makes its way back into the banking system, the first beneficiaries will be small business owners -- some of whom had their access to funding turned off seemingly overnight. In recognition of this fact, the Obama Administration has made small business the linchpin of many of its economic policies. At the same time, companies like Goldman Sachs -- which recently created a $500 million fund to foster and launch 10,000 small businesses -- and American Express - through its OPEN Forum for small business owners -- are jumping into the fray, in the hopes of galvanizing economic activity at the grassroots.

Small business owners have often been overshadowed as the traditional media focuses on the empire builders (yes, Donald Trump, that's you) and the titans of industry rather than unheralded small business owners. Heading into 2010, though, this trend appears to be reversing. Monocle, for example, published a Small Business Guide for 2010 that is chock-full of examples of how resilient small business owners around the globe are re-inventing their industries. From equity research companies in Stockholm to interior design firms in Tokyo to graphic designers in Munich, these small businesses are inspiring examples of how creative, nimble and risk-taking ventures can bring real economic change to any industry. The women and men who dare to dream big now will be the first to reap the rewards once economic growth returns.

(4) "Happiness" will become a way to measure economic prosperity. In September, Nicolas Sarkozy, the (often controversial) president of France, announced that his country was seriously considering a "happiness index" that would transform factors like "quality of life" and "vacation time" into a broader measure of overall economic well-being. In short, the traditional way to measure national economic activity - Gross National Product (GNP) - would be supplanted by something called Gross National Happiness (GNH). This, of course, is a fundamentally new way to think about work that surely has economists scrambling to find a way to quantify something so unquantifiable as "happiness." Other than France, only the tiny Himalayan nation of Bhutan has had the pluck and audacity to adopt the concept of Gross National Happiness. In 1972, Bhutan adopted GNH as a way to symbolize its dedication to spiritualist, Buddhist ideals rather than purely materialistic, Capitalistic ideals.

In many ways, this thinking about "happiness" is part of an overall paradigm shift in the world of economics that takes us further away from the purely "rational thinking" paradigm. Behavioral economists, led by Princeton's Daniel Kahneman (who won the Nobel Prize in Economics in 2002), Yale's Robert Shiller (who famously coined the term "irrational exuberance") and Harvard's Daniel Gilbert (who is typically credited as the founder of the "science of happiness"), are helping us understand that purely rational considerations are not all that matter when it comes to making decisions. (Shiller, in fact, specifically asked prominent New Yorker cartoonist Edward Koren to illustrate the book cover of Animal Spirits with his irrational wild things). Within the Obama Administration, ideas from the emergent field of behavioral economics are informing everything from solving for health insurance plans to helping workers save more in their 401(k) plans.

(5) Personal branding will become the buzzword of talented workers around the world. 2009 was the year that Gary Vaynerchuk and Dan Schawbel burst onto the scene with ideas about ways to use the leverage the Web for personal branding. Using everything from blogs to YouTube to Twitter, it's now possible for everyday people to create a personal brand online -- and then use it to launch new businesses based around their personal passions. Gary Vaynerchuk (known to his adoring fans as simply "Gary Vee") showed what's possible when you combine a passion for wine, a deep knowledge of social media, and a YouTube-ready personality. He turned a small family wine business into a national industry leader, becoming a national celebrity in the process.

Gary Vee has tapped into the current economic zeitgeist. Idealistic notions about lifetime employment with a single company are long gone. The only real job security is to create your own personal brand. With U.S. unemployment pushing above 10% in November, starting a new venture has become a very attractive option to millions of workers. Take the self-employment route and do what you love. Do it well, and you might just Crush It.

This last trend is perhaps the most important of all five mentioned above. The Internet as a distribution channel for a personal brand is unmatched. For freelance workers, the Internet has made it possible to showcase their best work to anyone in the world, at any time. Take photography, for example. Using the photo-sharing service Flickr, professional photographers have had a way to showcase and highlight their work. Starting in mid-2008, Flickr made it possible for anyone to buy royalty-free and rights-managed photos through a unique partnership with Getty Images. If your photography skills and talent are strong enough, you no longer need to give them away for free (the photo accompanying this blog entry was actually purchased via the Flickr collection of Getty Images).

Heading into 2010, I'm looking forward to watching how these five macro trends about The New Way To Work continue to evolve. Sometime in the future, no doubt, today's world of work will look as wonderfully anachronistic as the world of Matthew Weiner's Mad Men appears to us now.

[photo credit: People at Work by BestPics/Flickr Collection/Getty Images]

NOTE: This blog entry is an official submission to the Elance "New Way to Work" competition. Email contact information: basulto [at] gmail.com.

Darwin's Finches and Corporate Innovation

So many business terms that we take for granted - like "survival of the fittest" - are actually based on Charles Darwin's seminal work on the ways that species adapt to their environment in the wild -- and the way these adaptations are handed down to their progeny. So it's always fun when other innovation bloggers combine smart thinking about corporate innovation with insights about Darwinian evolution. Here, Michael E. Driscoll of Dataspora asks What Can Darwin's Finches Tell Us About the Downturn?

"Newspaper articles paint the markets in metaphors like “difficult climate” and “harsh landscape” –but these clichéd phrases have a kernel of truth. Thinking about markets as natural environments reveals that selective forces are at work. But it also predicts when they work.  In the natural world, as the story of Darwin’s finches tells us, selection acts in times of crisis:  drought, famine, and disease.  For our markets, that time is now."

As Driscoll points out, companies can learn a lot about how to survive the current downturn by looking to the example of Darwin's finches on the Galapagos Islands. During the wet seasons, it was hard to see how a finch’s beak made any difference to its fitness. However, when the rainy season brought no rain, they found that drought became the determining factor that shaped the survivors of the species: 

“They found fewer than two hundred finches alive on the island. Just one finch in seven had made it through the drought… The average beak before the drought was 10.68 millimeters long and 9.42 deep. The average beak of the fortis that survived was 11.07 millimeters long and 9.96 deep… The birds were not simply magnified by the drought: they were reformed and revised. They were changed by their dead. Their beaks were carved by their losses.”

In the same way, the benefits of having the right innovation processes in place are often masked during good times. "Firms with both new and old technologies remain solidly profitable, happily hopping along... But when hard times hit, innovators survive. More importantly, they flourish when the business cycle swings up again... But like Darwin’s finches, the survivors are not just those who have more technology investments, but those who get the dimensions right." At the end of the day, downturns are not only good for innovation, they are necessary. 

[images: Darwin's Finches via Calgary Public Library]

Digital Darwinism: The New Marketing and Media Ecosystem

In the current issue of strategy + business magazine, Christopher Vollmer, a partner with Booz & Company in New York City, comments on the "digital Darwinism" that is reshaping the world of media and marketing:

"An ecosystem is an appropriate metaphor for today’s marketing environment. It is a dynamic, complex, and interconnected community in which marketers, advertising agencies, and media companies depend on one another, to a certain extent, to survive and thrive. But it is also a brutal, competitive arena, where a kind of “digital Darwinism,” or survival of the fittest, holds sway, rapidly distinguishing winners from losers. Companies that possess certain preferred traits in their organizational DNA or that have superior skills of self-adaptation are positioned to flourish in this ecosystem. Those without either face almost certain extinction.

The marketing and media ecosystem has arrived at an evolutionary threshold. Old structures and ways of working persist but are fundamentally challenged by newer, more dynamic, more innovative alternatives. Numerous developments have brought the industry to this transition point. Consumers have more control and choice. Their media usage has fragmented. Many more advertising platforms exist. And marketers are insisting on greater precision in targeting and accounting for their ad spend.

The recent economic turmoil only accelerates this evolutionary transition. Companies across the ecosystem have to acquire or develop three dominant traits to survive: relevance, interactivity, and accountability."

According to Vollmer, companies adapting well to this new environment include Dell, Nike, HP and P&G. The Marketing & Media Ecosystem 2010 study is available as a free PDF download on the Booz & Co. site.

Webby Awards: FutureLab and TradeKing

With Internet Week in New York culminating tonight with the presentation of the 12th Annual Webby Awards to the most innovative websites in the world, it's the time of the year when people talk about unique and innovative websites. For me, it has been a chance to reflect on how fortunate I am to be contributing to two amazing sites that have been recognized by the awards panel as being best in class.

Within the Financial Services category, the TradeKing Community was selected as an Official Honoree. Within the Business Blog category, the Futurelab Marketing & Strategy Innovation Blog was one of the five official nominees, losing by a razor-thin margin to the FT.com Alphaville blog.

A big hat tip to the folks at TradeKing and Futurelab!

The sorta-highly evolved executive

Given this blog's focus on business evolution and the DNA of innovation, I couldn't resist this: Oliver the Humanzee. Recently featured on the Paranormal Insider blog, Oliver was a sort of chimp-human hybrid that never quite evolved the way he was supposed to:

"Oliver was odd for a chimpanzee. He looked different than most other apes, with his hairless face, light eyes, and a tendency to walk upright. According to the Burgers, he preferred the company of humans to that of his fellow apes; he enjoyed drinking beer and watching television with them, and would occasionally help out with chores around the house. With the Burgers, Oliver made appearances on the Ed Sullivan Show and at Radio City Music Hall. Unfortunately, Oliver was attracted to human females, and had to be sold when he became a threat to Janet Burger..."

Methinks Oliver the Humanzee might just be an apt metaphor for the type of business executive that tries to evolve -- but just can't seem to make it to the next step. Instead, he (or she!) sits around, drinks beer with the troops, occasionally helps out, but mainly just causes all sorts of problems for the business organization. Eventually, he or she is upsized, rightsized, or outsourced away.

[image: Oliver the Humanzee]

Thinking in terms of business ecosystems

This thought-provoking cartoon, distributed by the Universal Press Syndicate, is called Unclestiltskin. What happens to America when we deplete all of our natural resources and realize that we've squandered away our long-term future in favor of short-term profits? If you're a company like Halliburton, of course, the answer is simple: you just move to Dubai and continue business as usual. For other companies, the answer is likely to be much more complex.

Which leads to a digression of sorts from "natural ecosystems" mentioned in the editorial cartoon to "business ecosystems." Companies need to realize that they function as part of a living, breathing business ecosystem, and that the elimination of even a single participant in this ecosystem can have serious consequences.

A recent Toyota Motor Company feature in FORTUNE magazine ("America's Best Car Company") really highlights this point. A Toyota executive explains that the company is doing everything possible to ensure that Detroit's Big Three (Ford, GM, Chrysler) continue to survive within the automotive ecosystem, even as Toyota continues to gain market share in the U.S. If, say, Ford turns belly-up, Toyota knows that it will be facing the mother of all corporate backlashes in the USA:

"We understand that as Toyota's presence increases, expectations and demands will also rise," president Katsuaki Watanabe told Fortune. Nuances will matter more than ever. When then-chairman Hiroshi Okuda in 2005 said Toyota might raise prices to take pressure off GM, the perceived condescension sparked outrage, followed by furious backpedaling. Okuda's remark betrayed Toyota's biggest fear: the financial collapse of one of the Detroit Three. Jim Lentz tries his best to deflect such talk. "We're all in this together," he says of his U.S. rivals. "We wish them the best."

If Toyota cares so much, why is it entering Detroit's last bastion of comparative strength? But Lentz swears that he means it and that the Tundra is simply a way to offer consumers a choice. The status quo, as he needn't point out, has served Toyota well. Despite occasional Japan bashing, Toyota has been able to grow. This process that has been gradual enough that the company is now an accepted - in fact, admired - part of the U.S. landscape. The dramatic failure of any of the Detroit Three would destabilize the industry - and make Toyota the villain. "The most important management task at Toyota these days," says auto consultant Jim Womack, "is to manage the decline of the domestics."

[image: Unclestiltskin]

The Innovation Ecosystem blog analyzes Brand Evolution

With much of the mainstream business media focusing on rapid, revolutionary change, it's always a treat to discover bloggers and consultants who adopt more of an evolutionary view of business innovation. For example, Julie Fleischer, the Innovation Thought Leader for Egg Strategy, has been publishing a blog since December 2006 called Innovation Ecosystem that looks at how concepts related to evolution and ecosystems can be used to understand business strategy and marketing. As Julie explains at the top of her Innovation Ecosystem blog, "great innovation happens organically, with sloppy edges and growth spurts. Because as with nature, innovation doesn't take place in a vacuum - it is dependent upon and interrelated to all things around it. And because innovation needs to be cognizant of the ripple effect -- seeing opportunities AND managing potential damage. Innovation thrives on change, curiosity, and desire."

For example, citing a recent cover story in Newsweek ("The Evolution Revolution"), Julie points out what evolution means for corporate brands:

"The cover story of the 3.19 issue of Newsweek is fascinating... We're now learning that evolution is not a straight-lined path of progress. It occurs in fits and starts, with many adaptations failing to take root. We're discovering an evolutionary family tree of sorts, with a number of adaptive traits developing, hanging around for several million years or so, and then becoming extinct. Progress is lumpy.

And that's where brands come in.  Brand evolution is rarely a straight line path of forward progress. Quite often, brand adaptations (let's call them line extensions or flankers) come to market, score sufficient volume to hang around for several years, and then make way for a new generation of extensions. This process may continue on ad infinitum without ever really evolving the brand - making it more relevant, more contemporary, competitively advantaged.

Survival of the fittest is about more than merely hanging in there.

For a brand to truly evolve, it needs to move beyond these experiments and take a strategic view toward innovation of the entire ecosystem. Perhaps the business model needs to evolve (see Netflix vs. Blockbuster below). Perhaps the brand needs a different approach regarding channels or supply chain. Maybe the consumer situation (the human genomic code?) has changed and new needs have arisen, requiring repositioning or structural packaging innovation. Maybe a new predator has emerged that forces the brand to take a more defensive - or offensive - posture. Just as our species need to evolve, so do our brands.  Settling for "natural growth" only gets you so far - hyperadaptation of the innovation ecosystem is needed to grow the legs that take you out of the swamp."

[image: Newsweek]

2007: An innovation odyssey

Do you ever see corporations doing innovative things they shouldn't, theoretically, be doing? Usually, it starts with an employee in the front ranks, changing the way he or she interacts with customers. From there, the practice can spread throughout the organization. Customers and partners immediately wonder if it's just some kind of glitch - or whether it's one of those serendipitous changes that will soon become hard-wired into the company's DNA.

Anyway, the same types of things happen in nature all the time. The Associated Press, for example, recently carried a tale of chimpanzees that use spears to hunt small animals -- something they simply aren't supposed to be doing:

"Researchers have witnessed a chimpanzee skewering a lemur-like creature for supper, but it's unclear whether the spectacle was a bit of luck or an indication that chimps have a more advanced ability to hunt than was thought. A team led by Iowa State University anthropology professor Jill Pruetz witnessed the spearing of a bushbaby in Fongoli, Senegal, during an observation of chimpanzees from March 2005 to July 2006.

In a study being released in the online version of the journal Current Biology, Pruetz documents 22 cases of chimps using spear-like tools to hunt bushbabies — a small primate that lives in hollow branches or tree trunks. "It's not uncommon to have chimps use tools. But to use them in the context of hunting" is nearly unheard of, she said."

Anyway, this story of the chimpanzees who hunt reminds me of the opening scenes of Stanley Kubrick's movie "2001: A Space Odyssey," in which a giant ape-like creature at the Dawn of Man discovers that the giant bones of the woolly mammoth can become a hunting instrument. As Kubrick hints, it's only one small step from using a bone as a hunting instrument to becoming an evolutionarily-advanced species capable of exploring the cosmos.

[image: Kubrick's "2001: A Space Odyssey"]

Innovation, from an evolutionary perspective

A picture, as they say, is worth a thousand words. This was the cover of the February 17 issue of The Economist: "The end of the cash era." With electronic payments and various forms of digital money on the rise, the era of coins and bills could be nearing an end: "Cash, after millennia as one of mankind's most versatile and enduring technologies, looks set over the next 15 years or so finally to melt away into an electronic stream of ones and zeros..."

What better way to approach this topic than from an evolutionary perspective? In this image, dinosaurs comprised of coins and pterodactyls comprised of dollar bill fragments are being showered by cosmic meteorites in the ultimate dinosaur doomsday scenario. In the background, the U.S. $20 bill stands lonely vigil over a decimated economic landscape.

[image: The Economist]