Editor | On 10, Dec 2009

Jack Hipple

ISPIM (International Society of Professional Innovation Management) Meeting, New York, NY Dec 7-9, 2009: “Stimulating Recovery: The Role of Innovation Management”ISPIM (http://www.ispim.org) is primarily a European based innovation organization with a combination of academics, consultants, and industrial practitioners. They hold two meetings a year and occasionally one of these is held outside of Europe. This year’s meeting was hosted by the Fashion Institute of Technology in New York City. FIT is a very practically focused art and industrial design school. Below are commentary on several of the presentations over the first 2 days which I attended, and editorial comments with both my general innovation and TRIZ hat on.

Dr. Rita Gunther McGrath from the Harvard Business School discussed “Growth in Uncertain Times”. She made a very interesting presentation on thinking ahead in starting up a new business–asking the important questions first and looking at upward integration for value, which is not a new concept for those familiar with this line of evolution in TRIZ thinking. She illustrated this point vividly with the example of Build-A-Bear, a toy store company (and also on line now) in which a shopper chooses a “basic” bear and then outfits it with whatever clothes, ribbons, etc. that wants, in the store.

This model (the same one used in “cutting your own” Christmas tree farms, or the Chucky Cheese franchises (where the emphasis is on the party and not the pizza) allows individualization of the shopping (and innovation experience) and generates 70 times as much sales volume per square foot as a typical Toys R Us store, upon which they had benchmarked and simply could not generate the sales volume desired in the space they could afford. This also allowed “quantification” of the fantasy as seen by the shopper. Another point during this presentation, as this company’s development was reviewed, was the constant tracking of assumptions in a new innovative business.

We all make assumptions and Build-A-Bear made a list of there assumptions, dates, changes that occurred, etc. and then reviewed these on a rigorous time basis. All this takes is a simple spread sheet. The learning here is to constantly review the assumptions made and react before their changes become crises.

A very simple new business innovation tool.Dr. Jody Holtzman from AARP discussed the challenges faced in trying to expand innovate within the traditional structure and original mission (“retired persons”) of AARP. The dropping of the “retired persons” from the organization title and moving simply to the AARP acronym has not been successful in removing the stereotype image and prevents a barrier to new business and product offerings to younger individuals. This non-profit organization currently has 40 million members with $1 Billion in annual revenues, 65% of which comes from the sale of auxiliary products, endorsed by AARP. Membership dues, by themselves, are a losing proposition.

The linkage they have discovered for new product offerings and potential broadening is the 18-34 old age segment which is linked to their traditional older membership by the “sandwich” generation issues associated with elder care and college costs. In the US, 10% of people aged 18-34 still live with their parents, 1/2 of whom are retired. AARP has now formed 400 on line communities to share ideas, listen, launch test visions of new products and services. They have 400 on line communities for market research under the heading of Lifetuner.org This is providing support and market research to overcome resistance from senior management. They “fly under the radar”, and work remotely, but still report to senior executives in the organization. These on line communities are a vehicle to learn and minimize cost of failure of new ideas. The expert advice supplied as part of this effort is not linked to any sales effort.

An observation made by Jody was that people question methodologies but not results. The key in this effort has been to link the needs of younger people to the current needs of their present membership. (TRIZ principle of using existing resources) This effort has allowed this innovation effort to not threaten the current organization business and structure. There’s a lesson here for innovators—linking innovative ideas to an existing business or structure, not only not to be threatening, but also enhance existing product offering. A point made by Jody was that what seems to be “radical innovation” for a given organization may not really be radical innovation in its traditional sense.

It’s important to know the difference.Dr. Gina O’Connor from RPI reported on a long term research study tracking the life of internal venture groups, showing the familiar story of less than a 5 year life in the early days of these programs (this author has led and published a similar study also reviewing the psychological profiles of these groups vs. the corporate surroundings). Beginning in 195 through 2000, these efforts took on a different character, using multi-disciplinary teams to produce “radical innovation”. After 2000, these efforts focused more on capabilities rather than specific products or businesses, allowing them to respond to a broader variety of challenges. This mirrors the emphasis in TRIZ on understanding the function of a system and analyzing that vs. focusing on a specific product.

Her vision of a radical innovation hub includes a mandate and scope, the skills and talents required, appropriate processes and tools, and integration with decision makers. These observations parallel those made in the 2001 study of failed innovation champions published in Chemical Innovation.Robyn Raybold from Microsoft provided some fascinating statistics on the Web as well as the thinking behind their new Bing search engine product. Since 1997 there has been a 10 million fold increase in content on the web, an increase from 700K to 160 million web sites, and an increase from 256 million to 1 trillion URL’s. During this time there has also been a huge increase in video and audio content. She also stated that their research showed that searches drive by visual content and images was 23% faster than with word content.

An example of what they have tried to do with Bing (Note: I have no first hand experience with this search engine) would be someone searching in the new car area would automatically be provided picture and rating information without being asked for it. (TRIZniks: the need identifies itself and comes to you without asking–the IFR). The decision to design the system this way was in part driven by data that says that 25% of user clicks on a web search are to go back for additional information, only 65% of users are satisfied with their search experience, 50% saying their searches take too long, and 42% saying their searches need refinement. An example used was the narrowing of search from “New York” to “New York restaurants” to “Chinese restaurants in New York”. She also made the point that a lot of people used to be satisfied with the first cell phone from Motorola (true–do you remember how big and bulky they were? But they did something you could not do before. Think about the original microwave ovens that cost $499 and all they did was boil water!)

66% of people make decisions based on web searches. 43% of searches are in the health care area. It’s interesting that in the food industry food products such as Prego now have over 20 variables and Bing is going in the opposite direction with consolidation. Again, from a TRIZ perspective, one can make breakthroughs and make a product or service more ideal by either adding useful complexity or by consolidating and simplifying. A bit of trivia that I found fascinating was that on average, web users check the weather sites 2.6 times a day!

Dr. Howard Moskowitz, in his talk and participation on one of the panels, made the analogy of our progress in innovation as the same as moving from astronomy (observation) to physics (understanding the basic science of the universe). In his primary talk, he made the point that the US has virtually given up manufacturing and that the only thing left is knowledge to distinguish it in the future. He also shared his experience in observing and working with customers and clients and made the excellent point that customers do not tell you in clear detail what they want. Better coffee can mean strong and dark or weak and milky and unless you’ve actually watched them make their coffee, you can’t be sure. He’s a fan of the fail early, quick, and cheap school and developing what he calls “rule developing” experiments (sounds like the 40 Principles!)

Dr. Jayakanth Srinivasan from MIT reviewed his work with Rockwell Collins emphasizing the combining of lean principles with innovation. He mentioned the “10X” principle, meaning that a true breakthrough idea could be stimulated by such thinking. This is very similar to the IFR concept in TRIZ except TRIZ goes further! Part of this operates as a suggestion box program independent of the business units (I have my doubts about this). His model is a combination of open innovation, technology scanning, and internal R&D. A quote from 1927(Schumpeter): “Changes of the combination of the factors of production as cannot be affected by infinitesimal steps or changes at the margin. They consist primarily of changes in the methods of production and transportation, or in the production of a new article, or in the opening up of new markets or of new sources of materials”. A lot of wisdom from a long time ago!

Andres Stuckl from Swiss Post (post office) discussed their approach to open innovation. Two key thoughts. “Industry related factors determine the need for open innovation, while internal culture determines how it is implemented.Sabube Brunswicker from the Fraunhofer Institute discussed how we have begun to use open innovation concepts in looking for technology, but not sufficiently in looking at the open innovation process itself. This was the only paper to mention TRIZ and of course TRIZ is a tool kit and mental mind set that can assist us in looking for parallel universes with similar problems not thought about previously. The key elements of an open innovation program, according to Brunswicker, are (1) define where is the open innovation needed, (2) where to look [Note: this is a key area for TRIZ assistance through generalizing the function that is needed] , (3) what to source–the specific function required, and (4) governance and control (details and mechanics of the search). Key factors to be considered in these activities include trend and competency analysis, abstraction of the problem [Amen!] , and domain and firm selectionMy short presentation on inventive principles and TRIZ generated a lot of discussion and I was very surprised at the lack of awareness of TRIZ, especially with all the TRIZ activities and organizations in Europe, including many large corporate and organizational users such as Siemens, Nestle, and the Fraunhofer Institute.The next meeting of this group is in Barcelona in March of 2010. http://www.ispim.org