Innovation at Ford (What?)

Well, now that Ford has revealed the full scope of last year's financial bloodbath (a loss of more than $12 billion, which amounts to more than $4000 per car sold in North America, one of the most dismal corporate performances ever), it brings to mind that last summer Chairman and CEO Bill Ford fired himself as CEO and hired former Boeing exec Allan Mullaley to replace him. At the time I found the choice unremarkable, but subsequently I read a fascinating story that describes the making of Boeing's 777 in Karl Sabbagh's fine book "21st Century Jet;" Alan Mullaley led the project during critical years of the 777's development.

This is interesting because of the innovations in the 777 project itself - the first airplane that Boeing developed strictly using online drafting tools without pencil and paper; a design and manufacturing process entirely built on teamwork (250 design teams); and a consistent emphasis on creating a win-win environment among Boeing employees and between Boeing and its many suppliers. This last point was a big change, as projects prior to the 777 were characterized by a rather intense win-lose style, including a lot of yelling and a profusion of blaming. Mullaley led what was, in effect, a dramatic change in Boeing's corporate culture in the process of delivering a highly innovative aircraft, and doing so on time.

So, now, let's think about Ford. Ford could have brought in a financial genius to help sort through the red ink and make the countless tough financial decisions that the coming years will see. He could have chosen a product design genius, often known in Detroit as a "car guy," to help revitalize the decidedly tired styling at the company. Or he could have chosen an engineer who would lead the shift to alternative fuels and hybrids, which all auto companies will have to master to make it beyond 2010.

But he chose a leader whose distinguishing ability, at least according to Sabbagh's book, is his ability to foster a collaborative culture. Presumably Mullaley is a talented leader along many other dimensions that will matter to Ford's survival, but inasmuch as strong leadership and open collaboration is absolutely essential to effective innovation on the scale that Ford must now achieve, it seems that Bill Ford made a remarkably good choice.

TED : Jeff Han (2006) Ideas Worth Sharing

Here's a great look at multi-touch screen technology that would completely change the way we interface with computers and other machines. Apple's iPhone appears to use a form of this technology and is probably just the tip of the iceberg of what is to come.

Fast Cycle Times

Talk about shrinking cycle times. This small company used a trade show floor to generate product ideas from passers-by (or potential customers) and then used online tools to vote for the best idea - then product prototypes. All in 4 days. Now the top products are going into production.

Racing from idea to prototype at Macworld
Mophie, which makes a line of iPod cases, used a good chunk of its booth to solicit attendees' designs. The company got 150 ideas in about four hours at its booth. A quick round of online voting helped the company choose three finalists. By Friday, the last day of Macworld, the company had marketing pitches and rough, but working, implementations of all three finalists.

Wisdom of Crowds - Writing Books

This could be a very significant change in the way books are written - if it works. To date, almost all books have been written by one person or several people collaborating on an effort. A few books have been written as compilations of individual author's essays.

MIT and Wharton are experimenting with having up to a million people write a book on how community process influences and changes business. What's amazing about this so far is that people participating are not only writing the book but they are changing the software being used to write the book.



If you would like to contribute to this book go to We are Smarter than Me.

The Apple iPhone - Steve Jobs does it again at MacWorld

Take a demo listen here:

Apple - iPhone - Phone

Apple is renowned for it's Permanent Innovation. Here's the latest from MacWorld - the iPhone combining Internet browsing, highres camera and iPhoto- like picture management, integrated google map and search functions,and a whole lot of cool features for voice and email and call management.

And look: No Keyboard! - all running on OSX and compatible with most MAC apps. This new generation phone may be to mobile communicating what the iPod was to music and the MAC has been to personal computing.

Significantly Jobs announced that henceforth Apple was dropping "computer" from its corporate name and will now be known simply as Apple Inc. - a consumer electronics company.

I think the iPhone will be as big a hit at the iPod and will dramtically impact the enormous mobile communicating/computing market. I want one!

Knowledge Channel Innovation

A small article I wrote on "Knowledge Channel Innovation" has been posted this morning as the lead item at the Real Innovation web site.

The essence of the concept is that sharing knowledge with customers is no longer an option, because knowledge is now the basis of most business relationships. In today's economy, it's knowledge first, transaction second.

This is the first of 6 articles: There are six distinct innovation views that typically need to be integrated into one clear perspective in order to come out with the best possible results: three outsider viewpoints and three insider perspectives: Outsider Perspectives – Knowledge Channel Innovation, Peer-to-Peer Innovation, Outside-in Innovation; Insider Perspectives – Technology-Driven Innovation, Bottom-Up Innovation, Top-Down Innovation. This is Part 1 of a six-part series examining each of these perspectives.

Nintendo Blue Ocean strategy

Alex Ostwalder shows off the new Nintendo Wii game controller with a YouTube video - an innovative strategy to take a different path as No.3 in the game market vs. Microsoft and Sony - the video is fun to watch.The contrarian (Blue Ocean) strategy is shown in the graphic above.

Business Model Design and Innovation: Nintendo's Blue Ocean Strategy: Wii

What's Wrong with the Gap?

Sales figures released today show that December '06 sales at the Gap fell 9% from last year, and they also fell 10% between December '04 and '05. So what's the problem?

I'm wondering if the company is caught in the deadly middle, too plain compared to luxury goods, and too expensive compared to discount goods. This is the middle market, the niche that Sears occupied so well for so many decades, until Wal-Mart blew out their business model by selling equivalent goods for lower prices.

No doubt, at Gap HQ this week they're sweating it out, combing desperately through the analysts' figures trying to understand why their business model seems to be going into the tank. I hope they also figure out that they need to go and talk directly with their customers, to find out what shoppers really think.

It wouldn't be at all surprising if they learn that they have to reinvent the brand - but will they have the courage to do that? It's a risky move, but that would be better than becoming the incredible shrinking company ....

Insiders, Outsiders, & Immigrants

A report on the role of immigrants in US hi-tech startups released yesterday is generating a lot of buzz around the world because the researchers found that more than half of the Silicon Valley start-ups over the last decade included at least one immigrant among their founders. This gives strong ammunition to those who want to remove restrictions on high-tech immigration in the restrictive world of post-9/11 USA, and it also makes for interesting speculation among those, like ourselves, who study innovation.

One of the keys to innovation is the ability to combine insider and outsider perspectives, to see as an outsider what others miss, and to know as an insider why it's relevant. Highly educated immigrants are often in the unique position of being able to do that. This concept is nicely expressed in the words of Theodore Levitt: "The future belongs to people who possibilities before they become obvious." (And ironically, this was the sentiment in a New Year's greeting email I received today from a manager in India...)

Immigrants also have an advantage in that they become deeply embedded in different cultures, their native one and their adopted one. The bi-cultural perspective helps them to see what others may have missed because they're deeply immersed in only one viewpoint.

For those in pursuit of innovation, many of the lessons of this study are consistent with what we know about managing the search for novelty: diversity matters - a lot, as does education. You often must know a field fully to see its boundaries, and you have to see differently to see beyond them.

Finding the 21st Century

The town where I live, Walnut Creek, California, is a San Francisco suburb with about 65,000 residents. In a small step into the modern world, this month the city will begin streaming video of City Council meetings live on the web, and it will archive them on the web as well. I will be interested to see how it affects the small town governance process.

In another nod to the modern world, the local Chamber of Commerce is sponsoring a nine-day Business Leaders Trip to China March 17 to 25, 2007. Globalization impacts here, as everywhere else.

VerizonTown

Following in Nike's pioneering footsteps, Verizon is trying out its own retail stores in an effort to move its customers into higher-margin products and services. We'll see if this helps the company differentiate itself in the crowded and noisy cell phone market; if it works, you can expect to see a corner of all its stores dedicated to the new concept. And if it works, the others will follow.

Why does NikeTown work for Nike? Because the engaging design of the stores conveys the spirit of the Nike brand very well. It's also the only retail setting where customers can experience the totality of the brand.

Why would this work for Verizon? Because many people need to have an experience of new technologies before they understand them, and the retail setting is a way of providing that experience.

In the customer-driven world, creating positive experiences where people can learn is essential to success.