Today I found myself again reading about open innovation. One of the underlying principles of this is that in a world of widely distributed knowledge, it’s pretty hard, inefficient and expensive for companies to simply rely on their own research for innovative purposes. Therefore the suggestion is to spin-off, share, license, joint-venture or any variation therein to acquire innovative practises from others and also open your own for others to figure out how your company and theirs could benefit together. It’s a structurally collaborative path to value creation.
Closed innovation in turn goes like this: a company only uses it’s internal knowledge and research and is not open to uses and learnings form others. Quite uncool these days though it was the paradigm before World War II.
I find the premises of open innovation quite enticing ( - inspite of potential headaches to Legal Counsel…?) and I hereby list some of the thinking that governs the model:
Not all the smart people work for us. We need to work with smart people inside and outside our company
External R&D can create significant value; internal R&D is needed to claim some portion of that value
We don’t have to originate the research to profit from it
Building a better business model is better than getting to market first
We should profit from others’ use of our innovation process, and we should buy others’ intellectual property (IP) whenever it advances our own business model
In 2007 some 70% of Turkish citizens where under the age of 30 and almost 26% were under the age of 14. This is fascinating for a person coming from an aging country like mine. In 2008 the population of Spain under 29 is a bit less than 40%.
I was thinking today of the treatise The Art of War, written in the 6th Century BC by Sun Tzu and considered the most relevant tome on military strategy and tactics in history. Actually, if you look at the 13 chapters that conform it, you quickly understand how the structure and items proposed have been used more than any in military planning (in East and in West). They have also extended in recent decades to business strategy and planning. Find an ultra-short briefing of these 13 chapters here
There is a very famous quote of this book I came across the other day in Jordan Bortz’s blog which goes like this:
Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.
The reason this caught my attention was a recent debate I witnessed inside my organisation on waterfall versus agile methodologies for software development, whereby some considered waterfall (sequential software development model) as a purely strategic method whereas they claimed agile was purely tactical. I think this is a limitation and narrowing of both methodologies that’s not fair to either.
I believe you can use agile in a full fledged strategic manner as long as you manage agile actions and scrum teams in the context of a clearly visible and well communicated strategic endeavour. Probably managing this obeys a different order and formal logic than a waterfall project, but I am certain agile can be used in a mid or long term strategic context and at the same time respect it’s governing principles.
However, I still hold truth some basic notions, one of which would go something like this, as Dwight D. Eisenhower said:
In preparing for battle I have always found that plans are useless, but planning is indispensable
More also from Damon Poole, who has a bit of a fight on the topic with the above mentioned Jordan.
When considering nearshoring, outsourcing or other externalisation of processes, a number of strategic considerations have to be taken into account. I read a very synthetic (3 points) but spot on approach in Harvard Business Review recently on the subject which I would like to share:
List all your capabilities - including HR, finance, IT management, logistics distribution, product development, and packaging
Identify capabilities with high proprietary value. Your company executes these in ways that generate measurably more value than rivals could. And your company would suffer major strategic damage if rivals imitated them.
Identify capabilities with high commonality. Outside suppliers could achieve scale or other advantages by providing these to many others in your industry
An interesting note:only 6% of companies which outsource are satisfied with the practise (source: HBR).
Commonality identification illustration flow from esi.es
Horizontal scaling (scaling out) means adding or removing client workstations with only a slight performance impact. Vertical scaling (scaling up) means migrating to a larger and faster server machine or multiservers.
as equal quantities of one variable factor are increased, while other factor inputs remain constant -ceteris paribus- a point is reached beyond which the addition of one more unit of the variable factor will result in a diminishing rate of return and the marginal physical product will fall.
I think the reason I was associating these 2 is because I thought: In Allspaw’s model of diagonal scaling, this law is not only undermined, but is infact inverted.
I think Spanish bar and tavern tenders have a good lesson in customer relationship management to teach the world. They do two things which are just great.
The first concept is the tapa (analog to a push service). You order a beer or a wine at any bar where food is also served and always get something small to nibble on, usually on bread. This “tapa” is a perfect upselling scheme. If you like it, your tendency will be to order “raciones“ of this same or similar foods on sale at the establishment. After a few wines (this bar side drinking is normally before lunch or diner) you might probably want to sit to diner with your friends. One of the most ancient and best upselling schemes I know.
The second is offering the last shot of digestive liquor on the house. “El orujitose lo da la casa“. You had a great and not inexpensive lunch on tapas and raciones and end it with some pacharán, orujoblanco or some such concoction. Then when you ask for the bill a smiling waiter tells you: “this one is on the house” (refering to the liquor shot). The costs of this are truly marginal to the establishment, and yet it will probably entice you to leave a larger tip before exiting and generate a lot of gratitude. So, more cash to the tip pool and a subjectively (and probably tipsy) happier customer. Win-win was invented in Madrid.
According to Wikipedia, enterprise search is “the practice of identifying and enabling specific content across the enterprise to be indexed, searched, and displayed to authorized users”. There is large amounts of ink on the topic now and a world summit devoted to this critical knowledge management tool.
I was thinking about it because it seems the long tail of company information (over 80%) and therefore know-how and knowledge, is stored in disconnected systems (mail in-boxes and folders, private files…). This accounts for a lot of lost value as well as a lot of inefficiently spent time looking for things outside a total system.
It reminded me of the similarities between the pursuits of the many companies dedicated to ES and classifieds: in online classifieds we try to organise information, make it accessible and classify it in the most efficient manner possible. We want to build value into information by making it easier to get to it, enhancing/enriching it, use it, re-distribute it and act upon it.
Everyone is trying to persuade me that decline in newspaper readership is making society at large more dis-informed. I don’t think so. Perhaps if you are not a proficient user of available tools (and I am not) you may find yourself wasting important amounts of time trying to retrieve information from irrelevant sources. But it’s fair to say that in the information age we are all struggling with relevance.
I try to find the explanation to this, rather, in the principles of entropy. Entropy assumes that nature tends from order to disorder in isolated systems. Let’s say your throw a pile of books on the ground, disorder is more likely to occur.
A more precise way to characterize entropy is to say that it is a measure of the “multiplicity” associated with the state of the objects. If a given state can be accomplished in many more ways, then it is more probable than one which can be accomplished in only a few ways
The above is a time-arrow vision of entropy. But here is another take on it as disorder, illustration included, thanks to hyper-physics
For a glass of water the number of molecules is astronomical. The jumble of ice chips may look more disordered in comparison to the glass of water which looks uniform and homogeneous. But the ice chips place limits on the number of ways the molecules can be arranged. The water molecules in the glass of water can be arranged in many more ways; they have greater “multiplicity” and therefore greater entropy
eMarketer predicts that spending on online rich media and video ads will account for nearly one-fifth of all online ad spending by 2012, up from 9.7% of all online ad spending in 2007.
British artist and sculptor Henry Moore (1898 - 1986) introduced a particular form of modernism to art in the United Kingdom. He is particularly well known for his reclining female figures. Moore was born in Castleford, Yorkshire, the son of a mine engineer. He became notoriously acclaimed in the international scene as a sculptor for his large scale abstract bronze and marble figures which can be seen in significant public enclaves worldwide. Moore’s figures are normally characteristic for piercing and hollow spaces which are reminiscent of the hilly landscape of Yorkshire. Most of the wealth he made from these large scale commissions in his later years was endowed to his Foundation.
There is a quote of Moore’s which I particularly enjoy and I find condensates how I understand his work:
There are universal shapes to which everyone is subconsciously conditioned and to which they can respond if their conscious control does not shut them off
More about Henry Moore’s work and style here and in this tribute page to the artist.
Portrait of the artist in his studio in the mid 1960s via britannica. Reclining figure from sculpture.net. The Three Piece Reclining Figure: Draped in Kew Gardens via rwapplewannabe
Probability indicates that the large media groups will still own the information space, but it’s the brands, the means of access to information and the sources of credibility (traditionally the national dailies) that change.
Some days ago I read that Google and New York Times have built a layer on Google Earth (get a last upgrade; enable ‘geographic web’), so you can see what’s being written about in the New York Times via the earth map. This access still relies on the brand equity and credibility of the Times as a medium, but it provides yet another step towards non-conventional access channels to credible information.
My questions are: Are a the same few monster media corporations still going to dominate the information space? Will they engulf all the new and upcoming diverse forms of creating and distributing media and consolidate it? What does credible mean to the current young adults? How do you create credibility in the new media space (not just UG ratings)?
If you are in as dreamy a situation as Apple, with wads of cash, a great looking balance sheet and no debt, you might as well follow Steve Jobs’ wise counsel. This is what Michael Roberto of Conversation Starter quoted him as telling in Fortune magazine (is this meta quoting…?):
“In fact we were going to up our R&D budget so that we would be ahead of our competitors when the downturn was over. And that’s exactly what we did. And it worked. And that’s exactly what we’ll do this time”
Jobs was referring to previous recessionist environments and of course, to the current one. As Roberto reflects in his post on the matter, in a recession there are a number of good actions to take, namely:
Invest in research and development for the next shinny times
Analyze and know your competitors’ Aquilles heels and act upon them in a clever way (think on the fringes; be a parallel thinker?)
Identify critical suppliers and distributors and identify the risk associated to them in the economic environment and how it could affect you
Think carefully about your talent needs and be very careful so you don’t send the most talented people to you competitor’s den
Erica Abi Wright, also known as Erikah Badu, was born in Dallas in February 1971. She’s an R&B and hip-hop singer and writer. She is often compared to Billie Holiday for her “musical sensibilities”, Wikipedia dixit.
I like her. I would normally think this is too commercial, but there is something in her neo soul stream, this so-called alternative or underground hip-hop, that resounds. Her father had left the home when she was growing up, but when she chose the artistic name Badu, he wrote her: “Badu in Arabic means truth and light, good choice kid”.
Not sure if this video reminds me of Carmen Miranda, Billie Holiday or Chaka Kahn meets Grace Jones. I like Erykah Badu anyway, I discovered it last week.
Cool. I was there when they made this video (I mean I saw the filmaker with his tripod and his Sony HC7 camera on the tram to Kabatas). It starts on the Starbucks near Kabatas and gives nice views of Istanbul from there to Galata, including a ride on the funicular. I think they had a great time making it and I keep remembering Jim Jarmush ;-)
Paradise Lost is an epic poem writen by John Milton in blank verse in the XVIIC and originally published in 1667 in 10 books. It’s about the Judeo-Christian story of the fall of man, the temptation of Adam and Eve and the expulsion from the Garden of Eden.
Couple of other videos by the same author here and here. The Pink Panther vs Skeleton Man trailer is very surreal and quite funny. I love the Brazil soundtrack and the way Pink Panther manages to keep standing in the corridor with so much dignity ;-)
eMarketer predicts that this year online advertising will grow to nearly $25.9 billion and account for 8.8% of total US ad spending. I know some media players in much more underdeveloped markets who are making this proportion too. Awesome.
Syntegrity is a formal model presented by British theorist Anthony Stafford Beer in 1990. Now a trademark, it is “a form of non-hierarchical problem solving that can be used in a small team of 10 to 42 people. It is a business consultation product that is licensed as a basis model for solving problems in a team environment”. From synergistictensegrity
Another good description is this one: “a future-oriented approach to the design of democratic management in the sense of the heterarchical-participative type of organization. It is a holographic model for organizing processes of communication, in particular for the (self-) management of social systems. Based on the structure of polyhedra it is especially suitable for realizing team-oriented structures as well as for supporting processes of planning, knowledge generation and innovation in turbulent environments”.
But the really amazing thing that I read recently is that Beer is the brainchild of Project Cybersyn, an attempt by Chile’s Socialist government under Salvador Allende to achieve a real-time, computer controlled planned economy of sorts. The year was 1971.
“A network of about 500 telex machines linking the country from north to south supported all this. A single computer center in Santiago controlled them, using principles of cybernetics. Its futurist design offered the hope of a more participative and less bureaucratic society. The project had the participation of a multidisciplinary group of national and international scientists. Their task was to build a system for distributed decision-making supported by relevant information. But their efforts were interrupted by the coup d’etat of 1973“
I really liked this tip list on how to save costs and other clever tricks to use when running a start up, provided by Jason Calacanis. Definitely enjoyed point 11 about seeking talented workaholics when managing a start up.
Infact, I think it’s fair to say that also in large companies, in new projects, you need to abide by some similar set of rules in taking talent from outside or handpicking it from other divisions. It’s critical to ignite and steer certain projects within the corporation at large and if you don’t infuse innovative projects with individuals who also have a true entrepreneurial edge and a desire to outdo themselves, you may never lift to even the design phase.
It seems there are still too many hurdles to mobile advertising picking up big time. I mean, the forecast of emarketer to 2012 (19M$) is still very quiet compared to the overall advertising market size. I think it’s fair to say that one of the hurdles to this advertising format will not be overcome until mobile users stop getting charged a premium for all kinds of services related to the use of this most precious hand-held device.
The table below is a clear indication of this phenomenon, which is just one (but a biggie) of the significant hurdles to be overcome.
You could be in one or various of the following situations: projects stuck in logjams nobody can fix; non-strategic projects consuming too many of your critical resources; delays you cannot set objective milestones to; well run project parts which were executed perfectly (as parts) but which don’t wield together as a whole… and so on.
Some great authors in HBR explained that the problem is that in companies “we look at projects individually and try to push them, as such, through the pipeline with speed and cost efficiency”. But who keeps an eye on the big picture? Who decides which is the right blend of projects we should be nurturing in a period of time? Who sets the pace for strategic versus maintenance? Who provides metrics and confidence to roll out mega-projects with a calm mind?
The authors suggest a few techniques:
“Achieve the rightblend of project types: including breakthrough, platform and derivative products; R&D efforts; partnerships
Eliminate strategically irrelevant initiatives
Replace project management with process management: unplug the bottlenecks; smooth the workloads; increase the time to market
I like all the principles hereby stated. They are pragmatic and propose a good high-level framework to reduce noise and achieve speed to market in a reasonable priority setting.
The origins of the Jewish Istanbulite Camondo family probably start in 1492 Spain, from where they were expelled like all Jewish and Muslim citizens. After that their traces reappear in the ghettos of Venice and in Constantinople, Ortakoy, in 1758.
View from the top floor in the newly restored Camondo house near Galata, in Beyoglu. Photo taken by Eero Korhonen
They seemed to encounter some clashes with the Ottoman authorities and, of Austro-Hungarian nationality, fled to Cyprus only to return to Istanbul in the early 1780s. The Camondo was a family of bankers (lenders originally, “saraf”). Their institution, called after its founder Isaac Camondo & Co., started by means of lending and then diversified to control a network of retail in Galata and in Uskudar as well as a brick factory and olive oil production unit in Çorlu.
They were the bankers of the liberal Sultan Abdulaziz and later of Abdulhamit II and were allowed a very exceptional situation for foreigners: to own property. The Camondos were very active donors in the Crimean War (1853 - 1856) and philanthropists and they tried to modify the Israeli public instruction to allow Turkish and French, the languages of the official institutions and of trade, to be taught in schools (which no doubt lead to great discontent in the Jewish traditional institutions).
By the end of the XIXth Century their wealth in France, (where they moved to in the mislead hopes of finding a more welcoming and evolved society) and in other countries span companies such as Paribas, Portland Cements, the Imperial Ottoman Bank, The Refineries of Egypt, The Constantinople Water Company, The Portuguese Railways, and Franco-Canadian Credit, among many others.
After seeking and finding prosperity and wealth in Western Europe, the Camondo family, like many of Ottoman Jewish ascent, disappeared. Sadly, the French Government, blinded by its anti-Semitism, failed to welcome them into society in spite of the magnificent donation of the Nissim de Camondo house and collection in Paris and in spite of the death of war pilot Nissim in Lorraine in 1917.
