Monthly Archives: July 2008

We have the great ideas, now what?

Was reflecting on the second MIT Sloan Management Review article that I read, “Oops! Accidents lead to innovations. So, how do you create more accidents????”

This article is all about opportunity generation, stimulating creativity, etc. It highlights Xerox PARC. ..and suggests that corporations “keep PARC of the early 1970’s in mind as they consider the ideas that emerge unexpectedly.”

I would caution that  PARC contributed very little to Xerox’s growth. Is the issue really getting great ideas (i.e. Grabbing the Lightning)…or what to do with them once you’ve got ‘em????

In Search of Growth Leaders

Back from vacation …refreshed and renewed. Catching up on old news. July 7’s WSJ’s section devoted to reprising articles from MIT’s Sloan Management Review. Two articles picque my interest. This post is about the first one: In Search of Growth Leaders, describes a study of middle managers who actually make things happen in large bureaucratic organizations.

No surprises, but just want to point this out, because it’s absolutely true. Waiting around for senior leadership to ‘get it’ won’t work. Most of the companies we’ve studied who have built innovation capabilities initiated them from the middle management ranks. These guys WANT the company to grow, do well, achieve organic renewal. Many have energy, brilliance, and great leadership strength. As I mentioned before….it doesn’t have to start from the top. Ultimately, however, the top guys have got to become converts.

The article went on to describe these people in terms of their experience bases (extremely broad-ranges, diverse, allowing them to migrate ideas and solutions from one context to another), strong internal network, and strong held beliefs in their ability to change the world around them. Need to temper this with a reality check, to prevent ego maniacs from taking hold. We’ve seen it happen and it’s way too counter- productive to allow. But we also encountered, as these authors have, managers who really can get things done, and are confident. These are treasures in your organization.

The article’s sub-head is “Most companies have managers who can turbo-charge results. The trick is finding—and nurturing—them.” Unfortunately for readers, this last point…how to nurture them, is not addressed. But here’s what we find: They do NOT need equity participation in those businesses that they start. They want visibility with senior leadership. The usual sort of credit. They’re not the same as start up entrepreneurs who may be primarily driven by the promise of huge financial returns. These people want to see their organization’s continued success, and see its contributions adopted by the rest of us.

Innovating Coffee in a weakening economy

With soaring fuel prices, the $4 cuppa is probably unattractive as ‘everyday coffee‘. Starbucks plans to close 600 stores laying off 12000 employees. Downsizing and cost-cutting are popular moves exercised by Top Management to control costs in a receding economy. In most cases, the innovation function is also hurt badly owing to budget cuts and lay-offs, making way for quick and easy solutions that apparently, improve the upcoming quarter’s bottomline. But, in a weakening economy, should innovation really stall?

A while ago I wrote a piece about innovating around cost that is certainly one approach to the problem. Indeed this is a good time for Starbucks to further research their ‘everyday coffee’ product. Can they actually make the coffee affordable? Or should they focus on another demographic in this economy?

Another approach is to put their discovery competency into gear and analyze the new trends in more detail… what is the nature and distribution of rising food and fuel costs? Who wants coffee the most and what implications does this have about their business. Or is this really about coffee or something else?

Innovating Coffee

Recently Howard Schultz was brought back as CEO to revitalize foundering Starbucks. Schultz intends to use Ideas to change his company—to instill what he calls “a seeing culture.” In an effort to execute Schultz’s intentions, Starbucks launched MyStarbucksIdea.com. Here customers can make suggestions, other customers can vote on and discuss them. Seemingly as a result of this effort on Apr. 8, about twelve weeks after Schultz’s return, ‘Pike Place Roast’ was launched amidst much media hype.

As BusinessWeek noted, Starbucks ‘Everyday Coffee’ is an effort to Dunkinize the brand a bit. Perhaps, this was one way of demonstrating that Starbucks was listening to its customers but Starbucks so far hasn’t reinvented coffee, or pastries, or the experience.

Following the bandwagon is not the same as innovating. Shultz in an interview about his new effort said “this is hard”. Yes innovation is hard and it takes patience and speaking to your customers, customers you don’t have as well as your existing customers.

Will Gates return?

We’ve often mentioned how important it is to have a key individual responsible for driving innovation in a corporation. Everyone is now wondering how much Microsoft’s focus and fortunes could change. The Economist, like multiple other publications, has published an article titled “After Bill” where there has been some discussion on Microsoft’s newfound interest in Cloud computing.

So how important is the CEO profile for sustaining a highly innovative company? While the business literature often cautions against having founders run companies too long, there is evidence that in some instances its these very folks that are needed to sustain innovation. Steve Jobs returned to revitalize Apple and he did with the iPod and iPhone. Jamie Houghton brought Corning back to life after its nose dive during the Telecom bust. Michael Dell returned to assist a foundering Dell Corp., and Howard Schultz too has reclaimed his CEO role at Starbucks.

On Friday, Bill Gates stepped down and left the helm to Steve Balmer a long time friend and colleague who has worked with Bill at Microsoft for 33 years. Balmer is known for his ability to digest large chunks of data. His sales and marketing prowess complemented Gates’s technical acumen as Microsoft grew. Is one side of this duo enough? Will Balmer’s math excellence turn into number crunching and away from innovation?