Erik Micheelsen on Simple Systems Innovation

In a recent conversation with someone I know, a remark fell regarding a Danish medico company (OMX C20) who for years and years have done very well.

That medico has during the past five years seen their market lead deminish. The executives of that company have so far cut back and Leaned out.

Today, leaders and employees who are not 100% allocated “core business” are no longer with the company. That means that the whole of the out-of-the-box creative layer has been sliced away.

This spring, the same medico asked their customers (as they always do) how they compare with competetor products. The answer was “we can’t see any difference between you”.

Now they are faced to bring themselves ahead. To set the agenda in the market. To find their edge and seize winning strategies. You’ve heard it before.

Except for this one! An executive at this company said just a couple days ago “we will reach our vision through incremental innovation”.

Now, I happen to know the vision, and it’s truely a radical innovation. It’s right there next to implementing the flying car as the standard transport vehicle.

The question on the table is “can that be done?!”

The answer in short is absolutly no way!!

I’ll tell you why. Incremental innovation by definition means “small transformation”; you keep the design, the function and the form.

Change any one of those (function, design or form) and you got radical innovation. Radical innovations don’t have to be huge folks! They simply introduce a new degree of freedom. That’s all. But that is also different than simply improving.

For instance;  if we are looking at, say, “Buying shoes”, well, we’re all used to going to the store. Buying them on the internet is a transformative innovation because it not only introduces a new degree of freedom. It acutally defines a new degree of freedom: That degree of freedom didn’t exist “just a moment ago”. The downside is that when you both define and introduce a new degree of freedom, your customers wont have a default practice for working with that degree of freedom. For the same reason only about 10% buy through the internet.

Obviously, you gotta make a half-way-point before or at the same time as introducing you’re transformative innovation. Who doesn’t get that? Take the introduction of the computer. Now how the heck do you work them?? Nobody knew at the time. So why didn’t that introduction become a HUGE failure? Because people could be entertained with the computer in a way they had never been entertained before. But to get there, people had to figure out how to work with this new degree of freedom.

Another way to introduce how to work with a new degree of freedom is to introduce things in small chunks instead of the whole package at once. For this program to work your company must design the whole of the package. That means that you know what the WHOLE of the transformative innovation is!!

If you instead take an existing product and alter this or that (from a customer need perspective or by technology introduction), what you’re really doing is keeping to the product you have. That is true until either the design, form or function is changed: A new degree of freedom is introduced).

Philips Europe got this point when they looked at TIVO. TIVO introduced an all hardisk recording unite to replace the ol’ VHS. But the jump was huge (transformative innovation).

Philips Europe introduced first a VHS/DVD and then DVD + DVD/harddisk. BUT the transformative innovation was actually well known by Philips.

The products and services your business has now follow a rule. Incremental innovation will keep you WELL within those rules. Radical innovation and transformative innovations will break those rules and introduce new ones.

Now either you break them or you don’t. Did I say “can’t”?

Here’s my final point. You can’t play it safe.

CK Prahalad has made a brilliant point about the bottom the pyramid, which is that the 4 billion poorest people of the world who live for less that 2$ a day should not be seen as victims. Look instead at them as tomorrows middleclass.

This argues for business in the developed world to work on innovation from the point of view of aiming at third world needs. Obviously, looking to new and emerging global markets is attractive. But where is the gateway? And what are the steps to adressing these kind of markets? Today, the best answer is still CSR or CSI, using for instance UN’s Global Compact program.

The CareCubicle program looks at the whole of this topic pragmatically from a very different point of view. The CareCubicle team is really looking forward to show you how it works, which should be sometime next year.

What we want to show is how you can make a web based program that asks the people with the need to state the needs. Most likely through NGO’s or other help organizations.

Then have ordinary people and specialists called upon to build amazing social innovations right there on the internet! This has not been seen before.

And through a whole new micro-investment model; have the design of the innovations listed in such a way that businesses can pitch in with tangible resources to bring those innovations into reality.

Now, when the local population is involved in implementing those innovations, we have a bottom of the pyramid strategy. But why stop there with something good when we can something that can be astonishing.

The thing is that this kind of thinking is of a world that is evaporating before our very eyes. It is the idea of capitalism 1.0 and the idea of “us” versus “them. Today, things are different. I’ll save that discription for a later post. Here, I’ll just note that they have knowledge and knowhow that so far has been just as inaccessible as ours has been to them.

Business wise, the question from the developed question has always been how to argue bottom line for such a strategy. I wont say that it has been left unanswered because that is simply not true. The consequence for business venture is a “fend and figure it out for yourself” situation.

This is where CareCubicle is really interesting. We argue that once a social innovation has been delivered by a combined effort of businesses, organisations and network of individuals – the same innovations can be re-designed to address premium markets. And the network that helped innovate the social innovation is still there to co-design and turn that social innovation into products and services.

A quick example. Let’s say someone comes up with a whole new tent/habitat for refugees. Energy producing, water preserving etc. Now let’s re-design it; We could aim at traditional campers. We could also aim at wilderness campers and certainly extreme exploreres (mountain climbers or trips to the north pole etc).

This is just the beginning. We have many many many very practicle ideas we think will make heads spin. What we would like to say now is that Bottom of the Pyramid strategies are no longer about THEM buying our stuff. They are about all of us combining efforts to create a whole new level of social innovations.

What is peace? What does “getting the job done” mean when it comes to achieving peace? And one more question – do you need to be a saint to get the Nobel peace prize?

I write mainly about innovation and there is one specific topic where Obama’s prize is a great case. The topic is pattern-breaking.

Tradition has it that the Nobel peace prize is given as recognition for achieving peace where it was thought impossible. Obviously, this means a situation that has demanded a lot of work and struggle. A situation with suffering, pain and loss.

But what if you just happen to stroll in and people align and head in a commen and highly constructive direction. So no struggle, pain or suffering. This has to be the better option by far.

However, recognizing the individual with this kind of impact is difficult because you as the observer have nothing to compare with. All you see is peace. You will not have witnessed a situation with turmoil and then see that situation rectified. Nor will you have seen anyone who – like a saint – has “sacrificed” him or herself to alleviate pain and suffering.

The Nobel prize commity in Oslo must believe that they saw Obama strole in and instantly made this kind of difference to the benefit of all of us.

I think most of you know that I’m working on the CareCubicle program. A crew of people are working their b…s off to design the webbased platform. It’s really looking good!

But what is it? What is the CareCubicle program? Very simply put, it’s about a bunch of people co-creating infrastructure based on a need as dictated by the people with the need.

Here’s someone who really gets it! Enjoy

Cameron Sinclair on open-source architecture

I heard that Barack Obama wants to rebuild the US with new infrastructure. Here’s my guess: I don’t think that anyone truly gets how brilliant that idea is and I’ll tell you why.

Infrastructure either makes things easier or makes things possible. I lived in London for a number of years and there comes a point where you suddenly see and hear that the London infrastructure either works brilliantly or quite like a 3rd world country.

The Tube can transport several million people during rush hour from zone 5 and beyond into the centre of the city. The electrical grid is ALWAYS on. You can ALWAYS count on water schrrrraaaachhhh! Weeeell no you can’t. I remember one Christmas while living on Charleston Street (W1), it was minus 6 degrees and I had NO water. The pipes had frozen. Actually, they had frozen all over the city. And when the broke, there was water everywhere. What a mess.

Now, what about Banks? In the Simple Systems description; Banks are a societal “accelerator”. Not unlike irrigation in ancient Egypt, roman roads or schools, they ensure the structure that allows extra-ordinary wealth. Until the administrators forget their societal “accelerator” role and turn the “accelerator” into a “business”. These kind of businesses will always be a monopoly and leave the whole of the society handicapped. Not because such “accelerators” have a business role but because they loose their infrastructural role.

That’s what Obama has seen. Building the US with infrastructure is not just about re-building smoldering bridges but doing so with new materials. new distribution systems, incorporating smart systems and much more. Any of these infrastructures from idea to delivery represents a value chain and as such can be exported.

I think we’ve all come to like the idea of Clean-Tech but we’ve also come to recognise it as a hype concept. Any Clean-Tech must be a part of an “accelerator” and can not be a business by itself. If it is possible to incapsulate what ever total package a Clean-Tech is a part of, well, that’s a different matter.

You see, if you go the other way around and define what Total Package you are looking for, you’ll find out that you might have some of the ingredients but you might need something else, something different, something innovative.

Ultimately, this is what CareCubicle is about. Considering any local need with a local community value proposition – what Total Package can deliver THAT value. The position is that if you can deliver that value you can be sure that many many others have the same basic need. It’s a brilliant suggestion and it will work.

We’ve got all the climate innovation workshops set up for the next four months and this is going to be a blast! There’s just one thing I want to add – this is about making infrastructures due to the change of our climate, because new technologies make new things possible and because the way we are going to innovate these infrastructures is with such a radical approach that it’s worth introducing to the world.

Have a look at CareCubicle.

The UN’s Climate Change Conference will be held this December in Copenhagen.

There is only one real focus to this huge event and that is for the countries to agree on reducing CO2 emissions. But how about innovating and presenting climate innovations in a well designed portfolio including graphics, illustrations and text descriptions. How about an exhibition site that also presents podcasts and vidoes of the need and the innovated concepts with animations and interaction? It will take 23 workshops from the 2 August to 25 November and physically include more than 800 people (idea-people, business employees & leaders, politicians, specialists, designers & illustrators and many more). There will have to be brilliant presentations with global insights, inspiring Clean & Bio Technologies and an innovation facilitation that is world class.

Well, that’s what we got and we’re going to do it. Let me tell you a little bit about it.

The UN’s Climate Change Conference will not deal with the global consequences of the climate changes today. And I understand why: Partially because we’re going to have to re-innovate a lot of infrastructure and that is such a complex task it seems impossible. The other reason is that administrators like measurables; they may be able to list the needs and problems but not the visions or what will work. This calls for a very different platform and a hugely different platform. Not to innovate products but to innovate infrastructures.

As some of you may or may not know, I’ve have been designing the worlds first Creating Platform, CareCubicle. Many many people have been involved so far but starting this august, we’re really going to be involving people. CareCubicle is based around a set of ideas and I’ll just mention one of them here: Knowledge Rules! If you want to innovate anything, you must know how to work knowledge and patch-work it together. There a many very good open innovation platforms and I can point you to the one you need in your open innovation effort. However, I have not seen a platform yet that even comes close to holding and working with the whole of the innovation process including a Creating Business Model. I’m twitting on what such a business model is about if you’re interested.

We want to show what you can do with the CareCubicle innovation method and tools. Climate Innovations seems like great testing grounds. Now, CareCubicle is designed for a webbased audience with a whole bunch of very new ways to work with innovation. We will test them using the old fashion crank-the-handle workshop method but still with the new tools.

A workshop series is 3 workshops not including what happens inbetween workshops. We will hold two series. Combined, the final 10 concepts that we present at the UN’s Change Climate Conference will have been thtough more than 800 people.

If this sounds like something you’re interested in: Maybe you’re brilliant with concepts or know about climate technologies or work with a government somewhere in the word; drop me a mail at erik[at]imaginethis.dk and we’ll take it from there.

This can be like oil & water. They don’t mix well. Now, that sounds problem oriented so let’s bypass the problem and focus in on what works.

Practically speaking, up until for just a few hours ago – figuratively speaking – the success of a business was measured bottom line. This new thing turned up called Corporate Social Responsibility hit the news not too long ago without changing anything over night. As a key executive for a major corporation told me at the High Level ICT Climate Conference three weeks ago: “It still has to be good business”.

Now of course he’s right. But not the way he thinks. The discussion we had was very much centred on the idea of being able to know how a CSR project would be good business now. I only want to make two comments: 1) You can’t do that and 2) that’s not the 1st priority of CSR.

Businesses need to continually renew themselves. Their environment is changing and either your business is up to date or it’s not. To be up to date, a business needs to look at the world with new eyes. You’ve got to get: That is literally impossible from inside the box. You really really really need “what’s out there” to “get in here” in such a way that it changes the whole perspective of the business.

That’s where CSR is an important tool for the business side of things. This way, you actually get to help someone, to be of service AND keep you’re business on it’s toes. That’s one way of getting to “thinking out of the box” from within the box. So it’s not tangibly and measurably now and here that a CSR builds a business but the way it builds the business prowess.

The thing is, no business can do what I just wrote, if the people who make up the business don’t get what the prowess of the business is. This is what set’s very innovative business apart from innovation seeking businesses. Employees and leaders get what they are about and are continuously looking for new ways to express that.

Read the last sentence again because if you execute on that one sentence, you’re business will never be the same again.

So what the heck does that mean. Look at Apple; If you were CEO – would you EVER have allowed the IPOD-ITUNES business plan to be executed? Don’t answer, please! The very obvious question is: How did Steve Jobs know this was the right move for the company? What Apple is continuously expressing is “if computer appliances could be held in your hand like an apple, taste like an apple, be designed like an apple – what would they be like”. Look at Nokia “Connecting People”. Most people get lost here thinking “Connecting People” is a PayOff but that ain’t it. It’s what they do. And they are re-newing it all the time. Had Nokia existed 17 century, they would be sending boats across the sea to “connect people”. Today it’s mobile phones… and tomorrow?

Who knows. They don’t even know. Not until they get brand new knowledge in the door. That knowledge will go against the basis of their bottom line today. It wont add to it.

But the whole of that exercise is impossible if the success of the business is measured bottom line. You got to get that sequence is everything! Step 1 is not to look at what will add to your bottom line but how to express the prowess of you’re business. That’s of course, only if you want you’re business to be innovative.

I’ll tell you more about step 1 next time including how to lead that process and how to determine the prowess of you’re business.

Tom Peters once said that innovation was made by really pissed off people. That means, within orgainsations, standard operating procedures go out the window including the “positive communication” thing: People who are pissed off have zero patience, are not polically correct, they’re very much to the point and they’ll probably break a lot of corporate rules. But if the result is innovation, then everything is fine. The problem is that pissed off people present knowledge you as a manager would rather be without.

What’s “knowledge you’d rather be without”? Acting on the consequences means breaking all the rules, you’ll jepordize you’re career and it get’s worse because the chain of command will be flipped. Here’s the scenario; let’s say we are on board a ship from Spain to England in 1732 and there’s no land in sight because of fog, the wind is a gale and there are strong currents. If the navigator says course 16 degrees and the Captain calls it out, then that’s the heading. Now what if one of the ship mates came up to the captain and said “actually, I’ve been following your log and my calculations say we should be heading course 22 degrees” or we are all going to die. That ship mate would be flogged! Or hanged. There’s no room for creativity on board a ship. Free Knowledge, as I like to call it, is only so much “free”.

But when it is free, amazing things happen. This is when there is a chance of “emergent property” meaning the chance for something astonishing to happen: the light bulb, the walk man, the computers or the internet are all good examples.

Businesses have always wanted to harness such results for themselves but let’s face it. Businesses find it really difficult! Except for handfull who’s names we all know.

So why is that? Why can these companies work with “knowledge they would rather be without” and are they too “really pissed off”?

I’ll give you my observations on Wednesday.