Do we face a drop in living standards?

October 23, 2011 by · Comments Off 

I have had some interesting behind-the-scenes conversations with Michael Mandel about the guest post he asked me to write about the post-industrial production economy. (I hope that you will read and comment there)

Here, I would like to take a deeper dive on a question Michael asked me about the the scenario I paint of this knowledge economy production–whether it matches up with today’s goods-based world and whether it might feel like a drop in living standards for some or many people. It’s a goodquestion and here are some thoughts. Read more

Carbon labelling on food addresses design constraints 4 and even 6

March 9, 2011 by · Comments Off 

If you start carbon labelling food, you will help people understand the heavy load from fertilizers and transportation in the industrialized food system. This addresses the new design constraints for the American economy:

4 – Minimizing energy use

and, I would submit, 6 – Maximizing health and wellness (since foods like meats and processed foods generally have a higher carbon count than fresh foods)

Could Evergreen Solar keep its U.S. plants if it applied the new design constraints for American business?

January 15, 2011 by · 1 Comment 

A few days ago, I wrote about some new design constraints that I believe should shape corporate thinking about innovation. Today, my friend Ken Jarboe at the Athena Alliance sent me a link to this article about Evergreen Solar, a company located here in Massachusetts. This company built a manufacturing plant for solar panels in 2008, created 800 local jobs. Now, the company is closing down the plant and moving production to China. Ken asked me how this case fits into the standards I laid down. (It’s a hard question but I appreciate Ken asking it). So here goes.

First, I want to say that a big part of the story is the imbalance in the support that the Chinese government is willing to give to get the plant built there versus the support the government of Massachusetts and the U.S. is giving. I always get a kick out of this kind of argument because it demonstrates the hypocrisy we often see in American politics: taxes and government spending are bad. But if someone else’s government does it, we have no choice but to take the money. In this thinking, you get the short-term cost savings and worry about the long-term implications later.

In Evergreen’s defense, it is behaving consistent with the current mindset of the stock market and the still-dominant although highly discredited (see comments by Warren Buffett and Jack Welch) approach to maximizing shareholder value that we still accept as gospel–over the last thirty years, the concept of value somehow got to the point where short-term stock prices came to be a measure of how a company was husbanding its resources and building long-term value. Read more

Design Constraints for a New American Economy: Why Boeing and every other company has no choice but to change

January 13, 2011 by · 6 Comments 

If you follow me on this blog or on twitter, you know that I worry about jobs and the U.S. middle class. That’s why it may seem contradictory to take the position I did in my recent post on Boeing.

Boeing is in the midst of a grand experiment with its 787. It has “outsourced” a greater degree of design on a scale that is unprecedented. What they have essentially done is create a connected community where suppliers of parts and subcomponents of the jet can collaborate. The individual suppliers are empowered to come up with the best designs they can. Boeing’s job is as a convener and catalyst for the network. The approach reflects their belief that their core competency is in design coordination, assembly and marketing of planes. The belief is that each supplier is more expert in their field than Boeing and, therefore, better equipped to optimize and innovate its piece of the overall product.

But the experiment is not going too well. It hasn’t failed but it has had a lot of delays and problems. So there are lots of people critiquing the whole project. Of special note are the critics who fear that Boeing is letting loose the knowledge of how to build big airplanes and that they (and by extension the U.S.) will never get back. This is not that different than so many other U.S. industries that have outsourced and moved more and more of their production off shore.

Here’s my position. Read more

The Innovation Ecosystem: Built from Your Intangible Capital

October 26, 2010 by · Comments Off 

Innovation does not happen in a vacuum. It happens inside your existing business. The ideas you develop will arise out of the competencies or experience of your employees and your external network. They will build on your existing strengths to perfect something you already do or to apply your knowledge in a new direction. There will almost always be a connection with your core competencies. There’s nothing wrong with that, who better to compete in an arena that needs your organization’s skills than you, who already have significant expertise?

As our research with Chief Innovation Officers found, it is not enough to just have an innovation process. The process needs to be supported by an ecosystem that has the right people, knowledge, culture, and external relationships, in other words, the right intangible capital. What are the right components for your innovation ecosystem? Let’s look at each component in more detail. Read more

Basics of Innovation Process

October 26, 2010 by · Comments Off 

An innovation process is not necessary for all innovations. Hopefully, many innovations will happen incrementally through continuous learning. But for bigger ideas, you will want to have a process. Just as there are many definitions of innovation, there are also many different views on the best components of an innovation process. They all essentially address the need to capture ideas and track their progress through a succession of steps to develop and test them and guide the worthy ideas to commercialization. But, as with any process, there is lots of room for interpretation and design adjustments based on your organization’s needs and experience.

The main components of an innovation process include: Read more

The Dual Challenges of Innovation Management

October 21, 2010 by · 1 Comment 

A number of years ago, a manager in charge of implementing a balanced scorecard system shared his organization’s strategy map with us. One of the organization’s “learning and growth” goals was “to become a more innovative organization.” We asked how he was going to do that. He had no idea.

This was one of the catalysts that got us interested in the field of innovation. We actually did a research project where we interviewed Chief Innovation Officers (CIOs) in American companies. The project, in late 2006, was one of the earliest research projects of this group. We did it because we were curious about the people taking on this task. We were also trying to understand the intersection between innovation and intangible capital. Read more

Innovation Info Flows – Bottom, Top, Inside, and Outside

October 18, 2010 by · Comments Off 

Emergent strategy and innovation are about opening up the flow of information and ideas. The farther we get into the knowledge economy, the more that knowledge gets spread across a company’s network, both internally (through human and structural capital) and externally (through relationship capital of all kinds). The fact that much of the important knowledge is spread out in this diverse ecosystem has significant implications on some of the most basic ways that we see an organization. Read more

Innovation as Emergent Strategy

October 13, 2010 by · 6 Comments 

One of our favorite writers on strategy is Henry Mintzberg. He is an academic and is co-author of one of the major textbooks on strategy, The Strategy Process. But he is also a gadfly with a real sense of humor. In fact, one of his recent books, Strategy Bites Back, has a photo of a shark ready to bite any strategist that takes him or herself too seriously. In a number of his books, Mintzberg uses a graph similar to this one.  Read more

The definition of innovation that we like

October 8, 2010 by · 2 Comments 

Before we go too much farther, it makes sense to define what we mean by innovation. Most people look at innovation as related to invention and/or creation of new products. Others try to draw a fine line between incremental and “true” or “fundamental” innovation. Both of these views are too limited. We believe that innovation is the effect of the organization creating new knowledge and/or new ways of applying its knowledge. It’s the experimental, the learning side of business. You want to encourage learning and continuous improvement in all corners of your business.

We like the definition of innovation proposed by Sawhney, Wolcott and Arroniz, Read more

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