Only Dead Fish

Invention, Innovation and Imitation

    

"Live in the market, not in a spreadsheet" Cheryl McKinnon

I agree with Noah that the word innovation is so overused that it's all but meaningless. And that what meaning is attributed to it is often misplaced. A point he eloquently makes in his excellent post (and the presentation which I've embedded below) in which he draws the distinction between invention (as 'the creation of a new idea or process'), innovation (as 'arranging the economic requirements for implementing an innovation'), and diffusion ('adoption and imitation'). Noah defines three separate roles (which might be fulfilled by a single person) in the innovation process: the capitalist who provides the money; the inventor who creates the idea; and the entrepreneur who adapts the idea, brings it to market, and commercialises it. Each role is a different task, requiring different skills.

He goes on to refer to a 30 year-old HBR piece (aptly called Managing Our Way to Economic Decline ) that suggests that despite success clearly being derived from an organisational commitment to competing on technological grounds (over the long-term offering superior products to market), management focus has shifted away from the long-term development of technological competitiveness and towards short-term cost reduction, away from the insight that comes from hands-on-experience and towards analytic detachment. Sound familiar?

The example given in the post is Sony's shift in the 1980's from a process of defining new opportunities based on personal intuition (often that of the co-founder Akio Morita, who's withdrawal from active management was a catalyst to the shift), to a data-heavy, analytical approach: "Those processes were very good at uncovering unmet customer needs in existing product markets. But making the intuitive bets required to launch disruptive businesses became impossible."

The interesting thing of-course is that whilst it is innovation that brings new things into the world, it is often imitation that spreads them. With the internet being the greatest copy machine ever invented, copying is not such a dirty word anymore. It can spread ideas and knowledge, and make the process of perfecting insights and innovations quicker and more efficient. It's not only the innovators that can win big, imitators can too, and sometimes bigger. As this presentation from Andy Budd points out, the iphone wasn't the first touchscreen phone, the iPod wasn't the first MP3 player, Windows wasn't the first Graphical User Interface and Dyson didn't create the first bagless vacuum cleaner. But what all those examples have been very good at is what you might call artful imitation - imitating and reinterpreting the right thing, in the right way at the right time.

As this piece on imitation points out, the best imitators are those that sample widely and aren't afraid to change the current model for something new. I've long felt that a big part of the reason that (some) large organisations are so bad at innovation is that there is too much energy spent looking internally and not enough externally. My hunch is that in tough times this only gets worse. People start worrying about their jobs, looking at ways to incrementally improve processes, and companies get into that spiral I've talked about before of trying-to-do-what-they-did-before-but-more-efficiently. Worse than that, they look at new stuff through the lens of the old stuff, frame the future in the context of the past or the present, use existing assumptions and models as their start point (Russell reminded me yesterday of the point that Clay Shirky made about how established businesses will often use existing cost base assumptions as the start point for innovating product rather than thinking how it might innovate its cost base to enable a totally new form of product).

And let's not forget that if innovation is the commercialisation of new ideas, then a major reason why it is difficult for established companies to innovate disruptive models or technologies is because it does not make economic sense for them to do so. Noah speculates that part of the reason why so many large organizations are so disappointing from an innovation perspective is the shift in corporate mindset resulting from more company presidents being derived from financial and legal backgrounds rather than technical. He may well be right, but I'd like to add that it is just as likely to be because their focus is in the wrong place.

Thinking About Innovation

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25/04/10

 
I'm still reeling from the experience of running the London Marathon yesterday. I'll not bore you with the detail but to paraphrase something Tom said, all the willpower/goodwill/support and general humanity on display was truly humbling. I want to say a few thanks: to the girl outside the pub at mile 5 who offered me a pint of lager (I thought better of it); to the guy dressed as a giant cornetto who overtook me at 8 miles (shaming me into upping the pace a bit); to the scottish bloke at about 20 miles who yelled the loudest 'C'mon Neil'  of the whole race when I was at my lowest ebb; and to my girls who were there for me at 25 miles, and waiting for me at the end. And of-course, I want to say a very public thanks to everyone who offered me their best wishes, congratulations, advice, and their generosity in sponsoring me for an amazing cause. Thank you.

Unproductivity

 

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How much time in businesses is spent fulfilling unproductive corporate practices that add little value? I'd guess it's a lot. And I'm guessing you think the same. I'm sure you recognise Matthew Parris's vivid description of the curse of e-mail, the kind of electronic turmoil generated by copy-in and reply-all which have meant that our devices long ago passed the tipping point at which they ceased to be labour-saving and became work-generating machines ("my pending e-inbox is a sort of half-abstract infinity, stretching back to January, peppered with the unintended discourtesies of non-reply, of some of which I'm vaguely and guiltily aware; and others of which I've totally forgotten, each growing ruder by the week as I put off the old and firefight the new"). And I probably don't need to tell you what this means for people whose life outside of work is being increasingly encroached upon by the always-on expectation of always-connected devices.

And what about all those meetings? John Linwood, Chief Technology Officer of the BBC, recently complained about a meeting culture at the Beeb rooted in accountability, ownership around decisions and fueled by ambiguity, and an unwillingness to take risks: “I am pretty sure that most of us were recruited for our intellectual capability and yet how much of our days do we spend just thinking, using the key attributes that the BBC hired us for?”.

The answer is not always to sit in a windowless room with a bunch of other people and a plate of biscuits. A recent study suggests that instead of enhancing creativity, brainstorming sessions involving multiple people may actually generate less ideas and a narrower focus than if those people brainstormed individually, because of a "collaborative fixation" on particular ideas due to the fact that we mirror ideas in meetings, until we all become fixated on the same thing.

 

Not all meetings are bad of-course but reading this Guardian piece I was reminded of a Paul Graham essay I read last year that draws a distinction between what he calls a 'maker's schedule' and a 'manager's schedule'. Makers (creative types, writers, programmers, do-ers) prefer to use time in units of at least half a day since you can't complete a project or write or program well in anything less. Managers use time in a different way, typically segmenting time into one-hour slots. Several hours can be blocked off to complete a specific task, but the default is that you change what you do every hour. For those on a manager's schedule, a meeting is simply a matter of finding an open slot and booking it in . But when you're operating on the maker's schedule meetings can be a disaster, since one meeting can blow the whole afternoon by breaking it up into chunks too small to do anything truly productive with. The different types of schedule can work in isolation but problems arise, says Paul, when they meet. And since most bosses operate on the manager's schedule "they're in a position to make everyone resonate at their frequency if they want to."

Habitual organisational behaviour generates its own momentum and reinforces itself over time. So we should work hard to break the habit. And do it now. Particularly if, in searching for a way out, you recognise yourself in this: 
 
 

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Objects And Stories

 

"Information is not knowledge, knowledge is not wisdom, wisdom is not truth, truth is not beauty, beauty is not love, love is not music, and music is THE BEST."

Frank Zappa

The DIKW model is a hierarchy used in the fields of information science and knowledge management. In the model, data is characterised as discrete, objective facts, observations, readings, stimuli that have no meaning or value because they are unprocessed and unorganised and so lack context and interpretation. Information has some degree of meaning, structure and purpose applied to that data or stimuli (like descriptions) so is more useful, applicable and relevant. Knowledge is more useful still, and is typically defined as information that has been processed, organised or applied in some way - a framework derived from a fluid mix of values, beliefs, rules, skills, expertise, experience, insight, intuition, contextual information. Combinations of information combined over time to convey understanding, accumulated learning, applied in our minds or embedded in organisational practices and norms. Wisdom can be described as a more useful form of knowledge or evaluated understanding, that adds value, that requires judgement - 'why do' as opposed to 'why is'. The model is similar to Maslow's hierarchy of needs in that each level is a precursor to the level above, and so describes functional relationships in that lower levels comprise the material of higher levels. So information is defined in terms of data, knowledge in terms of information, and wisdom in terms of knowledge.

The data deluge is very real, and it's not going away. One estimate suggests that in 2005 mankind created 150 exabytes (that's a billion gigabytes). This year, that figure will be more like 1,200 exabytes. Most organisations sit on huge repositories of data that are often under-utilised and not linked up. The internet of things is already generating vast quantities of data from objects. Data that exists not just in systems but systems of systems. Systems that talk to each other, influence and affect one another in ways that can create helpful services (the IBM video below, a useful summary of the internet of things, describes this matrix).

So it is useful to think about the structure of interpretation and understanding that we apply to the data we gather. And it's interesting to think about how that can be applied so that we might create not just useful services, but interesting stories. Stories are important since they convey value and meaning, even onto inanimate objects. Value that can be intangible, but equally very real.

The Significant Objects project saw creative writers inventing stories about random objects that had been bought in thrift shops. The objects were then put on e-bay along with their stories (it was made clear they were fictional) to see if the stories could invest in them a new significance and value. It was not a perfect experiment, but the results were amazing. $128 worth of thrift-store junk was sold for $3,612 (which went back to the contributing writers).

When Russell first talked about his post-digital schtick he talked about how, as objects informationalise, communication channels are getting built in. About how the stuff and the possibilities that digital technologies facilitate - the creativity, conversation, community and collaboration - were migrating into the real world, turning out real objects, real events, real places. All of that real stuff was there before of-course, but we're starting to get to a really interesting point where embedded technologies, and the data that they create, are starting to be applied in some intriguing ways, generating some really interesting ideas.

Like The History Tag, an idea by David Hieatt. As I do, David believes that one of the best things we can do for the environment is to make products last longer. On a personal level I find the fallibility and impermanence that seems to be baked-in to products now an immensely frustrating cultural norm. We seem to have gotten ourselves into a situation where we accept ever shortening consumption cycles that see products designed with an in-built capacity to wear out, break, or become out-of-date after a given (usually short) amount of time. So David's idea is to encourage the practice of owning things that do last and that can be handed down by using digital technologies to enable objects to tell their own stories. So the History tag is like a barcode, but one that is updatable via the web or an app:

"…imagine a well-made bag with a 'History Tag'. This will allow the owner to update its history on a bit of The History Tag website. What they have been up to with their bag: its best day, its worst, its journeys, its fun times etc. And, if that bag is ever sold on one day, or passed down, then, that history will go with it. The new owner can get their phone to read the tag and its history, so they will know its  story."

The internet is changing the default from forgetting to remembering. As the line between physical and virtual blurs, perhaps we are only scratching the surface of what is possible. We're used to objects telling their stories through their visual appearance. A frayed hem on a jacket, a coffee stain on a magazine page, the page of a book turned over at the corner where someone once paused, mid-story, perhaps to sleep or just to think about what they'd just read. Yet objects are increasingly equipped to tell their own stories in multiple ways. It's intriguing to imagine where that might go.

Location, Location, Location

 
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So, I've started doing some writing for Gordon MacMillan and Brand Republic on their excellent new social/marketing/digital blog The Wall. My first post, on the potent combination of mobile and social, has just gone live. To celebrate, I'm cross-posting it here:

You’ve no doubt heard it before that location is the next big thing. It’s about to get much bigger. With Facebook soon to announce new location-based features at their developer conference late this month, location is about to take a giant leap forward.

Combine that with talk of a Foursquare sale, and the growing list of companies (FT and Starbucks being only the most well-known)  starting to use Foursquare check-ins as a whole new form of promotional CRM, and this space is rapidly becoming a hot-bed of focus and innovation.

At their developer conference, Chirp, Twitter announced new geo-location services including one called ‘points of interest’ which allows people to geo-locate their precise location (instead of general location which you could do previously) and search particular locations and see all the posts written from that spot (imagine doing this at a concert).

From the information that people post, Twitter will build a database of places across the world so people can refer to them in posts. With over 105m registered users just imagine how powerful that could be. Tweets already contain information additional to the 140 characters, including the date, time and the app used but with a new tool called Annotations developers can now include additional material, opening the potential for services such as the name of the location where the tweet originated, location based ratings or even payment and puchase options.

No wonder analysts like Jeremiah Owyang at Altimeter are saying that this is the moment when Twitter has gone from being a data play to being a platform play – something he calls the ‘natural evolution of a web company’.

When Morgan Stanley’s Mary Meeker delivered her latest ‘Internet Trends‘ report at at a Google event the other day,  she talked about how the key to the commercial potential of the web will be the game-changing convergence of two trends: mobile and social. She noted how the mobile internet is ramping faster than desktop internet did and predicts that mobile will be bigger than desktop internet in 5 years.

She noted the rapid growth in data usage, how the iphone/itouch has the fastest new tech device/ecosystem ramp in history and how whilst the average cell-phone usage pattern is 70% voice, the average iPhone usage pattern is only 45%  voice.

Meeker pointed to the ever-rising share of communications being garnered by Facebook, and how the Facebook app is the most downloaded of Apple’s free apps (in fact Facebook now has over 100 million people who use the social network on their cell phones, a figure that has increased five-fold in the past year). “Where consumers are empowered by the internet, Meeker says , “usage changes very quickly. And where eyeballs go, ad money goes.”

Personally, I’ve noticed that, as my network expands on Foursquare, so the service improves in its usefulness. And the more useful the service the more people use it, the more possibilities open up. It’s what Faris Yakob once called ‘Geotility‘.

The technology is just the facilitator. It’s the people that make it useful. With the network that Facebook has (everyone is on it), coupled with the degree of engagement and mobile usage it commands, this will be a real game-changer. As Meeker says, the “rapid ramp of mobile internet usage will be a boon to consumers and some companies will likely win big (potentially very big) while many will wonder what just happened”.

Empowered Audiences

 
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I'm chairing an event on 'Empowered Audiences' for the Association Of Online Publishers in a couple of weeks time. It's a good line up, with Kate Day (Communities Editor of The Telegraph), Paul Hood (Head of Digital at Mirror Group) and James Bromley (MD of Mail Online). In the lead up they've done a short interview with me around the subjects we'll be covering, which they've kindly allowed me to put up here. Reading it back I think I got a little feisty...

How do you think publishers can continue to develop their use of social media efficiently, cost-effectively and in line with what users want?

The key phrase in your question is 'in line with what users want'. My hunch is that if you get that right the rest will look after itself.  The most efficient approach is not to put social media in a silo but to embed it in everything that you do on a daily basis.
 
It's been said that social media doesn't have a business model, and that it is more of a matter of simply adding user satisfaction online - what's your view on this: is there such a thing as an ROI for social media?

I'd say that the ROI for social media comes in having a business which is fit and ready for the present and the future. I don't think of social media as a channel - I think media is becoming socialised.

Similarly I don't think that social media should have a business model, I think your business model should be socialised.

It's sensible to measure metrics like site referrals, sentiment, interactions, customer acquisitions, but the real ROI comes from the fact that you are closer to your audience, have a better understanding of who they are and what they like, and so can serve their needs better.

Peter Drucker said that the single most important thing to remember about any enterprise is that results exist only on the outside. The result of a business is a satisfied customer. If social is important to your business, you'll know if your customers are not satisfied and you'll very likely know what to do about it.

You've spoken before about how socialisation of content enables a richer level of user understanding - what are the best examples of a media owner doing this, in your experience?

I think The Guardian have consistently and successfully combined the familiar skills (editing, reporting) of their journalists with the views, expertise, feedback and on-the-ground reporting capabilities of a large community of readers to tell stories in different ways, and create a very involving editorial product.

Just look at Comment is Free, Trafigura, Tony Blair's tax affairs, Ian Tomlinson's death at the G20 riots. They're not ripping it up and starting again - what they are doing is combining the best of the old with the best of the new.
 
You've said before that 'social technologies require a particular mind-set', what is that mindset, and can it (and should it) be developed at a company-wide level?

I could talk about being open, useful, inclusive, human, but a lot of that has been said many times. For me, I think the critical change is in learning to be more adaptive and experimental - being responsive, just trying things out.

This can be counter-intuitive to established models because it requires a certain amount of ceding control, letting go, accepting that it may be better to allow your readers to help shape what you do than obsess over a perfectly crafted finished product.
 
What does the 'next stage' of social media integration look like for publishers?

The next stage should really be that we don't talk about the need for integration because it's already a part of what we do every day.

#VLM10

 

I don't make a habit of asking for anything on this blog but I'm making an exception for something exceptional. In less than two weeks time I shall be running the Virgin London Marathon for the PSP Association, a small, little-known charity that does amazing work with the sufferers of Progressive SupraNuclear Palsy - a degenerative disease for which there is no cure. I have a good friend, Kate, whose Father is gravely ill with the disease.

I'm not a natural runner so this is no small thing for me, and whilst this will be the second 26-miler I've done, I have a feeling it will be my last. So please, I'm asking you to spare whatever you can to support me by going here. It is a good thing you'll be doing. Thank you.

Think Video

 
YouTube are running an event called Think Video 12th May in London (disclosure: YouTube are a client of mine) looking at the ever-changing and rapidly developing video-on-demand market. There will be some independent perspectives (including one from me) plus some insights from YouTube themselves. It's a hugely dynamic market but with some forecasters predicting that 90% of all consumer IP traffic will be video based by 2013, a hugely important one too. For me, some of the most fascinating questions are around the implications of dual (and triple with mobile) screen consumption, the increasing socialisation of video content and the blurring or convergence (whichever way you want to think of it) between the different platforms for consuming it. Plenty there to get my teeth into and plenty to create a lively and interesting event. YouTube have kindly allowed me to put the link for the evnt up here so that readers of this blog can register - if you're interested in attending, you can do just that here. Hope to see you there.

UPDATE: the allocation of slots has now been filled so no more now available I'm afraid.

Ideas That Do

 
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"It's a lot easier to be repeatedly useful than it is to be repeatedly funny or sexy" Rory Sutherland

A good five-minute talk (below), given by Gareth at last month's AAAA's conference in which he talks about 'Ideas That Do': ideas that aren't advertising ideas but instead ideas that can be advertised. For all the talk of being useful, there is scant consideration of the real implications of what that means - a change in philosophy, different working processes and different behaviours. What matters is behaviour - both our own, and those of the people we hope to involve in what we do. Nothing will really change, says Gareth, unless we change the way we think communications work, the way we get paid, how and what we measure, and the way we work day-to-day. Amen to that.

Caught Up In The System

 
There was something about AOL's decision to sell or close Bebo that had an air of sad predictability about it. Digital start-ups, particularly those based on social technology, often seem to struggle once acquired by a large media interest. Friends Reunited was sold by ITV for less than a sixth of the price they paid for it a few years earlier. MySpace, owned by News Corp, has seen a steady decline in user numbers in the face of a continually steep growth curve from its main competitor, meaning that it now has less than one quarter the number of users Facebook has. Bebo's popularity peaked at about the time of its sale to AOL, and has seen its user numbers drop 45% year-on-year to a point where it now has 13m users compared to Twitter's 70m (Comscore).

What's going on? It was interesting that some sources closer to it than I am were talking about things like underinvestment and cost-cutting - the path-dependent strategy that some organisations get themselves into of doing-what-we-did-before-but-more-efficiently. Incumbent businesses like to deal in certainties. They often make judgements based on what they know of the past and the present. They reward thinking that deals with fact and actuality rather than imagination or prognosis. As A.G. Lafley has said:

"Business schools tend to focus on inductive thinking (based on directly observable facts) and deductive thinking (logic and analysis, typically based on past evidence), …Design schools emphasize abductive thinking—imagining what could be possible. This new thinking approach helps us challenge assumed constraints and add to ideas, versus discouraging them."

The trouble with traditional organisational thinking is that it frames the future in the context of the past or the present. So it constrains thinking, defines boundaries, restricts practice. And the trouble with that is that ways of thinking become culture, practice becomes habit, and habit becomes ritual. And as Steven Pressfield rightly says:

"Habit builds up energy over time. The repetition of any action–good or evil–generates power. Energy concentrates and accumulates. Bad habits become harder to break."

Inflexible rituals do not sit well with businesses that need to be agile. Bud Caddell talked about the complex adaptive systems that characterise the markets that organisations operate in. There's no optimal strategy for navigating markets like these, he says – your best course of action is to make predictions, collect insights, and explore successful strategies outside of your company and bring them in: "Knowing this, it's shocking just how little of all three activities most organizations engage in and how little credence each is given."

He's right. Today's markets are being disrupted by game-changing innovation. Start-ups that do not follow the established ways of doing things. That are founded on cultures of continual innovation. That are agile by nature. Originating the kind of disruptive technologies and business model innovation that transforms markets is not easy for established players. The majority end up being introduced by newcomers to the market. Incumbent businesses typically find this type of innovation hard to implement - not least because most business model innovations do not make economic sense for established companies. To paraphrase Costas Markides, the issue is not discovery, the real issue is organisational.

In his recent piece on The Collapse of Complex Business Models, Clay Shirky draws a parallel with Joseph Tainter's 'The Collapse of Complex Societies' which considered several societies that gradually over-time attained ever increasing levels of sophistication before suddenly collapsing. Tainter's theory was that these societies had collapsed because of, not in-spite of, their cultural sophistication. Their development cycle had begun with a group of people who, through a combination of social organization and environmental factors, find themselves with a surplus of resources. Managing this surplus makes their society more complex. Early on, the return in output for each additional bit of complexity that's added is high. The marginal value of this complexity is positive. But this changes over time, as the law of diminishing returns results in declining marginal value, until there is no value at all - any increase in complexity is pure cost. When such societies come under stress, they are too inflexible to respond:

"In such systems there is no way to make things a little bit simpler - the whole edifice becomes a huge, interlocking system not readily amenable to change. When the value of complexity turns negative, a society plagued by an inability to react remains as complex as ever, right up to the moment where it becomes suddenly and dramatically simpler, which is to say right up to the moment of collapse. Collapse is simply the last remaining method of simplification."

My point is not that every large, complex organisation is on the point of collapse. More that over time organisations become a system. Systems which can swallow and strangle a culture which is different, younger and less entrenched than their own. I've no idea whether this is what really happened with Bebo, or any of the others. But if big business is ever to become more agile, perhaps it should take some lessons from the start-up businesses it admires sufficiently enough to acquire.