What do Aston Martin, design, learning styles and digital storytelling have in common? (#MSRN)

Every now and again, I get invited to a fantastic event and, earlier this week, I found myself at a former school (now a “creativity and innovation space”), on one of Britain’s first council estates, in Shoreditch, East London, home of our very own “silicon roundabout”, to discuss research, disruption, invention and innovation.

If time permitted, I could write a dozen blog posts based on the discussions at Microsoft’s Research Now event. Unfortunately, the highlights are all I can deliver right now, but there were many of them…

The art of design

Aston Martin Parking OnlyFirst up, Head of Design at Aston Martin, Marek Reichman (@Design_Dr) gave a fantastic presentation on the iconic brand’s approach to design. Living, as I do, just a few miles from Aston Martin’s spiritual home in Newport Pagnell, I may be a little biased but there are few brands that stir the imagination as much as seven-times bankrupted Aston Martin – which is partly why they have been the coolest brand in the UK for five out of six years (the anomoly being the year that Apple temporarily took the top spot, since reclaimed for 2012/13 with YouTube in second place and Aston Martin in third).

The company’s new headquarters is a modern version of a castle in the middle of England, built from local stone, in a circular shape, with a moat, a drawbridge and narrow windows and signifies how design is integral to the culture of Aston Martin. Even so, Aston’s design studio (the company’s first in house studio, created in 2007) is a separate building with 6m tall windows, joined to the main complex with a glass corridor – an ivory tower in which to design, with transparency so others can see in.

I won’t continue to reproduce Marek’s presentation – I just can’t do it justice – so here are just a few choice words: power; beauty; soul; cool; exclusivity; luxury; creativity; and craftsmanship.

“Coolness” is something that one cannot claim – it has to be bestowed – but Marek Reichman describes it as stylish, innovative, original, authentic, desirable, unique. That’s a great set of adjectives that, for me, perfectly describe Aston Martin.

Design from the boardroom to the shop floor

With the unenviable job of following Marek Reichman’s keynote, Chief Design Officer at the Design Council, Mat Hunter (@mat_hunter) started out by commenting on the relationship between job titles and confidence, mocking has own grand title in comparison to Marek’s understated “Head of Design”. Mat’s presentation was no less engaging as he took us on a journey with:

  • A logistics company that’s seen improved revenues since they started to better communicate what they do through branding and graphic communications.
  • A discussion of form and function with the kettle evolving from a stove-top model to an electric kettle, one with an automatic off switch, to a cordless model, to a stylish model.
  • Disruption through changing meanings – why do we need a kettle? Why not simply have a tap that dispenses hot water for a cup of tea? Or how about the wrist watch, with Swiss craftsmanship commoditised by cheap Japanese digital timepieces, only to be usurped once more by Swatch, who took analogue technology and made it a fashion item? In another example, Streetcar (which became Zipcar and is now owned by Avis) proved that, in some markets, people want access to a car, not necessarily to own one. Then there are concepts like The Amazings – for people to try something old and learn something new.
  • Looking at innovation, Mat described the “double diamond” design process where we use the left side to redefine the brief before finding new solutions to a problem. Examples include: the Mailbox app which is aiming for a a clean mailbox and using a queuing system to manage demand [only time will tell how successful that is – I’ve lost interest already]; Casserole Club which uses the social web to connect people and provide peer to peer “meals on wheels”; The Matter which gives young people work experience and drives a better quality of output by involving them in local planning and decision-making; and even the Government Digital Service, aiming to transform the way in which the UK government provides online services with a set of human-centred design principles, integration, board-level leadership (and recruiting the best people).

Design-led transformation and innovation

In the next slot, Microsoft Consultants Fred Warren and Phillip Joe spoke about why and how to innovate using design. I really need to take another look at the slide deck to properly understand what was presented as we jumped from anecdotes such as Virgin Atlantic’s redefinition of transatlantic flight by “reframing the experience” in Upper Class, getting travellers from A to B (not Heathrow to JFK) and removing friction points to Pine and Gilmore’s Experience Economy and on to customer experience evolution but I got the impression Fred’s part of the presentation (the “why?”) could be summed up as “step back and look at the problem from a different angle” – and “don’t die hesitating”.

Phillip spoke about the “how?” with four themes of orchestration (guide the vision), envisioning (explore scenarios and define visual and textual narratives), empathy (understand what users want), and execution (take the vision and make it real – which parts of the narrative will be built out).

To be perfectly honest, this was the session that I didn’t really get. Maybe I was tired. Or maybe the previous presenters had given me so much food for thought my brain needed time to adjust… but the basic premise is sound: finding out what the problems are, rather than offering solutions right away (although isn’t that just what consultants do?).

Organisational DNA

This slot was the surprise for me. A real gem. Strategic People and Organisation Development Consultant, Elizabeth Greetham gave a talk on getting an organisation culture aligned for innovation. The concepts that Elizabeth visited are not new, but it’s good to re-visit them.

Honey and Mumford’s learning styles are a cycle of learning by doing (activists, jumping in at the deep end), reflecting (think and observe), theorising (through models) and trying out (pragmatists, starting in a safe environment). Often we skip the reflection, eradicating the time to think creatively, which in turn stifles innovation.  Meanwhile activist-pragmatists skip the theory, which can be valuable to re-engage with from time to time.

Moving on to perception and memory processing, Elizabeth spoke of four learning strategies:

  • Visual (pictures, written word).
  • Auditory (spoken word).
  • Kinaesthetic (actions and movement).
  • Tactile (touch).

Whilst visual and auditory learning are well understood (e.g. leading to success of PowerPoint) kinaesthetic learning is about doing, reaching, feeling. Restricting people to one screen limits this – the movement is important (mind maps can help). So does hot-desking – some people need their own space. The implications of touch are still being explored and, whilst it’s discouraged in the workplace there are some benefits that have been discovered through work with autistic children.

On cognitive styles, Elizabeth described two types:

  • Verbal-imagery: words vs. pictures (not everyone’s brain creates images – sometimes they need to be provided)
  • Wholist-analytic: global vs. components (some people need the big picture and to know what comes before and after their part vs. individual widgets in detail); another way to look at this is breadth first vs. depth first.

The psychological contract is about the perceptions between an employer and an employee about their obligations to one another – more than just a written contract of employment. Promises are often made or implied, e.g. during recruitment, in appraisals, at a social event, when travelling together – and we shouldn’t make promises that are not in our gift to deliver.

Elizabeth then spoke of the sixteen Myers-Briggs personality types, before highlighting that intimacy is key to success – for every person in an organisation, someone else needs to know what makes them tick. Organisations need a structure that supports this; small working groups enable people to get to know one another much better.

In summary, “well it’s how we do things around here” is made up of people, how they learn, the psychological contract status, and personality factors. And that, is the organisational DNA.

Design in the digital physical world

In his presentation, Principal Interaction Designer at Microsoft Research, Richard Banks (@rbanks) explained some of the ideas he’s been working on for digital storytelling. His team’s ethnographic work is a combination of social science, computer science and interaction design; they look at people, see how they work, spot anecdotes about life – and spark ideas for things that can be designed. Specifically, Richard talked about the theme of the future of looking back: creating new value from reflecting on the past.

For example, on inheriting his late grandfather’s box of photos, Richard discovered they had been recorded with “metadata” (names written on the back). But with most of  us creating thousands of digital images each year, that’s a lot to pass on when our time comes.

Technology has moved past the point where it’s a play thing, it’s now an integral part of our lives and we need to deal with death on social media too. We all have boxes of sentimental objects that we don’t keep on display. The question is whether digital artefacts be sentimental too? To take another example, old diaries provide an insight into others’ lives – even if the points recorded seem mundane at the time. May be our tweets will be the same some day?

Richard showed pictures of physical items created to store digital artifacts, such as:

  • A box to backup your tweets.
  • A digital slide viewer which backs up Flickr images into a box that looks like an old Boots slide viewer.
  • A digital photo display focused on one individual containing events throughout their life structured on a timeline [à la Facebook] providing the context for where things fit.

Another interesting angle is the motivation behind digital storytelling, perhaps just creating a record for a sense of permanence – not necessarily interesting now but it may be later. And then there are the new possibilities afforded by digital media – such as putting two people into a picture that could have been together, but were not (e.g. a grandfather and grandson when one had passed away before the other was born). I’m currently taking something in the region of 10-12,000 pictures a year and I have hundreds of slides in the loft inherited from my late Father. It’s high time I took a good look at my own digital curation and storytelling…

Envisioning the future

Microsoft Chief Envisioning Officer, Dave Coplin (@dcoplin) gave the final talk before the inevitable panel session to wrap-up the day. I’ve blogged about Dave’s talks before – fast paced and highly entertaining. The twist this time around was to ask the question “What can you change in your business that you do because you’ve always done it?”. See the big picture. Avoid the arrogance of the present. Look for outcomes, not process. Set your people and your data free. Fundamentally, think human, be human. And empower others.

Conclusion

It’s been a while since I attended a Microsoft event that was as thought-provoking as this one. Most of the company’s output is pure marketing but this was a refreshing change; enabling others to lead the conversation, facilitating discussion, and leading thoughts without the distraction of a product pitch.  For this reason alone, congratulations are due to the Microsoft UK Enterprise Insights team (@MicrosoftEntUK), who hosted the day. Add in the first-class speaker line-up and it was well worth it.

As for takeaways, well, I’ve written many of them in this post but, whilst design is not at the core of my work, it can help me to think about things differently and the organisational DNA talk has given me plenty to consider as I plan for building my own team inside the organisation where I work.

Instead of innovating, Adobe proves that if it looks too good to be true it probably is…

Yesterday, I spotted tweets and blog posts suggesting that Adobe was giving away its CS2 and Acrobat 7 products (which date back to around 2005) for free.

My initial thoughts were:

  1. Surely not?
  2. What an innovative way to tackle piracy and competition!

If you’re confused by my thinking here, Adobe is under increasing pressure from piracy and from open source alternatives (e.g. GIMP instead of Photoshop). Giving away an older version of the software lacks some of the later bells and whistles, and might introduce issues on newer hardware and operating systems but brings people into the Adobe ecosystem from where, hopefully, they will upgrade/expand into other Adobe products.

Apparently not. It seems that Adobe has shut down the CS2 product activation servers, and made alternative arrangements for registered users (thanks to Tim Biller for that link).

Whilst software and serial numbers have both been (and continue to be) published on official Adobe servers, with no extra terms displayed regarding limitations of their use, Adobe are stating elsewhere that these keys are only for use by existing CS2 customers:

“Effective December 13, Adobe disabled the activation server for CS2 products and Acrobat 7 because of a technical glitch. These products were released over 7 years ago and do not run on many modern operating systems. But to ensure that any customers activating those old versions can continue to use their software, we issued a serial number directly to those customers.  While this might be interpreted as Adobe giving away software for free, we did it to help our customers.”

I applaud Adobe for thinking of its customers on legacy products but their good intentions do seem to have backfired a little. With this latest statement, instead of doing something truly innovative, it seems that Adobe has simply proved an old adage:

“If it looks too good to be true, it probably is.”

Innovation abuse

Last week I was attending some product awareness training where claims were being made that a particular vendor’s servers were “innovative”. “Really?”, I thought, “how’s that then?”. I decided not to ask as I’d already been quite disruptive about the presenter’s use of out-of-date analyst reports on CIO priorities but they may well be – I just want to know how.

A day later, I was presented with a pop-up ad for the latest version of Microsoft Windows Server, with a big neon sign that says “Insert Innovation Here”. Sounds interesting – but a click through leads me to a standard marketing web page about the product’s capabilities – nothing obvious about how it will help me be innovative.

Let’s be clear – innovation is far more than just a buzzword on a website or a slide deck.

Over the last couple of years, I’ve worked alongside the guys in our organisation that run services and networks (communities) around open innovation within our organisation and with our partners and customers. I haven’t been directly involved, but one message has hit home pretty hard.

Innovation is about:

Problem + Solution = Value.

In other words, I have a problem (generally a business problem) to which I would like to apply an (innovative) solution to increase the value. Innovation is not to be confused with invention but it is about finding new and better ways to do things.

Marketing materials promoting innovation are generally just that – marketing. Maybe next time you see someone claiming to be innovative, you might ask them how they are – what is it about the way they work that captures innovative ideas to apply to business problems and derive additional value – at the very least it will be an interesting discussion.

Last Orders at The Fantastic Tavern (#TFTLondon)

About a year ago, I wrote about a fantastic concept called The Fantastic Tavern (TFT), started by Matt Bagwell (@mattbagwell) of EMC Consulting (ex-Conchango – where I also have some history). Since then I’ve been to a few more TFTs (and written about them here) and they’ve got bigger, and bigger. What was a few people in a pub is now a major logistical challenge and Matt’s decided to call it a day. But boy did it go out with a bang?!

Last night’s TFT was at Ravensbourne (@RavensbourneUK) – a fantastic mixture of education and business innovation hub on London’s Greenwich peninsula. I was blown away by what Chris Thompson and the team at Ravensbourne have achieved, so I’ll write about that another day. Suffice to say, I wish my university had worked like that…

Last night’s topic was 2012 trends. Personally, I thought the Top Gear-style cool wall (“sooo last year, tepid, cool, sub-zero”) was way off the mark (in terms of placing the trends) but that doesn’t really matter – there were some great pitches from the Ravensbourne students and other invited speakers – more than I can do justice to in a single blog post so I’ll come back and edit this later as the presentations go online (assuming that they will!)

The evening was introduced by Mike Short, VP of Innovation and R&D at O2/Telefonica who also sits on the board of governors at Ravensbourne and so is intimately involved in taking an institution with its rooms in Bromley College of Art (of David Bowie fame) from Chiselhurst to provide art, design, fashion, Internet and multimedia education on Greenwich Peninsular, next to the most visited entertainment venue in the world (The O2 – or North Greenwich Arena). Mike spoke about O2’s plans for an new business incubator project that O2 is bringing to London in the next 3 months as O2 looks at taking the world’s 6bn mobile device subscribers (not just phones, but broadband, payment systems, etc.) to connect education, healthcare, transport and more. In an industry that’s barely 25 years old, by the end of the year there will be more devices than people (the UK passed this point in 2006) and the market is expected to grow to more than 20bn customers by 2020.

Matt then spoke about the omni-channel world in which we live (beyond multi-channel) – simultaneously interacting on all channels and fuelling a desire “to do things faster”.

Moving on to the 2012 trends, we saw:

  • A. Craddock talking about smart tags – RFID and NFC tokens that can interact with our mobile devices and change their behaviour (e.g. switch to/from silent mode).  These can be used to simplify our daily routine to simply enable/disable functionality, share information, make payments, etc. but we also need to consider privacy (location tracking, etc. – opt in/out), openness (may be a benefit for some), ecology (printable tags using biodegradable materials) and device functionality (i.e. will they work with all phones – or just a subset of smartphones).
  • Riccie Audrie-Janus (@_riccie) talking about how, in order to make good use of technology, we need to look at the people element first.  I was unconvinced – successful technology implementation is about people, process and technology and I don’t think it matters that kids don’t understand the significance of a floppy disk icon when saving a document – but she had some interesting points to make about our need to adapt to ever-more-rapidly developing technology as we progress towards an ever-more complex world where computing and biology combine.
  • @asenasen speaking about using DIY healthcare to help focus resources and address issues of population growth, economics and cost. Technology can’t replace surgeons but it can help people make better healthcare decisions with examples including: WebMD for self-diagnosis; PatientsLikeMe providing a social network; apps to interact with our environment and translate into health benefits (e.g. Daily Burn); peripheral devices like FitBit [Nike+, etc.] that interact with apps and present challenges. It’s not just in the consumer space either with Airstrip Technologies creating apps for healthcare professionals. Meanwhile, in the developing world SMS can be used (ChildCount), whilst in Japan new toilets are being developed that can, erhum, analyse our “output”.  Technology has the potential to transform personal health and enable the smart distribution of healthcare.
  • Matt Fox (@mattrfox) talked about 2012 becoming the year of the artist-entrepreneur, citing Louis CK as an example, talking about dangerous legislation like SOPA, YCombinator’s plans to “Kill Hollywood”, Megabox (foiled by the MegaUpload takedown) and Pirate Bay’s evolution of file sharing to include rapid prototype designs. Matt’s final point was that industry is curtaining innovation – and we need to innovate past this problem.
  • Chris Hall (@chrisrhall) spoke about “Grannies being the future” – using examples of early retirement leaving pensioners with money and an opportunity to become entrepreneurs (given life expectancy of 81 years for a man in the UK, and citing Trevor Baylis as an example). I think hit onto something here – we need to embrace experience to create new opportunities for the young, but I’m not sure how many more people will enjoy early retirement, or that there will be much money sloshing around from property as we increasingly find it necessary to have 35 year and even multi-generation mortgages.
  • James Greenaway (@jvgreenaway) talked about social accreditation – taking qualifications online, alongside our social personas. We gain achievements on our games consoles, casual games (Farmville), social media (Foursquare), crowdsourcing (Stack Overflow) etc. – so why not integrate that with education (P2PU, eHow and iTunes U) and open all of our achievements to the web. James showed more examples to help with reputation management (spider  graphs showing what we’re good at [maybe combined with a future of results-oriented working?]) and really sees a future for new ways of assessing and proving skills becoming accepted.
  • Ashley Pollak from ETIO spoke about the return of craft, as we turn off and tune out. Having only listened to Radio 4’s adaptation of Susan Maushart’s Winter of Our Disconnect the same day, I could relate to the need to step back from the always connected world and find a more relevant, less consuming experience. And as I struggle to balance work and this blog post this morning I see advantages in reducing the frequency of social media conversations but increasing the quality!
  • Ravensbourne’s Chris Thompson spoke about virtual innovation – how Cisco is creating a British Innovation Gateway to connect incubators and research centres of excellence – and how incubation projects can now be based in the cloud and are no longer predicated on where a university is located, but where ideas start and end.
  • The next pitch was about new perspectives – as traditional photography dies (er… not on my watch) in favour of new visual experiences. More than just 3D but plenoptic (or light field) cameras, time of flight cameras, depth sensors, LIDAR and 3D scanning and printing. There are certainly some exciting things happening (like Tesco Augmented Reality) – and the London 2012 Olympics will e filmed in 3D and presented in interactive 360 format.
  • Augment and Mix was a quick talk about how RSA Animate talks use a technique called scribing to take content that is great, but maybe not that well presented, and make it entertaining by re-interpreting/illustrating. Scribing may be “sooo last year” but there are other examples too – such as “Shakespeare in 90 seconds” and “Potted Potter”.
  • Lee Morgenroth’s (@leemailme‘s) pitch was for Leemail – a system that allows private addresses to be used for web sign-ups (one per site) and then turned on/off at will. My more-technically minded friends say “I’ve been doing that for years with different aliases” – personally I just use a single address and a decent spam filter (actually, not quite as good since switching from GMail to Office 365) – but I think Lee may be on to something for non-geeks… let’s see!
  • Finally, we saw a film from LS:N profiling some key trends from the last 10 years, as predicted and in reality (actually, I missed most of that for a tour of Ravensbourne!)

There were some amazing talks and some great ideas – I certainly took a lot away from last night in terms of inspiration so thank you to all the speakers. Thanks also to Matt, Michelle (@michelleflynn) and everyone else involved in making last night’s TFT (and all the previous events) happen. It’s been a blast – and I look forward to seeing what happens next…

[I rushed this post out this morning but fully intend to come back and add more links, videos, presentations, etc. later – so please check back next week!]

Why “cloud” represents disruptive innovation – and the changes at HP are just the tip of the iceberg

Yesterday, I wrote a post about disruptive innovation, based on a book I’d been reading: The Innovator’s Dilemma, by , by Clayton M Christensen.

In that post, I asked whether cloud computing is sustaining or disruptive – and I said I’d come back and explain my thoughts.

In some ways, it was a trick question: cloud computing is not a technology; it’s a business model for computing. On that basis, cloud cannot be a sustaining technology. Even so, some of the technologies that are encompassed in providing cloud services are sustaining innovations – for example many of the improvements in datacentre and server technologies.

If I consider the fact that cloud is creating a new value network, it’s certainly disruptive (and it’s got almost every established IT player running around trying to find a new angle). What’s different about the cloud is that retrenching and moving up-market will only help so much – the incumbents need to switch tracks successfully (or face oblivion).

Some traditional software companies (e.g. Microsoft) are attempting to move towards the cloud but have struggled to move customers from one-off licensing to a subscription model. Meanwhile, new entrants (e.g. Amazon) have come from nowhere and taken the market for inexpensive infrastructure as a service by storm. As a consequence, the market has defined itself as several strata of infrastructure-, platform- and software- (data- and business process- too) as-a-service. Established IT outsourcers can see the threat that cloud offers, know that they need to be there, and are aggressively restructuring their businesses to achieve the low margins that are required to compete.

We only have to look at what’s happened at HP recently to see evidence of this need for change. Faced with two quarters of disappointing results, their new CEO had little choice but to make sweeping changes. He announced an exit from the device space and an aquisition of a leading UK software company. Crucially, that company will retain its autonomy, and not just in name (sorry, I couldn’t resist the pun) – allowing Autonomy to manage its own customers and grow within its own value network.

Only time will tell if HP’s bet on selling a profitable, market-leading, hardware business in order to turn the company around in the face of cloud computing turns out to be a mistake. I can see why they are getting out of the device market – Lenovo may have announced an increase in profits but we should remember Lenovo is IBM’s divested PC division, thriving in its own market, freed from the shackles of its previous owner and its high margin values. Michael Dell may joke about naming HP’s spin-off “Compaq” but Dell needs to watch out too. PCs are not dying, but the market is not growing either. Apple makes more money from tablets and smartphones than from PCs (Macs). What seems strange to me is that HP didn’t find a buyer for its personal systems group before announcing its intended exit.

If HP spins off their PC business....maybe they will call it Compaq?
@MichaelDell
Michael Dell

So, back to the point. Cloud computing is disruptive and established players have a right to be scared. Those providing technology for the cloud have less to worry about (notice that HP is retaining its enterprise servers and storage) but those of us in the managed services business could be in for a rough ride…

The theory of disruptive innovation (from The Innovator’s Dilemma)

I always like the idea of reading more business books, but somehow that doesn’t often transition to reality as I tend to use my travel time to listen to podcasts, catch up on email or Twitter and I’m more likely to read a novel or a magazine before I go to sleep at night.

Even so, I have a few business books on the go at the moment and, over the last couple of weeks, I’ve been reading The Innovator’s Dilemma, by Clayton M Christensen.

It’s a bit old now (first published in 1997) and not the easiest read in the world  as it gets a bit repetitive with it’s “tell them what you’re going to say, say it, tell them what you said” approach, nevertheless the author puts forward some interesting theories that are already making me think differently about some of the business decisions I’ve witnessed recently.  In this post, I’ll highlight some of the book’s key points and then I’ll follow up later this week with my thoughts on current IT industry issues and trends.

The book is predicated on the idea that there are two forms of innovation in technology:

  • Sustaining technologies foster improved product performance.
  • Disruptive technologies often worsen performance in the near term, and bring to market a very different value proposition. Typically though, these are cheaper, simpler, smaller and more convenient.

In part 1, the author looks at why great companies fail:

  • Sustaining technology innovations sound great – after all, everybody wants improved performance, don’t they? As it happens, no they don’t: sustaining innovation can lead to companies providing more than customers want or are prepared to pay for. This leaves an opportunity for new market entrants with disruptive innovations.
  • It’s also true that customers may not want disruptive technologies, at least not until a market has been created by others. The problem for established vendors is that, by the time the market is proven, it’s too late (or too difficult) for them to adapt. On the flip side, Clayton Christensen highlights that it’s very rare for new entrants to succeed in marketing sustaining innovations.
  • Another concept the book describes is that of value networks: these may be based on rank order of product characteristics but also on the cost structure required (e.g. margins, etc.). The principle is that technologies with attributes that are only valuable in networks with low gross margins will be ignored by those looking for high margin business. As companies grow, it gets harder to continue the same rate of growth so they start looking for bigger bets.
  • In the book, Clayton Christensen describes a technology “S” curve of performance vs. time or engineering effort. The trick is for companies to switch technologies at the right point on this curve (where a new technology rises to intercept an established technology) but, whilst this works for sustaining innovation, it’s less applicable for disruptive innovation as each new technology has different attributes of performance. Consequently, new entrants get their commercial start in emerging value networks before invading the established networks.
  • Established players can usually create the required technology to match disruptive entrants but it becomes a management decision about resource allocation (known as the “impetus to innovate”) – which would you do, given the choice of sustaining innovations to meet the needs of important customers or investing in disruptive innovations with small markets and unclear needs? And it’s this decision that, all too often, leaves the door open for others – maybe even for others from inside the organsation who leave to create a new venture.
  • Christensen highlights that disruptive technologies don’t match the “S” curve and, typically they improve at a parallel pace with the established value network. Instead of looking for the point where new intercepts old (as with sustaining innovation), the aim is to look for the point where the emerging (disruptive) technology intercepts the market need.Impact of sustaining and disruptive technological change
  • New technologies may well intercept the old ones if the trajectories are different and this allows new entrants to join established value networks (because progress has diminished the differences between technologies). Put differently, once two technologies can both meet a need, the fact that one can do it better ceases to be of competitive relevance.Innovation and value networks
  • For established vendors, Christensen suggests it’s not a problem of being sleepy or of arrogant management – often the disruptive technology simply didn’t make sense (in their value network) – at least not until it was too late. It’s a lot easier to companies to move upmarket into established value networks, but harder to go down. Essentially, middle management will screen innovation projects from deep within organisation by only sponsoring those likely to succeed – i.e. those with a clear market demand. This market demand can be attributed to three factors:
    1. The promise of up-market margins.
    2. Upmarket movement of many customers.
    3. Difficulty cutting costs to move down-market profitably.
  • This creates a vacuum downmarket for new entrants with disruptive technologies and cost structures that are better suited to competition.

Part 2 of the book looks at managing disruptive technology change:

  • In addressing the challenge of allocating finite resources to innovation projects with unclear returns, one approach is to spin out a new organisation. This new organisation can develop new products without the constraints of the old business, then bring back its values back in house (perhaps replacing most of the old company) once established. It’s also possible to do this with organisational units within a company but resource allocation is a challenge and often fails. The key appears to be embedding independent organisations with different value networks – for example to be able to “get excited about a $50,000 order” when the company is used to $1m orders! Each organisation has to be free to persue its own customers as a separate organisational unit and to compete.
  • Another point that Clayton Christensen makes is that leading in developing and adopting sustaining technologies gives no discernible competitive advantage. On the other hand, leadership in disruptive technologies creates enormous value. Effectively there is a trade-off, exchanging market risk (i.e. the risk that an emerging market might not develop) for competitive risk (entering a market against entrenched competition).  Because markets that do not yet exist cannot be analysed, in order to confront disruptive change, it is necessary to plan for learning and discovery rather than execution.
  • It’s also important to recognise that a failed idea is not the same as a failed business. It’s common for a business to abandon it’s original business strategy after implementation highlights what would/wouldn’t work in the market. Chritensen suggests that guessing the right strategy at the outset is less important than running out of resources or credibility before iterating towards a viable strategy.
  • On the other hand, failed ideas are a different story when it relates to management careers where a failed idea/project can block career progress so we’re generally often unwilling to take on the risk of disruptive technologies. As failure is intrinsic to the process of finding new markets for technologies we have to plan to learn rather than plan to execute. Often this means using discovery-driven planning (identify assumptions upon which business plans/aspirations are based) to test market assumptions before committing.
  • Markets for disruptive technologies often emerge from unanticipated success and Clayton Christensen suggests that discoveries come from sharing how people use a product rather than listening to what they say. In effect, he advises getting out of labs and focus groups, and creating knowledge from discovery-driven expeditions into the marketplace.
  • Even if people have the capabilities to tackle innovation, the organisation in which they work may not. Clayton Christensen suggests looking at organisational capabilities in terms of resources, processes and values. In their startup phase, resources (people) are important to a business; later, the emphasis shifts to process and value. Even with change management, processes are not as flexible as resources (we can train people to be multiskilled) – and values are less so. If an organisation lacks capabilities the options are:
    • Acquire a new organisation.
    • Try to change processes and values.
    • Create a separate, independent, organisation.
  • In the last of these, physical separation is less important than a separate resource allocation process.
  • As we experience performance oversupply, performance attributes change such that, for example, as a product meets market demand for capacity, size, reliability, price etc. become differentiators. When this is completely played out, the product becomes a commodity. Effectively, differentiators lose value when features and functionality exceed market demands.
  • Clayton Christensen attributes a customer buying hierarchy to Windermere Associates’ that identifies four phases of functionality, reliability, convenience and price. Another conception of evolution/technology adoption comes from Geoffrey Moore’s Crossing the Chasm with innovators/early adopters, early majority, late majority [and laggards]. Using this model there is a price premium for early adoption, reliability is important for the early majority, and convenience for the late majority.Technology Adoption Process
  • The same attributes that make disruptive technologies worthless in mainstream markets become strong selling points in emerging markets – as disruptive technologies tend to be simpler, cheaper, more reliable and convenient. Therefore, Christensen suggests three strategies to deal with performance oversupply:
    1. Move upmarket: command a premium for better performance.
    2. Move with the customer, introduce new, disruptive technologies.
    3. Market to convince the customer that they need better performance.

There’s a lot more detail in the book and, although it can be heavy going at times. The writing style, together with notes at the end of each chapter betray the research/academic focus, which provides good accountability but is not easy to skim.

Throughout The Innovator’s Dilemma, Clayton M Christensen uses the disk drive industry as an example (along with other examples from the excavation and steel-making industries) but I can see some parallels with cloud computing too. In my next post, I’ll explain my thinking, but in the meantime I’d like to throw out a question:

Is cloud computing disruptive or is it a sustaining technology?

Finally, if you, like me, find these theories interetsing, you might also be interested in the Disruptive Library Technology Jester, who has produced a pocket-sized graph of the theory of disruptive innovation.

Crowdsourcing a digital future at The Fantastic Tavern (#TFTLondon)

Earlier in the year, I blogged about my first visit to The Fantastic Tavern (TFT)  – a meeting of people to discuss ideas, over beer, with the common theme being that we all do something in “digital”.

Last night’s meeting was an opportunity to crowdsource ideas for the enablement of the digital future on London’s Greenwich Peninsular. When people think of Greenwich, they tend to think of a Royal Borough, Victorian architecture, Greenwich Park and the prime meridian but Greenwich Peninsular is an area of reclaimed industrial land on which stands the O2 Arena and the Ravensbourne Hub Digital Innovation Centre with plans for 3.5 million square feet of business space, 10000 new homes, schools, healthcare and other community facilities, the Thames cable-car link to the Siemens Pavilion at eXcel, a cruise liner terminal, beaches – and the opportunity to make Greenwich an exemplar for future living.

I won’t talk about the ideas that we brainstormed – that’s between the taverners and the Digital Greenwich Advisory Board – but the whole process seemed, to me, to be a model of how crowdsourcing can work to drive innovation.

Around 50 taverners were there, broken out into four groups in an open spaces brainstorm to look at education, governance, business/commerce, and community. People could move between conversations and the ideas were written/drawn on huge boards. At the end of the evening, each group presented their topic and, inevitably, that generated even more discussion.

Hopefully, what we came up with provides inspiration for Greenwich Council. At the very least it was an opportunity to experience a real-world crowdsourcing event – one which seemed to me to be very successful indeed.

If you’re interested in future TFT events, find out more at The Fantastic Tavern site (or @TFTLondonNYC).

Adapt, evolve, innovate – or face extinction

I’ve written before (some might say too often) about the impact of tablet computers (and smartphones) on enterprise IT. This morning, Andy Mulholland, Global CTO at Capgemini, wrote a blog post that grabbed my attention, when he posited that tablets and smartphones are the disruptive change lever that is required to drive a new business technology wave.

In the post, he highlighted the incredible increase in smartphone and tablet sales (also the subject of an article in The Economist which looks at how Dell and HP are reinventing themselves in an age of mobile devices, cloud computing and “verticalisation”), that Forrester sees 2011 as the year of the tablet (further driving IT consumerisation), and that this current phase of disruption is not dissimilar to the disruption brought about by the PC in the 1980s.

Andy then goes on to cite a resistance to user-driven adoption of [devices such as] tablets and XaaS [something-as-a-service] but it seems to me that it’s not CIOs that are blocking either tablets/smartphones or XaaS.

CIOs may have legitimate concerns about security, business case, or unproven technology – i.e. where is the benefit? And for which end-user roles? – but many CIOs have the imagination to transform the business, they just have other programmes that are taking priority.

With regards to tablets, I don’t believe it’s the threat to traditional client-server IT that’s the issue, more that the current tranche of tablet devices are not yet suitable to replace PCs. As for XaaS (effectively cloud computing), somewhat ironically, it’s some of the IT service providers who have the most to lose from the shift to the cloud: firstly, there’s the issue of “robbing Peter to pay Paul” – eroding existing markets to participate in this brave new world of cloud computing; secondly it forces a move from a model that provides a guaranteed revenue stream to an on-demand model, one that involves prediction – and uncertainty.

Ultimately it’s about evolution – as an industry we all have to evolve (and innovate), to avoid becoming irrelevant, especially as other revenue streams trend towards commoditisation.

Meanwhile, both customers and IT service providers need to work together on innovative approaches that allow us to adapt and use technologies (of which tablets and XaaS are just examples) to disrupt the status quo and drive through business change.

[This post originally appeared on the Fujitsu UK and Ireland CTO Blog.]