People often ask me about what metrics I would use to evaluate an organization’s level of “innovation”. Depending on how well I know that person, I sometimes flippantly respond with a question (or two; the first one being the more important one):
- Has the organization recently created an “Innovation Center” or team? This is usually a big red flag that there is no innovation culture that permeates the organization, so the company creates a “innovation” organization and hires “innovation associates” to help the company “ideate” and “innovate”. The end result is more process, less innovation.
- What percent of your individual contributors’ day is spent in meetings? When people who should be doing things, researching things, designing things, building things are instead stuck in pointless meetings (you know which ones I mean) then the organization has an execution problem that will come back to haunt them later. Their time would probably be better spent on solving problems and implementing solutions.
On a related note, I thought the following quote from a recent New York Times opinion piece on Innovation and Bell Labs was particularly apropos:
By one definition, innovation is an important new product or process, deployed on a large scale and having a significant impact on society and the economy, that can do a job (as Mr. Kelly once put it) “better, or cheaper, or both.” Regrettably, we now use the term to describe almost anything. It can describe a smartphone app or a social media tool; or it can describe the transistor or the blueprint for a cellphone system. The differences are immense. One type of innovation creates a handful of jobs and modest revenues; another, the type Mr. Kelly and his colleagues at Bell Labs repeatedly sought, creates millions of jobs and a long-lasting platform for society’s wealth and well-being.
I would add “Regrettably, building ‘innovation centers’ passes for innovation today.” The author describes Bell Labs’ founders’ philosophy of innovation:
His fundamental belief was that an “institute of creative technology” like his own needed a “critical mass” of talented people to foster a busy exchange of ideas. But innovation required much more than that. Mr. Kelly was convinced that physical proximity was everything; phone calls alone wouldn’t do. Quite intentionally, Bell Labs housed thinkers and doers under one roof. Purposefully mixed together on the transistor project were physicists, metallurgists and electrical engineers; side by side were specialists in theory, experimentation and manufacturing.
I tend to agree with this approach. You need (empowered) cross-functional teams working cohesively to develop new solutions, given organizational resources (time and budget to do proof of concepts, testing, and take risks) to get an innovative culture going. “Innovation centers” are often a symptom of siloed organizations. When employees bemoan going to another “innovation session,” that is usually a sign that the latest “corporate initiative” to promote innovation is not working. Sometimes the best thing to do is to admit you have a siloed organization and take steps to reshape. This takes true leadership (at the most senior levels) and effective change management. It is easier said than done.
Investors’ appetite for hedge-fund start-ups is slowly returning. But managers typically are raising relatively small amounts and some are granting concessions on key terms.
via New Hedge Funds Start to Emerge – WSJ.com.
An interesting article on WSJ.com: An Old-School Social Network – The Wednesday 10 – WSJ.com.
Before there was Facebook, there was the Wednesday 10.
In 1957, as men in their late 20s, they began meeting—initially over breakfast, then over dinners held at the Sherry-Netherland Hotel or at the Harvard Club in midtown Manhattan. Few were born to means. Many were sons of immigrants. Most went on to become luminaries in their fields—presidents of television networks, partners at banks, editors of magazines.
Nothing beats building real relationships over time, as opposed to “facebook stalking” your friends and acquaintances… however, that news feed on facebook can be pretty helpful 😉
Now, at the dawn of the 21st century, the world is looking to China to assume an unfamiliar role of global leadership. At a time when American prestige is fading, China’s status is rising.
China: A Superpower Stirs – WSJ.com.
After the stock market meltdown of the past year, financial experts from Wall Street and academia are putting more effort into bringing behavioral modeling into their complex financial calculations (NYTimes).
The risk models proved myopic, they say, because they were too simple-minded. They focused mainly on figures like the expected returns and the default risk of financial instruments. What they didn’t sufficiently take into account was human behavior, specifically the potential for widespread panic. When lots of investors got too scared to buy or sell, markets seized up and the models failed.
Is “concentration” the new politically correct term for “big bet”? (“Concentration Proves Winner At Hedge Fund”, Heard on the Street, from today’s Wall Street Journal) This quote is straight out of a hollywood movie…
Mr. Barakett is at the forefront of a new group of hedge-fund titans. He started Atticus — named after Atticus Finch, the crusading lawyer in the Harper Lee novel “To Kill a Mockingbird” — with $5.8 million in 1996 after playing a year of professional hockey in Switzerland and doing stints at venture-capital and hedge-fund firms. It took him six months to raise money for the fund, but today investors are eager to get in.
Mr. Barakett’s firm is now worth $15B dollars!! That’s tremendous. Why all the attention on HedgeFund/VC/PE guys now? (Besides the obvious reason they’re making tons of money) There seems to be a “gold rush” to VC/PE these days. Easy ticket to untold fortunes. I was once told (jokingly) that once MBAs flock to a particular industry, it usually dies a painful death. (eg. dot com era, now real estate). Is VC/PE next? Even so, I can’t help but think I better start networking with some VCs to learn what its all about. Anyone willing to give me a few million dollars to invest?
The Wall Street Journal recently printed an article (entiled “Ohio Town Plans for Population Decline“) about Youngstown, OH, located about an hour away from Pittsburgh. Facing the reality of substantial population decline, loss of its tax base, and declining economy, this old steel city has decided to shrink:
Faced with the devastation of Oak Hill and other depressed pockets of the city, Youngstown is trying an unusual approach: Allow such areas to keep emptying out and, in some cases, become almost rural. Unused streets and alleys eventually could be torn up and planted over, the city says. Abandoned buildings could be razed, leading to the creation of larger home lots with plenty of green space, and new parks. …
Another goal is to wipe away the most obvious blight. The city estimates it will take about four years to bulldoze the biggest eyesores, including about 1,000 abandoned homes and several hundred old stores, schools and other structures.
Driving around the outskirts of Pittsburgh I have seen some blighted neighborhoods, left in the wake of the steel industry’s decline. But to raze large neighborhoods and shrink a city seems pretty extreme. Still, someone must be making money during this process. With the declining economy, population flight, house prices must be extremely low, and there must be lots of tax liens on abandoned or foreclosed properties. As can be seen on this map, a large number of houses have unpaid taxes and are subpar. Is it possible to make money in real estate despite all those drawbacks? Is the government paying landowners their land? Seems like speculators would want to flock there to buy cheap homes and wait to be bought out by the government if it were indeed the case.
Abengoa, a Spanish energy company, has built this cool power station that harnesses the sun’s rays using a large array of mirrors. It’s right out of a James Bond or sci fi movie. In fact, I am almost positive there was a James Bond movie (or other action flick) with this same premise and same construction. Check out the full article at BBC’s news website, here.