SciBlogs

Archive January 2012

Kiwis have to learn to identify and kill bad ideas — Dorenda Britten Peter Kerr Jan 24

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An unwillingness to rigorously evaluate and kill weak ideas is but one indication that many New Zealand companies don’t fully understand the role of design in taking products and services to market.

The managing director of designindustry Ltd, Dorenda Britten, says that in general Kiwi companies are good at the technical side of creating new products or services and we can ALWAYS be relied upon to make improvements on existing – cheaper, better etc…….

However we don’t tend to be good at standing back and evaluating the opportunity, costs and benefits such as, whose needs are we aiming to satisfy, when and how?

‘We tend to lack a holistic view of both our business and its opportunities?’ says the Christchurch-based design champion. ‘The often-solitary, do it myself kiwi way tends to preclude sharing and this means we frequently fail to pick up vital information at critical times in the decision making process.’

Britten is very familiar with the IDEO design ethos as she is with a number of other high profile international consultancies. While she’s in agreement with much of IDEO’s thinking, she believes a New Zealand-centric approach is required, taking into account our New Zealand character, resources and markets.

IDEO’s processes have been largely developed for organisations much larger than most of ours and subsequently have much more ‘fat’ in them than New Zealand has a taste for Britten says. Also IDEO can safely assume some design awareness and a preparedness to invest in something where the value cannot be guaranteed up front.

designindustry, on the other hand, has always kept New Zealand’s approach to business firmly in mind whilst working to enhance product and service design standards and increase a company’s return on investment she says.

‘Preparing well for design is an essential ingredient for success, rather than adding a ‘Designe’r and hoping for a great result,’ says Britten. ‘designindustry emphasises the need to think rather than leap into immediate action.’

Design starts with establishing purpose — that is, understanding the impetus for action. Why are we setting out to do this? What sort of result are we seeking?

Other questions are equally critical. Are we committed? Can we resource it? Who should be involved? Who are we designing the solution for? What need are we solving? Can we substantiate that evolving need? Are we able to deliver on time?

‘Successful design must answer these and other ‘soft’ questions and cannot be rushed,’ she says. ‘We’re talking ideas here, not technology. If you don’t share ideas you can’t test. If you don’t rigorously test an idea you cannot know its true potential — or lack of.’

Much has been written about the celebrated solitary man in his shed Britten says.

He/she might be clever but also highly likely to be deluded about the value of what they are working on. It’s easy to delude ourselves if we are isolated she says.

‘Sometimes I’ll ask an inventor when they expect to be able to deliver,’ Britten says. ‘They’ll say six months. Eighteen months later they’ll still be struggling along ignorant of a changed world and evolved customer requirements.’

‘It’s not just about clever technology but about solving a problem for customers. It’s hard, but killing less than optimum ideas is a skill that has to be learned or we’ll sink without trace.’

When developing designindustry’s own services, Britten who is trained and experienced in several design disciplines, brings diverse skills into the design team. She draws from science, technology, law and finance — whatever will ensure stretched thinking and fit the budget.

designindustry Ltd, has developed an over-all design methodology and specialist tools to assist in the process from initial ideation to a highly evolved level — ready for integration into a product creation and launch system.

designindustry has a trademarked Ten Design Principle â„¢ template, complete with on-line components to help companies manage the holistic development of a new product or service. (see here)

‘I have to say that designindustry has evolved through applying our own processes and are a very different organisation to the one we started over ten years ago. This evolution cannot and must not stop.’

From sticK’s point of view, the methodology and approach help counteract the Kiwi ability to shoot ourselves in the foot, as identified by Tony Smale (and reported here, here and here).

Opening up the creative, thinking about new products and ideas side of things to more internal and external people in an organisation is somewhat counter-intuitive to New Zealanders’ way of acting.

As a means of lowering the cost of (unsuccessful) innovation and speed of delivery, Britten’s creed of less doing, more thinking about, around a purpose, makes plenty of sense.

At the same time she’s somewhat wary of a propensity to import outsiders’ views of design when the New Zealand environment needs a different approach.

‘Why import somebody else’s ideas, when we already know what we should be doing,’ says Britten who quotes our past love affair with Michael Porter, Tom Peters, Tim Brown and others who fail to make a cultural connection and therefore a lasting difference.

‘Outsiders can’t solve our design dilemma,’ she says. ‘But we can ourselves, and should back our ability to attack design and innovation from a home-grown perspective.’


Innovation’s not easy…and there’s other ways to get value from it Peter Kerr Jan 19

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According to a couple of intellectual property commercialisation experts doing a mini road trip late last year; a) we’re doing it completely wrong, and b) realise that patents can be sold and/or licensed.

Paul Adams of Auckland-based EverEdge IP says while New Zealand has no shortage of incredible ideas for a world that has a huge demand for innovative products and technology, there’s a commercialisation gap in this country. It’s not so much what people commercialise but how it is done that matters most.

And the way most Kiwi companies (and others around the world too, so we shouldn’t feel we’re alone on this) are set up, innovation and commercialisation is almost doomed to failure right from the get go.

Among his observations are:

  • Having too many ideas can be worse than having too few
  • Commercialisation is expensive (for every $1 spent on innovation, typically $7-$15 needs to be spent on commercialisation) and starving ideas does not succeed
  • Selecting the wrong ideas creates major long term problems
  • There are obstacles to innovation inside corporate structures
  • Incentives and compensation for innovation is back to front
  • Decisions are driven by a desire for solid data — but high growth innovations have little available data (hence the tendency to choose ‘safe’ innovations
  • Talented managers are rapidly promoted — with no time to understand areas well enough to commercialise, plus a tendency to concentrate on the short term payoff ideas

‘If a manager promotes an idea that is wildly successful, they often receive little or no direct reward,’ says Adams. ‘If they promote an idea that fails, then they’re often punished with a loss of career prospects. Such an all risk, no reward situation tends to the promotion of safe, well-known ideas that are rarely high growth.’

Adams says it effectively means that organisational pressures kill innovation; and it isn’t that managers are stupid, they are simply responding rationally to their environment. On this premise, ‘unless we change the environment and the way innovation and commercialisation are treated, managers will continue to make decisions that retard or ignore the highest potential innovations,’ he says.

He suggests a number of ways around this rationale yet destructive outcome, contending that the number one factor in success in innovation and commercialisation is CAPABILITY. From Adams point of view, companies must build an internal commercialisation capability while working with an external capability to help deliver immediate projects and build management capability he says.

The corporate and commercialisation skill sets are almost completely different he says.

Whereas the classic corporate skill set is structured decision making processes which looks to reduce risk, a commercialisation mentality is flexible, responsive and even ad hoc in its decision making, while being able to accept and work with risk.

While corporates favour specialists, avoid failure and work with reliable, solid data, commercialisation favours generalists, finds that failure is frequent and data is often unreliable and irrelevant.

The corporates target large, well known markets with quick certain paybacks while preferring certainty and known facts, commercialising companies’ initial markets are often small and unknown, payback is often distant and uncertain, at the same time being comfortable working with uncertainty.

Adams’ presentation segued into Chicago’s Global IP Law Group managing director Steven Steger who contends that NZ businesses are almost totally ignoring the option of selling and licensing patents overseas.

This is a legitimate way to extract extra value from R&D, and the sale of IP is a means to make more money beyond the physical shipping of a tangible product he says. Patents should therefore be seen as something separate from the actual business, and there is increasing recognition that it is a separate asset.

‘A company may pursue a particular line of R&D, but if this doesn’t result in a particular product or service, a return can be obtained from selling the patents,’ he says.


Gluckman tells Auckland to get cracking Peter Kerr Jan 17

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In giving a push/shove as Auckland as an innovation or knowledge city, chief science advisor Sir Peter Gluckman reckons the country could expect area like industrial design and digital and media research to have a high presence.

In his ‘Auckland conversation’ speech of early December (see here), Glucklman says that Wynyard quarter innovation proposal would have such a characteristic.

The election announcement that IRL is going to be remoulded into a much larger organisation, with a much larger Auckland footprint (of which the broad brushstrokes let alone the detail has still to be worked through) will be part of the innovation concentration.

Along with better linking of academia, entrepreneurs and industry working together much more closely, Gluckman acknowledges another challenge — if/when Auckland gets its act together as NZ’s only international city.

Keeping knowledge based businesses in Auckland (or NZ for that matter) is difficult, for as companies grow their markets, overseas, there will be a pull to shift executive functions and even manufacturing offshore.

‘I think the only thing that can keep the companies anchored here will be an R&D function so embedded within the city that it cannot move,’ he says. ‘We have to build a city and a country that really values knowledge and science and entrepreneurship. We need technology parks, we need an intertwining of researchers, in the public and private sector, we need a world class university sector and a vibrant knowledge based ecosystem. Without that I fear for the future. The time is now.’

A feature of the small high tech oriented countries that Gluckman uses as NZ comparators (Denmark, Israel, Singapore) is their capacity to attract multinationals to do research and development in them. It is not unrealistic to imagine they will come here he says.

Auckland has the attributes that could attract multinational activity, and its diverse populations makes it attractive for many forms of product development — in food, in pharma and in advanced electronics he gives as examples.

Attracting big food industries or some of the digital companies to set up shop in Auckland should be a significant goal for the Auckland (supercity) regional government. Overseas the experience has been that once one multinational moves in, others follow.

‘Local and central government, the public and private sectors need to work together to change the perception of New Zealand, and Auckland in particular,’ he says.

And though the rest of the country has a love/hate relationship with Auckland, as the country’s major city, it is pretty important that it gets its act together, better.

Auckland consumes more than it produces from an economic point of view. Innovation is probably the only way it can positively contribute – and heck, the rest of the country might even start to give it some love if it did so.


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