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Archive for the ‘Innovation’ Category

I have had the pleasure of teaching Innovation Management this semester to our Master of Engineering Management students at Duke; both distance and residential.  The student engagement in the material has been great, making it a lot of fun, including some great analyses of how companies manage innovation (or don’t in some cases!).  For the current post, I asked students to provide their opinions on the top 10 innovation management concepts (an extra credit assignment for the class).  I then choose some of them to share here with a little editing in some cases.  I hope you enjoy them – I did.

1.     Recognize Innovation vs. Invention

This is important because for every great idea that turned into Crocs or Snuggies or Facebook, there are hundreds and thousands that remain just that – great ideas.  The book “Managing Innovation” puts it succinctly, to paraphrase, innovation is invention plus.  It is invention plus implementation, invention plus value extraction, invention plus extra steps.  The invention portion of innovation, whether completely original or incremental, is just the first step in the innovation process.  (Colin R.)

2.     Build a Culture of Innovation

Innovation is not created by a single individual, but rather by a concerted collective effort of the entire organization. 3M and Google are considered temples for innovation as they cultivate their employees to innovate and have set up a framework that supports integration of innovation across the organization.  The company must become an ‘innovation factory’ where employees are challenged to drive a constant but focused flow of ideas through the factory. The company must support innovation at all levels and should be organizationally structured to support innovation, for example, flat organization structures or innovation cells. (Sreecharan C.)  and

“Innovation has nothing to do with how many R&D dollars you have…it’s not about money. It’s about the people you have, how you’re led, and how much you get it” by Steve Jobs in an interview with Fortune Magazine.  Innovation is increasingly about teamwork and the creative combination of different disciplines and perspectives. (Haoze Z.)

3.     Cultivate Champions

I think the concept of “champions” plays a very big role in a company’s innovation management process regardless of the innovation being sustaining, incremental or disruptive.   Companies need these creative, passionate, risk-seekers to sustain their innovative environment.  Champions can sometimes stick to their ideas irrationally and advocate them without justification, but the value they bring to the innovation process outweighs this problem.  The Stage-Gate process should be utilized to help manage and harness the value of Champions. (Duygu S.)

4.     Fail Early (and Often)

Start with lots of ideas, but have a process that carefully selects and develops the right ones, and gradually reduces risk as projects proceed.  Utilize a “funnel” selection approach by continuing projects that pass pre-determined criteria and dumping those that don’t. Using a stage-gate process ensures that resources are not wasted on projects that cannot meet company targets and guarantees that the right activities are undertaken at the right time. (Doug M.)

5.     Build a Portfolio

In innovation, as in investment, we should seek balance. A matrix-based innovation portfolio is an excellent tool to visualize and understand a company’s range of projects. The use of portfolio management allows a company to spread risks while taking on projects of varying potential reward. (Doug M.)

6.     Practice Open Innovation

Open innovation is a relatively new concept, but due to the many benefits it provides it is currently becoming more popular among innovative companies.  Companies go beyond their boundaries and open up their innovation processes to partners, vendors, customers and sometimes even the general public.  They are no longer limited by their internal workforce.  Previously, every company was responsible for “inventing its own future”, but open innovation can enable industry, academia, government and the public to collaborate and contribute to the innovation process.   (Duygu S.)

7.     Engage in Customer development

Customer development is as important as product development. Steve Blank’s four steps in customer development include —“customer discovery”, “customer validation”, “customer creation” and “business building”. Each should be implemented according to the target industry and company strategy.  Although developed for start-up companies, this concept is equally valuable for large organizations. (Shibo F.)

8.     Sharing is Caring.

If only your company knew what it knows!  Knowledge management is more essential than ever as we deal with increasingly complex projects. How does your company make knowledge sharing easy? Does your company utilize social networks, wikis, blogs, instant messengers, and other communication tools? If not, you’re missing out on opportunities to forever capture and pool knowledge that may otherwise be lost.  (Doug M.)

9.     Enlist Diverse Talents and Backgrounds

Along with experience, in order to have a successful working group, there must be people in the innovation management process who have diverse talents and come from different backgrounds.  This creates a team with different points of view in order to foster a climate of creative friction.  More ideas – in number, subject, and quality – will be generated, which will lead to stronger innovations. (Colin R.)

10.     Ten Concepts Don’t Tell the Whole Story

Let’s face it; this assignment is not very realistic!  There are so many facets to innovation that defining the top ten is not really possible.  Disruptive Innovation, Blue Ocean Strategy, incentives to motivate employees, core rigidities, life cycle concepts and the S curve, technology forecasting, etc., etc. all have an important place in innovation management.  Nonetheless, these important concepts summarized by future innovators for our society is a great start and a fresh view of an important topic.  (Jeff G.)

Footnote:  Special acknowledgement and thanks to the text we used in the course which discusses many of these concepts: “Managing Innovation: Integrating Technological, Market and Organizational Change,” by Joe Tidd and John Bessant.

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We are fortunate to have a guest post by MEM alumnus Somana Konganda who works for Amazon.com Inc.  He shares some important experiences and thoughts about intellectual property.  This is particularly important because MEM students many times do not realize how critical this part of their training is.

Post by Somana Konganda

Having after dinner drinks with some Dukies and Jeff in Seattle, we had the following discussion –

Me:  Jeff, I filed two patents with my company recently.

Jeff:  That is cool! What did you think about the experience?

Me:  It was far more exciting than I expected. I have to say, the core IP and Business Law Course I took during the MEMP came back to me!

Jeff:  That is great. Would you write about this? I know future students will want to hear about it

Me:  Alright! I would need some time though…..

So here I am writing about my experience and also trying to pull together anecdotal information that will be useful for those of you in similar situations.  I have also tried to include information on both how you file your patent individually or through your company.

Most of us innovate at our jobs quite often –in large and small ways. We might be working individually or in a team.  But either way, many times these innovations contribute to something much bigger than solving an immediate and specific problem. As Engineering Managers, it is very important to keep an eye out for such opportunities – that you or your teams are solving a problem much larger than what you originally expected. It is our responsibility to ensure that we capture the value of the innovation for our organizations by protecting it. In my experience, the MEMP core IP and Business Law course is designed to provide you with the knowledge and judgment you need to do this.

Protecting an innovation with patents has very high stakes. In the corporate world, a strong patent can equate to billions of dollars of revenue or loss, depending on which side of the patent you represent. I once met an entrepreneur who was forced to ramp-down his $300 million company because he lost a patent lawsuit related to his company’s core technology. It was particularly unfortunate because he was the first to bring the technology to market, but did not file a patent on it. The competitor copied and patented the technology and sued his company. The silver lining is that this guy is smart and he took this as a learning opportunity and is now successful in a different venture. Not all of us will have such a second chance.

As clear signs of how high the stakes are, in the recent past we have seen:

  • Google’s purchase of Motorola Mobility for $12.5 billion driven by Google’s perceived need to establish a strong portfolio of patent rights in an attempt to ward-off patent attacks by competitors in the fiercely competitive and growing smart-phone market.
  • Microsoft, along with a consortium of other companies including Apple, Research In Motion and Sony, agreed to pay $4.5 billion to buy 6,000 patents from bankrupt Nortel Networks, thereby keeping them out of the hands of rivals, including Google.
  • Microsoft is seeking double-digit royalties from other Android makers. One report suggests Microsoft wants $15 per device from Samsung, though the company might take less per Android device if Samsung is willing to commit to a solid Windows Phone road map.
  • Or currently being unveiled, the love-hate relationship with the patent battles between Apple and Samsung

So where do you start?  First, you need to discover if your idea is patentable. The best way to do the initial research is to go through the US Patent and Trade Office’s site (www.uspto.gov). It can be time consuming depending on the type of invention. Next, find yourself a lawyer who deals with your type of invention. Typically in larger companies you will have internal lawyers to help with the process.

I started to research copyrights and patents and thought it would be easy. I proceeded to do my own search trying to see if there was anything like what I was thinking of out there already. This was important not only for my adventure in applying for a patent, but also to protect against infringement. I came up with nothing. By this point the thoughts were racing through my head about how neat this opportunity could be. Make no mistake though – just because nothing is found does not mean you will be granted a patent. Actually, it doesn’t even guarantee that the invention has not already been patented. Sounds like a crazy waste of effort, but you need to give your patent attorney as much information as possible about the most closely related inventions you can find.

After much reading and careful consideration, I decided to contact the lawyers for a patent search. So, why did I go to a lawyer? Courses in the MEM made me pretty savvy in technical writing so why not write the patent application myself? The application written by the attorney was completely different than the one I had drafted.  You can try it yourself, but if you make a mistake, a resubmission could potentially cost you a substantial delay, a loss of rights, or a lot more money than you would have spent had you gone to a patent attorney in the first place.  Even with an attorney, you will probably get involved in the patentability study and helping to determine what was “known prior art” related to your invention.  You should also be prepared to wait. It may take your lawyer a while to complete your application and there is a backlog in the USPTO so it may take quite a long time to get a ruling on your application. But if the invention is successful, it will be worth it.

Editorial Note:  To conclude, I would like to emphasize the importance of intellectual property.  The value of a firm today is all about the knowledge the firm has.  Understanding the basics about how to protect that knowledge is critical.  This is true for everyone; from those who are developing products to those who are conducting due diligence on a firm.  See https://jtglass.wordpress.com/2011/12/30/top-5-misperceptions-of-engineering-management-students/ for more info about why this is an important topic.

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Happy New Year! For my post this month, I want to discuss the top 5 misperceptions that I think our Engineering Management Students have when they first start in the program and even when they graduate and begin their careers. Engineering managers who are very early in their careers may also find this of interest as they probably have some of the same misperceptions. Interestingly, when I talk with alumni who have been out for a few years, these misperceptions have generally evaporated. This is one reason we struggle with parts of the MEM curriculum; our data shows that they are needed based on feedback from our Industrial Advisory Board and Alumni but as a student, it is hard to understand why (and I felt the same way when I was a student!). Thus, for some courses and activities, we simply need to say “trust us” – in five years you are likely to agree that it was a good idea to spend time on this while in the MEM Program. So here they are:

Misperception #1: I do not need a course in Intellectual Property and Business Law because I am going into [fill in the blank: banking, IT, architecture, etc.] – Every year students ask if they can be relieved from attending the core course involving Intellectual Property, Business Law and Entrepreneurship. The argument generally centers around the fact they will never need to understand patents or intellectual property because their career paths diverge from such mundane matters. Please reconsider! Think about it – the most durable competitive advantage that any company has in today’s global economy is their knowledge. You should be familiar with the common phrase that “We now work in a knowledge economy.” Intellectual Property is simply another way to say a firm’s knowledge! You are just as likely to need intellectual property and business law as you are to need marketing and finance fundamentals. It is part of the general understanding of what creates competitive advantage in businesses. To understand how firms create value it is critical for you to understand intellectual property, including but not limited to, patents. I mentioned, banking, IT and architecture above as examples because I have spoken with alumni in all three of those areas within the last year who have told me that they thought the Intellectual Property and Business Law course was going to be the least useful course they took and in reality, it turned out to be one of the most useful. It is probably clear how important this topic is if you are developing new products but consider the following. If you are a business analyst trying to evaluate the value of a firm, how will you determine the value of its processes and know-how without understanding what type of intellectual property it holds and how it has protected it? Or if you are a consultant trying to advise a company on how it should improve its position in the market or enhance its operations, doesn’t that require a basic knowledge about how to assess value of its true competitive advantage; i.e., its intellectual property? This may not be the most glamorous course you will take but it’s important; trust me!

Misperception #2: We do too much networking – I can empathize with students who feel this way because it does not necessarily come naturally and it is not like an engineering or science course where you learn a set of equations or concepts and then you do some assignments and get tested on them. On the other hand, too many people excel in their area of study or expertise but never really grasp the importance of the relationships that they will need throughout their careers. They feel; If I do a good job I will get noticed and just rewards will come to me naturally. I wish it were so. In reality, it is not even logical to think that is the way it works. What I mean is; why should we think that relationships take a back seat to competence? Trusting those you work with and believing they will do a good job in the future when you hire them for a particular job or ask them to join an important project can only be judged based on the relationship you have with them. On paper they may have all the skills in the world but if they can’t work with others on the team or if they alienate themselves from the rest of the organization, it does not generally matter how smart or competent they are in their field.

Misperception #3: The career center will get me a job when I graduate – If we could all have a job placement specialist follow us throughout our career and make sure we were doing the right things to find our next position, then it might be best to simply hire a placement officer in our career center and ask them to put you in a new job upon graduation. Unfortunately, or perhaps fortunately in many ways, you will likely change jobs every 3 to 5 years and even organizations in many cases, and there will not be someone there to hold our hand through those changes. We are all responsible for those changes ourselves so it is MUCH more effective for your long term career if we teach you the skills you need to manage your career and find your next position rather than spending our time just trying to place you in a job. The career center does great work and is more focused on specific job opportunities than many other programs I am aware of but it is the student’s responsibility to learn the skills, and make the significant effort, needed to find a job. It is an important life-long skill.

Misperception #4: I performed better than my team said I did so I should get a higher grade – Teamwork is hard. And companies continue to tell us that there is no such thing as too much team training. I was ready to dial back the team training a couple of years ago until our Industrial Advisory Board gave us a strong and unified argument (from their personal experiences with students) in favor of more, not less, team training. The thing students dislike the most is the team grading. Every year we hear, “I worked very hard and contributed a lot to the team so the score they gave me is not fair.” In reality, you probably need to develop your self-awareness and awareness of others (i.e., Emotional Intelligence). Your contributions probably were not of the quality you think they were. But actually that does not matter. The most valuable thing about your team grade is that it tells you how your team perceived your contribution. Thus, the team score is, more or less by definition, correct. It is how they perceived your contribution. If you make an exceptional individual contribution to the tasks you are assigned in a team at your company but simultaneously disenfranchise, distract, or otherwise derail the other members, do you expect to be rewarded? I hope not! From the perspective of the organization, your net contribution is negative in that case. Call it what you will (politics, subjectivity, favoritism), organizations are about people and people are about relationships and relationships are about feelings and emotions so you need to start paying attention to how you are perceived as much as about how you think you contributed.

Misperception #5: The MEM program spends too much time teaching me writing skills – I will keep this short because I have already written an entire post about it: https://jtglass.wordpress.com/2009/04/13/the-importance-of-the-written-word/. Writing skills are nearly as important as presentation skills. Quite often students think that we mean spelling and vocabulary when we say writing but we actually mean much more. Please see my previous post but in short, it is all about communicating effectively, which means that flow, conciseness, knowing the audience, etc. are all important parts of the quality of your writing. Even those of you who write constantly can improve through continued structured writing activities. It is like the layers in an onion. As you improve you can understand the more subtle points and develop a style that changes with your goal and your audience. In many situations, how you write will determine how you are perceived by your peers and your supervisors – make it an asset not a liability.

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What can I possibly add to the numerous commentaries about the life and death of Steve Jobs that are already permeating the web? Perhaps not much but I want to give it a try with the following perspective: What should early career engineering managers and engineering management students take away from the Steve Jobs phenom.

My first thought is; be careful not to take away too much from the life and death of Steve Jobs. I don’t mean this to be negative and I am as big a Steve Jobs fan as anyone – he was, rather he is, an icon. But what I mean is that the way he managed his life and career may not be a way that most of us should emulate. Or to put it another way, if we try to do things the way Steve Jobs did, it may not lead to success for many of us. Of course, the general characteristics he embodied such as; vision, creativity, persistence, customer centric design, etc. are great for us all to strive for. But let’s face it, people like Jobs (or Bill Gates or Andy Grove or John Chambers or Jack Welch), are icons due to an extremely rare combination of intellect, drive, judgment, perception, and the list goes on. There is a bit of luck and timing involved too but these folks are way out on the tail of any bell curve you want to use to characterize people. So back to Steve Jobs, his incredible ability to change the paradigm of an industry time and time again is truly remarkable and something I do not think can be copied. And some of his management approaches, and life decisions, while accomplishing this may not be right for many of us (for example, see http://blogs.hbr.org/davenport/2011/10/was_steve_jobs_a_good_decision.html). Can you afford to use intuition (or your “gut”) rather than analytics to make major decisions or can you afford to micromanage a process rather than empower the process owners? In many cases Jobs could. And for Jobs, dropping out of school was a good decision (see his Stanford Graduation Speech; http://www.forbes.com/sites/davidewalt/2011/10/05/steve-jobs-2005-stanford-commencement-address/). Would it really be right for you? I could go on but suffice it to say: Choose the exceptional characteristics that you want to integrate into your career but use your own self-awareness and judgment to know the limits for you.

My second thought about the passing of Steve Jobs is simply that we are all mortal. It is somewhat sobering to be reminded that anyone, even someone who has done so much to shape the current world we live in, can die too young. For those of you starting out your careers, I think this supports what you hear from all the career experts – choose something you love to do. As with Jobs, you may be doing it until very close to the end of your time here. But also, and a bit more subtly, it is a reminder that every decision you make until you die is a choice. Whether that choice is to work 12 hours a day or to achieve balance between work and home life, it is your choice. One is not better than the other. As Jack Welch, another management icon, has said, it is not about balance it is about choices. There are only so many hours in the day and so what you choose to do with your time, either way, has consequences. When you make choices, understand those consequences and determine if they are acceptable. Include risk and probability in your assessment as you make these choices and take a long term view. I think Steve Jobs death brings this into focus. He seems to have done what he loved until very close to his death.

Finally, Jobs death puts a spotlight on Leadership: Its importance and its complexity. There are no formulas. Few could have predicted that Steve Jobs could leave Apple, reshape animation entertainment, and return to save Apple, making it the most valuable company in the world. Very smart people asked him to leave Apple, successful leaders in their own right. Jobs himself hired John Sculley, who was not succesful for Apple. For many years I thought that the value we put on leadership in our organizations, as judged by the exorbitant salaries we pay, was over the top, not reasonable. But over the years, as I have observed what great leaders can do for an organization, I have become more and more supportive of such pay. (Of course, there is a limit and I am not referring to the high profile cases where performance does not support such pay or with some of the Wall Street pay that is not related to running a great company – but that is another story). So Jobs is an extreme example of what great leaders can do and how much influence they can have on an organization, an industry and even a society. As with any extreme, there are plenty of characteristics other than great leadership that come along for the ride but the point is simply that leaders can have exceptional impact.

In summary, for early career engineering managers and students about to start their careers; (i) leaders have incredible impact, consider how you can develop your leadership skills for you future career, but remember (ii) it is about choices and every decision you make on your way to a leadership role will impact all aspects of your life so choose based on the consequences of your decision and finally (iii) don’t expect that you can do it the same way Steve Jobs did.

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Every now and then we have the opportunity to observe an exceptional demonstration of leadership.  Yesterday that opportunity came in the form of an email that Bob Muglia, Executive Officer at Microsoft and President of Microsoft’s Servers and Tools Business, sent to his staff about his decision to leave Microsoft after 23 years.  Yes, I said 23 years.  To put that in perspective, Bob is about my age so he would have been under 30 when he joined the company.  And in 1987 Microsoft had approximately $345.9 million in revenue and 1,816 employees.  In 2010 Microsoft had approximately $18.8 BILLION in revenue and 89,000 employees.  Whatever your opinion of Microsoft, they changed the way we live and Bob was an integral part of that.

But what is my reason for going on about this.  Read Bob’s email to his employees below and you will see.  This is one of the best summaries of leadership I have read (Full Disclosure: Bob and I are related in a roundabout way: step-brother-in-laws or something like that!).  It is a classy, articulate, thoughtful way to announce a departure – exactly what you would expect from Bob if you had followed his career.  Some of the things I like about this note include; i) he reinforces the values and culture that he believes in and that made his groups achieve incredible success, ii) he humbly describes how much he has learned from others – colleagues,  customers and industry partners, iii) he accepts full responsibility for the transition, agreeing to stay on until new leadership is in place, and iv) there is not a sour grape in the note, just appreciation for the great opportunities that Microsoft provided.  In addition, look at the leadership ideas he describes: integrity, principles, listening, being honest (even when it hurts), taking responsibility for incorrect decisions, providing clarity of roles and responsibilities for the people you lead, creating an environment of teamwork (one that is a “joy” to be a part of), and finally, delivering results.  I really like this list.  Those of you in Duke’s MEMP will see these same concepts in your core management course.

Moving on from any position can be difficult.  You have forged relationships, developed a level of comfort and even have a raison d’être in your organization.  I am sure some MEMP students will go on to greatness and will then need to transition out of a high level position.  I hope you use this as a template for how to move on when it is time.  (You can see Steve Ballmer’s announcement of this transition and the note below on ZDNet.com)

From: Bob Muglia
Sent: Monday, January 10, 2011 9:34 AM
To: STB FTE Worldwide; Executive Staff
Subject: Thoughts from Bobmu

Last week I celebrated 23 years working for Microsoft.   During that time Microsoft has grown from a brilliant, yet awkward and aggressive adolescent riding a rocket ship into a mature industry leader.  I’ve learned an amazing amount from the people with whom I’ve worked, from the customers I’ve served, and from the many partners who share this industry.  I feel blessed to have had the privilege of working with so many great people.  Later this year, I’m moving on to new opportunities outside of Microsoft, so I wanted to take a few minutes to share with you what’s important to me in life and leadership.   

The foundation of who I am is based on living with integrity.  Integrity requires principles, and my primary principle is to focus on doing the right thing, as best I can.  The best thing, to the best of my ability, for our customers, our products, our shareholders, and of course, our people. 

Other principles, or guideposts by which I live, are learning from and listening to others to make the best decision possible; not being afraid to admit a mistake and change a decision when it is wrong; being consistently honest, even when it hurts; treating our customers, partners, and people with the respect they deserve, with the expectation that each of my actions forms the basis of a lifetime relationship; and finally, being willing to admit and apologize when I have not lived up to these principles.  

Integrity is my cornerstone for leading people.  Leading starts by setting a strategy – not one that I’ve dreamed up myself but something that my team has worked together to create.  The strategy provides the North Star for each person.

The second part of leading people is creating a structure that enables collaboration and provides clarity of roles and responsibilities.  This is more than an organizational structure; it is creating a system so people can work together effectively and productively, in an environment that makes it possible for each person to give their best.

Leading is more than strategy and structure; it’s all about people.  Choosing the right people for each role is critical, but insufficient.  Even more important is empowering every person to be their best, to work with others, to be as creative as possible.  It’s about providing each and every person with encouragement when they’ve done something amazing and constructive feedback when they are off track.

While each individual is important, success requires a team.  The team is more important than the needs or capabilities of any individual.  This is what makes a team much more than the sum of the parts, and a joy to be part of.

That brings me to delivering results.  Results are built when people act with integrity and deliver their best.  Results are all about the positive impact we have on the world – transforming personal lives and revolutionizing ways of doing business. 

As a leader at Microsoft, I have a responsibility for delivering results to our shareholders.  STB has performed well – with revenue growing from $9.7B in 2006 before I took over, to $14.9B reported last July, and operating income climbing from $3B to $5.5B over the same period.   That’s over a 50% increase in revenue with a near doubling in income.  That growth continued during the first quarter of our FY11.  There are few organizations in the industry who have demonstrated the same results. 

I am incredibly excited by the emergence of cloud computing, and the opportunity it represents to shape business and the way people live for years to come.  I have deeply enjoyed my role in positioning Microsoft as a leader and innovator in cloud computing.

The coming months are a time of transition.  During this time, I will be fully engaged in leading STB until new leadership is in place.  After that, I will continue to do everything I can to help Microsoft, STB, and all of you.

I particularly want to recognize the outstanding work done by my current team in the Server and Tools Business over the past four years.  We rapidly built a series of best-of-breed products that changed the way businesses run, while helping our customers and partners be successful.  We’ve led the industry while facing tough competitors, most notably Linux, VMware, and Oracle.  We succeeded by focusing on the simple idea that our customers make smart decisions, so we need to provide the best solution for everything our customers want to do with our products. 

Microsoft is a blessing in my life and a blessing for my family.  I love working with our customers and partners.  Most of all, I treasure the wonderful and bright people with whom I’m privileged to work each day.  I hope that in some way, large or small, I have helped each of you to lead your life with your own deep sense of integrity, that you help to bring out the best in other people, and deliver the results that matter most to you.

My best to you, with thanks,

bob

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