Author Archives: Paul

Can Cheap Storage Spur Innovation? You Bet It Can

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Today’s Web 2.0 companies are the fastest-growing part of the Internet economy, where cheap storage is one of its essential technology drivers.

Disk storage – that most prosaic commodity of computerdom – is giving birth to a whole new breed of innovative businesses on the Web. It can be a springboard for innovation in your company, too.

Most people don’t pay much attention to the disk drives in their computers or servers. Perhaps we’ve noticed that they’ve gotten a good deal cheaper in recent years, but storage is not the kind of thing that gets people excited. However, data storage has been one of the most exciting areas of innovation in computing for the last decade. The remarkable declines in storage prices – I figure them to be about 40 percent per year since the invention of the rigid disk drive in 1957 – have made what was once a precious resource into a cheap commodity.

Consider this: IBM figured that the amount of storage in a standard PC hard drive circa 2003 would have taken up more than a square mile of disk drives in 1957. And the prices have come down 90% since then. This is, quite simply, the most remarkable price deflation in the history of the world.

So what happens when a resource that used to be expensive becomes essentially free? A lot of innovative business ideas spring up. Consider YouTube, the video-sharing web site that recently sold to Google for $1.65 billion. YouTube and services like it enable people to store videos at no charge. Other free sites like Flickr, Blogger, and eSnips use a similar business model to let members publish and share their words and images. It would have been unthinkable just a few years ago for these businesses to survive. But today, the so-called Web 2.0 companies are the fastest-growing part of the Internet economy. And cheap storage is one of the essential technology drivers.

That’s just the beginning of the innovative potential. Marketers are learning to take advantage of viral marketing, in which information about products and companies is spread by people sharing links to interesting content. Many companies are now encouraging their customers to actually create multimedia ads for them and upload their masterpieces to a server. Check out The Nerd League and BoltBand for a couple of examples.

There are many other opportunities for businesses to innovate around the promise of inexpensive storage. You may already be posting manuals and documentation for your customers to download. Why not add video how-to courses? Start a contest and ask customers to upload photos of themselves using your products in innovative ways. Post video interviews with some interesting people who design your products or run the company, as Microsoft and General Motors have done. Or, for internal use, take on that big data warehousing project you weren’t previously able to afford.

Ideas like these will only proliferate as the cost of computing continues to fall. I call it the “technology leverage effect.” Small changes in technology can have a ripple effect that leads to massive changes in business and in our lives years down the road.


Tapping New Mobile Technologies to Spur Innovation

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Can the day be far away when you’ll want to buy all your employees – and many of your customers – an iPod? Maybe it won’t be Apple’s ubiquitous little media player, but devices like the iPod will become part of every business person’s toolkit in the not-too-distant future.

The iPod and its competitors are revolutionary in their ability to take media offline. No longer do we need to be connected to be tuned in. Podcasting, the Internet radio phenomenon that is sweeping the consumer market, has spawned more than 80,000 programs, some with upwards of a half million subscribers. But the unfolding story behind podcasting is its use behind the corporate firewall.

Think of it: what if you could turn people’s downtime – the time spent mowing the lawn, waiting in checkout lines or working out at the gym – into a connection to your business? Why not podcast your weekly employee newsletter or an update message from your CEO? How about a weekly audio program for your customers giving them tips to get more out of your products?

This is already happening. Whirlpool is podcasting a weekly program – Whirlpool American Family – offering valuable advice on issues ranging from childcare to nutrition. Accuvue, the contact lens maker, is reaching out to young people through Download with Heather & Jonelle, a podcast about teenage life. IBM’s investor relations group produced a podcast called “IBM and the Future of…,” looking into the evolution of technology in different industries. It was so successful that the company created “ShortCuts,” a weekly podcast of tips for getting more out of personal technology.

The concept shouldn’t stop there. Podcasts can deliver new product information, business intelligence and sales reports to your reps in the field. And a new breed of device is just around the corner. Next-generation media players will incorporate small but functional video displays, greatly enhancing the kinds of information you can distribute. Your field service reps will have access to training materials or the latest repair manuals in video form. Sales people will be able to carry customer testimonials and promotional videos with them. Your partners will download demos of your new products to play back at their convenience.

You’ll want to make sure these influencers are connecting with you, and that’s why I think you should consider giving away the technology to make that happen. Digital media players are already cheap and they’re getting cheaper. For example, MobilBlu is selling a 2GB MP3 player for $130. Why not can load one up with your latest promotional and how-to advice, stamp your brand on it and send it to each of your top 50 customers? And shouldn’t every one of your field sales reps have a digital music player pre-configured to download the latest sales reports? Cost is no longer a big impediment to doing this.

Corporations are already experimenting with the idea. When General Motors launched the Saturn Sky, its media relations group shot a four-minute lifestyle video about the design of the vehicle. It packaged that along with a variety of other digital assets into a black video iPod and sent the devices out to key media.

Digital media players are important new channels to get information to your employees and your customers. Are you willing to be an innovator in putting them to work?

New Collaboration Tools Enable Innovation

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Not long ago, online collaboration meant complexity.  The available tools required installation of proprietary server software and dedicated programs on each user’s PC.  Licensing costs were high, and it often took a small army of consultants to get things working right.

No more. An Increasingly popular tool called a wiki is making group collaboration cheap and simple; so simple, in fact, that I submit that every organization should be looking at one.  Many people know of wikis through the popular wikipedia.org encyclopedia, which is among the top sites on the Internet. Any registered user can edit a wikipedia entry, and hundreds of thousands do. The resource is many times larger than the venerable Encyclopedia Britannica.

The same technology that powers Wikipedia can be applied inside your organization to cut cost and clutter and to jumpstart innovation. Wikis are marvelously simple. They provide a shared workspace in which users can create pages and sub-pages containing text, attachments and even multimedia content. Any unauthorized user can change any page, with all changes logged in a journal for easy auditing and rollback. Users can subscribe to wikis via RSS or e-mail.

The wiki can unleash the creative power in your organization by providing an online brainstorming location. It’s more flexible than a discussion group, and it can be integrated with internal blogs to give users a place to share their ideas with a group.

Wikis also help solve the problem of e-mail overload. E-mail was never intended to be a medium for group collaboration. In fact, it’s a lousy way for groups of more than about four people to communicate. But everyone knows how to use it, and so e-mail is constantly applied to tasks for which it isn’t suited. How many times have you been caught in large e-mail exchanges about topics that didn’t apply to you? Wikis move those conversations to a central point, where users can simply subscribe to the discussions that interest them.

There are literally hundreds of open-source wikis available for you to download in use. A good directory of software is available on – where else? – Wikipedia. For the sake of time and reliability, though, you might consider one of the many commercial providers. They include SocialText, JotSpot, Atlassian, MindTouch and Near-Time. There are also many wiki services on the internet the cost little or nothing. They include Wikia, WetPaint, PBWiki and Wikispaces. You can use these sites to start your own wiki for little or no cost and experiment to your heart’s content.

Wikis are a great invention because they open up the world of online collaboration to businesses that previously couldn’t afford it. They’re also inexpensive enough to be applied to small problems. For example, Dickson Allan’s Business Technology and Consulting Group, based in Troy, Mich., uses JotSpot to track sales leads. Previously, the company gathered spreadsheets from across its national sales force and consolidated them for review prior to each weekly sales meeting, according to Kim Lesinski, VP and Practice Director. Changes would then be made to the spreadsheet after the meeting, bounced back and forth for correction and eventually sent out to the field. The practice was time-consuming and error-prone, Lesinski says.

With the JotSpot wiki, sales forecasts are now updated centrally and are available to authorized users at any time. The tool has been so successful that many other departments are now dreaming up their own uses for the wiki, Lesinsky adds.

It doesn’t take much to realize the power of a tool like this to foster innovation. Cut down on bureaucracy, minimize confusion and let people do what they do best. Wikis rule!

Are you using wikis in you business? Tell us about you experience by commenting on this blog.

How Software As a Service May Reshape Enterprise Computing

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

When Salesforce.com launched its hosted software service in 1999, few people gave it much chance of success. The class of companies then known as application service providers (ASP) was collapsing, taking with it hundreds of millions of dollars of investor dreams. Salesforce.com’s customer relationship management was dominated by Siebel systems, a multi-billion dollar juggernaut that showed no signs of slowing down. The whole idea of selling software as a service over the internet seemed crazy In light of the carnage that was occurring.

Now it appears that Salesforce.com has the last laugh. And the company’s eye-popping growth – revenue was up 64% in the second quarter – is only one indication of how right its timing was. Software as a service (SaaS), as the on-demand market has come to be known, may actually be the future of enterprise software. “SaaS will continue to pull the (overall) customer management market along with a 24% compounded annual growth rate,” said AMR Research in a recent report.

Few people saw in 1999 the factors that would lead SaaS to roil the software industry. Human nature is to look at failed ideas and assume they will always fail.  But history has taught us that innovative ideas often don’t succeed the first time around. The on-demand software model is fundamentally a sound notion. It’s just that a decade ago the technical infrastructure was not there to deliver it and users were not ready to accept it. All that has changed.

Users love this idea. Why should their companies have go through multi-year and multi-million dollar installation cycles to implement software that may be irrelevant by the time it’s in service? The SaaS proposition is simple: get started quickly with a reasonably robust set of features and then customize as you need. The ROI is fast and the setup costs are next to nothing. And SaaS companies, unlike packaged software firms, have a vested interest in keeping their customers happy and because it’s so easy for customers to walk away.

IT thought leaders were quick to shoot holes in the early SaaS proposition. Security was a problem, they said. You couldn’t customize the software. And what about reliability? I fell prey to this mindset myself. In a column back in 2000 I dismissed SaaS as nothing more than the second coming of time-sharing.

Most of the skeptics’ arguments were rubbish. Successful SaaS vendors are building world-class technology infrastructures that are as secure and reliable as any Fortune 500 data center. Customization is still limited, but I think a lot of technology people over-estimate users’ interest in that feature. Most of them simply want to make their lives easier, cut out the grunt work and focus on doing business. The fact that SaaS delivers benefits so quickly overwhelms the negatives.

Many people now believe that SaaS is the future of enterprise software. “ThinkStrategies believes that SaaS deserves to be viewed as a mainstream alternative to traditional on-premise packaged applications,” says Jeff Kaplan, Managing Director of THINKstrategies.

Adds Bill McNee, president of  Saugatuck Technology, “At the end of the day, the business users are focused around business value and that’s what this is all about.”

In the last year, we’ve watched the software industry begin to completely reshape itself around on-demand delivery. It’s the foundation of Google’s application strategy, while Microsoft, which is quickly reshaping its business around “Microsoft Live,” which is essentially its own version of SaaS.

This is not to say that packaged software is dead. Some applications don’t lend themselves to the online model and some users will always prefer the control that packaged software gives them. But there is no doubt where the trend is headed. The vast majority of new entrants into the software market today are delivering their products online. That trend is not going to change.

This blog is about innovation, so let’s see what lessons we can learn from this. SaaS innovators refused to kowtow to the skeptics in the IT world. They were talking to the business users, who were telling them a very different story. They learned from the mistakes of their predecessors and focused on getting the model right, rather than changing it

It’s difficult to tell how all this will play out. We’ve talked earlier about disruptive technologies, those that force dramatic and often unpredictable change on institutions. There’s no doubt in my mind that SaaS is a disruptive technology. It could completely upend the power structure of the software industry.  More importantly, it could give users important new options for deploying software quickly and effectively. IT organizations should get involved in this sea change. If they don’t, it will swamp them.

Reshape IT Via New Models Like Software-as-a-Service

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

IT should embrace SaaS enthusiastically, as it can save a whole lot of headaches building prototypes that users reject.

Anyone who’s been in IT for more than a few years knows the dirty little secret of the profession: many IT projects (in fact, most of them, in my experience) fail. That’s been the story as long as I can remember. Why, after so many years, are we still so frustrated by failure?

There are three main reasons I’ve observed:

  • In too many companies, IT is an island that is organizationally and even physically removed from the business it serves.
  • Too many users suffer from throw-it-over-the-wall syndrome, which leads to projects that fail to match the needs that exist at delivery.
  • Turnover and organizational change undermine too many projects, making them irrelevant by the time they’re delivered.

Let’s look at how you can approach each problem.

IT is an island – IT people themselves are often too willing to accept a balkanized structure that isolates them from the business. There is a bad idea for so many reasons, but the insular, often introverted nature of technical professionals lets them rationalize this situation. They don’t communicate well with the business side, so they settle for separation.

You can’t change people’s personalities, and you can’t force people to work in situations that make them uncomfortable. But you can make sure that IT project leaders have the capacity to work productively with business end-users. That means not talking down or clamming up, but rather showing tolerance, acceptance, and humor. Your project managers are ambassadors. You need to select people with strong diplomatic skills.

With the right ambassadors in place, you can afford to set the rest of your IT organization apart to some degree. The project leaders should serve as both diplomat and translator, buffering the relationship with the business side while speaking both languages fluently.

Customer accountability – The throw-it-over-the-wall problem begins with the user sponsor, and is perpetuated by gullible IT organizations. Often, the perpetrator is a senior business-side executive, a “big idea” type who conceives of a grand vision and then hands off half-baked requirements to an IT group that often doesn’t fully understand what it’s supposed to deliver. Six months later, IT comes back with a prototype, by which time either the requirements have changed, the user has moved on, or he or she has forgotten about the whole thing.

Let’s face it: no one likes creating spec documents or sitting through progress report meetings. They’re tedious and boring. But they are absolutely essential if a project is to remain on track. The CIO needs to be the bad guy here. He or she must insist upon project management discipline and review meetings at least once a quarter to make sure the project is still relevant. The CIO needs the backing of a top company executive in taking this approach. Otherwise, IT will be buffeted by constant changes in the business environment. Which leads to the final problem.

Organizational change – How many managers can you name in your organization who have been in the same job for more than two years? In many companies today, half the leadership has taken on a new assignment in that time. So why do we still start IT projects that have deliverables scheduled a year or more down the road?

The business environment is too changeable these days to permit that kind of scheduling. Projects must be componentized, with deliverables scheduled every few months. If you can’t decompose a project like that these days, it probably isn’t a very good idea in the first place.

Technology may be riding to the rescue. The rise of the so-called “software as a service” (SaaS) business – epitomized by Salesforce.com –– is enabling users to try applications before they commit to them. SaaS delivers applications over the Internet, and users can often achieve results in a matter of days. In some cases, users may find that a SaaS solution is all they need. But even if they don’t, SaaS is a heckuva way to prototype different approaches and solutions. A lot of IT organizations are approaching SaaS warily, worried that they will lose control. Instead, they should be embracing the model enthusiastically. It can save them a whole lot of headaches building prototypes that users reject.


Disruptive Technologies to Watch Over the Next 12 Months

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Keep an eye on these four technologies in the short term, as they’ll have profound implications for the long term.

This week I get to talk about one of my favorite subjects: disruptive technologies. These are the innovations that get into the cracks and crevices of our daily lives and break things apart, often causing massive changes to institutions and procedures years down the road. Those changes are rarely evident at the outset.

Here are four technologies that I think are potentially disruptive:

Digitized voice – We’ve been recording voice digitally for years, of course, but the arrival of voice-over-IP services like Skype are forcing the cost of voice communications toward zero. Also, technologies embodied in services like Podscope are making it possible to index and search audio almost as effectively as we search text today. What will the world look like when our voice interactions can be stored and searched? How will this development change the way we research a topic or access content that helps a customer? What are the privacy and accountability implications?

Virtualization – So many of the headaches in IT today are caused by scarcity of resources. Software slows down, crashes, or is rendered unavailable because of hardware problems. Virtualization is a big step forward. First storage was virtualized. Then servers. Now you can also virtualize applications, running each in its own protected and secured envelope. Combine that with AJAX technology, which permits applications to be downloaded from a server and run as needed on a client, and you have the elements of a radical restructuring of computing fundamentals.

In the future, software will be less and less “machine-aware,” meaning that programs will draw on hardware resources as needed, whether locally or across a network. This could make a rich suite of applications available to users wherever they are in the world without concerns about hardware availability or capacity. The possibilities for innovation are almost endless.

The $100 laptop – A couple of weeks ago, I wrote about the One Laptop per Child project, whose goal is to build a $100 networked portable PC. When you think through the implications of this achievement, the potential is stunning. Here we have the possibility of putting computers in the hands of billions of people who can’t now afford them. What will be the implications of this development be on global business? How will it change the way we organize workgroups, outsource applications and manage dispersed organizations? How will communities of people who are unfettered by a legacy of costly, complex computers organize new enterprises around this cheap, simplified technology? How will it change our expectations of computers as appliances? The implications of this project are very long term, but very exciting.

Video iPod – If this choice looks incongruous, hear me out. The next wave of the Internet will be the multimedia Web , and portable video will be the killer application. Once we can stream and download video to a lightweight, handheld device, it will change nearly every aspect of our lives. I’m not talking about watching reruns of American Idol. I’m talking about being able to communicate with our colleagues, access real-time news, view training materials and documentation, access archival information and check in with our loved ones with all the benefits of full-motion video. The ultimate vision is to carry around a window on the world, but coming up with functional players is the first step. Whether the leader is Apple or someone else, the term “iPod” connotes a user experience that we all relate to.


The Power of Goals

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

One characteristic that’s almost universally shared by innovative organizations is a commitment to goals. I’m not talking about fuzzy goals like “improve the customer experience,” but rock-hard, quantitative, measurable and achievable goals, stuff like “cut invoice processing times by 50% within 12 months.” Those are the goals that get results.

There’s a remarkable example of such goal-oriented innovation going on right now in Cambridge, Mass. There, a team led by computing visionary Nicholas Negroponte is building the $100 laptop. Their project has gotten a lot of press and a lot of skepticism. I have to admit that the first time I heard the idea 18 months ago, I thought it was crazy. Everyone knows laptops have to cost north of $500.

But the One Laptop per Child (OLPC) association, a nonprofit group led by Negroponte, is on its way to achieving that impossible goals. Although early production units are expected to cost about $135 when they ship in early 2007, the $100 price tag is within reach and certainly will be achieved within a year. It is a stunning example of the power of big, hairy audacious goals (“Beehags,” for short).

The OLPC team came up with a long list of innovations to achieve this milestone. It used open-source software (naturally, since the Windows license would put the machines over the $100 threshold out of the box) and an innovative dual-mode screen based on display technology used in portable DVD players. The screen can display color but can also be switched to black-and-white mode at three times the resolution.

The units have only 128Mbytes of memory and 500Mbytes of flash ROM. That’s not very much by business standards but, as Negroponte explains it, “Today’s laptops have become obese. Two-thirds of their software is used to manage the other third, which mostly does the same functions nine different ways.” In other words, the project will focus on doing a few basic things well rather than attempting to be all things to all people.

Broadband wireless networking will be built in, as will mesh networking, a technology being advanced by the MIT Media Lab that enables nearby computers to create a peer-to-peer network that inexpensively expands the power of each computer.

Finally, each unit will have a hand crank on the AC adapter that can deliver about 10 minutes of power. Designed for rural areas where power is scarce, the innovation strikes me as something that could be handy for business travelers on long plane flights with dying batteries. It’s flat-out brilliant.

The One Laptop per Child project is a shining example of the power of beehags. The group started with a simple, if seemingly impossible goal, and methodically knocked down barriers until it reached its objective. The toughest problem to solve was the display, but there the team looked to apply technology that was already on the market to a new use. Building on an established product is a form of innovation.

Give credit to Negroponte for never wavering from the mission. At any point, he could have revised the goal to a $200 laptop, but that would have been too easy. It was up to the team to innovate the last $100 out of the cost. And now that they’re nearly there, you can see $50 laptops on the horizon.

Give credit, also, to OLPC for changing the rules. If it had focused on simply stripping cost out of today’s low-end laptops, it would have invented an under-powered business machine. Instead, the group looked at the needs of the core audience – the roughly 80% of school children in the world who have never touched a computer – and designed a machine from the ground up just for them.

If the initiative succeeds – and there’s no guarantee it will – it could revolutionize the computer industry in unforeseen ways. Laptop computers were designed from the outset to duplicate the power of the desktop as closely as possible. But who says we need to compute that way? Could you be happy traveling with a machine that only did word processing, spreadsheet, e-mail and web browsing, but got eight hours of battery life and weighed about three pounds? We’ve been conditioned to believe that such portability should cost hundreds of dollars more than the price of a conventional laptop. OLPC is turning that on its head, making a lightweight portable machine the cheapest option.

The project could also be a breakthrough for open-source software. U.S. business users are hooked on Windows because that’s all they’ve known for 15 years. The OLPC project works from the assumption that users shouldn’t care about their operating system. Under those conditions, Linux works just fine.

The One Laptop per Child initiative is innovation personified and a tribute to the power of simple goals. What beehags have made a difference in your life? If you were the boss, what big goals would you assign your team to meet? Let me know in the comments ection below.

Making It or Breaking It with Customer Service

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

On June 13, Vincent Ferrari decided he no longer needed his $14.95-per-month account with a major online service provider. Ferrari had heard stories about the company’s notoriously poor customer service, so on a hunch, he wired his phone to record the conversation.

What he got is a marketer’s nightmare. After waiting 15 minutes on hold, Ferrari finally spoke to a customer service rep who spent the next five minutes insisting that he shouldn’t cancel the account. Despite Ferrari’s repeated requests to “Cancel…the…account,” the agent wouldn’t give up. The exchange reached the height of absurdity when the rep asked to speak to Ferrari’s father. Ferrari is 30.

There was a time when a story like this would have been shared and laughed over with a few friends. But this is the age of the blog and Ferrari did what any self-respecting blogger does these days. He posted the recording.

The response was overwhelming. More than 1,000 readers weighed in with comments, many lamenting their own customer service horror stories with the vendor. Ferrari was interviewed on the Today show. Google news lists 32 news accounts of the incident. The recording was downloaded more than 65,000 times from YouTube. Demand was so high that Ferrari’s blog server crashed. You can read his story here.

The conventional wisdom that a dissatisfied customer tells 10 people about a bad experience is outdated. Today, they tell millions. Social media is unforgiving in this way. Consider the poor vendor in this situation. One negative exchange with a customer resulted in a firestorm of bad publicity that was wholly out of proportion to the offense. Ferrari had a juicy story to tell and the media loves a juicy story.

For many businesses, customer service is a neglected afterthought. Squeezed to cut costs, businesses are increasingly marginalizing the customer experience by inserting automated phone systems and ponderous Web interfaces between themselves and their clients. Or they’re outsourcing the whole thing overseas. The result is that customers are becoming more and more disenfranchised. And they’re going to sites like The Consumerist to vent their frustration.

I set out today to write about innovative customer service, but in researching the topic, I discovered so much rancor about the state of customer service that I changed course. It seems to me that in the outsourced, cost-controlled, Webified and automated business world, innovative customer service is increasingly about going back to basics. It’s about providing your customers with a speedy, hassle-free exchange with a pleasant human being who genuinely appreciates the customer’s business.

Think of the businesses you patronize that give you good customer service. What do they do right? Chances are they make a positive customer experience part of their value system. Whether it’s an efficient web design, a helpful e-mail newsletter service, a pleasant telephone support staff or a cheerful hello at the checkout counter, they show you that they appreciate you as a person, not just an account number.

So innovative customer service these days isn’t about innovation so much as it’s about core values. Getting back to basics. Sweating the details. How important is a happy customer to you? How dangerous is an unhappy one?

Let’s close with a positive anecdote. The other day, my regular Federal Express delivery guy rang my doorbell just to tell me that it was starting to rain and he had noticed the top was down on my convertible. He didn’t have tell me that; I’m sure he had plenty of deliveries to make. But he took literally one minute out of his day to help a steady customer. I will remember that small courtesy for a long time and will tell other people about it. In fact, I just did!

What are businesses doing to make you a happy customer? Share your stories in the comments below.

How to Create an Innovative People Strategy That Maximizes the Talents of All Your Employees

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

It’s been said that if you build an organization entirely out of creative people you get chaos but if you build one strictly out of task-oriented people you get the registry of motor vehicles. But innovation is neither creativity nor routine; it’s a cultural bias toward continually improving the way business is done. Every single employee in your organization should strive to innovate in ways that streamline tasks or create new business opportunities. There’s no downside to having a workforce composed entirely of innovators.

Innovative employees are important not only because they think up ways to improve the business but also because they have the mindset to tolerate change and innovation by others. Nothing will derail a project faster than the “That’s the way we’ve always done it” or the “You must fill out this form” mentality. You need to build innovation into your human resource strategy from the start.  Here are a few strategies that I’ve seen successful organizations use:

Look for innovative job candidates – Hiring managers and HR departments should be alerted to look for candidates who use words like “initiate,” “create” and “conceive” in their resumes. Avoid the people who “perform” their job or whose “responsibilities include” a laundry list of tasks. When interviewing candidates, be sure to ask for specific examples of ideas they have conceived and carried through to fruition. The second part of that equation is critical. There are plenty of good ideas out there, but precious few people who can see them through to results. Finally, check references and be sure to ask past employers for specifics about a candidate’s innovativeness.

Celebrate innovation – Study after study has documented that most people value peer recognition more than money. So put in place some small programs that recognize innovation and tie them to creative rewards. One company I worked for awarded the journalist with the best “scoop” story of the month an ice cream scoop, gift certificate to a gourmet ice cream shop and a framed certificate. People displayed those certificates proudly for years. You can create your own program. Launch a monthly innovation award that includes a short article in the company newsletter, two tickets to a show or ballgame and a photo of the winner with your CEO. Stick with it. If you make reward programs a part of your culture people will learn to value them. If you let them lapse, people will doubt your sincerity.

Demonstrate that innovation yields promotion – Many companies don’t do nearly as good a job as they could of telling employees why certain people get ahead. When you announce a promotion, point to specific examples of how someone demonstrated innovation in their work. And tell them what was innovative about what they did.

Put your money where your mouth is – Search giant Google is famous for encouraging its employees to spend 20% of their time working on new ideas. You don’t have to go that far, but you can make it a point to give people time and funding to develop ideas into business plans. Don’t make this work additive. Use temporary help or divide tasks among others in the group to give the employee time to develop an idea. Tie small bonuses to short-term milestones or offer to give back to the employee a small percentage of the savings or revenues benefits you realize from their ideas. If the idea really has legs, put the employee in charge of the group that’s charged with carrying it through to fruition.

One other point is worth noting. Recognizing innovation means that management must give up its monopoly on good ideas. You need to control egos so managers are encouraged to step back and let the spotlight shine on their best people. That’s a scary idea for control-oriented bosses, so you need to make it clear to all your managers that the success of their employees reflects well on them. You can do this in little ways: quote the manager in that company newsletter article or add the manager’s name to the innovation award certificate. Just make sure that everyone in the company understands that innovation is a quality that’s valued at every single level of the organization chart.

How One Innovative Company Made the Most of Business Intelligence

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From Innovations, a website published by Ziff-Davis Enterprise from mid-2006 to mid-2009. Reprinted by permission.

Sometimes, even a successful and profitable business can contain huge hidden opportunities for savings.  Such was the case with Vicor Corp., a $180 million maker of industrial power conversion equipment based in Andover, Mass.

Vicor’s business is highly customized. Each of the 8,000 customers it will serve this year buys a somewhat different configuration of its products.  Because its market is so specialized, Vicor can derive big profit gains from identifying deficiencies in its operations.

In 2002, Vicor’s operating profit margins were in the high 20-percent range. This year, gross margins will approach 45 percent.  That’s a remarkable improvement in just four years. The difference is focus. And cubes.

Vicor made the migration to PeopleSoft Financials in 2002. The ERP system gave Vicor unprecedented insight into its own operations. But what really accelerated the transformation was the addition of business intelligence (BI) tools, according to Joe Jeffrey, the company’s director of manufacturing.

Vicor saw BI as a way to focus its problem-solving. Managers thought they spent too much time identifying problems and not enough time solving them. They believed that BI would be the tool they could use to ask better questions, which meant getting answers more quickly.

The company made a commitment to BI. It armed its managers with an assortment of data cubes. Cubes are multidimensional database views that give users a way to examine data from different perspectives and to drill down to a fine level of detail. Each cube was a roll-up of database records, and the multidimensional analysis gave managers a way to look at information from a variety of perspectives: for example, over time, by product and by customer

If a manager noticed an anomaly in inventory, for example, she could drill down to find the exact work order where the anomaly originated. “When a question is posed about what happened, it’s now a much more specific question,” Jeffrey says. “It makes questions tactical, which means you’re focusing on solving problems rather than figuring out that problems exist.”

Vicor went a step further. It made sure that the metrics it was tracking in the data cubes were linked to specific business goals. Those goals, in turn, were tied to individual performance plans. When a goal is reached, a new one is quickly set and reflected in the individual performance plans of employees. Users are responsible for monitoring the metrics that will decide their performance. In effect, they can’t afford not to use the cubes.

The result is that managers across Vicor are totally bought in to the value of business intelligence. That has paid off in innovative uses of the tool across the organization. For example, the analytical program that users write can be shared and applied around the company. A routine that works for volume analysis, for example may also be used for dollar analysis. Jeffrey said some programs are used in a half dozen different applications, even though each tracks different things.

Users also understand that the business intelligence tool is intrinsic to their own success. Because their metrics for success are so closely tied to reports, users have an incentive to learn how to use business intelligence. That’s created a widespread acceptance of the tool and a spirit of innovation around it.

The difference at Vicor was that the company made a commitment to a technology at an early stage and stuck with it. It made sure that the tool was central to everything its managers did and it created a culture in which success with the tool equated to success in business. I wish more companies would take a chance like that. Too often, we’re tentative with our adoption of technology and leave it to the individuals to decide whether to use it. Vicor’s experience demonstrates that commitment and vision creates the most effective scenario for deployment of  technology for strategic advantage.

Has your company experienced success by committing to a new technology at a high level and then sticking with it? Let us know by posting a comment below.