Innovation Science

An Olympic Anthem Made To Stick

The New York Times had an article today on successful and failed commercials from the just completed Olympics. I eagerly read it because I wanted to see what they said about the one commercial that I liked so much that I actually rewound it (using Tivo) and watched it many, many times. And I actually stopped my Tivo (an act that should be a metric of marketing success) whenever I spotted this commercial while fast-forwarding through Olympic commercial breaks. Not only that, I searched for the commercial on YouTube and watched it again. Not only that, I found the original source for the commercial and watched that again. Surprisingly, Stuart Elliott, the NYTimes article’s author, didn’t mention the commercial at all in his article on memorable commercials during the Olympics. So I will.

Nike’s United We Rise commercial takes film of Marvin Gaye singing the Star Spangled Banner at a 1983 NBA game and intermixes it with footage of the American Olympic basketball team preparing for the games. The effect, for me, was mesmerizing.

The appeal of the commercial, of course, is Marvin Gaye. To be able to take a national anthem and make it so different, so soulful, and so memorable is stunning even today. I can’t even imagine what the reaction was in 1983, although I know that Jose Feliciano almost ruined his career doing something similar at a baseball game in 1968.

What makes the Nike commercial so memorable? Let’s consider it within the context of Made To Stick, one of the more insightful commentaries on marketing of the past several years. In their book, Chip Heath and Dan Heath (brothers, one of whom is a Stanford Business School professor) outline the qualities of what makes a message (or commercial) sticky—what makes people remember a message and want to tell others about it, or in my case want to watch it over and over again.

The Heaths identify six characteristics that make a message sticky. Let’s examine the Nike commercial with these principles in mind:

1. SIMPLICITY. The commercial’s message is simple enough: Gaye brought greatness in his own way to  honoring America, and the Redeem Team is going to do the same, in a way that will be memorable for ages. With style, and with a whole lot of coolness.
2. UNEXPECTEDNESS. Needless to say, associating Marvin Gaye singing the national anthem with the Olympic basketball team was quite unexpected. Check.
3. CONCRETENESS. Well, I’m not so sure what’s concrete about this commercial. Certainly it’s meant to embody Nike’s Just Do It, but without knowing that slogan already one would have a difficult time pulling that from the images. I’m going to rule that the commercial doesn’t capture this principle.
4. CREDIBILITY. I believe that part of what Gaye brings to this commercial, believe it or not, is credibility to the USA basketball team. Gaye was a world-famous music icon who had recently had a hit with “Sexual Healing”, yet he chose to open an NBA game with a moving rendition of the national anthem that was as likely to hurt as help his career. Gaye took an American-born music genre and honored his country by applying his incredible talents in that genre to his national anthem. The American team had the ability to take an American-born game and apply their incredible talents in that game to honoring their country. The question pointed towards the USA basketball team as they entered the Beijing Olympics was whether they’d put their NBA stardom on the shelf during the Olympics and focus on representing America against the best of the rest of the world to the best of their ability. In today’s star-driven society, it’s easy to imagine a Kobe saying, “What’s the point? I’ve already achieved greatness in the greatest basketball league in the world.” Well, let’s consider what Marvin Gaye would say to that…
5. EMOTIONS. Music has a way of touching people’s emotions unlike any other art form. Not only was Gaye's performance masterful, when have you ever heard a national anthem transformed into a pop-art-form performance that preserved the spirit of the original anthem? There’s a reason that some of the most memorable (sticky) commercials have featured memorable music. Recent JC Penny commercials come to mind. This VW commercial from several years ago is said to have caused the significant posthumous revival of Nick Drake. And, of course, there’s Apple’s iPod commercials.
6. STORIES. Well, there isn’t a strong narrative here. The message is more implied, as I’ve outlined above. I’m ruling that they didn’t meet this one as well.

So, that’s four out of the six Sticky principles achieved by this commercial. Not surprising that it stuck with me.

Given the nature of this blog, I’m forced to consider: was Marvin Gaye’s performance innovative? Given the requirement of economic value that many of my innovation colleagues require for something to be considered innovative, I suppose not. This Nike commercial, however, undoubtedly is.

Todd Mintz has a wonderful recount of his attendance at the NBA game in which Gaye performed. Below is the 60–second Nike commercial that I watched so many times on my Tivo (there’s 150 second version available on YouTube as well). And below that is film of the original Marvin Gaye performance. Enjoy.

Nike ad:

Original performance:

Lessons from the Olympics

The Olympics are always inspiring with the amazing results achieved by the competing athletes. It's easy to look at someone like Michael Phelps and decide that he provides no inspiration for the average person because he has been groomed for over a decade to excel at this event due to his extraordinary natural talent--and the reality is that yes he has.

What is easy to ignore in Michael’s life-story, however, is that he has worked extraordinarily hard to get to the position that he is in. Unbelievably extraordinarily hard. And so has every athlete at the Olympics. They've found what they are good at and have worked extraordinarily hard at doing their best at it. This is not only the secret of successful athletes in all sports but also the secret of successful entrepreneurs and technologists worldwide, and a model of success that can be accessed by anyone: find what you are good at and work extraordinarily hard at it. Don’t be lulled into the job model that has been created for those who work at something that merely defines something they can do. There is an unspoken job model that is not taught in school and never really discussed, but it is a model for those who find themselves in the unique position of being able to work at what they are best at:

If you resonate at your job, ring it as hard as humanly possible.

I am constantly amazed at talented people who have the ability to do great things in their professions...yet they don't achieve greatness because they treat their job like the average job that they’ve been taught to expect: working nine-to-five (well, nine-to-six is the norm these days) and only do what they are asked to do.

Finding what you are good at and working as hard as you can at that is, frankly, a luxury that most people don't have. Most people aren't able to spend their salaried time doing what they do well—most people just work to make a living no matter what the job. Being paid to do what you do well is an opportunity that perhaps one can only truly appreciate at the end of one's career—to be thankful for being paid to be best at exactly what one is in fact best at. The satisfaction of this unique situation is not about being paid for it, of course; it's about being judged at what one does best and being given the opportunity to excel at what one does best. If one takes that opportunity, that is.

That opportunity, of course, defines the lives of Olympic athletes. And nothing defines them more than matching their talents to their training and working as hard as they can to be best as they can. In the spectacular finish of the American 400m freestyle relay, the finish of Jason Lezak was spectacular: his performance seemingly pre-destined for the history books, and an achievement celebrated worldwide. Yet what’s not seen nor appreciated by the Olympics viewers is the incredible—and I mean incredible beyond what most people can ever imagine—incredible work ethic that Lezak executed to put himself in the position to be able to make one of the most amazing comebacks ever.

Randy Pausch, the Carnegie Mellon professor who became an online sensation when he gave a Last Lecture after being diagnosed with pancreatic cancer (and who passed away soon after), provided simple yet insightful advice about achievements and work ethic:

The brick walls are there for a reason. The brick walls are not there to keep us out; the brick walls are there to give us a chance to show how badly we want something. The brick walls are there to stop the people who don't want it badly enough. They are there to stop the other people!

Work hard. Work harder than others. Work hardest if you are really good at it. Challenges simply exist for you to overcome then if you are up to it.

Most people complain about their jobs and the perceived difficulties and obstacles that they experience. This tip is for the few of you who want to be able to look back on your career with sanguine satisfaction rather than a melancholy attitude towards all that you simply put up with: the brick wall is there for a reason, so let your colleagues complain about it while you scale it, put it behind you, and face new challenges that few ever progress far enough to even come up against.

Better than Prime Time TV

I just discovered a pretty interesting video site that describes itself as a Brilliant Ideas Network for Discourse and Debate: fora.tv. It’s videos include conference speeches and interviews, such as several from the Aspen Idea Festival. Unfortunately, most of the ones that I saw were abbreviated versions of the full speech/interview—tantalizing tidbits instead of complete content.

The video/audio content on the site is organized by category and varies from Entrepreneurship to Science to Visual Arts & Film to (of course) Innovation.

The videos aren’t as mind-changing as as the incredible TED talks, but are definitely worth spending time with.

As a sample, check out this discussion on innovation and R&D breakthroughs:

 

Disruptive Innovation in Health Care

Most people interested in innovation will have some familiarity with Harvard B-School professor Clayton Christensen and his classic books The Innovator’s Dilemma and The Innovator’s Solution. Christensen recently lectured at MIT on the topic of his upcoming book, The Innovator’s Prescription: A Disruptive Solution to Health Care. Christensen is an excellent lecturer and I recommend that you watch this video, courteously pointed to by Irving Wladawsky-Berger who also provides an excellent summary of the class. Make sure that you allot time for watching—the video is 88 minutes long.

Christensen spends the first half of the lecture reviewing the basic concepts of his first book: the process of disruptive innovation.

Here’s a tip for those who don’t want to watch the video or read his books: if you find yourself in a business that is happily conceding low-margin commodity business to small start-ups and happily retreating to the more lucrative high-margin business, be careful or you may end up as one of Christensen’s case-studies on extinction by disruptive innovation (you will never forget this lesson if you watch Christensen’s video).

I love the way that Christensen phrases his preventive medicine for avoiding extinction by disruptive innovation: create a division that is given an unfettered charter to kill the parent—imagine that mission statement on a conference room wall!

Christensen’s prediction for the future of health care (which begins around the 38–minute mark of the video) is that it will experience disruption due to three emerging technologies:

• molecular diagnostics,
• imaging technology,
• high-bandwidth telecommunication.

Part of his message is something that I heard biotech guru Steve Burrill talk about a couple of years ago when predicting future trends in biotech: that better diagnostics will allow health care professionals to treat causes rather than symptoms. I’ve talked about how my field of hearing impairment will go through a similar transition, with better diagnostics allowing us to identify the physiology behind different hearing loss etiologies and provide individualized treatments. This falls under the general theme of individualization in health care, a future trend not only in my field by in health care in general.

For the rest of Christensen’s thinking on innovation opportunities in health care, check out the video—it’s worth the time.

New Yorker on Speech Recognition

I always hold my breath and get a sinking feeling in my stomach whenever a field in which I have expertise takes center stage in a news story or pop-culture piece. More often than not, there are misrepresentations of both sophisticated and not-so-sophisticated aspects of the field (e.g., see Wired Magazine).

Such errors are a common occurrence in movies and television—accuracy in details play a secondary role to the story, and the vast majority of the audience has no idea whether the details are accurate or not. Pilots may object that the location of landing gear switches are not accurately portrayed in a movie, but does anyone else really care? (I recall the howls of protest that arose as outraged chess players complained about inaccuracies in the portrayal of competitive chess in the charming and under-rated movie Searching for Bobby Fischer—seriously, does anyone really care that the players weren’t writing down their moves, or that the games were actioned-up? Chess players worldwide should have been grateful that such a beautiful portrayal of the game was the framework for such a great family film).

Thus, it was with surprise that I read a recently published article in the New Yorker on speech recognition by John Seabrook that provided an interesting and accurate tour of speech recognition, with brief asides on on a variety of related fields—the physiology of speech production, the physiology of hearing, prosody of speech—all tied together by the promise of computer-based communication that HAL presented in 2001 when the article’s author was  a little kid. I was also surprised to see a popular magazine reference John Pierce’s Acoustical Society letter Whither Speech Recognition, a scathing throwdown on the field of speech recognition in 1969 by the then executive director of research at Bell Laboratories (in this highly debated letter, Pierce criticized the state of speech recognition research at the time for having a “scarcity in the field of people who behave like scientists and of results that look like science.”) I highly recommend reading this New Yorker article for anyone with an interested in the topic.

One odd aspect of the story is that it ends with a discussion of a company called Sound Intelligence, which has developed audio sensor technology that detects violent activity on city streets for use by police. The company is cited as an example of the successful application of the work that Seabrook detailed on detecting emotion in speech. An engineer of the company, whom I heard speak about their technology last year, is quoted as saying that the Sound Intelligence grew out of auditory modeling research at the University of Groningen and its application to separating speech from background noise. It’s unclear to me how much the success of the technology requires complex auditory models or any of the science and technology the article had detailed up to that point. While I applaud Sound Intelligence’s success, the inclusion of their technology as the coda to an otherwise great review of the speech recognition field makes for an empty conclusion. I’m sure that the folks at Sound Intelligence, however, would disagree with me completely.

Read This Post for Free!

People often make irrational decisions when money is involved. They’ll go out of their way to save 25 cents, say by driving around and around looking for a parking meter with time remaining, yet immediately after blow that much and more without a thought ($4.50 for a latte, anyone?).

Dan Ariely explores such irrational behavior in his book Predictably Irrational. Ariely is a business school professor at MIT, and much of the book describes simple yet ingenious experiments he’s conducted that demonstrate over and over again the consistently illogical behavior of people when making choices. This field of research, known as behavioral economics, stems from the ground-breaking research of Daniel Kahneman and Amos Tversky’s that won Kahneman the Nobel Prize in economics (I’ve been citing Kahneman for years in my talks on cognitive attention and effort, but it seems that every week for the past year I’ve read Kahneman’s name referenced in a different news story, book, or magazine article. Behavioral economics seems to be the hot topic these days). Ariely’s experiments demonstrate the fascinating ways in which people repeatably make decisions that appear to be contrary to common sense.

Ariely details, for example, the powerful allure of something being free. People’s choices change dramatically when items change from being effectively free (costing one cent, for example) to being actually free (costing zero cents). For example, he tells how Amazon’s customers bought more books on average once Amazon started shipping for free on purchases greater than $25—the increase in customer spending far exceeded the amount that they were saving on the free shipping, but they gladly spent more on books to get shipping for free. More puzzlingly, Amazon saw this behavior exhibited worldwide except in France. Was this because the French were more logical in their purchasing behavior? No. The country manager in France decided not to make shipping free but to reduce it to one franc, or 20 cents, which wasn’t a small enough shipping amount to change people’s purchasing behavior. Is 20 cents really a significant amount when buying a $20 book? No. Is a shipping cost of 20 cents effectively the same as 0 cents? For most people,yes. But when the manager in France reduced Amazon’s shipping charge from 20 cents to Free, French customers suddenly increased the amount of books they purchased per order by the same amount as the rest of the world.

The reason that I am writing about Predictably Irrational is to contest an explanation that Ariely gives for his first example, and one of the most interesting, of irrational behavior. In the example, Ariely describes an offer that I’ve seen before but never understood, which made me even more interested in his explanation (and my alternative one).

Ariely noted an ad in the Economist magazine that offered three different types of subscriptions:

1. an electronic subscription for $59;
2. a print subscription for $125;
3. a print and electronic subscription for $125.

That’s right, the price for a print-only subscription was the same as the price for a print&electronic subscription. Why would they bother offering the print-only option when it was clear that no one would select it because they could get both the print&electronic versions for the same price? Being the good researcher that he is, Ariely decided to run some experiments to determine if there was a reason why the Economist made this offer (Ariely’s ability to set up simple experiments to provide insight into unusual behavior is fascinating).

Ariely asked two different groups of students to make a selection among a choice of Economist subscriptions, but each group were given a different list of options. One group was given the same three selections that the Economist offered. The percentage of students who selected each option was as follows:

1. electronic: 16%
2. print: 0%
3. print&electronic: 84%

No one chose the print-only option (not surprisingly). This begs the question of why one would offer that option at all (the same question that motivated this experiment).

For the second group, the unchosen print-only option was removed and only the electronic subscription and print&electronic subscription were offered (still priced at $59 and $125, respectively). One might expect results similar to those from the previous group (16% for electronic and 84% for print&electronic) since there wasn’t any interest in the print-only option that was removed. The results for this second group were as follows:

1. electronic: 68%
2. print & electronic: 32%

Without print-only as an option, the number of people interested in the print&electronic option dropped from 84% to 32%! In other words, by offering an option that no one wanted, 52% of the people changed their preference from electronic-only to print&electronic at a $66 higher cost. What’s going on here?

Ariely’s explanation was that people need a basis for comparison when evaluating whether a deal is a good one or not, and from this comparison they make their decisions. With a similar item for comparison, they can assess the value of an item and determine whether that item is a good or bad deal. He gives a couple fascinating examples where the choices that people make are biased by the presence of a similar and inferior alternative. If people are choosing between A and B, they will choose A more often if there exists a third alternative similar to but inferior to A, and they will choose B more often if there exists a third alternative similar to but inferior to B. Having that third alternative allows people to say to themselves, “I can’t judge whether A or B is a better choice, but I know that A is better than this similar third alternative, so A must be a good deal.”

Ariely suggests that this is why the selection for print&electronic is high when print-only is offered for the same price—the print-only option gives people an alternative from they determine that print&electronics is a better deal, and that drives their choice.

I believe, however, that there’s another possibility for these results: people are more likely to select the print&electronic option in the presence of a print-only option because of the Free phenomenon. Let me explain.

Ariely’s explanation is partly correct: in the absence of knowing the cost of the print-only subscription, people cannot judge whether the combined subscription is a good deal or not. Maybe print-only was $66, and the cost of print&electronic was simply the sum of the costs of the individual subscriptions ($59+$66=$125). Or maybe print-only was $100 and getting the combined subscription would save $34. Or maybe print-only was also $50 and $125 for print&electronic was a rip-off. No one can tell whether both together is a good deal in the absence of a print-only option—in that, Ariely is correct.

The fact that the print-only and print&electronic options are priced the same, however, suggests another explanation for the large difference in behavior between whether or not the print-only option is offered. Ariely made the convincing case later in his book that getting something for free can have a hypnotizing allure on people’s decisions. Providing a print-only option at less than $125 probably would not be enough to drive such a large percentage of people to change their selection from print-only to the more expensive print&electronic option—the print-only option had to be priced at exactly same same price as print&electronics so that the electronics version was free if they chose both. It was the identification of something free that made such a large percentage of people select the print&electronic option. This is similar to the phenomenon observed by Amazon: 20–cent delivery didn’t change behavior but free delivery did. Given the convincing case that Ariely made for this free effect, one would probably have predicted that people would switch their decision from the electronic-only option to the print&electronic option when they discovered that the latter choice would get them the electronic version for free.

So, now you know why so many ads offer free cheap items if you purchase an expensive product A free month of HBO if I get the Lifetime Triple Gold package of cable—sign me up!

A World Champion Encounter

Most people strive to be good at their jobs and hobbies, and this often requires a considerable amount of dedication, effort, and innate skill. To be great at these, however that is defined, is more difficult still. To be considered by one’s peers to be one of the best in that field is rarely achieved. To be known as the best in the world at something…well, that achievement is nearly incomprehensible.

A month ago I played a game of chess against the current world champion in chess in his age division:12 and under. Daniel Naroditsky, who goes to school in the Bay Area, won the world championship in Turkey last fall. The achievement, the skill and effort required, of becoming a world champion in chess in any age bracket is mind-boggling. My game against him was less so. Herein are the details of that game.

Daniel conducted a 17–person simul, where he played against 17 people at the same time. I was one of those 17 people. Playing against many people simultaneously is not a new concept; The great American player from the 1800s Morphy used to play blind simuls with regularity. It doesn’t take a world champion to be able to play a simul successfully, but if there are reasonably ranked players among the challengers, then such a contest can be interesting.

One doesn’t play against a world champion chess player and expect to win (unless one is delusional or also ranked as a grandmaster). When playing against someone rated much higher than you in a simul, your best chance of success is for the higher-level player to offer you a draw if you give him a decent challenge; the higher-rated player would do this if he wants your game out of the way so that he can focus on other games that are more challenging. This was my goal. By the way, I also have hopes to hit a hole-in-one when I play golf, to have my luggage be the first one unloaded when I am waiting at an airport carousel, and to have celebrities talk to me with great interest when I see them in public places. Basically, expecting to win or draw against the world champion in chess is like expecting to beat Michael Jordan in a game of one-on-one.

Back to the simul.

The rules of a simul differ from regular competitive chess in that there is no clock dictating the amount of time allotted for moves. In a simul, you make your move when the champion appears in front of you—not before, and you certainly don’t continue to think about or hesitate in making your move once he appears before you. He then makes his move and proceeds to the next table, upon which the next nervous challenger must immediately make his move. Interestingly, the champion has no time constraint on his moves. After you make your move, he can think as long as he likes. Of course, he’s got other games to get to, so he usually doesn’t take too long. Also, the person in my simul is the world champion—how much time does he really need to decide how to respond to my castling? I can answer that, in fact: less than a second is how much time he needed.

Before the simul began and the challengers were standing around waiting for instructions on how the event would be conducted, it was clear that the majority of the challengers were young kids—possibly Daniel’s classmates from his school but clearly not typical students: they all had that dead-stare in their eyes indicative of a well-honed and massively complex calculating machine behind them. These kids wouldn’t be going to go back home after the game to play hacky-sack, they would likely immediately reference several chess books from their library of similarly sounding titles (“Variations in the French Defense,” “Countering the Sicilian”) and study how they could have better played the opening before firing up the latest Fritz computer program for some quick games of blitz chess.

Five of the adult challengers, including me, stood together before the event, nervousness in our body language. This group was clearly insecure about its age. There was a “please let at least one of the adults put in a good showing” attitude, not wanting our age to be proven irrelevant in this arena, our intellect crushed by a 12–year old. I’ve played chess competitively before (reaching a temporary Master’s rating, sort of…see the link), and one quickly realizes that age and ability do not have a high positive correlation. Sitting down against a 10–year old in a chess tournament, shaking their tiny limp hand at the beginning of the game, hearing their high-pitched “good luck,” facing them across the board as their head barely sticks up above the table, and having them proceed to suffocate the life out of your King while laying waste to your supporting pieces is a humbling experience. I was under no illusion about the fate of us adults, given that only one of us (not me) appeared to have had any experience with chess over the past few years: we would likely be among the first to relinquish our seats at the game for the observation gallery.

The 17 chessboards were set up in a U-shaped table arrangement, allowing the champion to walk from board to board inside the U while the challengers sat in front of their board around the outside of the U. Looking at the game setups, I was surprised at first to see that all of the boards were arranged so that Daniel played as White on all of them. At the grandmaster level of competition, playing as White is a considerable advantage because White makes the first move, and the best that one typically hopes for when playing as Black is a draw (tie). Thus, I was surprised to see that the simul was set up to give Daniel the advantage of White. Even though he was playing against 17 people simultaneously, giving him White in all games seemed an unnecessary advantage for a world champion. After his first move, though, I realized why the sides had been arranged this way.

We challengers sat at our tables and awaited the start. Daniel approached the first table, shook the challenger’s hand, and played Knight to f3. An unusual opening, and certainly a confusing one for a novice, who is used to seeing a pawn advance as the first move—usually the King’s or Queen’s. Daniel then moved to the second table, leaving the first challenger to ponder his response to this opening.

At the second table, Daniel shook the challenger’s hand and played Knight to f3 again. He moved on to my table, whereupon he shook my hand and also played Knight to f3. Daniel in fact opened every game with this move. Now I saw the reason that he was playing as White. Doing so allowed him to keep some consistency among all of the games. Each one had the same starting point and therefore was a a little easier for him to adjust his thinking as he approached each board. Makes a lot of sense.

At first, I had quite a lot of time to consider my moves. The rules were that a challenger had to make their move as soon as Daniel appeared in front of them. They couldn’t make their move before because Daniel needed to see what the move was. They couldn’t delay their move once Daniel showed up because that would hold up the whole process. At first, I had a whopping 2 minutes to consider my move between the time that Daniel left my board and he returned again, which was quite a bit of time to think about a move, particularly early in the game.

Time passed quickly. As Black, I created a King’s Indian Defense, developing the pieces on the King’s side and being cautious with pawn movement in the center and the Queen side. Whenever Daniel appeared before me, I made my move, he thought for a second (perhaps thinking about a game 34 years ago that had produced this same position), made his move and walked on. It wasn’t long before I looked around and saw one of the challenger’s seats empty. The pieces had been put back to their starting position except for the Black King, which lay on its side in the center of the board, slain by Daniel. Victim number one: one of the adults. Mere minutes later, I saw the second victim extend his hand in defeat to the world champion. Another adult gone.

As the position on my board started getting complicated (at least by my judgment), the time between Daniel’s appearances seemed to accelerate. I realized that as more players dropped out, there were fewer moves that Daniel had to make between moves in my game and thus I had less time to spend between my moves. With only 10 games in play, I figured that I’d have just over a minute between moves. If I made it to the final five, I’d have little more than half-a-minute. Time would get tighter the longer I played. For Daniel, however, the time he spent on his moves at my game remained the same.

The game went on. I played it fairly safe, developing pieces and slowly acquiring territory on the Queen’s side while he built space on the King’s side. More players dropped out of the competition, more Kings lay dead in the center of their boards. I had no illusions that I was going to win this game. I also had no illusions that I would give him a good game. With half of the players gone now, I also had no illusions that he was going to offer me a draw in order to focus on more critical games. He was in it for the kill. Most of the time, Daniel watched my move, thought for a second, then made his. I considered it a minor victory each time he actually had to stop and think for 5, 10, 15 seconds about his response before making his move. One time, he actually put his hand up to his chin in contemplation! In the face of certain defeat, I took such minor satisfactions where I could.

In chess, resigning doesn’t have the stigma that it does in other games. In fact, it is considered not only dignified but also good manners to resign if the game is clearly lost. Unlike most sports where one plays one’s hardest even if it is clear that there is no chance of winning, playing chess to the bitter end in a tournament is considered a waste of time and disrespectful of the person who won. This is in fact why the game ends on checkmate and not on the actual taking of the King—if there is no way to avoid the King being taken on the next move, then the game is over.

While in casual games it’s fun to play to checkmate, that rarely happens in competitive chess (except in the movies, where pieces are also slammed on the board and moves are made with the speed of a boxing match). At the grandmaster level, the play is so precise that if a player gets a piece down then the game is over. Players will even resign when they get a pawn down and their opponent has a good board position; the skill level is so high that the slightest advantage is enough to guarantee a win. As my game progressed, I became a pawn down, then we exchanged pieces, then I lost a rook for a Knight and pawn—plenty to cause another grandmaster to resign, let alone a patzer like me. Yet, to resign at a slight disadvantage against a world champion would be absurd, because realistically I should have resigned after his first move were I to resign once I realized that I had no chance of winning. The point of this game was not to play until it was clear who would win—that point occurred even before the game started. So, to resign after being a pawn down was to pretend that losing a pawn was a critical turning point against the world champion: “Oh, now you have me, sir; your pawn advantage has tipped the scales to ensure you a win.” So, I wasn’t going to resign just because I knew I was going to lose. However, I wasn’t going to keep playing until he checkmated me either; to force a world champion to checkmate me would be an insult (“I’m sorry, you are going to have to prove that you can win with a K-Q-B-B-R against my K-N pair…”) I decided that I would resign when I got more than one piece down.

As more challengers bowed out, Daniel’s appearances came quicker. With the time to ponder moves shortening and the game becoming more complex, I started to feel as if I had stalled into a death spiral. Daniel would appear, I would move, Daniel would spend 1–2 seconds considering what I had done (What was he thinking just then: Idiot? Book? How sad? That Hannah Montana is quite a talented singer?), Daniel would quickly make his move and walk away, then reappear seemingly seconds later. I no longer had enough time to assess the move choices that I had—I had to start doing partial analyses and taking my best guess. Soon, I made a mistake and he took my Rook. And then…and then…

And then I saw it. Two moves later I would be able to fork his King and Rook! This was kind of move one giggles with anticipation of playing in a normal game, and I was going to do it against a world champion. I was going to put the world champion in CHECK! This move would simultaneously attack his King and Rook at the same time, so that when he moves his King to safety, I could safely take his Rook. This was my moment, far beyond any outcome that I had anticipated. A series of scenarios rushed through my head once I saw what I was going to do. “Check, sir,” I would say, calmly taking a pawn with my Knight while simultaneously attacking his King and Queen’s Rook. Or I would simply make the move, and he would look up into my eyes with appreciation, reach out to shake my hand and give me the game. Or, making an unforgettable spectacle out of it, I would suddenly rise up out of my chair with the palms of my hands slamming down flat on the table, snatch up my Knight and slam it down on his pawn’s space, knocking the pawn sideways into the board beside me, and growl as loudly as I could, “Check, punk!!” while glaring over the table and looming an easy two feet above Daniel’s head. With this last possibility, of course, I would have been immediately humiliated by his play on the following moves, assuming that the parents in the room didn’t throw me out of the building first. While fantasizing about how I would play my pending check move, Daniel suddenly appeared at my board. I reached forward, moved my Knight while simultaneously taking his pawn with the same hand; he paused for two seconds, moved his King to safety, and disappeared to the next table. Hmm, not the dramatic event I was expecting.

The game lasted a few more moves but, as I said, the end result was a foregone conclusion. I made a couple more mistakes (that I knew of) and then resigned, embarrassed that I hadn’t resigned long ago. I reached my hand across the board, said “Good game,” got out of my chair and stepped back among the rest of the observers. As the organizer put the pieces on my board back to their starting position, except for the Black King which he laid on its side in the center of the board, I looked at all of the other boards similarly set. Two players remained, but it was a matter of minutes before those two also resigned. It was over: 17–0, a clean sweep.

Everyone clapped for Daniel’s performance. I’m not sure what he thought about the whole event, but it was fun and thrilling for me to have the opportunity to play a world champion at their own game, even if the result was a foregone conclusion before the first move.

Chess is a sea in which a gnat may drink and an elephant may bathe, says an ancient Indian proverb. I would say that I’ve slurped from it a little bit in my life, while Daniel is not just bathing but swimming in it and diving deeply. It was great to have been in the water however briefly as Daniel temporarily entered the shallow-end, taking a short rest from his deep-sea diving.

Trolls Attack Innovation: Panic in Corporate Parks!

Patent trolls are becoming a nuisance for technology companies. These trolls are companies/entities that develop or acquire patents for the sole purpose of suing companies that unknowingly infringe on those patents. The infringement lawsuit brought by NTP against Research in Motion (RIM) received a lot of attention in ‘06 when the ruling court threatened to shut down RIM’s Blackberry service. RIM eventually settled by paying NTP over $600 million. The motivation for such patent trolling is clear.

In the June 2008 issue of the Harvard Business Review (HBR), management professors Henkel and Reitzig have an article that offers their suggestions for how businesses can protect themselves against these trolls (which they call “sharks”). In my opinion, their recommendations are unrealistic in that they idealize the willingness of competing companies to cooperate with each other and to forgo competitiveness in technology development in order to protect themselves against the trolls.

The first half of their article is informative and makes very good points about the general situation that exists today. The recommendations they make, however, are not so good. I’ll address each of their five recommendations here and suggest what I believe are more realistic solutions below.

1. High-technology firms should move away from building huge patent portfolios for the purpose of cross-licensing with competitors
The authors correctly point out that one reason companies generate patents is to trade them for patents needed from other companies. Such trading is done because the patents behind key components in complex technical products are usually distributed across all of the major companies in an industry—no one company owns all of the patents necessary to produce a product. Because no company can produce a product solely on technology from their own patent portfolio, companies trade their patent licenses for licenses to the other companies’ patents. The cellphone industry is a typical example of this, e.g., Nokia trading patent licenses with Motorola and Samsung. The authors suggest that this strategy of building a strong portfolio and trading licenses is no longer valuable to companies and should be stopped because it doesn’t protect them from trolls. Indeed, it doesn’t—it protects them from their competitors, who are ultimately more threatening than patent trolls. Just because a patent strategy does not affect patent trolls does not mean that it isn’t worth doing. If I were Nokia, however, I would certainly try to convince Motorola to follow this advice to stop building up Motorola’s patent portfolio.

2. Companies must simplify technical standards and create more-modular designs
These two points are reasoned as follows. The authors assume that simpler technical standards would reduce the number of patents that teach the technology in a patent, thereby producing less opportunity for patent trolls to own the patents on technology required by the standards. The authors assume that modular designs for products would allow a technology component to be swapped out of a product if a patent troll claims that the component infringes on their patent; in other words, redesigning the product to respond to the troll’s threat would be easier with the modular design. Well, easier said than done. The nature of standards committees is such that they are not going to adjust their ways to account for a trend in patent litigation abuse that may or may not impact their standard—to make such adjustments would be considered by committee members as compromising the integrity of the standard. As for the modularity recommendation, a company has many other motivations to modularize their designs; if companies don’t modularize then it is because they can’t or have reasons not to (manufacturability, cost). The assumption behind the authors’ modular strategy is that patented technologies can be easily worked around by swapping different components, while in fact patents can be quite broad and difficult to design around. Whether RIM could have designed around the NTP patent is unclear to me, but there are many patents that are so fundamental that they embody the general feature of a product (e.g., an lcd screen on a remote control, ringtones on a cellphone) and to avoid the patent is to eliminate the feature. Finally, the bottom line is that companies will design products that best serve their customer in a way that best meets the needs of the company (e.g., profitability). The financial threat from patent trolls to a company is not (yet) so great that a company with risk revenue and profitability by changing their whole R&D approach to product design, particularly given that it’s unclear whether the proposed solution will, in fact, eliminate threats from trolls.

3. Companies must begin cooperating with their competitors early in the R&D process
The authors argue that the process of a company developing technology in secret, without the knowledge of their competitors, is “outdated”. The authors acknowledge that companies would be “uncomfortable” to share knowledge with their competitors early in their technology development process, but they argue that by doing so patent trolls can be abated. While the authors state that lawsuits from trolls “could change if more firms started to disclose early-stage information,” they do not explain why this the early-stage sharing of secret information would help against patent trolls. I can’t explain why either. Again, the authors seem to be suggesting that companies would be willing to forgo their competitiveness in order to avoid patent trolls, joining with their competitors in a spirit of innovation cooperation and protection. Again, if I were Nokia, I would strongly recommend to Motorola to share with me their early-stage technology development to guard themselves against patent trolls. I would go even further by offering to sacrifice Nokia to patent trolls by not sharing our technology secrets with Motorola and thereby drawing the trolls towards Nokia and away from Motorola.

4.Firms must foster interdepartmental and intercompany cooperation
Here, the authors discuss the value of getting patent lawyers involved early in the patent process. No argument from me here, although I’m not sure what they has to do with interdepartmental and intercompany cooperation. They then suggest that companies should cooperate with each other, and they give an example where a patent troll bought patents from company A and then sued company B for infringement. The authors suggest that company B would have been better off if company A had talked to company B first and offered a license to them rather than selling the patent to the troll. Indeed! In other words, please don’t sell to trolls. What the motivation is for company A to do so, however, I don’t know. This seems to me to be an unrealistically idealistic hope for how companies could work together.

5. Companies must stop flooding the patent office with insignificant applications
Now, here I agree with the authors. The patent office in the US is overwhelmed, making them more prone to issue patents that are not novel and thereby not valid. Inventions that lack novelty but are erroneously issued can become legal weapons against companies that have used the technology in a product. Also, as the authors point out, a flood of frivolous patents in a field makes monitoring patent activity difficult. The suggestion that companies should unilaterally decide to reduce patent activity for the good of the whole (and their competitors) is, however, unrealistic. Again, as Nokia I would strongly urge Motorola to reduce their patent activity as to not overburden the USPTO and my patent managers who monitor Motorola’s activities.

As can be seen, the solutions that the authors suggest simply aren’t realizable in a competitive world such as today.

I believe that the solution to this problem to is to de-fang the trolls by

1. making their threats less likely to succeed in court through the combination of new federal laws and Supreme Court guidance,
2. improving the patent office process in a way that reduces the number of illegitimate patents that patent offices issue.

To the first point, the US Supreme Court has already ruled in such a way that the bar is raised for obviousness. This was done in the KSR case, which I have previously blogged about with respect to the Court’s interpretation of innovation. The authors of the HBR article do mention the KSR case and others, and they clearly support this idea. What remains to be seen on the impact of KSR is if its precedence will have an impact on future court decisions. If it does, the validity of frivolous patents wielded by trolls will be easier to attack.

To my second point about reducing the number of illegitimate patents, a test program (the Community Patent Review Project) is in place in the U.S. to assist the USPTO in finding and analyzing prior art so they can better assess whether an invention is novel or not. In this program, companies are able to see patent applications earlier than normal and to offer prior art and commentary for patent applications in their field of expertise. There are potential problems with this approach that I won’t go into, but trying new ideas to help the USPTO is critical for mitigating the effectiveness trolls.

Finally, there is a patent reform bill in Congress that has been trying to gain momentum for quite a while. One effect of this bill, if passed, would be to restrict the ability to sue over patent infringement. Obviously, this would de-tooth the trolls quite a bit.

Things That Suck: Wired Magazine's Fact-Checking

A little over two years ago, CNN named modern hearing aids among the top 25 technology innovations of the past 25 years. Last year, Wired gushed over the latest hearing aid technology, saying that new hearing aids “make your Bluetooth gear look like junk.” Wired also reported last year on research that the center I run did with UC Berkeley on how hearing aids reduce the effort that the brain expends understanding speech in noise. And just last week, CES awarded a hearing aid its Best of Innovations 2008 Design and Engineering Award.

Which is why I was so surprised to see the latest issue of Wired magazine whose cover story on Why Things Suck includes a scathing and poorly informed attack on hearing aids. Hearing aids? Suck? Am I back in the 1980s world of distorting peak-clipping analog hearing aids?

This categorization is, frankly, astounding. Hearing aids have made incredible advances in technology over the past decade that rival anything out of Apple, Intel, or Microsoft. The response I constantly receive from other industries when discussing hearing aid technology, such as as when I met with researchers at Yahoo or researchers at a UC Berkeley engineering research center, is one of astonishment over their current level of sophistication and technical challenges that have been solved.

Hearing aids may whistle (although even that is becoming a thing of the past), but the do not in any way “suck.”

Many of the facts stated in article were either clearly wrong or bad interpretations of the state of technology today. Anyone familiar with hearing aids at all will immediately dismiss the story for some of its stunning inaccuracies.

What is surprising to me is that the reporter actually interviewed me about hearing aids two months ago before the publication of this piece. Anyone who knows me (or has read this blog, or read my publications, or heard my presentations), knows that that I am a fairly strong proponent of the current state of hearing aid technology and the benefit to the hearing impaired that they provide. This reporter was clearly filtering whatever information she received from me to use in her assignment on hearing aid suckage.

What’s unfortunate is that Wired didn’t do any fact checking on this story, and that neither the reporter nor the magazine checked with me (or apparently anyone else knowledgeable) on whether the facts were accurately represented in the story (I also now know why the reporter didn’t reply to my e-mail asking about the purpose of the article).

Rather than provide a point-by-point correction to the article, I will simply highlight and correct a few of the more obvious errors.

The article starts with the ubiquitous inaccurate comparison to eye-glasses, which have the near-perfect ability to compensate for optical distortion of the lens of the eye. Hearing aids address a much more difficult-to-solve medical ailment of neural damage. The strawman of “why aren’t hearing aids as good as glasses” has been beaten to death and this fallacious question is a fore-shadowing to the inaccuracies that follow.

The reporter rightly points out that hearing aids consist of highly specialized technology that does not benefit from off-the-shelf components used in other products—Dell will never be getting into the hearing aid business. Would one raise the same complaints about other high-tech medical devices? Would someone really complain that pacemakers or spinal implants don’t use the same components as an XBox 360? Why should hearing aids cost the same as simple ground-glass holders? Does anyone honestly think that the R&D behind complex electronic medical devices matches the work necessary to develop and produce contact lenses?

The reporter correctly identifies that the hearing impaired are more exhausted listening in noisy environments. Hearing loss has even been proven to cause poorer memory due to the increased cognitive demands caused by hearing loss. Research conducted at UC Berkeley in collaboration with the center that I direct, however, suggests that hearing aids can help to reduce cognitive load. Contrary to what the reporter insinuates, hearing aids can reduce the concentration to understand speech in noise, not cause it. In fact, Wired even reported on the benefit to listening effort provided by hearing aids last year! I think that this commenter to one of the online Wired pieces last year summarizes this benefit of hearing aids nicely:

When I don't have my hearing aids, I spend most of my time trying to make sense of what people are saying. This leads not only stress and fatigue, but also miscommunication. The longer you go trying to understand, the easier it is to make mistakes in translation. On top of that, when you are constantly asking people to repeat themselves... it gets increasingly annoying for the speaker and the listener. Too much focus is on the translation of sounds into logical words and not on understanding the point or participating in the conversation.

Later in the sucks story, the reporter strangely suggests that bulk is a critical issue when using directional microphones in hearing aids. Bulk is not only non-critical, it is a non-issue. Few audiologists would suggest that directional microphones are not beneficial to patients, fewer still would even recognize bulk as consideration, and no patient has ever complained about the bulk of the directional microphone.

I have to assume that these and other mistakes are honest misinterpretations of what this reporter heard from the people she interviewed (including me). If so, the fact that Wired did not check the accuracy of what they wrote is unfortunate because it does a disservice to those who could experience real benefit from hearing aids but who might not seek hearing assistance because of the article.

The psycho-social consequences of hearing loss suffered by the hearing impaired are serious: depression, anxiety, fatigue, social isolation. These are details that I made available to the reporter by e-mail. Because of the possible deterrent effect this article could have to someone with these symptoms, I can’t simply shrug this article off with an, “Is she having a laugh?” dismissal—my only response is, “For shame.”

Strategic Intuition: an interview with author William Duggan

Much has been written about innovation and the creation of new business and technology ideas. Little has been written about how a person makes that creative leap to come up with something new an valuable, the process that leads to the “Aha” moment.

Columbia Business School professor William Duggan has written about just this topic in his new book Strategic Intuition. I conducted an e-mail interview with Prof. Duggan to talk about the themes of his book, with a focus on the relevance of his ideas to entrepreneurs and startups.  First, though, here’s a brief introduction to his book.

Duggan describes the importance of strategic innovation right at the start:

It’s how innovators get their innovations, how artist get their creative ideas, how visionaries get their visions, how scientists make their discoveries…

Duggan is talking about not just any new idea but ones that are potentially game-changing, ones that seemingly come out of the blue and have a profound impact.

Duggan starts his book off by differentiating strategic intuition from the expert intuition that Malcolm Gladwell detailed in his bestseller Blink. Duggan goes on to describe how strategic intuition is achieved and how it is necessary for developing creative leaps into unexplored territory. He does so by investigating how strategic ideas get created through an examination of such diverse topics a Napoleon’s wartime strategy, Thomas Kuhn’s theory of scientific breakthroughs, and Buddha’s enlightenment. Duggan then discusses how strategic intuition has been applied in some well known and not-so well known business and political situations.

The following is the e-mail conversation that I (BE) had with Prof. Duggan (WD).

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BE: Clausewitz, Kuhn, and Buddha are not obviously connected to each other or to business strategy. What was the inspiration to make these connections when preparing your book Strategic Intuition?

WD:  I noticed in reading that all three explain that good ideas come to you in the same way:  as flashes of insight.  Previous elements come together in your mind in new combinations.  They all talked about different subjects:  Clausewitz on military strategy, Kuhn on scientific discovery, Buddha on personal enlightenment.  So the content of the ideas is different in each field.  But the method of the good ideas forming is amazingly similar in all three.   

BE: In war, chess, and other disciplines, strategy and tactics go hand-in-hand. What is the relationship between tactics and strategic intuition, and how do tactics relate to what you call expert intuition?

WD:  The quick retrieval of the right tactic in the right situation is the essence of expert intuition.  An emergency room nurse is just walking by, glances at a child, and swings into action to save the child’s life.  The nurse can act so fast because she has seen that ailment before in some form, and her training or experience told her the right tactic to use.  Strategic intuition is different from this in three key ways.  First, it applies to new situations.  Second, it’s slow.  Third, it brings together many tactics in a new combination. 

BE: So simply put, expert intuition enables tactical action, while strategic intuition enables strategic action. In your book, you state that “Expert intuition works for familiar situations…But strategic intuition works for the unfamiliar” (p.7).  Your thesis here is that the application of intuition built from years of experience, such as that described in Gladwell’s book Blink, will not lead to innovations that can be provided by strategic intuition. People often try to apply their expert knowledge to new situations, thinking that insight from their own field of expertise will provide new and useful guidance to these new fields. Entrepreneurs often do this, and certainly venture capitalists rely on their own expert intuition when assessing new technologies and business plans. How can an entrepreneur tell when they are inappropriately applying their expert intuition and when their “flash” of insight is the result of a breakthrough from strategic intuition?

WD:  It’s entirely possible that some of what worked in field A will work in field B.  But you improve your chances if you also draw from field C, D, E, F, G and so on.  So you cannot set out blindly to apply field A to field B.  But it does often happen that you’re just going about your business in field A and it strikes you how to apply it to field B or C or D.  That’s good.  For example, Henry Ford got the idea to turn a stationary assembly line into a moving assembly line from the overhead rail of a slaughterhouse.  But he did not set out, as a planning exercise, to apply slaughterhouse ideas to carmaking.  That would be crazy.  So the moral is:  keep your mind open to using an idea from any field in any other field.  And notice that Ford was no expert on slaughterhouses.  You can borrow many ideas without any direct expertise at all in that field – which is another big difference from expert intuition, where everything depends on lots of direct practice. 

BE: That makes me think of a lesson I learned from a successful serial-entrepreneur in Silicon Valley: that startups often innovate by taking technology that is mature in one field and introducing it to a field in which that technology currently doesn’t exist, doing so at the moment when the market is ready for that unique technology transplant. You highlight this concept when discussing Thomas Kuhn’s The Structure of Scientific Revolutions. You note that “the common idea of how a leap of progress happens is a leap of imagination. Kuhn gives us an alternative to imagination…a selective combination of elements from the past makes something new. The elements themselves are not new” (p.16). It seems that many inventors and entrepreneurs develop innovations in ways similar to what Kuhn describes. The challenge is being able to identify those cross-disciplinary connections and to see the breakthrough that can arise from combining those previously unlinked technologies. What are your thoughts on whether these approaches by startups and entrepreneurs make them more naturally inclined towards strategic intuition than established market-leading companies?

WD:  I don’t think people in startups and new companies have better ideas than people in big companies.  I do think big companies make it harder to change direction, and most good ideas mark some kind of change of direction.  So it’s easier for a good idea to come true in smaller companies.  This is why I personally try to work mostly with big companies.  They have elaborate methods for generating and implementing ideas that run completely counter to how flashes of insight really happen.  When someone in a big company has a great idea, the company is already lumbering along a different path, and some top executive will have to admit that there is a better idea now and we need to spend a lot of money to change direction.  You can see why that seldom happens.  But it’s within the power of companies to make it happen.  That’s where I try to help.

BE: Are you familiar with IDEO’s approach of iterating customer observation and rapid prototyping as a way to gain insight into product use and to develop product innovations? Their approach seems to be a variant of Kuhn’s stages of scientific breakthrough.

WD:  There’s a wonderful book by Andrew Hargadon, How Breakthroughs Happen, that shows how IDEO draws existing elements from very different fields to make a new combination.  That’s exactly strategic intuition, and I think that’s the heart of their success.  Customer observation and rapid prototyping are good, but many companies do that.  I think what Hargadon points out is the most important piece of the puzzle.   

BE: Do patents embody strategic intuition or expert intuition—or do these concepts of intuition not apply to patent development?

WD:  The patent system is in chaos because better information – chiefly the internet – lets everyone trace backwards all the elements that you combine for a new patent.  So the people who did each element claim a piece of the new patent pie.  I think inventions are almost always strategic intuition in action, not expert intuition.  By definition it’s a new combination rather than a repeat of the same tactic in the same situation.

BE: In the traditional scientific method, one develops a hypothesis and then proves or disproves that hypothesis through experimentation. Kuhn points out that scientific breakthroughs do not occur though the scientific method; rather, breakthrough ideas occur after the assimilation and analysis of information, then experiments prove the truth of the breakthrough idea, and finally hypotheses are developed to explain the results. How do these concepts relate to innovation in business? One might view the traditional scientific method as akin to the market-research approach to business strategy: define a product offering based on knowledge of current customer demands, prove those demands with market research, then release the new product. Clayton Christiansen might call this incremental innovation. Kuhn’s scientific breakthroughs could be viewed as disruptive or radical innovations, where ideas are not readily apparent from current customer and market trends. Startup companies can be particularly adept at the equivalent of Kuhn’s approach because they typically have the breakthrough idea, take it to market, and then understanding the market and customer needs after assessing the success of the product.

WD:  The traditional scientific method does not start with a hypothesis.  That’s the experimental method, which is step 2 of the scientific method.  Step 1 of the scientific method is the work you do before you come up with a hypothesis and the experiment to test it.  And scientists know how you start that first step:  look in the laboratories of other scientists.  So whenever someone wins the Nobel Prize, ten other people come forward to say they did this and that piece of the work.  As in the patent system, that’s true.  So yes, starting with market research is a version of the experimental method, not the scientific method.  Market research should come after you have your new idea, because otherwise you have no idea which market to research, and you can spend a fortune researching exactly the wrong market. 

BE: Thanks for the clarification. Speaking of right and wrong markets, one strategy for finding new markets is Blue Ocean Strategy (BOS), described by Kim and Mauborgne in their book of the same name. Where do the concepts of strategic intuition intercept with the strategy of developing a business in an uncontested marketplace? The BOS concept seems at odds with the advice from Clausewitz, in that BOS advises not to compete directly in a fight for market share but to move to a battlefield where the enemy doesn’t even exist.

WD:  BOS makes the correct observation, after the fact, that the best business ideas create new markets rather than compete within existing markets.  But BOS does not tell us how to get an idea that creates a new market.  In fact, it leads you down exactly the wrong path, by telling you first to identify a new market with nobody in it.  That’s actually a recipe for losing a lot of money, because by far the overwhelming majority of markets with nobody in it have nobody in it for a very good reason:  there’s no money to be made there.  Let’s take Microsoft:  after the fact, we can see that they were the world’s first company to specialize in operating software, when there was nobody else in the market.  But did the idea for Microsoft come from first identifying that empty market?  Of course not.  Bill Gates and Paul Allen had no idea that operating software would be a big business until after their first success – BASIC for the Altair – which they put together from existing elements that were within the grasp of millions of computer geeks at the time.  Their flash of insight brought those previous elements together.  Then they realized they were first in a new market.  First the flash.  Then the blue ocean.  Not the other way round.

BE: “First the flash…” This is one of the main points of your book: that the flash is an acknowledged part of innovation, yet no one before has explained fully what is required to spark that flash. That’s where strategic intuition comes into play. You state, “What triggers active problem solving is the ability to recognize when a goal is achievable…There must be an experiential ability to judge the solvability of problems prior to working on them” (p.47). This speaks to the need for experienced management teams on startup companies proposing breakthrough technology, and experienced teams are something that venture capitalists look for in companies that they are considering for investment. It also speaks to the need for researchers to immerse themselves in their field of investigation if they want to develop their own breakthrough ideas. Yet it is often thought that someone with no experience in a specific industry might bring fresh eyes to problems and not be restricted in their thinking by common wisdom and past assumptions, i.e., they do not have expert intuition for that field. Is this thinking naïve or wishful thinking?

WD:  That quote is from Gary Klein, the world’s leading expert on expert intuition.  But as to your question:  I think the confusion comes from the meaning of “experience.”  Napoleon won his first battle against terrific odds without any previous combat experience.  Yet he had studied all the major battles of history, and so had all the experience of previous generals to draw on.  Expert intuition requires direct experience.  Strategic intuition requires knowledge, which you can get from reading or talking to people.  So yes, someone with no experience in an industry can bring fresh eyes to it.  But it’s unlikely that someone with no knowledge of an industry can do the same.  So someone from the slaughterhouse industry could bring a fresh idea to Henry Ford, who was already in the car business.  But someone has to know the car business too, to understand why the moving rail is such a good idea.  So I guess that argues for insider/outsider teams, where one person knows the industry and someone else brings fresh eyes.  The problem there is that their fresh eyes might not be the ones you need.  So imagine that Henry Ford brought in someone from the shipping industry, not the slaughterhouse industry.  There’s no way to predict which fresh eyes you need.  That’s why my favorite formula is someone with deep industry knowledge who consciously opens their mind to drawing from other fields – like Henry Ford himself. 

BE: I agree completely with what you say. I’ve found that some of the most innovative people I know are those who have a wide variety of intellectual interests and look for inspiration from outside of their field of expertise. How should these people, or any entrepreneur attempting to develop new technology, think about Clauswitz’s decisive point when considering their own business strategy?

WD:  The key to the “decisive point” is the contrast with the “objective point.”  Like everyone else, an entrepreneur must set goals.  But never think they’re set in stone.  An example is Puma, which Jochen Zeitz took over when it was a small, failing shoe company.  He made a tough four-year plan to outsource production and streamline operations.  A year into it, the Beastie Boys wore one of his styles at a concert – the Clyde – and the shoes sold out overnight.  It was a decisive point:  he realized he had a fashion sports apparel company, and threw out his objectives.  The decisive point is where you win.  The objective point is just your current guess on where your latest idea will take you. 

BE: Right, and Zeitz’s strategic intuition enabled him to identify that decisive point and take action. In a completely different field from military strategy, photographer Henri Cartier-Bresson talked about the decisive moment defining creative success in photography: “There is a creative fraction of a second when you are taking a picture. Your eye must see a composition or an expression that life itself offers you, and you must know with intuition when to click the camera.” The decisive point and the decisive moment seem to be similar concepts, both requiring experience from which intuition is drawn, the presence of mind to be looking for the breakthrough, the actual epiphany, and finally the execution.

WD:  My guess is that Cartier-Bresson is talking about expert intuition in that subset of professional fields where there is a lot of waiting and then quick action.  Hitting a baseball is similar.  Martial arts have a whole philosophy and discipline for this.  It shades into strategic intuition if the situation is new enough – perhaps if Cartier-Bresson takes on a new subject, a hitter faces a new pitcher, or a samurai confronts a new enemy.  Napoleon spoke in terms similar to Cartier-Bresson’s about the moment when you make your decisive move in a battle – that is, when the decisive point appears. 

BE: Miss that moment, and you risk failure. One builds up strategic intuition, in a way, to be prepared to take advantage of that decisive moment when it occurs. Do you believe that everyone has the ability to have strategic intuition—to innovate and create that flash of insight that combines elements from the past into something new? How can a company identify individuals who are better at this than others? What steps can be taken to successfully promote the development and application of strategic intuition?

WD:  My own view is that strategic intuition is an ordinary function of the human mind.  Can some people do it better than others?  I have no idea.  We have no way to measure.  Ray Kroc was 52 years old, struggling to sell milkshake machines, when the idea for McDonalds struck him in a classic flash of insight – he called it an “Idaho potato” hitting him on the head.  The day before you would think he had no strategic intuition at all.  The day after, you’d think he had a lot.  Did his capacity for strategic intuition change overnight?  I doubt it.  I do have a survey that shows how close people think to the basic ideas of strategic intuition, so companies could use that, but how you answer a survey and what you do in action are two very different things.  So I’m not sure how to identify people with more strategic intuition.  But I think I know how to promote the development and application of strategic intuition:  that’s what my whole book is about.  First, learn what strategic intuition is.  (That’s in the book.)  Second, apply tools that use it.  (Those are in the book too.)  Third, stop using other tools that inhibit strategic intuition.  This third step is the hardest, and that’s why big companies suppress strategic intuition so much. 

BE: You quote from Napoleon’s memoirs: “I bent my policies to accord with the unforeseen shape of events” (p.76). One common characteristic among many successful startups in Silicon Valley is their flexibility towards their business strategy.  Startups often reach unanticipated roadblocks and their ability to readjust their business plan with decisiveness—to find new applications or customers for their technology and abandon their original business plans--can determine whether they will succeed or fail.  You note that, “He [Napoleon] passed up more battles than he fought, looking for only those he could win” (p.172). This speaks to the need for startups to narrow their focus on what they are trying to achieve. Venture capitalists shudder when they see a business plan with multiple markets being addressed because this indicates a lack of focus for the startups inherent limited resources. Are restricted focus and strategic constraints necessary for the successful application of strategic intuition?

WD:  I think this is actually easier than it looks.  It’s very rare for a business plan to include the most important thing:  what previous elements combined in the entrepreneur’s mind to make up the new idea.  Since that’s not in the business plan, the VC must ask the entrepreneur in person.  If there’s a good answer, the VC will then have as good an idea as the entrepreneur of what markets the idea might or might not fly in, at least to start.  Then as the entrepreneur wants to change strategy, the VC will be up to speed to understand why. 

BE: This being a blog about innovation, I have to ask the obvious question: what is the relationship between strategic intuition and innovation?

WD:  Strategic intuition is how successful innovation happens.  I’ve studied countless cases, and when there was enough information to identify the source of the actual idea for innovation, it was always strategic intuition.  It’s really a simple idea:  for something complex to work, each piece that makes it up has to have worked before, in some way, sometime, somewhere in the world.  Innovators don’t dream – they combine.  How else could it possibly work?

BE: Our discussion has only scratched the surface of the material and insight provided in your book Strategic Intuition. I recommend to those readers of this blog who have found these topics interesting to seek out the more in-depth discussions in your book. Thank you, Bill, for what has been for me a fascinating discussion. Best wishes, and good luck with your book.

Presidential Hopefuls Ponder Innovation

BusinessWeek recently asked several of the presidential hopefuls from both parties questions on the topic of innovation. BW started by asking how each candidate defined the word innovation (the definition of which I’ve posted on several times, as have others), and then moved on to platform issues on innovation.

Probably not surprisingly, I was underwhelmed by the insight provided by the responses.

The most interesting answers given were their definitions of innovation. I’ll start with what I thought was the best response:

Barack Obama
Innovation is the creation of something that improves the way we live our lives.

A pretty good layman’s answer to the question. It includes the key elements of creation/creativity and the necessity for that improvement to provide value of some sort.

The rest of the Democrats' responses were:

Hillary Clinton
Innovation…will be key to creating new jobs and rebuilding class prosperity.

No argument from me on this. It’s reminiscent of thoughts on innovation by Joseph Schumpeter. It’s not a definition, though.

John Edwards
Innovation means taking impossible tasks and turning them into reality.

Not a bad attempt. Luckily for those of us working on innovation generation, innovation does not actually require overcoming impossible tasks.

Bill Richardson
The American Dream is a belief that we can make tomorrow better. Innovation powers that dream.

Hmmm. I’d say the American Dream for most people is powered by hard work, skilled labor, initiative, and ambition. I’m guessing that one can almost substitute any noun for innovation in Richardson’s response when asked about something of value: “lower taxes power that dream,” or “education powers that dream.”

Now for the Republicans:

Rudy Giuliani
America can meet its challenges through innovation…low taxes stimulate growth [and] spark innovation.

Good job staying on Republican-point by bringing the topic of low taxes into this non-definition of innovation.

John McCain
Innovation is fueled by risk capital, skilled workers, incentives for entrepreneurs, a light regulatory framework, and open access to markets.

Not a definition either, but I like his attempt to define what is needed to create innovation. Proper education needs to be added to his list, though. I’ll actually blog on what I mean by this soon.

Mitt Romney
Innovation and transformation have been at the heart of America’s success from the very beginning.

Not sure why he threw “transformation” in there, but not a bad sentiment. Like Richardson’s response, though, this really is a catch-all response that can express support for practically anything that a questioner is asking about.

Fred Thompson
What we need is another spike in American creativity and innovation.

Thompson didn’t actually respond to any of BusinessWeek’s questions, so BW culled his responses from Thompson’s campaign material. I’ll let someone cull my response to Thompson’s quote from my previous blog posts—you can post it in my Comments section.

Overall, most responded to the question without really answering it. A sign of a great politician, I suppose.

BusinessWeek also asked each candidate how they would increase innovation in science and engineering education, green energy, and the military. Answers were consistent and predictable: increase funding for education, invest in non-oil energy resources.

Strangely, the article’s introduction stated that the candidates were further asked how they would stimulate innovation in R&D and how they would develop better ways to measure innovation, yet the only reply printed was Richardson’s response to measuring innovation: “track the extent to which federal R&D dollars spent at universities result in commercial products.” Not a good response: commercialization of university research is not really a good indicator of a society’s innovation creation. Also, Richardson would be sadly, sadly disappointed in the low number measured if his suggestion were attempted.

The article lists who (apparently) are the “Innovation advisors” to each candidate. I found this interesting for some reason—providing a peek behind the curtain, I suppose. Clinton’s is Tom Kalil, the Chancellor for Science&Technology at UC Berkeley. Obama’s has a couple Bay Area internet heavy hitters: Lawrence Lessig, Marc Andreessen—no wonder he had the best definition of innovation. Giuliani’s includes VC titan Kleiner Perkins (Al Gore’s new gig)—the VC connection explaining Giuliani's focus on financing innovation in his definition. Romney’s includes the dean of the Columbia Business School.

Success Lessons from Coach Carr

Coach Carr has resigned as head coach of the University of Michigan’s football team. He leaves as the fifth most winningest coach of all time in the Big Ten, having brought a national championship to Michigan for the first time in half a century. Yet he leaves at the urging of most Michigan football fans because he failed in one non-negotiable requirement of his job. I am a Michigan fan, my cats are named Maizey and Blue, and I appreciate and value what Carr has done for this program. Yet I agree that Coach Carr needed to go.

And this is a key message to be heard by all highly skilled and seemingly successful employees everywhere, from Silicon Valley to around the world. Take notice of Coach Carr.

I am sad to see Coach Carr go, I really am. He achieved greatness for Michigan over his 13–year tenure. Similar success at other universities would have ensured his iconic status and everlasting love among those fans and alumni. But Carr failed to make Michigan competitive against Ohio State University, and at the University of Michigan that is a breach of the unstated non-negotiable requirement to be head coach. Even though Carr has a career record of 6–7 against OSU, his record against OSU’s current coach is a mere 1–6. Not good enough.

Reading the details above of Coach Carr’s extraordinary success at Michigan, the unknowing reader may not understand why his departure was inevitable. His departure may be even more perplexing given the value that Carr brought to his players. By all accounts, Carr is one of the most decent coaches in Division I football. Coach Carr has been a players’ coach, looking out for the well-being of each student player in his team, providing life-lessons that will help them well beyond the last time that they touch a football, and as a result engendering their everlasting loyalty towards Carr. Players truly love him.

But failing on one key requirement has forced Carr’s departure from Michigan.

And this is a key message to every motivated, achievement-oriented worker in the US. Know the fundamental requirements of your job. If you don’t know, ask. Because if you don’t meet those requirements—that one key “achieve this or else,” possibly unspoken component—then you will be lucky to survive no matter how successful you are in all the other aspects of your job. Just ask Coach Carr.

SF Mayor Gavin Newsom, whom I recently posted about, sent this message loud and clear to senior city officials: two months ago, he told them to submit letters of resignation. All 400 of them. Now, most if not all of those letters he intended to reject. So why would he ask them to submit a resignation letter if he didn’t plan on accepting it? I believe Newsom wanted to send the exact same message that I’ve been talking about: that no matter how well they have played the political system and become comfortable in their job, San Francisco officials have a non-negotiable requirement to meet the needs of the citizens of San Francisco. Fail to meet those needs and your job is at risk.

Such messages can be valuable wake-up calls to anyone—the mere knowledge of their existence can be job-saving. Unfortunately, most people don’t have the in-your-face warnings received by those under Newsom, or have the obvious demands of their job laid bare like they are to every Michigan football coach. Which is why every employee, particularly those who have achieved success in their job, needs to understand what their job’s non-negotiable requirements really are, and whether their successes satisfy those key requirements or are simply nice-to-haves.

Coach Carr knew what his key requirements for success were, but unfortunately in sports one’s success does not lie in one’s own hands. Carr was unable to succeed in the most important demand that his job required because of many factors out of his control. And for this failure I am very sad. Carr is a great coach and deserves a better retirement than he is getting. His memory will be blemished in a way that many will call unfair. But I also understand that there are non-negotiable requirements that must be met by any coach of Michigan Football. And under Coach Carr, those requirements were not met.

So, with a lump in my throat, that’s the end of story for Lloyd Carr, a man whose career almost anyone would envy and admire. Do envy and do admire.

As always, Mitch Albom has honorable and tear-worthy words by which to remember Coach Carr. For what it’s worth, I still occasionally re-read Albom’s near-poetic words written upon Bo Schembechler's death. Bo spoke about the honorable Michigan tradition when he first took the Michigan head coach job. Both Bo and Carr have indelible added to that tradition.

Newsom Insights

San Francisco is a surprisingly small city considering its world reputation (7x7 miles with a population of 750,000), and it’s not uncommon for city residents to run into people of note in ordinary situations here.

I found myself last night sitting beside and talking to San Francisco Mayor Gavin Newsom in the cafe section of a downtown SF restaurant. Mayor Newsom is someone whom I have admired since he’s been in office—he’s made many tough but innovative decisions about how to run the city. This is a particular challenge because the mayor of San Francisco has to make decisions that are impactual and assessed on a local, national, and international scale—pressures that the mayors of most cities do not have to worry about. It would also be easy for a mayor of this city to simply focus on local issues (after all, it’s the residents who will re-elect him) and ignore the city’s potential influence on the rest of the nation and the world. In my opinion, Newsom has been effective at these different scales exceptionally well—addressing the demands of city residents such as myself while making decisions that will impact the rest of the country and the world.

Because of this, Newsom has also been subject to pressures and criticisms at the local, national, and international scale. Problems with the homeless remain a constant pressure on the mayor locally, Newsom's brief gay marriage allowance has been blamed nationally for the results of the ‘04 presidential election, and just this weekend the mayor seems to have upset China over his decision to cancel a planned trip to China in order to oversee the recent oil spill in the San Francisco Bay. Yet despite these pressures he still has to deal with more mundane city issues such as making an appearance at the opening of a new tourist-friendly plaza in downtown SF.

Despite the incredible challenges that face prominent politicians such as the mayor of SF or NYC, business executives typically views politicians as a disreputable lot whose skills who have little to offer those seeking to improve their practices in corporate America. If one wants to learn how to be a better manager, entrepreneur, or CEO, one reads books by Lee Iacocca on how to reinvigorate a company or articles in the Harvard Business Review on how GE injected innovation into their development process. Certainly, I’ve tried to learn from prominent executives and entrepreneurs that I’ve met in Silicon Valley. Whether it’s working alongside a serial founder of successful startups, having business meetings with famous VCs, or chatting over dinner with chief executives of a multi-billion dollar technology companies, I’ve felt that I’ve learned successful traits and habits from many business people with whom I’ve interacted. The one group of people I have not looked to nor expected to find guidance from is politicians.

That’s why I feel that I had an epiphany while talking with Mayor Newsom. What struck me the most about the conversation was the extraordinary variety of issues that the mayor has to deal with on a daily basis, and how the breadth of these responsibilities overwhelm typical issues that face corporate CEOs. Yet it’s the latter group—CEOs, captains of industry, prominent VCs—to which people like myself typically look for advice on how to be effective in the workplace, through case-studies and lessons-learned in books, magazine articles, and blogs. Learning from politicians is completely off the businessperson’s radar.

Listening to Mayor Newsom detail how he’s addressing the various issues facing San Francisco—keeping the 49ers in from moving to another city, solving the recent oil-spill crisis, preserving the city’s benefit from tourism, improving the city’s homeless situation, working with both the state and federal government on city problems—makes corporate issues of dealing with stockholders, organizing sales and R&D teams, and increasing market share almost trivial by comparison. This isn't even considering the fact that the mayor faces public scrutiny of his every move and behavior the likes to which no CEO has even been subjected.

I’ve written quite a bit on this blog about the nature of leadership and the skills necessary to run startups and technology companies. It was clear to me last night that being the mayor of a city like San Francisco is a more complex a job than the role of CEO in most, if not all companies. It was also clear that there is much that can be learned and applied to business from the methods of effective leaders in challenging political roles, such as Gavin Newsom in his current mayoral role.

Time management, e-mail control, collaboration, communication, delegating, employee optimization, meeting customer needs, decision making—these are all topics about improving effectiveness in business that are discussed endlessly in blogs and books targeted to every level of employee. We typically look for people like Jack Welch to teach us how to be more effective managers. The fact is, however, that each of these aspects of the work process are honed to razor-sharp effectiveness by politicians like Mayor Newsom, and we could well be better served by examining the processes that they incorporate into their day-to-day actions.

That’s not to say that business books and magazines like that Harvard Business Review have no value. For sure, some of the organizational approaches of Mayor Newsom overlaps with the current wisdom of corporate America, whether its differentiating between incremental vs radical innovation as described by in The Innovator’s Dilemma or making sure that you have the right people on the bus as advised in Good to Great.

Still, I’d love for someone to shadow Mayor Newsom and relay how he optimizes his day-to-day time management of business practices. This would be information that could be valuable to employees at every level in a corporation and would likely represent best-practices that exceed even the strictest disciplines of corporate CEOs.

Funny how a random meeting at a unplanned stop can have such an impact on one’s thinking.

Not Suitable for Journalists or Young Young She-Goats

By the looks of this news story, it seems that some Israeli journalists should have read my Oct 27 post on how poor online translators have the potential to cause international turmoil (and how using Google’s Language Tools might be the solution).

Apparently, Israeli journalists used the online translator Babel Fish to create Dutch-language versions of questions for the Dutch foreign ministry. They ended up with moronic drivel that included

Helloh bud, enclosed five of the questions in honor of the foreign minister: The mother your visit in Israel is a sleep to the favor or to the bed your mind on the conflict are Israeli Palestinian.

Not surprisingly, the Dutch government officials were not amused. Also not surprising were the poor results obtained by the journalists given that my test of Babel Fish’s Dutch translation ability converted Here’s looking at you, kid into Examining you here young, young she-goat.

Competition is Why You Play

While I have not been happy with this season’s Michigan Football, and do think that Coach Carr was out-coached by both the Buckeyes and Trojans at the end of last season, I was pleased to see these words from the embattled Carr about the upcoming game with Ohio State:

You embrace the pressure because the competition is why you play. It's why you coach. More than anything else, it's about competing to the best of your ability in a game you love and to try to achieve something with a group of people that you care about.

That sentiment speaks to the attitude found throughout Silicon Valley and provides a clue to its success.

Some people in the Valley simply work for their paycheck, and that’s okay. The top workers in the Valley, however, work for the challenge of achieving success in the face of difficult competition, and for these people meeting that challenge provides much of the satisfaction that drives them in their work. There’s no escaping this mentality in the Valley, it’s everywhere.

Stock options are often the most visible motivators in the Valley and are valuable motivators and rewards for many (just ask this masseuse), but they are often simply apparitions of false rewards that misdirect motivations. The Valley provides the opportunity for ambitious entrepreneurs to pursue their ambitions of competitive success, assuming that those ambitions allow for the success of funding venture capitalists.

One of the qualities that venture capitalists most value, not surprisingly, is a management team that is experienced in the field of their business plan and who display a desire for success and resilience to fight through inevitable difficulties. In the face of roadblocks and problems, those motivated only by stock options will quit and pursue seemingly brighter paths. Those who remain are those dedicated to their field and who find satisfaction in conquering those challenges.

To understand this mentality, all you have to do is spend some time with entrepreneurs at various meetings in the Bay Area to feel their heat and desire to succeed. This is the je ne sais quoi of Silicon Valley—that certain something that continues to allow this region of the country to be so successful in technology. You feel the urge for technological development in Palo Alto as strongly as you feel the urge for filmmaking when in Santa Monica.

People talk and exude their passion for their work here whenever possible—I recall a July 4^th party last year where I ended up talking with Bill Atkinson about his latest work with Jeff Raskin’s company Numenta and their approach to modeling cortical processes. Not your usual picnic conversation about baseball, hotdogs, and Chevrolet—Bill spoke as if this was these were the most critical ideas ever worth discussing. It was the kind of passion that one finds over and over again among successful people in the Valley.

And among top football coaches, which is what got me started on this tangent about worth ethic in Silicon Valley. Even here, though, if you go the equivalent of 1–6 against Ohio State’s latest coach, not even a tier 3 VC would provide bridge funding to keep your entrepreneurial dreams afloat. Good luck on Saturday, Coach Carr.