HBR: Using Students for Innovation

The December issue of the Harvard Business Review has a short article, Bringing the College Inside, on Porsche’s use of university Masters students as a key part of their R&D. Some details: Porsche has 2000 full-time R&D personnel and they bring in 600 students a year who work for 4 to 6 months at a cost of approximately $50,000 per student.

HBR highlights the following tips to be learned from Porsche’s approach (italicized words are HBR’s, the comments that follow are my own):

  1. Value creation and passion over grades. This isn’t necessarily good advice for hiring full-time people (assuming that grades equals quality). I typically hire for the best quality people rather than those who happen to have the knowledge of a specific area for a job. If the students are only there for 4-6 months, though, I can see how the best work will be obtained by those who have the most enthusiasm towards the projects assigned.
  2. Use the Web. Internet tools are used to recruit and select students. I assume that this is optimal due to the large number of applicants that apply for positions.
  3. Treat interns like employees. Reasonable advice. I’d like to see this applied to law firm summer interns.
  4. Focus on communication and presentation. Porsche has the students give presentations on their work across the company to rapidly disseminate their results. How about using blogs or wikis for this instead? Surprisingly, Porsche recommends, "emphasizing strong visuals rather than detailed written reports." Edward Tufte wouldn’t be too happy to hear that.
  5. Deploy students in any activities that add value. Reasonable.
  6. Build loyalty. In other words, don’t treat students like cheap labor. I suggest that loyalty creation should be a part of almost all aspects of a business.
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Burning in Your Presentation

Creating Passionate Users has multiple bloggers who post on innovative business approaches in a whimsical yet thoughtful way. A recent post by Kathy Sierra provides a checklist to help determine if your product, presentation or other creation will be memorable to your consumer.

Memorable
Kathy analyzes this issue from a cognitive perspective and nicely summarizes neural mechanisms that determine what gets sent to long-term memory and what doesn’t make it through the gate. Since we can’t exactly mix CREB-2 inhibitors into our audience’s coffee, following Kathy’s advice on how to “burn in” something into memory is a reasonable step to enhance the memorableness of a presentation, and her ideas are consistent with the cognitive approach and visual style prescribed by Cliff Atkinson. She even describes how the brain “tags” information for retrieval—I knew it, Web 2.0 is a metaphor for the brain!

Here are a few items from her checklist of characteristics that will make your presentation memorable:

  • Surprise, novelty, the unexpected
  • Counterintuitive failures or mistakes
  • Varying visuals

Report on the Value of R&D Spending

A new Booz Allen Hamilton (BAH) report (registration required) has been published on the relationship between R&D spending and corporate performance. The report details their analysis of the financials of the top 1000 corporate R&D spenders, the Booz Allen Global Innovation 1000. This report is timely because there have been several stories recently on how the US is losing their innovation lead in the world, and Congress just announce a National Innovation Act that will double federal research funding and promote corporate innovation.

Spending
BAH found no correlation between the percentage of sales spent on R&D and several performance metrics such as sales growth, gross profit, and market cap. The figure here shows one set of data indicating little correlation between R&D-to-Sales Ratio and Sales Growth. The only significant correlation in the data is that if a company’s performance will be hurt if is in the bottom 10% of spending.

The basic conclusion of the report is that companies cannot blindly throw money at R&D and assume that innovation will develop and performance outcomes will improve. The authors suggest that effort must be spent on improving the innovation process. Companies can do this by incorporating marketing and sales into the R&D process to ensure that innovations created have relevance to their customers and market. BAH do not suggest other ways in which the innovation process can be improved, although this is clearly an important issue for companies to focus on. Gordon Graham at Broken Bulbs addressed this is in a recent post on how companies can improve product success in the marketplace and he provides a list of questions to help analyze one’s own innovation process.

Here are some highlights from the BAH report:

  • Increased R&D spending does result in increased gross margin, likely due to expertise applied to optimizing product cost and manufacturability. BAH don’t mention this, but this is probably also due to high levels of R&D resulting in highly innovative products that command a premium in price and a high margin.
  • The former chief scientist of DARPA was quoted saying, “It’s absolutely a myth that money alone will solve vexing technical problems.”
  • “…marketing analytics have become more sophisticated,  marketing budgets have increasingly gravitated towards an optimal level. The same may ultimately happen for R&D and innovation budgets, but there’s no sign of it to date.”
  • “…companies can maximize their return on innovation investment through better processes for ideation, project selection, development, and commercialization.” This is easy to say, but the key is issue is how to do this.
  • Successful innovation requires an exceptional level of cross-functional cooperation among R&D, marketing, sales, service, and manufacturing.” Absolutely. I’ve been a big believer in cross-department cooperation ever since I ignored a company policy years ago prohibiting communication between R&D and Marketing and instigated a successful and lasting cross-department cooperation.
  • After Jobs came back to Apple, their R&D budget remained below that of their competitors–in fact Jobs cut it even more–and this led to incredible innovation creation. “…Apple cut a large percentage of projects, focused its development resources on the short list of those that had the greatest potential, and started an innovation machine that eventually produced the iMac, iBook, iPod and iTunes.” This required someone (Jobs) who could force sales, marketing, R&D, manufacturing, and software services to all work in synchrony with their corporate innovation strategy. The presence of someone like Jobs within a company who has this cross-department vision and ability to integrate them into a consistent strategy is rare.
  • Align innovation strategy with corporate strategy…” Again a statement that is true but difficult to do or know how to develop such an alignment successfully.
  • There is a clear link between a corporation’s organizational DNA profile and its performance results from innovation…” This relates to a previous BAH report analyzing corporate personality and performance.

The take home message for me is the emphasis on integrating other departments into the R&D process, something that I’ve been a strong believer in and seen companies struggle with this because of the typical mistrust among the departments: engineers of marketing motives, sales of R&D’s understanding of customers, etc.

I see one problem with the correlation analysis done and that is that there is no control over other factors that influence performance outcomes. To really show that R&D spending has no impact on performance, one wants to keep all factors constant except for R&D spending. This can be done by observing a company’s performance over time during which the company significantly increased or decreased R&D spending while not changing other aspects of their business. This is the closest one can come to the scientific method of controlling for other factors other than the one under investigation.

Web 2.0 Frees Me While Limiting Me

Wherein I claim that Web 2.0 makes my data less
accessible while providing me with more freedom.

Dion Hinchcliffe’s post The Best Web 2. 0 Software of 2005 got
me thinking about how these offerings have changed the way I work, what they
enable and how they limit  me.

I use a variety of new web applications to create and store information. Software and services like 37signals’ Backpack (of which I’m a big fan), Writely, del.icio.us, and Calendarhub all move mechanisms and content from the desktop to the web. While this is enabling, it is also limiting.

In most cases, with these applications, lack of an internet
connection means lack of productivity. I BART between San Francisco and Berkeley everyday during which I have no internet connection and no access to these services. As a result, I have no access to my data stored on those sites and no ability to enter data into their applications.

There are some attempts to work around this: Backpack allows
me to send information to their database through e-mail, so I can write an e-mail while on the
train, store it in the outbox, and then send it to Backpack when I next connect
to the internet (assuming that I have the address for each of my backpacks in
my Outlook address book). Good thing that I don’t rely on internet-based e-mail
clients exclusively or even this option wouldn’t be available. Writerly allows me to
write a document in Word while on BART and import it when I connect, but it
does not give me access to my documents that I’ve already started unless I
purposefully saved a copy on my desktop which would be a little outside of their proposed
process. If I’m at a café without an internet connection (which do exist even in San Francisco), then I’m
stuck again. Techcrunch wants to see all of MS Office online AJAX-style, but that again limits usability for me. Om Malik talked about concern with using online text editors because of security concerns, but I think that his reluctance also includes a fear of inaccessibility.

What’s missing is a seamless integration between the services’
online and offline states, whereby a desktop client takes over when I’m offline
and seamlessly synchs my information with my online app when I’m connected.
Current workarounds are cumbersome and add an extra layer of data management
that these tools should be trying to reduce. While desktop integration may seem
antithetical to the Web 2.0 movement, it’s fundamental to my needs until
internet connectivity is present everywhere.

However, there is a very strong way in which these Web 2.0 services are
freeing, and that is by allowing me to leave my laptop behind and still have
access to my data. This is particularly important for me if a web software
system provides a mobile version of their service so that I can access my data
on my Treo. Web 2.0 services are also freeing as more connected computers are
available to me in different locations. This frees me up from taking my laptop
everywhere as long as I know I will have access to a computer. For the first
time I may not bring my laptop with me when I visit my parents over the
holidays—I will have access to everything I need through their PC, their
internet connection and my data provided by Web 2.0 services.

Innovation Creators and Enterprise Blogs

Rod Boothby of Innovation Creators has published a valuable white paper called Turning Knowledge Workers into Innovation Creators, a treatise that ultimately argues for the use of enterprise blogs as a means of facilitating innovation creation. He builds up an explanation of what the needs of a company are to foster innovation and offers blogs as a solution that meets those needs.

His initial analysis of how to create and foster innovators was the most interesting part to me (and also the longest—he doesn’t even get to blogs until page 28). His thesis contains many nuggets of wisdom regarding turning innovation into a process and how management can be tuned to optimize idea creation:

Managing well means motivating, which means transferring ownership, knowledge and control

Boothby uses examples from a variety of sources to support his theories. Using a story from Gladwell’s Blink, Boothby advises on how a manager should guide knowledge workers on projects to maximize effectiveness and innovativeness:

  1. This is what I want you to do
  2. This is why I want you to do it
  3. If you cannot accomplish what I asked, here is the big picture of what we as a team are trying to accomplish. Either figure out another way to get your job done, or come to me with ideas about how we can accomplish the strategic goals.
  4. This is what our final strategic goal is.

When setting the stage for an environment necessary to generate innovation, Boothby provides the following points necessary to understand how to prevent barriers to innovation:

  • Innovation creators need to know who is who
  • Innovation creators need to know what is going on
  • Innovation creators thrive in an environment that encourages dialog and has true feedback loops
    – The organization must be culturally primed to accept constant innovation

Boothby’s proposition is that corporations need to improve access to information that lies with workers, and that meaningful communication across the company needs to be improved to allow good ideas to develop and mature.

By the time Boothby proposes the enterprise blog as a solution, the requirements for a remedy have been constructed such that his solution does not come as a surprise (well, since “blog” is in the title I suppose it really shouldn’t be a surprise!). How to engender a corporate culture that accepts internal blogs, however, is an issue that isn’t addressed, nor is the proper way to set up a process to develop and productize ideas generated through the corporate blogosphere. Also, engendering a culture of openness and cooperation/collaboration might need to be learned by some who are used to keeping their expertise close to their chest (knowledge is power and valuable…my knowledge is my power and my value). One step at a time, I suppose; Boothby’s arguments seems logical and aren’t lessened by not creating a complete pre-packaged solution.

Google has recently stated that one of the first things that they do with new employees is to set them up with their own internal blog, and I know that other giants of innovation use internal blogs as well for communication. I am setting up a blog system at my research center along with a wiki, the latter perhaps being more useful for access to information that usually lies on individual hard drives and for collaborating on knowledge and idea development. I may post observations in the future on my success with these tools.

Tufte’s Seminar of Data Display, PowerPoint and Cognition

I saw Edwards Tufte’s seminar yesterday. I am not going to
summarize his more well known ideas since his seminars have been well
documented elsewhere. You can find
one here and another here. Tufte’s work and thoughts on
information display and Powerpoint are excellent, and I’m glad that I went. I’m
going to add a few general comments that are perhaps different from the
hundreds of seminar summaries published elsewhere, and I’ll also talk about some areas where I
disagree with Tufte.

Tufte’s Style

Firstly, Tufte practices what he preaches…partly. For most of the
presentation, the projector was off and he only used it to show full-sized
images or videos. Other than that, it was just him talking and no PowerPoint
Phluff.  Not even the usual title slide
when you walk in. I suppose we already know the speaker and topic, so a title
slide would have been superfluous—makes me think about which presentations of
mine don’t need a title slide.

Strangely, Tufte offered little evidence to support many of the design claims that he was making. His theories and ideas seemed sound, but there was no data presented that gave scientific weight to his advice on proper data design. In his seminar, he advocates that you view a presenter skeptically, making sure that they are a "detective" without bias rather than an "advocate" of their ideas. Tufte certainly sounds like an advocate in much of what he preaches.

Ancient Texts

Tufte brought several first edition books that were hundreds
of years old to demonstrate data layout by the world’s geniuses. He talks about
these examples in his books, but it’s amazing to see original books by Newton and Galileo in
person. I felt sorry for the person wearing archival gloves who had to slowly
and delicately carry the books around, pausing at each row so the audience
could see the book up close.

 PowerPoint

Accommodation of presentation design to cognitive styles is
a theme of Tufte’s, which I found interesting given the current discussion
of this in the blogsphere and in my own blog. Tufte argues that eliminating
bullet points from presentations accommodates a diversity of cognitive styles.
While it’s true that many people expect to see bulletpoint summaries of what
the speaker is saying, and a few probably assimilate information best in that style,
the bullet point mode is not optimal for the cognitive styles of most people.
By avoiding bullet points, more people in the audience are better served. 

The PowerPoint structure entices people to reduce their
syntactic discipline and causal structure in our thoughts and arguments, so in
a way it affects the cognitive process of the presenter as well as the
audience. Tufte’s The Cognitive Style of PowerPoint should be read for detailed
thought on this topic. My final thought on this is that there must be a way to
effectively use PowerPoint that eliminates Tufte’s complaints, but Tufte
doesn’t offer such a solution–he recommends that a Word report be distributed at a meeting
instead. To that end, Cliff Atkinson is being more realistic in his work and
advice on trying to work within the PowerPoint paradigm, and Garr Reynolds at PresentationZen gives practical advice on improving PowerPoint presentations consistent with Tufte’s theories.

Sparklines

Tufte spent considerable time talking about sparklines,
his concept for tiny graphics inline with text that will be a significant part
of his next book to be published, Beautiful Evidence. You can find some discussion of sparrklines at Agile Testing and Anil Dash.

While the concept is
innovative, Tufte over-values the amount of information that these can provide.
As an example, he considers the plotting of a mutual funds price embedded
inline with text (the chart is the height of an uppercase letter and the length
around five letters). He argues that this tiny chart consists of over 250 data
points with a resolution of at least two significant digits (or, say, over 7
bits of resolution). Therefore, there are 1750 bits of information in the space
taken up by four letters. This seems like a reach, since certainly the reader
isn’t assimilating that many bits of information. People do a considerable amount of data reduction in their
perceptual space, and the amount of bits of information obtained from such a
small graph is considerably smaller than the actual resolution of the graph (think
of principal components).

The fact that people can discriminate two charts/sparklines
that differ in one data point doesn’t mean that they will interpret the two
charts any differently—the information to the reader is the same in both. This
is the classic difference between discrimination and identification: two images
might be discriminable but not differently identified. In my field of hearing,
a one-second vowel sampled at 44.1 khHz with 16 bit resolution doesn’t mean that
there is over 705,000 bits of information in that one-second sound sample. A vowel
with a formants at 710 Hz and 1100 Hz will be identified as an /a/, as will a vowel
with formants at 850 Hz and 1300 Hz even though the two data points are considerable
different. The two vowels can be discriminated but are not differentially
identified. I believe that the analytical value of sparklines is not nearly
as large as Tufte calculates.

 Tufte the Artist

Tufte spent a small amount of time showing us pictures of
giant sculptures in his garden. While interesting, I’m not sure what the point
of this was.

Watching and Not Listening

While preparing for my recent talks, I watched videos of presentations given by Steve Jobs at Apple product launches. I first learned of Jobs’ unique style, by the brilliantly informative analyses of his presentations at Presentation Zen, and learned a lot about presentation style by watching Jobs’ presentations downloaded from the Apple site and reading Zen’s analyses of them. I’d like to add my own observations the extensive analysis done at the Zen site.

 
An exercise that I found useful was to rewatch Jobs’ presentations with the audio turned off. By eliminating what he was saying, I was able to pay complete attention to his use of the stage and, more importantly, his use of graphics. What I noted right away was not only the absence of bullet points, but for most of his talk the absence of any text at all on the screen. The majority of visuals that accompanied his presentation was graphics only. When, for example, he announced that for the first time Madonna’s complete collection will be available online (on iTunes), all they showed was pcitures of her and her album covers. Not even a heading with her name at top of the screen. No text at all.
 
The primary times when he (well, his Marketing department) used text was for headline-worthy announcements. "70% Market Share!" "1 Billion Downloads!" By limiting the use of text to just these key moments, the words had that much greater an impact.