Here is an interesting report from the Economist Intelligence Unit on the biggest impediments to getting innovation (ability to effectively create and commercialize breakthrough products and services) to work in corporations. The 30 page report surveyed 261 global executives and details their account of the barriers to innovation and how companies can break them down. What is alarming is that leadership was not identified as a barrier at all? Innovation is tough stuff requiring people to break from status quo and sometimes do things against the direction of management.  It’s pretty apparent that this is the biggest challenge companies face!

via PSFK.com

Here is why I voted for Obama:

1) We cannot win a war in the Middle East; we at best can only keep the peace.  I have been studying the region on and off for a year and, having also studied Japanese and Japanese History, it is clear that tribal loyalty trumps all else (Thomas Friedman’s From Beirut to Jerusalem was a real eye opener) .  Even between the Shia and Sunni conflict, there are tribal conflicts within each Islamic sect that have been going on for centuries.  The only time there was true peace in the Middle East was under the Ottoman empire and that was through a dictatorship (what is really necessary until tribalism is weeded out).  I could go into more depth, but is important to mention that we were able to occupy Japan peacefully only because the Samurai class took military control over tribes centuries before we arrived.  There were no tribal tendencies for people to “cling to” when the US officially occupied Japan.  We are in the Middle East and foreign intervention has time and time again caused more uprising than change: Russia, Israel and the US have all fled because of insurgency.  Sound familiar?  General Petreaus is a smart cookie and he will even not use the “V” word (perhaps for a reason). We need to get out of Iraq (BTW - We very much thank the men and women serving in the armed forces and respect you for your valor, honor and duty to the United States of America). 

2) We need to innovate our way toward energy independence, not fight out way out.  We need an energy revolution!  Barack Obama is the only Green candidate truly for Energy Independence.  The only idea that the Republican’s have is to “drill our way out,” which is needed but not an end all solution.  They are talking about “everything above” but have voted against alternative energy, especially McCain.  Having worked in Oil & Gas, there are two things I know: #1) We all could be driving natural gas vehicles which was a big industrial initiative in the early 1990s.  It died because oil companies did not have incentive to invest in the distribution, nor did the DOE mandate that local governments comply with government NGV fleet conversions put into law by congress (not sure exactly why, but it clearly died because of a lack of incentive for BOTH oil companies and auto makers).  #2) By drilling and producing oil offshore, we would be importing necessary technologies from Norway, France and the UK.  We lost the offshore race 30 years ago to the Norwegians, who now have the highest standard of living in the world!  That race is over and we would still continue to be dependent on foreign (albeit friendly) technologies for our energy.  (Norway nationalized energy and redistributed wealth much like Palin did in Alaska.  Is this not what McCain and Palin call socialism?  Sorry, had to comment on this.)

In this race, the Democrats and Barack Obama totally get the need for Energy Independence and have (in my mind at least) what it takes to create an Energy Revolution that will restore our economy and eliminate our dependence on oil from countries that harbor terrorism.  Here is why I think this: During the Democratic Convention I witnessed inspiring and optimistic speeches from the likes of Mark Warner (former Governor of Virginia who helped build the cell phone industry) and Brian Schweitzer (Governor of Montana with new ideas on energy independence).  From a past perspective, the bench strength and experience Democrats have from their work enabling the information technology revolution, which led to the largest economic expansion in the history of the world (dot-com boom), is impressive to say the least.  Ironically, this, and many other Clinton & Gore research initiatives (i.e. robotics, smart roads, biotechnology, machine tools, magnetic-levitation trains) were met with skepticism from critics (Republicans?) claiming they would “create whole new categories of waste.”  In hindsight, the Clinton administration created policies for, and investments in information technology that lead the way for America to hit a serious home run: The Internet Revolution.  How many new billion dollar companies were created as a result (ie. Google, Yahoo, Amazon.com and eBay)?

The economy was so good in the late 1990s that restaurants in Cleveland had a hard time finding employees because they moved up the job food chain.  One successful restaurant I frequented in Solon, OH was randomly closed as result (not sure if it caused their eventual demise).  During the early 1990s I lived in San Francisco as the Internet bubble was building.  I left in 1995 and went back to visit during a business trip at the height of the bubble in 1999.  What I witnessed was interesting; the college students and locals that worked at the bars and restaurants were all but replaced by immigrants.  They too moved up the food chain.  Pretty amazing to compare that with today’s economy.

We need to lead the world in Alternative Energy Technologies that we can export, similar to how we led the Internet Revolution.  It’s vitally important for our economy and national security (the Pentagon recently acknowledged that high energy costs are indeed a threat).  The Democrats and Obama totally “get this” and have a chance to legislate new energy policies and investments (Sorry, the free market approach is not enough if you can’t tell already.)  Importantly, Obama stands alone at the moment with a plan to invest $150 billion on new technologies and innovations that can help us realize an energy independent and clean America.  I’m afraid that this is going to take more than helping Joe the Plumber; we need vision and a plan. 

3) The Democrats and Barack Obama “get” innovation and Entrepreneurs, while the Republicans want more CEOs and Joe the Plumbers.  Okay, they are important, but we need a lot more (energy) Entrepreneurs, thank you.

After observing both party’s conventions, and listening to the debates, I am far more convinced by what the Obama camp presents versus that of McCain as it relates to Entrepreneurship.  Basically, I see a CEO GOP team taking jabs at their rival’s supposed lack of experience and questioning Obama’s association with terrorists?  Certainly no disrespect meant towards McCain’s honor and valor, but where is the imagination and vision?  There are no NEW ideas on how to create a new future for America (other than war, Joe the Plumber and “Drill Baby Drill”) coming from the McCain and Palin ticket.  Rudy Geuliani, Mitt Romney, Carly Florina (Former HP CEO), Meg Whitman (eBay CEO) and Joe the Plumber represent only three things - tax cuts, “drill baby drill,” and more war.  Again, no leadership or vision for the real Entrepreneurship and an Energy Revolution that this country desperately needs to survive and thrive in the future.  (Ironically, Meg Whitman never would have had a job at eBay if it was not for the proliferation of the Internet and the founder of eBay, Pierre M. Omidyar.) Why wasn’t Pierre present at the GOP convention?  Hmm.

On the other hand, Obama, Mark Warner and Brian Schweitzer (Democrats) “get” innovation, know what it takes to build new industries and support Entrepreneurship (in addition to small business).  It takes leadership, a commitment through legislation, smart investments and tax incentives, which Obama not only has a plan for, but is backed by party support and vision, as well.  It could not be more clear on what is needed.

Judge for yourself.

John McCain

Barack Obama

PS - Here is an interesting article on use of the Internet and how one party “gets it” and the other does not.  I think it says a lot about which party really gets the future. Oh, and my lovely wife Caryl, Ohio School Social Worker of the Year 2006, is voting for Obama because of his policies on education, health care, his stand on the Iraq War and his skills in diplomacy and unifying America.  Oh, and these people are also voting for Obama (Colin Powell, Scott McClellan, William Buckley Jr., Thomas Friedman). Okay Tom, I know you have not completely come out for Obama, but I would be really surprised if you didn’t. 

Happy voting!

Jay

This is one of the best ideas I have heard of in a while. TechShop can be thought of as a country club (perhaps fitness center wold be a better analogy) for Geniuses, Artists and Innovators who have ideas and need to get them past the stage of “idea” or “concept.” Prototyping can be kind of costly, even if it is not a working sample. While stereolithography and rapid prototyping have made things a lot easier and cost effective, if you are someone who “can do things,” tech shop might be for you. For $100/month or $1,100/year, you can become a member of and have access to a 15,000 square foot workshop with a range of tools and equipment for machining, sheet metal work, welding, casting, laser cutting, rapid prototyping, CAD/CNC, composite work, and much more. Of course, the best part about TechShop is the community of like minded tinkerers. For areas like Cleveland, OH, that are challenged with figuring out their future, this could be a low cost, ground level activity to spark some innovation and future economic development.

Great stuff!

via Guy Kawasaki’s Blog

Addressing the class of 2007 at Rensselaer Polytechnic Institute, Thomas Friedman, author of The World is Flat, challenged everyone with the thought that “the most important competition is the one between you and your own imagination.” He commented further on the ease by which one can start their own company because of the Internet: “When the world is this flat, with this many distributed tools of innovation, what you will imagine is going to matter so much more because you can now act on your imagination, as individuals, so much faster, farther, deeper, and cheaper.” This is definitely true, although innovation and business generally require some experience and savvy (not just access to the Internet). What I like about Thomas Friedman’s speech is that he balances the need for more “know how” (i.e. Science and engineering) with the need for people to use and expand their imagination (importance of liberal arts) in order to help America with it’s “Quiet Crisis” (outsourcing everything overseas). This is a breath of fresh air from the way things are going with education in the US (memorization and standardized testing). I also liked President Jackson’s call to “Take risks, have courage.” This is where I think more thought leadership is required around innovation and entrepreneurship. It’s not just “know how” and imagination - one has to have guts to take risks. Can this be taught? Are innovators and entrepreneurs just born that way? Probably a little bit of both.

via Rensselaer website

Harajuku Man 1, originally uploaded by Two Dragons.

Based on a recent survey conducted from 2002-2006 by the Economist Intelligence Unit, a research firm spin-off from the Economist magazine, Japan took the honors as the most innovative country ahead of the US, Switzerland and Sweden. The study defined innovation as “the application of knowledge in a novel way, primarily for economic benefit. One of the main factors affecting the ranking is the number of patents per 1 million people in a country.” The ratio of patents per million in Japan vs. the US was 3.5 times higher than the US. The study concluded that China will likely see the quickest progress for innovation in China (no surprise there) and the US still is the “most suitable place for innovation.”

What does this mean? It means that Japan is filing a lot of patents; who knows if they will really see the light of day, or if they are of value. Also, there are a lot of companies who do not file patents and prefer trade secrets, so there is plenty of room for argument as to which nation is truly the most “innovative.” Seriously though, I have always been impressed with Japan’s ability to create great (innovative) products/services and, as importantly, commercialize them. Having studied, lived, worked and played in Japan over the years, I continue to be amazed with their ability to unify and work as groups to accomplish things (at light speed pace I must say). This is in spite of considerable cultural/societal barriers that continue to exist and fly in the face of current thought leadership on why innovation happens (i.e. Rise of the Creative Class). Japan likes to be homogeneous in looks, thought and way of life. For example, 3rd, 4th and 5th generation Koreans, whose ancestors where brought over as slaves in the early 1900s, are second class citizens and have a very difficult time fully naturalizing into the mainstream unless they marry right (a Japanese person) and give up their Korean name. All students from elementary school to high school have to wear uniforms and abide by strict appearance dress codes (eg. black hair), and there is a saying about people who think different (”The nail that sticks up gets hammered down”). How can creativity and innovation exist at all in such a rigid society?

Well, there are opportunities for people to “be different” and think up new stuff, even under so much societal conformity. Japan has a weird side (i.e. Harajuku) where people that don’t fit in can feel comfortable. Everything from Elvis impersonators to cutting edge punk rock bands congregate to become one of Japan’s greatest tourist spectacles. While Japanese education from pre-school to high school is an absolute grind, if you make it to college its time to sow your oats. 10 years ago, it was rumored that one could not fail from university as the school would loose face for accepting you in the first place. Probably true to some extent today. While perfection permeates all that is Japan, there is a Zen approach to outcome where effort is just as, if not more important than than the end result. While failure is taboo (anywhere), in Japan it can be seen as an accepted part of the process as long as it is a means to an end and defined as “training.” As much as harmony can create one way thinking and ways of looking and doing things, without it nothing ultimately gets done (well).

Is Japan really more innovative than the US, Switzerland or Sweden? Depends on how one looks at it, obviously. Suffice it to say, Japan is innovative (or they would not be the 2nd largest economy) because they make it a part of their national psyche (Public and Private investment and initiatives in Engineering, Science, R&D). Really, ideas are only good if they are available for public consumption; the faster ideas get to market the faster a company can fail (figure out why they fall short of expectation) and ultimately succeed. Aside from having crazy, breakthrough ideas, and the “know how” to bring things to market, what else can be learned from Japan about innovating?

Obviously, in Japan innovation has a lot to do with the “Wah” factor. “Wah” (harmony) in Japan is king and people give up their personal interests for the group; in the context of innovating, Wah can be a powerful principal to effectively and efficiently get stuff done. Certainly, I will be the first to say that Wah can breed complacency, a lack of new ideas and stagnation. Case in point, I was completely dumbfounded when I could not get Eggs Benedict WITHOUT hollandaise sauce when staying at the Westin Tokyo. “What? Come on.” That’s right. They could not think of breaking the Wah in kitchen for some individual customer. It was so delightfully ironic. That said, Wah is imperative for execution. That’s what I admire about the way things get done in Japan. They have respect for it, demand it and have it in their collective conscience. It’s built into the fabric of what it means to be Japanese. How does Wah happen? There are many cultural and societal aspects of Wah (far more than one has time to blog about in one entry). For simplicity sake, it’s the wisdom they have around “groups” (Han). It is well known that in Japan they value the Han over the individual. So when it comes to making decisions, executing and getting things done, everyone respects each other’s position towards a collective goal. People give up their self interests and stay in the flow of getting things done. Once a decision has been made, things move with speed and perfection. It’s amazing to observe how things get done.

Respect for the Han

When I lived in Japan during college there were two group dynamics I observed at the ground level that always provide insight into Wah. The first is that the schools had relatively light janitorial services compared to the US. At the end of each day, every student participated in cleaning up their respective classroom. It was great to watch and be a part of. Nothing had to be said, and 20 minutes before school ended, kids would scramble to their classroom and fastidiously get the room and their respective part of the hallway clean. They all shared a sense of awareness that if they individually did their part to keep their classroom clean, and everybody else shared the same interest, then the entire school would be clean (for everyone’s benefit). When implementing innovation (eg. Hondo Asimo, Toyota Scion) everyone does their part for what is best for the company. When there is respect for the Han (at the highest level - company), priorities and budgets can more easily be shifted from legacy departments to subsidize risky endeavors with far less infighting and politics. Everyone shares in the future success of a new innovation even if they are not directly involved with the project. This is Wah and it allows innovation to happen.

Everybody as Hancho

Another interesting thing I observed while living in Japan was the concept that everyone got to be Hancho (Group Leader) for a day. When doing reforestation work with Waseda students in Northern Japan, we broke into Hans to do everything from the reforestation work itself to preparing food and keeping the quarters clean. What I loved is that the Hancho changed everyday so everyone had the opportunity to lead AND serve. This was not a formal organization where the Hancho is more firmly established, but the practice of revolving the group leader seems to be common practice in learning or training environments in Japan. This is a very interesting dynamic that many companies (in the US, Japan and beyond) could learn from - the idea that everyone is a leader. The Wah factor can only be heightened when everyone has a chance to lead and everyone supports each other’s leadership. What does this have to do with innovation? In my experience, innovation can be tricky if there is infighting and people are more concerned with being in the lime light, rather than getting the innovation to market. While not every team member will have the opportunity to be the project manager for a new innovation, they still have to lead in their respective area (i.e. engineering, marketing, production, etc.) to ultimately get the innovation to market. Team members have to negotiate with vendors, rally departments to meet critical path time lines, and persuade customers to wait while a major internal fubar is worked out. Too often companies do not view non-managers as leaders, which can result in internal and individual conflict, drawing attention away from what is important (getting an innovation to work and to market). This would be disharmony, so everyone being seen as a leader and working towards the collective good of everyone else only helps to establish collective Wah.

Seeing the Forest (Wisdom)

Some say that Asians see the world more holistically than Westerners, who tend to focus on the “trees versus the forest.” One can argue whether this is indeed true or not, but there certainly is a big difference in the way leaders are trained in Japan that might suggest there is some truth in the matter. From the perspective of creating and maintaining Wah, it is easy to argue that a holistic view of the world (and the way things work) certainly provides a richer path to Wisdom than being a strict expert or hand picked “Golden Boy.” Even Miyamoto Musashi, Japan’s most prolific Samurai, disciplined himself in “cultivating a wide range of interests in the arts, and being knowledgeable in a variety of occupations.” In other words, he had to be able to “see the forest” in order to win. In Japan, corporations have something called the “Horizontal Fast Track,” where the next generation of leaders spend the first five years of their corporate life going from one job to the next in every department. This is the opposite of what happens in the US, as promising protoges are moved straight up the ladder. In Corporate Japan, they think it’s important that the next generation of leaders not only find what they are “good at,” but also become familiar with all the inner workings of an organization. Of course, a holistic understanding of a corporation can only help a leader create and maintain Wah. There can be fewer strifes between engineering, manufacturing and marketing when getting a new innovation to market if each team member has some appreciation for the other’s area of responsibility.

Okay, there are major impediments to creativity and innovation in Japan (authoritarianism, less meritocracy, homogeneity, discrimination, etc.). That said, there is no question that Wah has its advantages in terms of getting ideas that add value to market. Japan Inc. is unequivocally one of the best at commercializing innovations globally and I am not surprised they were voted #1 by the Economist Intelligence Unit. Certainly, Wah plays a big role in Japan’s rankings and there are many ways to redefine what Wah can mean in the fluid, Free Agent, Flat World we find ourselves in.

As the current regime in the US tries to copy the academic mechanics (Science, Engineering and rote memorization of facts) that helped Japan get to where it is today, I hope a little more time and effort is paid toward the “Wah factor.” This is especially true now that creativity is an afterthought in our schools and corporations. I mean, a Meiji like Restoration (by any country) focused on creativity, individualism and entrepreneurship might put the US in a very precarious situation for the future.

Noboru Makino should be so proud.

via International Business Times