Vision & Execution’s Weblog

McKinsey & Company released their latest Global Survey – this one focused on Innovation and Commercialization.  There were many significant highlights from their research.  Below are a few that stood out for me.

50% of businesses expect to achieve growth outside of their core business – 32% by growing beyond the boundaries of the core business and 16% by growing as a result of adjacent opportunities.  In either case half of the companies surveyed are looking outside their comfort zone for growth.  What is problematic with this goal is that most companies don’t change their process for inputs.  Or, in other words, companies don’t change how they generate innovative ideas and collect data about the likelihood for market success for new innovations.  It’s the same one day fly in – brainstorm – prioritze – fly out process that regurgitates all the projects that were previously killed. Garbage in, bad products out.

Over 60% of companies acknowledged that they are not good at commercializing new products or services.  The challenge McKinsey identified appears to be in handing off ideas to those who would convert these ideas to commercially viable products.  Companies appear to have a significant talent gap in finding folks who can translate vision into reality…that’s not surprising since most folks are good at one or the other.  But it may also be a factor of garbage in, bad products out.

Another issue associated with the successful handoff of new ideas to market reality is picking the winners; 43% said their top challenge was choosing which ideas to move forward.  Not surprisingly 40% use an ad hoc process to make these commercialization decisions and 77% do not address these decisions at corporate leadership meetings as a regular agenda item.  New ideas don’t just surface during the annual strategic planning process – this needs to be well-funded ongoing initiative.

Vision & Execution has experience helping companies improve their inputs.  We run innovation workshops that help shake up corporate mythology about what business a company is really in.  When you rethink the way you define the business you’re in, you increase your clarity about where to expand your business.  We also help companies use the plethora of web-based solutions designed to actively engage customers and innovators outside the organization to vet or enhance new ideas.  And lastly, we help companies implement expedient ways of sizing and categorizing market opportunities to help senior management prioritize which products or pieces of a product to bring to market first.

That’s an interesting question in a Web 2.0 world, and it was recently posted as an inquiry on LinkedIn. The question becomes should your core competency be innovation, commercialization of innovation, or both?

Historically innovation has been presumed to be a core competency while commercialization has been much easier to outsource. When you think about the most successful companies, were they successful because they invented a novel solution or because they executed well on an idea whose time had come, or both? The challenge is having the vision and market savvy to identify the idea whose time has come ahead of the curve but not ahead of customer readiness to adopt.

Some large and notable companies are slashing their R&D budgets in favor of Open Innovation platforms such as those below sourcing “big” ideas from outside of the company.

• NineSigma
  leverages a singularly focused approach of posting well-defined tech briefs (needs) to it global network of solvers.
• Yet2 is a global marketplace that lists both “technology needs” and “technologies available”. Yet2′s software engine drives many of the corporate open innovation marketplaces (DuPont, P&G, etc.).
• TekScout
  connects companies (TekScouts) and scientists (TekExperts). The company cites its relationships with over 2000 academic institutions around the world in addition to the TekExperts who join the site directly.
• Innocentive offers a rewards-based approach to open innovation. Problem solvers post technical challenges to network of 140,000 technical solvers. Winning solutions are rewarded via cash awards. Although usually small, the potential reward is up to $1,000,000.

The rise in user communities and social media has enabled many companies to outsource piece parts of the NPD process.

• You can test theories about what will become a trend or track others’ trend projections with edopter.
• Monitor Google Trends and Google Insight for Search for search queries that suggest trends.
• Trendspotting service Trendwatching.com tracks consumer trends.
• SpringWise.com’s network of spotters scan the globe for new business ideas that you can mine.
• Fellowforce’s WebForce 2.1 provides an online suggestion box and customer challenge platform to facilitate co-creation with customers.
• Kluster facilitates internal brainstorming with its group decision making platform. Kluster has an interesting approach to prioritizing ideas as part of its solution.
• redesignme lets customers redesign the look and feel of your products — part customer QA and part customer co-creation.

See Not Invented Here is a Good Thing for more ideas.

While there are many good tools and resources that allow many parts or phases of the product development process to be outsourced, at the end of the day someone needs to translate the input into new business opportunities. It is an art as well as science to discern what new ideas are big marketable ideas. Hopefully you’ll be leveraging these tools soon to advance your business priorities.

Actually they’ve been coming for the past 5 years to Silicon Valley Open Doors – an investor conference sponsored by AmBAR for Russian and Russian-American entrepreneurs. This is my fourth year attending and I’ve found it insightful in terms of the dynamics of innovation and migration of innovation centers. An interesting example was a company that presented in 2006 which designed a product for India, manufactured it in China and came to Silicon Valley for funding – the company was based in Israel.

This year has been notable in terms of the sophistication of the investor presentations and also in the complexity of the offerings. It’s not just twenty-somethings with a Web 2.0 application they coded in their dorm room. There’s more gray hair, more serial entrepreneurs and not so many hockey stick revenue projections.

What’s interesting this year is the migration of financing. A US-based company that started to flounder after receiving its Series A funding went to Russia for its next round of funding. It received funding from Troika Dialog (Russia) and DoCoMo (Japan). It was then able to close a sizable Series B round from Morgenthaler Ventures.

In addition to learning about entrepreneurial activity in former Soviet Union states, there are always nuggets to be gleaned from the high quality VC speakers they secure. A few highlights from my perspective are noted below:

The second day included a one hour Q&A session with Vinod Khosla of Khosla Ventures who offered his point of view across a wide area of topics but some particularly interesting ones on CleanTech:

And after 18 presentations culled from 80 submissions ….The winner is….PTP Group Americas.

Looking forward to SVOD 2010.

…rather quietly.  It’s hard to believe that 10 years have gone by.  It’s the longest job I’ve had and most of the time the best boss I’ve had.  We’ve ridden the dot com boom and bust, the rolling waves of recessions adjusting our services to meet client needs along the way.  Our tag line evolved from Marketing Strategies that Deliver Results to Creating Value Across the Product Lifecycle to our latest incarnation of Turning Innovative Ideas into Global Success.

We’ve watched the epicenter of innovation — Silicon Valley — lose a bit of luster as emerging markets developed their own innovation centers.  We’re enjoying riding that wave with relationships to organizations like FinPro, AmBAR, Innovation Center Denmark with the goal of having similar relationships to Chinese and Indian trade organizations.

When we started, cleantech had been languishing for roughly 20 years…it was not the hot technology sector it is today targeted to lead the US into financial recovery.  Now it’s a significant part of our business and we’ve done our pro bono part mentoring entrepreneurs competing in the California Cleantech Open.

What has been constant over the 10 years is our passion for helping entrepreneurs and companies find the best way to bring the best products to market for the benefit of customers and now more than ever, the planet.  We look forward to continuing that commitment here in Silicon Valley and the many new innovation centers around the globe.