Updated Vision in China

“Updated Vision in China“
© PK* Oct.29, 2009

 

WHAT?
As a potential leader, you have to keep your eyes on things that happen around the world. A little change can have a huge impact on the whole system. With the economic insight, you will be able to see a big picture and make a better decision, especially in the global business.

In the past few years, many companies thought they would be in a better position following the economic trend to relocate their businesses to China. Books about how to do business in China are written to support the increasing rate in demands. As I have read, most stated that: 1.) There is a great opportunity doing business in China, and 2.) You have to understand Chinese culture in order to be successful. That’s true. However, many people forget that, in the economic growth, demands not only increase but also change. It’s a dynamic process.

Today, Shaun Rein from “China Market Research Group” mentioned in “Forbes” that we could no longer rely on the idea of low-cost manufacturing in China since the Chinese government and people are now demanding change.
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What is the change here?*

1.    China’s economy is export-led

“…the government wanted to reduce its reliance on foreign energy, so it pushed for a more service-led and less export-led economy. “

“The export sector is going to continue to play a diminishing role as domestic consumption increases…”

[PK*Note: This is interesting but it’s still a prediction. Some doubt if the domestic consumption will really increase.]

2.    China has a limitless supply of cheap labor

“They have far more job opportunities closer to their homes…“

“Many mainlanders feel, why work for Google if you can get a job with its Chinese competitor Baidu and feel there’s no glass ceiling above you? “

“Companies need to make clear to young Chinese that they’re dedicated to retaining them. They need training programs, overseas rotations and clear paths for advancement.”

[PK*Note: This is the most interesting point. Chinese people are everywhere because they are seeking for a better living. Well-educated people didn’t want to go back when there was no hope in China. Now, things are changing; more people build and bring the opportunity back home. They learn and leave the foreign companies to establish their own. ]

3.    Connections are everything

“Regulations are more transparent than they were just five years ago…”
“Connections can actually damage your business if a factional fight breaks out and your well-connected partner is on the wrong side.”

“You do need to cultivate relationships with government officials, but do not base your whole business on them.”
[PK*Note: Well, I think the author might look at the case of Google Vs. Baidu and thought that “Yes” a relationship with the government is very important. From my experience, I would say that it’s definitely true, especially for a big company in the developing countries.]
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Some points are not new but most people may not realize until there is a change. Overall, I still do not 100% believe in all the points mentioned above, but at least, I think we all should keep our eyes on those issues. You got the idea.

PK* [Oct.29, 2009]

*Source: http://www.forbes.com/2009/10/27/china-exports-labor-leadership-managing-connections.html?partner=alerts

Ex-Google China Chief and the Business in China

What?

“Kai-fu Lee, Google Inc’s former China chief who quit the search giant this week, said on Sunday he will launch his own business next week to fund Chinese technology start-ups.”

*Source: http://www.reuters.com/article/technologyNews/idUSTRE5850BQ20090906

(Sept. 06, 2009)

“…During his tenure at Google, Dr. Lee built a 700-person organization with many successes. Under his leadership, Google China’s market share nearly doubled from 16.1% to 31.0% in the past three years (Analyses International)….

Dr. Lee has also devoted himself to fostering the professional growth of Chinese technology students. He has given hundreds of lectures to about 500,000 students, and has written seven public letters and three books for Chinese students. His first book, Be Your Personal Best, sold over one million copies and is still on many best-seller lists. Dr. Lee has built his own website for Chinese students (www.5xue.com) and answered thousands of questions from students.

A true entrepreneur, Dr. Lee will announce a new project on September 7th, 2009. This new project will combine Dr. Lee’s passion for entrepreneurship, technology, experience in building organizations, and love for mentoring young executives.”

*Source: http://www.businessweek.com/the_thread/techbeat/archives/2009/09/google_china_he.html

(Sept. 04, 2009)

Lee wrote in Chinese:

“… 我的下一步就是和中国青年人一起打造新奇的技术奇迹，我想用自己的主动性做一个掌控全局的工作。 My next step is to build the Chinese youth with the novelty of the technological marvels, I would like to control their own initiative to do a whole job. 我已经到了这个人生阶段，再不去做，我真的很怕来不及了。 I’ve been to this stage of life, do not do it, I’m really afraid of too late.

所以，尽管加州的山景城再次向我伸出了橄榄枝，希望我再续约四年，但是我却在此刻做出了发自内心的选择，我希望帮助年轻人圆梦的同时也圆自己的创业梦想。 So, while Mountain View, California, offered an olive branch to me again, I hope I renew for four years, but I made from the heart at this moment of choice, I want to help young people realize their dreams as well as fulfill their entrepreneurial dream.

这个周末，我终于能够从业务发展、战略策划、离职宣布、工作交接中松一口气。 This weekend, I was finally able to from a business development, strategic planning, separation, announced the transfer of work in relief. 这个周末，我会把我的思路理顺。 This weekend, I will straighten out my thinking. 下周，我会和大家分享的我的“从心选择”计划。 Next week, I will share my “From Heart Select” program.

每当我想到我将迈出的一步，我就会想起苹果创始人乔布斯的名言： Whenever I think I will be a step, I would think of Apple founder Steve Jobs’s famous remark:

“最重要的，拥有跟随内心与直觉的勇气，你的内心与直觉多少已经知道你真正想要成为什么样的人。任何其它事物都是次要的。” ‘The most important, have the courage to follow the heart and intuition, your heart and intuition already know how much you really want to be what kind of person. Any other things are secondary.’…”

*5xue.com (Translated): http://translate.google.com/translate?js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.5xue.com%2F&sl=zh-CN&tl=en&history_state0=

(Sept. 04, 2009)

P.S. “Google translate“ did a good job in China too.

………………………………………………………………………………………………………

PK*Says

Today, I’m not going to discuss in detail about  Google and its executive, but to reflect and share my vision about China in the global business context.

-          Dr. Lee aims to support the growth of Chinese’s high-technology companies. Also, he provides a great contribution to the educational and personal development for Chinese people. He created a website to support that as shown in the link above. That’s a good idea. Anyway, you may have seen many cases in different areas which are similar to this one before. What does that mean?  Chinese people are now trying to reform the educational system both in the private and public sectors. China has already had the labor skills and what they need now is the brainpower. Otherwise, all the executives will be the foreigners.

-          Many Chinese companies still take a lead in China, such as the ones in search engine and mobile phone industries – why? Doing business in China is not easy, especially if you are trying to change the attitude of Chinese people. China used to be in a closed-loop system. That still has a huge impact on the attitude of Chinese people in the society. You have to ‘crack’ into the culture first following by creating a great relationship with local people. As I have known some people doing business with Chinese companies, language also indeed plays a very important role. It’s probably a must in China. As I observe, many of my international friends from China, Korea and Taiwan also use personal computers operated in their own languages, not English. Is this good enough to be the evidence?

-          For a big picture, we should review the history a little bit: “…With the rise of Western economic and military power beginning in the mid-19th century, non-Chinese systems of social and political organization gained adherents in China. Some of these would-be reformers totally rejected China’s cultural legacy, while others sought to combine the strengths of Chinese and Western cultures. In essence, the history of 20th-century China is one of experimentation with new systems of social, political, and economic organization that would allow for the reintegration of the nation in the wake of dynastic collapse.”

[*Source: http://en.wikipedia.org/wiki/China]

-           Worldview is always a key of success for a new talent at work. Kaifu Lee had also leaded “Google China” to offer free and legal music in China, acting against some of Baidu’s illegal activities which got into trouble now. Baidu is one of the largest Chinese search engines. [*More about Baidu on the music issue: http://www.techcrunch.com/2009/09/04/watch-out-baidu-china-clamps-down-on-music-piracy/] You know “Copy right” is like a bridge to connect people in the global business together.  At this point, Dr. Lee knows how to deal with people from another side of the world in order to serve Chinese people, and somehow, he is trying to develop a new business along the line.

-          China is a good case study for some other developing countries, such as Thailand. After China opened the country, we have seen a giant wave moving Chinese people toward the goal together (not only in their country). They want to be a developed country in Asia. Nowadays, China is accepted to be one of the world’s most influential countries. However, they still have to face some difficulties in doing a global business – the copyright issue. This has a huge impact on Chinese businesses in many ways from now to the future through the process of development. Today, no matter how much Chinese people could accomplish in the new technological and educational systems like what Mr.Lee did, as shown in the statistics, they still have to face many problems related to the copyright issue. For example, it’s difficult for people from the outside to run a company in China because they are afraid of having trouble competing with the dark market, and so on.

-          Who is going to pay for your stuff if they can get the same product which is available all around for free? Most people in developing countries still have that attitude in mind, and yet, many illegal businesses are controlled by the local gang and mafia. Some people in the government have also joined the businesses behind the scene. Therefore, to break the illegal chain, you have to play hard with the value of your products and the attitude of people in the society. Law is just a tool; please remember that people still control the law and there are many kinds of people. Doing a successful business in China, you should be a part of the society. You cannot do it alone and it may take a decade to get done. A real key of success for China to develop the economics, which is very challenging, is to change the attitude of those people who buy and sell the illegal products first.

PK* [Sept. 06, 2009]

Microsoft+Yahoo! & The New Homepage [Part02]

Let’s focus on design & usability in business context

Aug.07, 2009

- Figure 2-

Now, let’s take a look closer. There are 3 main points that I would like to discuss here: 1.) Color, 2.) Customization, and 3.) Visual communication.

(1.) COLOR

The colors used on Yahoo! homepage as shown in “figure2” are mainly purple and dark blue.

Why purple??? Does anyone know that “Yahoo!” is purple? I don’t know that before until I heard about it on a TV program this year. A good guess, I thought that it’s red because the logo on website is red! Anyway, I was wrong. I believe that not many users could get it right too. The weakness of brand sense like this could develop a serious problem in brand identity. If you noticed, they are trying to come over this problem in the new design theme!

Why dark blue??? Microsoft did a better job here. I believe that everyone agrees with me that the existing schema of colors in our brain for “Microsoft” is blue. In other words, apparently the brand sense of Microsoft is blue!

Therefore, by looking only at the colors of this website, we can talk about the business. I have seen the effort to mix these two colors in the mockup of their website since last year. At that time, Microsoft aggressively moved trying very hard to convince the board members of Yahoo! to sell the company. However, the negotiation was still unsuccessful though there was a big support from some investors. Then Microsoft’s negotiating team changed the tactic by focusing on the search engine only. Yahoo! without the search engine is nothing, so I’m not surprised why Yahoo! agreed to be partners with Microsoft instead of selling it. They share the systems.

This seems to be a win-win situation for now, but if we take a deeper analysis, we may realize that the only winner in this situation is Microsoft. Now, Microsoft has a better chance to break Yahoo! taking control over in the future if they want to.  This reminds me a good story in the book mentioned by Schmitt, a professor at Columbia Business School, about Odysseus’s strategy in the Trojan War. In that story, Agamemnon led the greatest army to Troy, fighting for ten years, but he was still unable to get pass the Troy’s walled city. Odysseus, then, suggested the Greeks to build a huge Trojan horse pretending to be a peace offering for Troy, but many of Greek warriors were hidden inside. Troy, falling to the trap, opened the city gate to receive that horse. Then Troy was destroyed from the inside out; Greeks won the war easily in only a night.

Is Microsoft leading by “Odysseus” in the modern world?

(2.) CUSTOMIZATION

Aug.09, 2009

- Figure 3-

In my dictionary, “Customization” is a keyword which simply means “Manage it in your own way.” One of the selling points on the new Yahoo! homepage (see figure 2) is to allow the users to customize the page (e.g., to add Facebook, e-Bay, Twitter, and so on). Is it a secret weapon for Yahoo! to win the battle? That is actually not new because I have seen some other online services, such as BBC News (http://www.bbc.co.uk/) design their websites based on this principle before. It’s almost exactly the same. At this point, as an outsider, one may possibly think that 1.) Yahoo! imitates that idea, or 2.) Yahoo! and BBC News are partners. If those are not the case, then I shall move on to find a real reason behind that mechanism.

In this business context, I will look at the services provided by Yahoo! and its main competitor – Google.

First, looking at Yahoo! alone, they usually contribute the contents on site for users. Thus, they should have done a hard work in market research, partnership and production in order to serve the users. Who are the users here? I don’t know exactly, but the more, the better for them. According to CNN, Yahoo! is now trying to create more opportunities for advertising by focusing on the content and user experience. The new homepage project started in October 2007, and it seemed to take forever to finish. New Chief Executive Carol Bartz has been trying to light a fire under the company’s developers, as a result of recently having a beta testing (CNN –July 21, 2009). Well, I believe that the reason taking too much time is because they got a poor developing process and had to change it later. They might say that they developed the website base on feedbacks from the users, which was good, but that didn’t mean they had done in the best practice.

Anyway, the new Yahoo! website tells me something about their business strategy. Looking at the new interface and interaction design, I can feel the increasing of freedom. To increase the freedom here means users can adjust the products or services for themselves – more flexible and open. This strategy, as I know, is based on a principle in the book called “Democratizing Innovation” written by Eric Von Hippel from MIT. Hippel claimed that innovating by users is a right direction to follow based on some evidences in his research. Yes, he mentioned that the world of production process is changing. We are talking about heterogeneity of user needs in a higher level which only small numbers of users need the same thing. However, I think we still need more evidences to support if this is a right direction in each industry.

Is Yahoo! in that case? What do most of their users need? Yahoo! is very confident saying upfront that the change is on the right track. Therefore, it implies that they think each of their users seems to have a very unique taste or style. I do not see any strong evidence to support this view though; only they have discussed with a very small group of the users. If they are right, then this will help increase the users’ activities and draw more people to the website, making Yahoo! a better partner for advertisers (CNN, 2009).

On the other hand, Google’s service is different from Yahoo!; instead of creating all the contents, Google acts like a hub to deliver the information and need for users. Many good sources from the outside are linked to the Google. Many innovative products are open to form a strong partnership with the developers. Many advertisers and investors are interested in. This seems to be a more open strategy compared to Yahoo! Then to be more competitive, Yahoo! has a better reason here to design the new homepage that is more open. However, once again, this doesn’t guarantee that the outcome will be the best for them. There are many factors both in business and web development to consider.

Moreover, there is a drawback in this direction. It may be better for Yahoo! to control some major areas in the main page and let users customize only in a deeper level if they want to. This requires a good research and a thoughtful strategic planning though. Facebook would be a good example in this area. Doing so will provide a good sense of freedom and flexibility using the web without losing the cohesiveness and brand identity which is now a weak point for Yahoo! You should not focus only on a specific area in production or market, but better thinking together as a whole.

(3.) VISUAL COMMUNICATION

Aug.07, 2009

- Figure 4-

Behind that blue box in figure 2, there is a video clip of Yahoo! engineers talking about the new homepage (see figure4). But sorry, I didn’t really understand the main point that they’re trying to say. Thus, I had to replay and read it while the automatic pop-up screen kept coming on top of it all the time which was very annoying. Well, the reason taking too much time to learn might be because I’m a stupid. Otherwise, the visual communication in that video clip is poor. Google has done a much better job in this area! It must be concise and clear; pictures would also help.

Well, let’s talk about words and pictures a little bit. I guess the process of creating this video clip is rough though it should be a selling point in business!  I believe that the idea of having texts (white on purple) appear on the screen in each topic is an afterthought. Yet, the text messages are clear enough to understand, but what they are trying to speak is considered too technical for most audiences. If you expect the users to read, why don’t you just put the texts on, right? Trying to show the corporate culture and working environment is good, but if you did implement it in a wrong direction, it might cause a huge distraction.

Oh! One more thing, Yahoo! is in a global business, right? Thus, using images and standard symbols would create a great advantage over the text version alone. Many people from all around the world still don’t know English, and some countries are not very open. It’s difficult for them to follow. I suggest the content contributors to mix those visual elements (i.e., real picture, text, and drawing) in a more creative way and easy to understand. I’m talking about design & usability in business context. Google’s would be a good example. Without paying a good attention to small details like this, it’s definitely hard for “Yahoo! + Microsoft” to beat Google. That is my worldview.

Above all, I strongly believe that those small points that I mentioned are big, especially in the future –period.

© PK*[Aug.09, 2009]
pkdatabase.wordpress.com

Notes:

-          Hippel, E. V. (2005). Democratizing Innovation. MIT Press.

-          Schmitt, H. B. (2007). Big Think Strategy: How to Leverage Bold Ideas and Leave Small Thinking Behind. Harvard Business School Press.

-          http://www.cnn.com/2009/TECH/biztech/07/21/cnet.yahoo.new.home.page/index.html (2009)

Let’s focus on design & usability in business context

Microsoft+Yahoo! & The New Homepage [Part 01]

What happens now?

There are a lot of changes going on recently in Yahoo!  At the beginning of this year (2009), Yahoo! announced that it had hired veteran technology executive Carol Bartz as its new CEO. In July 2009, Yahoo! became partners with Microsoft in search engine business with a high expectation to challenge “Google” who is now a top runner. Today, in August 2009, there are some changes on the Yahoo! website.

What I’ve mentioned before?

In January 2009 I stated in my article that Microsoft would probably do not stop negotiating with Yahoo! in spite of failing to acquire it last year; only waiting for the right moment. Yet, I believed that one day Yahoo! might have to sell their business or became partners with Microsoft. Well, the experts know that a negotiation has never been done at the first round, right? Yes, seven months later (July 2009), Yahoo! finally became partners with Microsoft!!!

In December 2008, I critiqued the Yahoo!’s usability testing process for the new look of their website, compared to Google’s and Facebook’s usability testing processes.

“Compared to Facebook.com, the Facebook team is much smarter than Yahoo!, creating the “New Facebook” as an option first, and then recently they turned it to be a default setting with having the “Old Facebook” as an option instead. Meanwhile, they got good and bad feedbacks from the real users, so they could be able to redesign their stuff effectively.”

I also mentioned that letter “M” in the URL of that testing homepage and the choice of colors used would be a tactic in business which is related to Microsoft.

Let’s talk about the new Yahoo! homepage

Today, I visited Yahoo! website again and saw a new improvement based on exactly the same approach as I suggested in the article about nine months ago!!!

Yahoo! Homepage (Aug 07, 2009)

- Figure 1-

In figure1, looking at the dark-blue bar on top of the page, you will see a yellow button saying “Try it now!” The new Yahoo! homepage is now set as an option with a “close” button on the right, see? Now, it’s in a testing process. In the future, they will switch the options if the feedbacks are good and most users are familiar with the new system. They completely changed the usability testing technique from a poor one which got a lot of complains from users to a new one that I mentioned.

…

© PK*[Aug.07, 2009]
pkdatabase.wordpress.com

PK’s Note: GV & High-Technology Companies, 2009

PK’s Note: GV & High-Technology Companies, 2009

[Business Approach]

# Google’s business strategies:

Google voice (GV) reminds me…

* Remember “gmail”? >>> Invitation first  >>> ppl get excited  >>> Lead users give feedback (like a rat in the lab)  >>> develop it >>> open to the public later  >>> now everyone can use, cheer!

[GV is now using this tactic too, I believe.]

* Another tactic: Big picture  >>> keep people awake by introducing something new   >>> related to the organizational culture  >>> which is innovative (encourage employees to think)

* Google  >>> attempt to replace the existing systems and acquire many good ideas (e.g. Android OS, Youtube, Sketch up, and so on) >>> 1.kill a new talent /  2.easy to develop

*With T-Mobile, Google  >>> failed to beat iPhone but it’s still in the (smart phone) game by focusing on the software platform, Android. // In Asia & Europe  >>> monopoly? >>> may end soon after the competitors, such as LG and Motorola join the market (BW)

# Yahoo!’s business strategies:

* Not very strong (just changed CEO too) >>> now trying to survive (tactics: partners + ads) >>>recently partner with Microsoft (only search engine, playing with ads)

*SYSTEM:  Yahoo! is different from Google >>> Yahoo! contributes its own contents / Google borrows others (link info back to the web, for example)
# Apple’s business strategies:

*Coming soon: short, clear and simple campaign (same in Thailand) >>> ppl want to find out >>> grand opening!

* Playing with the “Versions” >>> e.g., iPod nano, iPhone G3, and so on >>> this is a common business model in high-technology products, but Apple hits it hard!

*Positioning >>> outside your home (portable device) >>> now got beat by “Google voice” or not; we will see : ) >>> Apple defends, ban GV on iPhone >>> to protect the benefits not only for At&T (e.g., profits from SMS), but in a wider perspective, to protect their own market too!!!

*Product differentiation >>> by design and innovation (look at CEO, see?)

# At&t’s business strategies:

Partnership >>> with Apple (iPhone) to get members (long-term contract) >>> pay Apple per unit sale (e.g., At&t pays $3/unit) >>> iPhone cut the price down below the unit cost (e.g., cost $3, Apple sells $2) >>> Apple still gets the profits from At&t (e.g., $2+$3=$5, profit = $2)

# Microsoft’s business strategies:

>>> I have no idea; they are weak in this area lol (Opps..pls correct me if I’m wrong..haha)

>>> They focus on brand positioning (implement in home & office, not portable)

>>> They did defend though (e.g., when iPhone came) –> to protect their market share >>> leader style?

>>> Negotiating with Yahoo! successfully, expect about 30% in market share (Google 65% now, BW) …still, a long way to go // Why they really want Yahoo? >>> they want to stop Google (MS began with OS Vs. Google began with online service >>> good future is online or offline? >>> they need to connect that!

# Facebook’s business strategies:

* Get money from ads >>> restrict the rules >>> to gain control over the application producers (protect profits) >>> Changing something? >>> set it as a new option first >>> involve users to the process (kind of HCD) >>> switch the options >>> delete the old one

* Facebook‘s marketing style playing with the rules a lot :)

# Skype’s business strategies:

*Cheap internet calling might be a very first thing to think of >>> my bro. told me that the calling rate is now cheaper >>> I guess…coz of Google Voice?

*Skype is not on my list in the future

# Sony’s business strategies:

*Sony is out >>> doesn’t have a strong foundation to connect with software developers and online businesses >>> e.g., lost to Amazon on e-book because of the poor database >>> lost to smart phone in mobile phone (R&D is weak) >>> computer & camera might be OK for now, but look carefully to the future… >>> Sony business strategy is to lower the pieces of the end products, but increasing the pieces of components  >>> they are tricky (e.g., simply make a new standard for their own products (something longer?), so people have to pay more for that (repeat that again & again in the product lifecycle)) >>> If they still use this tactic…I don’t think they we have a good future (revenue is going down now)

# Amazon’s business strategies:

*Successfully built the online business (e-commerce) >>> and they have been focusing on the online service, customer satisfaction, and supply-chain management for a very long time. >>> That is their comfort zone.

* Kindle (digital book reader) >>> just a new innovation like what Sony did? >>> No >>> Why? >>> I think Amazon has a better reason to jump into this battle >>> Now, it’s a leader in paper book market // In the future, if someone can invent a successful product like e-book, Amazon will lose the market share. >>> To prevent that…Amazon must jump into this game at the beginning of development (it started since a new development of Nano technology, I believe) >>> already got the advantages in the book database and customer loyalty >>> but still have some new competitors >>> Who??? >>> Those who provide a free or cheap download for “Smart phone.” >>> Well…lucky enough that the small screen is still a problem : )

# Nokia’s business strategies:

*Nokia still has a chance to compete, in my opinion. (still on top overall, but…)>>> Now..lost to smart phones >>> Market share in this area is going down / Apple & RIM are going up >>>Anyway, Nokia is still smart enough to know what is the key factor >>> Nowadays, the competition is moving from the physical appearance (e.g., everyone can make a touch screen, and so on) to the platform & software programs inside the phones >>> Businessweek (issue: Aug, 2009) mentions that Nokia 1. Dropped licensing fees for the tools using to create software / 2. Open a global library of applications >>> Result: increase #apps, but still far behind Apple store!

© PK* [Aug.05, 2009]

**p.s. Looking at the big picture, everything is connected.

[Logout]

Innovation & Network

Many people have a good idea but they have no idea how to make it real.

“…Most great innovations are based on ideas already developed by others. The iPod was not the first MP3 player. Google was not the first search engine. Edison’s wasn’t the first light bulb. These and other innovations were successful because of the networks that were built around them. The particular network of founders, investors, developers, customers and distribution partners is what makes the difference between a good idea that goes nowhere and one that overthrows entire industries.

How does helping entrepreneurs build up their social networks speed the rate of innovation?

If you want more innovation, focus on getting people the networks they need to drive their best ideas forward. Our UC Davis Entrepreneurship Center has created a set of innovation ecosystems–networks of related and interdependent investors, entrepreneurs, mentors, regulators and public and private corporate partners. In the right conditions they self-assemble into networks around promising ideas and innovators. Through them we dramatically increase the likelihood that good ideas will become great, and, equally important, that bad ideas will quickly be recognized and reworked or abandoned….”

[NOTE: Andrew Hargadon, professor of technology management at the Graduate School of Management at the University of California, worked at the design firm Ideo and as a product designer at Apple  ( AAPL -  news  -  people ), also heads his own consulting company, the Hargadon Group.]

*Source: http://www.forbes.com/2009/06/15/innovation-invention-networking-leadership-managing-hargadon.html?partner=alerts

…………..
PK* says:

Overall I agree. Don’t do the work alone. You should look across the industries too – creating the connections. In my opinion, the word “Network” can be off-line and/or on-line. In the past, we created a good relationship by using face-to-face communication. Now, when we use the social-networking site, we may have less personal touch. However, from my experience, we often analyze the information more deeply in details because we interact with each other directly through the messages, easier to get what you want at the first glance like searching with a keyword. Don’t need to pay for the coffee ten times before getting the right one to consider. Then it’s your choice if you want to meet them in person or whatever. Anyway, we need both types of communications to drive a successful business. That’s all I want to add.

© PK* [June 16, 2009]

The Real Problem is the Innovation Process, Not the Number!

WHAT?

This month, Businessweek mentions that “INNOVATION” is a major cause of economic downturn in the U.S. They have shown some evidences related to the unsuccessful  projects.

I question…”Is any of those a real innovative project?”

[* http://www.businessweek.com/magazine/content/09_24/b4135000953288.htm ]

PK* says:

Creating a new innovation needs a lot of effort, money and energy, especially for the breakthrough innovation. Because of the high production cost, many companies fail to make their own ways to the destination.  Some give up promoting the new products to compete in the existing market, for example. Yet, despite the fact that it’s difficult to manage, saying that fewer innovative products mean a weaker trade performance, especially for the U.S. to complete with low-cost countries such as China, is still right and reasonable. No doubt, the increasing rate of productivity can help support the economics. We, therefore, should keep focusing on the innovation. That is a good direction to follow, but what wrong is the way we execute it.

I strongly believe that the number of “INNOVATION” is not a major problem in the economic crisis today. We should not limit our imagination. Of course, there are many factors. Sometimes, we are also confused about what is called “innovation.” If we look at this problem only from the economist’s point of view, either looking at the production cost or looking at the productivity based on the statistics, we may get the incomplete data to analyze. To look at the problem closely from a wider perspective, we will soon realize that the real problem is not about the number of innovative projects, but the process itself.

In my opinion, many innovative projects are down because they focus too much on the technology, not human. Of course, you can use a new technology to drive the business, but that doesn’t guarantee that you will have a good feedback like Facebook, a big market to support like Google, or the users will accept it. Also, the high-tech products have a short product lifecycle and it’s a dynamic process. It’s even more difficult to manage. You may fail because of the overwhelming cost of production and advertising. Again, the real problem is not about the word “INNOVATION” as Businessweek mentions, but the “PROCESS” they have done wrong – wrong place, wrong time, wrong people, and so on. To reduce the errors, companies should focus more on the human aspect (i.e., users and workers) from the beginning of ideas to the end of production though their goal is to sell the technology. You will need to pay more attention to the users (and cultures), especially if you develop a new product for the global market (Katz, 2003).

How to make an innovative product or service that is practical and successful?

There is no single solution here and I agree with Businessweek that no industrial revolution in the past has been based on a single technology. I think it requires a great vision and deep understanding in R&D to distinguish between what is just a new thing and what is an innovative product that has a great impact on the society.  Nowadays, many companies still work separately as in the old action-office without well sharing the information and opinion across the disciplines, both inside and outside of the offices. They often say, “It’s not my job. It’s their responsibility.” For instance, engineers may have a cool idea and write a proposal in order to get financial support doing a new research from the executives. Accountants look at the budget and say “No.” Marketers estimate the benefits doing a quick survey and vote to support this project. They think individually. Finally, they have a new project to work on, and they call it: INNOVATION. Then they work separately and make a review in the meeting only at the end before selling to the market. You do your job and I do mine. They ‘think’ people or users will get exciting about the new discovery all the time – wrong! Moreover, I believe that many of them create persona just to support their own ideas. Persona & scenario is a good tool in design and marketing, especially when thinking ahead to the future, but if you put it in a wrong direction, you are now cheating the reality. That is not a real innovation. Therefore, I would say we don’t really have too many innovative projects, but having a few good ones. Most set a wrong problem to solve. We need to improve the standard here.

That is a real challenging problem (not only in the U.S.)!

© PK* [June13, 2009]

*References:

Katz, “Harvard Business Essentials: Managing Creativity and Innovation” (2003)

http://www.businessweek.com/magazine/content/09_24/b4135000953288.htm (June, 2009)