BIF-3 (Day Two)
Welcome
Saul Kaplan
Enabling experimentation
How do we make big systems change?
How can we use new technologies to solve new problems?
Not a big bang approach, but about trying things and connecting the dots
R&D for business model innovation
Today's CEO never really had to manage both today's businesses & biz model change
Tomorrow's CEO will need to manage two or three biz model changes
Yesterday was a really "treat" but it can't just be that.
We need to figure out ways to carve out time and attention to learn about new ideas and try new things
Session 5
Irving Wladawsky-Berger (interviewed by Walt Mossberg)
IWB worked at IBM (technology futurist)
WM: you changed IBM culture to move ideas into products
IWB: the things that make you great in one market can hurt you in another, leaders won't be sensitive to changes and won't adapt to what's next, IBM confronted this challenge with shift from mainframes to PCs
IWB: PC project was treated as a toy, because profits were so puny compared to mainframes
IWB: research lab had a DOS-compatible operating system but IBM didn't use it because they didn't want to piss off Bill Gates
IWB: can a company reinvented itself if it doesn't have a near-death experience?, the experience reshapes your head and you're open to more things, Apple same situation (90 days from bankruptcy)
IWB: internet became IBM's "lifeboat" along with Linux/open source
WM: Ballmer says there are two main biz at MS: desktop/Office and enterprise biz, Ballmer realized that biz model that made MS successful would not apply to every product, Two areas with different biz models: search/advertising (GOOG) and consumer electronics (AAP)
WM: MS trying to going into new biz with new biz models--what's your advice?
IWB: near-death cleans your brain, IBM switched from internal facing to market facing company
IWB: MS doesn't like Linux because they are protecting the franchise
IWB: when you are fighting the major innovative force in the marketplace, you setting a culture/attacking Linux or Open Document Format--what is the message?
IWB: can you balance these two ways of thinking and acting?
WM: MS built labs/ IWB: labs are back office/baseball is played on the field, not in the dugout
WM: IBM has embraced virtual worlds, primarily SL/what do virtual worlds have to do with business
IWB: you watch really smart people in IBM to see what they do, it's a market signal
IWB: many smart people within IBM were conducting meetings in SL
IWB: people found the experience of dealing with people in SL more "human" than a conference call, especially a global group.
IWB: conference calls don't offer the human element, but SL does create that/is it the evolution of collaboration on the Web?
IWB: killer apps for virtual worlds are meetings/learning/training/events
IWB: let's figure out with our clients what the prototypes should be
IWB: virtual worlds can become a collaborative platform, not for everything, but for many things.
WM: conference calls don't offer all of the visual cues of F2F but what about high end video conferencing systems (HP/CISCO)?
IWB: these systems are very expensive and technologies don't scale
IWB: IBM has built SL classrooms that scale quite easily and cost is low
WM: look ahead in virtual world space/number of facial expressions etc is limited/five years, where will we be?
IWB: need more research on what people will need for virtual worlds/currently at MIT/at Media Lab working on digital living--we live in a hybrid world
IWB: How do you humans want to use it?/what are the business models to monetize it?
IWB: what about the global university/WM: your classes are on the Web/IWB: it's passive learning
IWB: evolution of the Internet to a truly collaborative Web for many things, more visual
WM: internet is overwhelmingly a text medium, IWB: the opportunity for something different is huge
Clay Christensen (interviewed by Walt Mossberg)
WM: you're Ballmer, you're huge and you have new competitors and you haven't had a near-death experience/what do you do?
CC: the business unit was not designed to evolve/its profit model and process were designed to replicate the same thing
CC: the mainframe business unit didn't evolve at IBM, but other business units were created
CC: we need to pray for Ballmer/it's not just about creating new biz units, but about doing it in the right way
CC: the leaders are already way out in front/you need to disrupt them in some way (Sony/Nintendo and Google)
WM: can Google be disrupted?
CC: it's not clear to me what the pathway is yet, but it will happen?
WM: what about Apple?
CC: you're a Mormon, but you're really the Jewish mother of business
CC: what's disrupting Apple is downloading music on to mobile phones/we don't have as much capacity as an iPod, but they are getting better
WM: i have an iphone/CC: they have introduced what is essentially a handheld computer to jump the curve on Nokia, but you unleashed innovative energy on the part of competitors (iPhone is a sustaining innovation relative to Nokia, rather than a disruptive innovation)
CC: they are disrupting the notebook computer/research suggests that Nokia will be the one to achieve the disruptive innovation, not Apple
WM: working on two new books at the same time/one on disrupting public education, one on health care
CC: two very sick industries consuming enormous resources and studies have been education within education and same for health care
CC: we're studying the problems of innovation and applying those lenses to education and health care
CC: health care--very expensive tools and very expertise intensive, disruption by technology that simplifies a complex problem coupled with a business model that carries that simplicity to the market
cc: precise diagnosis is the disruptive technology in health care, Type 2 diabetes is actually about 20 different diseases
CC: makes the body articulate about what's wrong and diminish need for intuitive diagnosis on the basis of high end expertise
WM: will it crack the code of waste and inefficiency in health care
CC: we need biz model innovation, CC: three types of biz models, Value shop (consulting, advertising), value chain (automotive assembly), value network
CC: hospitals are value shops with some value chains (value chains are about standardized process/value shops are more intuitive)
CC: with more technologies delivering more precise diagnoses, costs can be removed from the system, e.g. lower paid people can handle it
CC: Hernia hospital outside Toronto with lower cost than MGH and better results
CC: MGH will still play a role when precise diagnosis cannot be achieved
CC: Minute Clinic: simple diagnosis with rules based treatments
CC: health care is so expensive because we have not allowed biz model innovation to accompany technology innovation
WM: Steve Case (Revolution) is a consumer-centered approach to health care, including concierge service
CC: challenge is that no one player can rearchitect the healt care system; too many players (mainframe vs. PC)
CC: someone needs to reintegrate all of health care under one roof; insurance companies can deny claims, hospitals can introduce Six Sigma etc
CC: people can work on the pieces but no one has the whole thing
CC: VA is state of the art practitioners in EHR because they own the whole thing
CC: education--distinction btwn interdependent technology architecture and modular architecture
CC: custom interdependent architecture is expensive but modular isn't
CC: teaching is interdependent architecture which mandates standardization
CC: multiple intelligences and we're wired to learn differently
CC: different learning styles really require modular approaches
CC: if we can migrate instruction from teacher center mode to student center mode disruptively (computer based instruction)
CC: role of the teacher--design different kinds of learning environments based on teaching strengths to cover multiple intelligences
CC: role of the teacher--one on one interaction with students rather than one size fits all
WM: do we need to rethink the schools?
CC: we need schools within schools
Stephen Lane
reimagining emergency room care with BIF
collaboration among "neighbors"
huge competition among industry players, but no one player own the entire thing
huge opportunity to change the way people receive care in the trauma bay, takes too long/too many people/ignorant of presence of loved ones, too many wires in a wireless world; dangerous and confusing
creating a common language (some partners in project wanted a white paper, others wanted a model so they compromised and created a white model.)
Ellen Levy
living the network effect
stripped away the notion that i should focus on an organization, and instead focus on ideas
jack of all trades=master of none
what would it mean to be the "master jack of all trades?"
Media X/Silicon Vally connect/3quadrant consulting
Media X--a new model for university-industry collaboration
what if we only took on questions that engaged multiple disciplines of the university?
universities are not approachable with questions generally, who do you ask the question/great complexity within the research university
virtually reorganize the university around ideas rather than structurally change it
played at the information layer; easier to move ideas around
principles, about questions, move dollars, don't need that many, $600K budget put $1M back into university after costs
how is the world going to change when mobile devices proliferate?, put out RFP to university to discover who is doing relevant research on the topic, received 17 proposals many already included interdisciplinary collaboration/getting the question right mattered
tech transfer does not equal idea transfer
organizational principle does not equal organizational structure, when structure leads the process, you need org change
"It's all about the ROI" (return on investment/industry...research of interest/university...results of importance/government)
innovation guiding principles: start with good questions, relationships over transactions, sufficient metrics don't (yet) exist
Session 6
Bill Taylor
competing on ideas
we are living in the age of disruption
strategy as advocacy--leaders stand for important ideas that can shape the trajectory of an industry
distinctive and disruptive point of view, a clear sense of purpose
each storyteller is addressing an industry/system that is broken
Robin Chase
Spoke with head of Woods Hole Institute about climate change/head of AAAS
why aren't you saying more?
at what point do worldwide CO2 emissions need to start going down--2015 (50% chance of avoid cataclysmic climate change)
driving cars and making cars/fuel--29% of CO2 emissions in 2004
if everyone buys a fuel efficient car in the next ten years, we can reduce our fossil fuel consumption by 5%
carbon taxes--people change on a dime when money is involved, carbon taxes is the bad medicine we need to take
Role of business--how can we take the bad medicine and turn it into something people want--ride sharing
not carpooling--deadly term/not hitchhiking
one trick pony--ZipCar--efficient use of the resource and GoLoCo--driving alone 86% of the time at a cost of $8K per year
two trick pony--how can I get end users to create the infrastructure
one sentence e-mail to ZipCar while she was CEO: have I told you lately that I love you?
William Herp
keep it simple, what do I do?, Linear Air--very light jet air taxi, enjoying hockey stick growth, also started company called edialogue, how did I get this way?, always encouraged to seek out my interests and how they relate to my talents, putting together great teams is important to success of entrepreneurial endeavors, lessons for others, encourage young people to pursue entrepreneurship (involved in JA), focus on your talents; focus on what people are good at, you can't do it on your own; the team matters
Jack Hughes
You can tell the pioneers because they are the ones with the arrrows in their butts
work is changing--no longer about going to a single place and do what you're told/also not about working for just one organization
virtual work--a community of non-affiliated individuals working collectively and individually to create value
community-a diverse group of individuals with affinity and common interest
to accomplish real work, there must be some kind of structure in the community
coders are members of the community
to bring the community together, there must be some set of common values
diversity is a good thing, but since you're dealing with different povs, experiences etc, you're herding cats
the underlying theme of topcoder is competition; there are players on top of their game and there are players that want to get there.n
has turned the complex software development problems of organizations into a game for coders who want to see how they progress over time
global collaboration on projects among people who have mostly never met each other
tapping into a global network--there will be similar biz models in other industries
Group Conversation
BT: what are the roadblocks/frustrations/barriers that need to be overcome that might be surprising to others
WH: biggest challenge is getting the biggest customer group that don't fly privately or don't understand charter travel
WH: education process in the marketplace about the VLJ air-taxi option; frustrations with airlines help but there is still work to do to bring them over
RC: using the right words; how do you get someone to understand in the nutshell
BT: the high concept pitch from yesterday; it sounds small but it is actually crucial
BT: how do you wrestle with th language?
BT: when started FC, we wrestled with it--came up with HBR crossed with Rolling Stone
JH: how do you change an embedded culture?/how do get people on an individual basis to implement that change
JH: if the underlying business model has merit...
JH: new biz models are happening
BT: personal public transportation system--is that your mantra?
RC: how do you combine things to get something really robust
WH: different themes for different industries
BT: you're all passionate about what you offer that is tangible product or service/how much do they need to buy into you?
BT: is it important to buy into the worldview along with the product?
RC: they are buying a quality product; if you focus on quality the evangelism comes
JH: most of my members are doing it for what they get out of it; they come at it from an individual point of view
BT: ultimately, it's a business, not a religion. Motivated by sense of purpose or mission
BT: in an idea driven business, you get lots of feedback and can tweak things along the way.
BT: what's a reasonably important tweak you've had to make?
WH: articulate a vision but be receptive to feedback
WH: able to deliver on a service model and get everyone in the company in tune with that idea
JH: not about changing what you're doing as it is about being open to listening
JH: a change was proposed by members. didn't want to do it, they created it themselves
RC: still new; people were coming to see what's happening but not posting trips
RC: created a more lightweight way to enter and contribute
BT: this is at least a second act for everyone--what lessons are you carrying over?
JH: innovators are very impatient; it's very hard to give an idea time to catch on
WH: get better at being able to articulate an idea to the team and then let it go; trust the people on the team
RC: always improving and really understanding your business model; understand the living breathing dynamics of your company
Session 7
Denise Nemchev
Reinventing the nail
started with an innovation over 100 years ago--stapler and the glueing of staples together
Bostitch--Boston Stitchery
nails keep the wood frames of our homes together
what happens when a nail fails? (hurricanes, earthquakes, tornadoes)
don't think you don't need to worry about these catastrophes--you most likely live somewhere that will experience something like this
how do you tackle this problem?
We don't always know how to solve problems--we need help
Worked with government, other industry partners, universities etc to learn how a building fails
Earthquake--two forces pulling in opposite directions shears the nail--shear force breakage
Hurriquake disaster resistant fastener
Hurricane--wind blows through your home/high pressure inside, low pressure outside, the nails come out of the wood
dual shank technology--different kinds of surfaces on the same nail--patented technology
nail head technology--larger area
Nail named the Popular Science Innovation of the Year/named by Reader's Digest as one of the Ten Products that will change your life
On the Pop Sci award, won the group and then was surprised to win the overall award
only costs $15 more to build a home using the Hurriquake nails
a simple and elegant design of a product that's been around for a long time that can save millions of lives and billions of dollars around the world
if you can innovate a nail, you can innovate anything.
Joseph Coughlin (interviewed by Walt Mossberg)
runs MIT Age Lab
WM: what's wrong with the advertising industry?
JC: we've never had a population this old; the disruption is the age of the population
We've never had a population this healthy, wealthy etc.
Current model--if I can capture you 18-24 I have you for life
WM: I'm a totally research free person, which is another word for journalist
JC: to truly pursue innovation, it's not just about getting an idea out there but recognizing that the world around you is changing
JC: insurance company doesn't believe it's book of business is changing because they've been around forever
JC: economic forecasting=witchcraft
JC: no one admits that they are aging
JC: a young man won't buy an old man's car, but neither will an old man
JC: boomers want them to advertise to me/aging is driving health style etc
JC: companies won't drop what they are doing to deliver it
JC: Boomers are in chronic disease prime time--developed a Personal Advisor with P&G to figure out what to buy
Right now, it's a smart shopping cart
JC: 1 in 4 people in Europe is over 65/Japan is 120 million people in 50 years it will be 65 million people and 1/3 of them will be 65+
JC future of the house without need for nursing homes/a platform for living
Longevity 3.0--1.0 pure luck 2.0 we give you a few vaccinations 3.0 what is you personal responsibility for living longer and the alignment of other systems to accommodate it
China 135 million people today 65+, it will double in 50 years
WM: what is the evidence that companies are getting this message?
JC: Chicos is for 45+ audience/Boomers aren't buying beer but energy drinks
WM: beer isn't an energy drink?
JC: not just live longer, but live longer well
JC: the aging world is all about women--she lives longer, she makes most of the decisions and she will be the primary care giver
JC: i've seen alot--excite and delight me--help me envision a lifestyle I want
WM: the 18-35 demo is making significant money in later years; what is the impact on your spending power?
JC: if life has gotten 30-40 years longer over the last century how have we filled those gaps--we've prolonged adolesence etc
JC: the idea that you're educated for life is crazy--not just CE or training, but going back and getting an entirely new degree
JC: the new frontier of innovation is very old; how do you want to live your life; I've just given you 30 years of life what do you want to do with it?
Mark Cuban (interviewed by Walt Mossberg)
WM: any guilt about blowing away Wayne Newton?
MC: he's a good guy, he was the grand dad of the group
MC: has lost 27 pounds--practiced from 6 pm to 12 midnight last night
Flying back to Dallas and will return to practice and do his job on the plane
WM: why interested in the Chicago Cubs?
MC: it's an iconic brand that can leveraged in the world of digital media
MC: when I got to the Mavs, we were dead last in revenue, now 3rd in revenue in the NBA
MC: direct correlation between how innovative you are and how competitive you can be?
MC: currently in the qualification process?
WM: not shy about your opinions MC: people just don't appreciate my shy side
WM: how do you think about a great business idea and getting it moving?
MC: always looked at myself as a consumer--how can I apply new technology to business in different ways?
MC: realized early on that computers would need to be networked
MC: became one of the first 3 or 4 networkers in the country
MC: we're going to differentiate
MC: Broadcast.com--be able to listen to IU basketball anywhere
MC: used sports to understand the technology
MC: started doing company conference calls and prices increased
MC: will create technology to help you conduct communications over the net
MC: how can I make my customers more profitable and give them an advantage
MC: GOOG is moronic for buying YouTube--they can't monetize it--no magic in video--bits are bits
WM: today you need to deal with Soviet ministries--telcos, wireless companies cable companies etc--they decide what you can get
WM: no more frictionless engine of feedback from the customer?
MC: hasn't gone just different--today you're choosing your operating system to be on
MC: Steve Jobs is the king of orafices because he is one
MC: Apple isn't as open as it could be
WM: Dell is shipping a Linux laptop that no normal person could use
MC: there is an enormous market for someone who could knock off Apple
MC: switching from PC to Mac--the mac just worked (posted to his blog)
WM: was Vista a huge strategic mistake?
MC: Vista was a mistake
MC: the n factorial issue--everything has to work with everything that came before it--Vista has revealed the problem with this strategy
WM: Jobs cuts you off at the knees every five years
MC: Vista has so much junk in it, it operates slower
MC: MS is making a mistake on the PC side and it is a huge opportunity
MC: there was a day when you were excited about what is coming out next (PC) those days are gone
MC: it's all about where you want to consume content
MC: all of these devices are cures for boredom; new features are new cures for boredom
MC: in the house you're buying consumer electronics DVRs
MC: you will not push hi-def tv over wireless
MC: HDNet--content for hi def
MC hd is taking off--Moore's Law--performance increases and cost decreases
It's growing 5% per month
70% of men will turn to hi def first
MC: there are many hi-def channels but not hi-def content
MC: there is plenty of bandwidth for more hi def channels and content, but it is not being created
MC: next battleground--how many hours per day of hi def content
MC: would have predicted in 1997 that we would have 100 MB of bandwidth into every home--I was dead wrong.
MC: public companies get hammered for making investments in innovation--EPS is more important than innovation
MC: it's all just media, except for dancing
MC: theatres are still part of the entertainment experience
Magnolia productions--you can use movies in a variety of ways--don't sell it
Landmark Theatres
3D is coming back in a big way
1000 theatres that will be 3D enabled over the next 18 months
WM: how do you motivate your people to stay on target?
MC trying to make it fun
Is Google unstoppable--they will be perfect until they're not, right now some 12 year old is coming up with something better
Google is trying to move to mobile phones but who knows if they will win?
Google is vulnerable to innovation
Things change at 100 MB throughput into the home--verizon could do it with fiber--this is the next inflection point, if you can hit 100 MB, you can hit 1 GB in the next 15 years
IWB is right about near death experience--somewhere there is a 12 year old trying to kick you ass--if you don't look at it this way, you will wake up with your ass kicked
what's you're next business--HDNet trying to leverage hd media in new ways
