Making elephants dance - Business Innovation

Following write up talks about innovation that large companies are adapting to succeed in future. This information is taken from BusinessWeek online.

The Knowledge Economy as we know it is being eclipsed by something new -- call it the Creativity Economy. Even as policymakers and pundits wring their hands over the outsourcing of engineering, software writing, accounting, and myriad other high-tech, high-end service jobs -- not to mention the move of manufacturing to Asia -- U.S. companies are evolving to the next level of economic activity.

What is unfolding is the commoditization of knowledge. We have seen global forces undermine autos, electronics, and other manufacturing, but the Knowledge Economy was expected to last forever and play to America's strengths: great universities, terrific labs, smart immigrants, an entrepreneurial business culture.

The U.S. has a lead in this unfolding Creativity Economy -- for the moment. The new forms of innovation driving it forward are based on an intimate understanding of consumer culture -- the ability to determine what people want even before they can articulate it. Working in what is still the largest consumer market in the world gives U.S. companies a huge edge. So does being able to think outside the box -- something Americans still do better than most.

A New DanceFor managers, the biggest challenge may be making the leap from their Six Sigma process skills to new ways of thinking. For corporations, transforming themselves will require new sets of values and organizational principles. Have you heard of design strategy? It's probably the Next Big Thing after Six Sigma. How about consumer-centric innovation? It may be the most powerful way to raise a company's innovation success rate. Do you know what innovation metrics your company needs? Have you heard of CENCOR (calibrate, explore, create, organize, and realize)? It's the post-Six Sigma dogma GE is spreading far and wide among its managers. Are B-schools on top of all this change? Not really, but Stanford University is starting a "D-school" -- a design school where managers can learn the dynamics of innovation. Teaching elephants to dance is never easy, but that's the task ahead if you want your company -- and your career -- to prosper.

There is, in fact, a whole new generation of innovation gurus. They are not the superstars of the '90s, such as Clayton Christensen, who focused on what might be called macro-innovation -- the impact of big, unexpected new technologies on companies. The new gurus focus more on micro-innovation -- teaching companies how to connect with their customers' emotions, linking research and development labs to consumer needs, recalibrating employee incentives to emphasize creativity, constructing maps showing opportunities for innovation.

When creative mojo gets going, it can explode into innovation. An example: the mundane mop. Cleaning used to be done with mops and water. Design Continuum Inc. in West Newton, Mass., researched cleaning for P&G and observed that water tends to slop dirt around, while dry rags pick it up (thanks to electrostatic attraction). Ergo, the Swiffer. In the design-speak of the Creativity Economy, this is paradigm shifting. Design Continuum helped P&G shift the cleaning paradigm. Now the Swiffer may become P&G's newest $1 billion brand.Think out-of-the-box consumer experiences, and you get the idea of paradigm shifting. Old paradigm: corner coffee shops. New paradigm: Starbucks (SBUX ). Old: radio. New: satellite radio. Old: crowded electronics stores. New: Apple Computer (AAPL ) stores. Old: grungy, smelly circuses. New: Cirque du Soleil. Old: any airline. New: JetBlue Airways (JBLU ). Old: Macy's (FD ). New: Target (TGT ). Old: Earth-toned Birkenstock sandals. New: colorful beach "Birkis."

The evolution of the economy toward creativity has been underway for some time. Steve Jobs, of course, has turned Apple into the paragon of the creative corporation. Companies throughout the world are deconstructing Apple's success in design and innovation, and learning the lessons.

Storytelling is very important. Designers have found that placing a potential new product within an emotional story that connects with consumers raises the chances of success. The design of the new line of MINI_motion watches and driving shoes, for example, captures the story of the Mini Cooper's cool urban driving experience. It's about the driver, not the car.

Whats Hot? Is CNOOC's Bid for Unocal a Threat to America? - Knowledge@Wharton

On June 23, CNOOC, the third-largest oil company in China, made an unsolicited $18.5 billon bid for U.S.-based Unocal. The bid has caused concern in the U.S. Congress because CNOOC is a government-owned company attempting to buy a natural resource that is important to national security. But ultimately, some say, there appears to be no sound reason why the U.S. government should move to block the deal, if Unocal shareholders decide it is in their best interests. At the same time, observers note the unresolved ambiguity that exists in the minds of both ordinary Americans and government officials responsible for U.S. foreign policy. Should China be viewed, as it was during the height of the Cold War, as a foe of American interests? Or should it be seen as a trading partner that is embracing free-market principles?

http://knowledge.wharton.upenn.edu/article/1240.cfm