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A Grove Outlook

Been meaning to write this post since I read the article What Detroit Can Learn From Silicon Valley by Andy Grove (Intel) the Journal last week.

I do not get too political on this blog and don’t wish too in this post. But as we live in the world of bailouts and government intervention, Grove’s comments are too timely. I’m not talking about his perspective about vertical integration but his points are quite valid there too. I think his point about government involvement (or not to) is spot on.

“Imagine if in the middle of the computer transformation the Reagan administration worried about the upheaval and tried to rescue this vital industry by making huge investments in leading mainframe companies. The purpose of such investments would have been to protect the viability of these companies. The effect, however, would have been to put the brakes on transformation and all but ensure that the U.S. would lose its leadership role.”

This is a very compelling statement. Think about it. More often than not, people that know me know that I will fall into the camp of letting innovation, letting customers choose and the markets decide. In the long term, letting companies that have fundamental problems and issues figure it out themselves forces creation, value for customers and quite effectively removes bloat from the market. Sometimes sea changes happen, companies go away, new ones enter that have learned from the past and are built for the future. Holding up things for a few more rounds that are clear are not working typically costs us in the short term (money), costs of in the long term (money) and the scariest consequence could prevent new emerging greatness from places we aren’t aware of yet or least expect. Definitely Darwinian but in most cases, the best path.

Something to think about.

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“We put the ‘no’ in innovation”

My wife handed me a full page ad today of Post cereal’s ad campaign that started I believe last month.  The headline:  “Innovation is not your friend.”  The tag line:  “We put the ‘no’ in innovation”

Certainly an attention grabber.  It certainly caught me off guard on first glance.  And I don’t think anyone will be clamoring to steal that tag line from them.

But there is certainly something to the campaign.  We live in a world of innovation, innovation is taking place everywhere around us:  genetics, new sources of energy, the web, sneakers that blink, sneakers that roll, beer that tastes like it has lime already in it…  While innovation is great and the right thing for many companies and products, is that always the case?

Too many times we see companies fall into the trap of innovating to create the next new thing that they lose sight of what got them where they are.  Worrying too much about what is next rather than concentrating on their core competency and ensuring that they maintain their competitive advantage  simply (or not so simply).  Sometimes, remaining the best in your space and at “what you do” needs to be the focus.  

I’ll always be a believer in being on the outlook for new markets, new features (that add value), new technology trends and understanding what could disrupt your business.  At the same time, focus must remain on the core, this campaign speaks volumes to how companies need to remain focused on the core knitting.  Just in the time its taken me to write this post, I like this ad more and more.  And it is just a bonus for Post that I don’t believe anyone is going to try to mimic this campaign.  How ironic. An innovative ad campaign saying ‘no’ to innovation.

A Project to Root For

Reading the latest issue of the MIT Technology Review and there is a good article about the Masdar Initiative. I find it hard to not root for success of the project: A $15B investment in aims to create a zero emissions city, a green metropolis as they refer to it. If you haven’t read about the project, I recommend the article as it gives a good outline of how big they are thinking. Common sense says that it is hard to imagine the project achieving success but then curiosity and hope make you root for it. And the ancillary benefit I really am intrigued about this project is that there will be an immense amount of industrial and green environmental learning from not only the results but the planning and construction of such an initiative. Kevin Bullis wrote an editorial covering the project and echos this sentiment:

One of the best things about the project–which I’ll write about more in the coming days–is that it provides a much needed way to test ideas for renewable energy and efficiency at a large scale. The hope is that the technology tested here can be applied throughout the world.

Bullis is concerned about some of the applicability of learning due to the climate conditions of the region. This is true but I tend to believe if you can achieve a degree of success and learning in the harshest of conditions where energy consumption is necessary at high levels, surely one benefits where the challenges are less intense. Nonetheless, I love to see the “big bet” thinking here. I recently wrote about the renewable energy grid that has been discussed, another “big bet” project. This is what it is going to take to make huge strides in innovation, particularly in this market sector. It is great to see Dubai who has placed other big bets in a variety of other projects place such a bet on getting a project off the ground where the world can benefit from what it learns; it could be a big step in the right direction.

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Creativity and New Ideas

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Puneet Gupta, CEO of Connectbeam, and I were having a conversation earlier today regarding entrepreneurial thought and creativity of idea.  I love these types of discussions, taking a step back and assessing where “we” are in general.  They are always compelling and if nothing else, forces you to take a step back from your current position (if just for a moment) to reflect.

During our discussion, Puneet mentioned a great talk that Sir Ken Robinson gave at the TED conference a couple of years back.   I had not seen it so decided to take a look.  So as TED 2009 takes place here in California, I am watching videos of TED keynotes from prior years.

Sir Ken Robinson discusses the concept on how we need to re-assess how we approach education and educating our children.  That education normally goes towards the math and science disciplines rather than the arts.  His view is that we must think very hard about the arts and how developing these skills as well is fundental to creativity and thinking outside of the box.  Two things I find compelling about this line of thought:

1)  You hear more often than not that we need to invest more not less in the math and science educational system in order to continue to progress innovation forward.  Completely the opposite of the lens that Robinson takes.

2)  On merit, what Robinson says is true.  The education system simply by its nature is geared to teach students what is already learned and known by others who have determined it.  Makes sense.  It is not that math and sciences are bad but that it conforms everyone’s thinking to what has already been thought of.

So, where does that leave us?  How do we develop new ideas?  Very interesting discussion points particularly when you talk about entreprenuerial attitude, trying new things, creating new businesses and ways of looking at the world.  Robinson makes a statement in his talk that really rang true for me:

If you are not prepared to be wrong, you will never come up with anything original.

How true this statement is.

I don’t know quite yet where my thoughts land on where the right balance between the sciences and arts should be.  It is a complex topic.  Education is important.  Learning from the past is important.  Math and Science are important.  I’ve always slanted and been more interested in the sciences side of things.  But I appreciate Robinson’s perspective, there is certainly something to be said for the development of creative thought rather than learning disciplined sciences, thinking creatively rather than analytically.  Obviously both are needed, that leads to true innovation.

If you haven’t seen his talk, it is about 20 minutes and well worth it.

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Renewable Energy Power Grid

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There’s a very good article, Lifeline for Renewable Power, in the latest edition of MIT Technology Review regarding the need for a revamped energy grid that can distribute power generated through alternative energy methods into the places the need it. There is always the ongoing debate on whether we even have at our disposal a set of alternative energy resources that are comprehensive enough to significantly reduce our reliance on fossil fuels.  I don’t want to get into that debate in this post but it is clear we can certainly do a lot more with nuclear, hydro, wind and solar power sources.

And it seems the consensus is that regardless of what alternative energy sources we utilize, the current energy grid that we rely on is in major need of an overhaul.  The current system has major inefficiencies for today’s needs (anyone who experienced the northeast blackout a few years ago can attest to that).

Smart-grid technologies could reduce overall electricity consumption by 6 percent and peak demand by as much as 27 percent. The peak-demand reductions alone would save between $175 billion and $332 billion over 20 years, according to the Brattle Group, a consultancy in Cambridge, MA.

So to sum it up, I think there is more consensus on the fact we are going to need a new grid or at least major renovation on the current one.

Gore called for a “unified national smart grid” that would move power generated from renewable sources to cities, increase the efficiency of electricity use, and allow for greater control over renewable resources. He estimated that the grid overhaul would cost $400 billion over 10 years.

So $400B?  Please allow me to backseat govern for a moment.  $400B to redo the energy grid and move us towards a better energy system?  And we think $700B bail out package to financial institutions suffering from many wounds that are self-inflicted is a better investment where money could go?   Okay, the financial markets situation is a very fragile one and the downstream negative consequences was not something that could be risked.  This has been debated as well.  Perhaps, then we should give the energy grid a nice $14B kick start instead of funding the auto bailout that went in front of the senate, seems to keep growing and one has to question on whether the world needs poorly run car companies.

Let’s move forward, not backward.

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