February 1, 2013

Issue 18 – February 1, 2013

1. 10 Secrets Internet Giants Share about Growth.............................................. Nicolas Bry

2. Visualizing World Economic Forum Outcomes ……..…….………..…...…. Braden Kelley

3. Broken Windows Innovation ………………………..……………....…..……… Scott Bowden

4. Leadership Means Facing Challenges Head-on ..........................................…. Mike Myatt

5. Efficiency versus Value – The New Innovation Equation .………..……… Rowan Gibson

6. The Pricing of Social Innovation ……………………..………………………. Stephan Liozu

7. How Engineers Create New Markets …………………………....……….….... Mike Shipulski

8. The Reverse Innovation Revolution ……………………………………..…...….. Greg Satell

9. 16 Innovative Ways to Use Crowdfunding for Education ……………….... Miriam Clifford

10. The Productive Startup ….…………………………………….……...….….…..… Rob Toledo

Your hosts, Braden Kelley, Julie Anixter and Rowan Gibson, are innovation writers, speakers and

strategic advisors to many of the world’s leading companies.

“Our mission is to help you achieve innovation excellence inside your own organization by making

innovation resources, answers, and best practices accessible for the greater good.”

Cover Image credit: Power

10 Secrets Internet Giants Share about Growth

Posted on January 27, 2013 by Nicolas Bry

Internet

giants are not only shaping creative business models, they are reinventing the way to manage computer science, software applications, and

moreover, their human capital. As their new products are intrinsically linked to computing, their re-engineering unfolds new tremendous paths

for innovation.

Internet archetypes

Octo Technology, a savvy IT consulting firm, has recently reviewed some of the most emblematic firms of the Internet, such as Amazon,

Facebook, Google, Netflix, LinkedIn, and extracted ten best practices used to maximize applications delivery.

No matter how young these companies are, it is surprising to discover their creativity in leadership and management: as if these ‘engineers

from the Silicon Valley’ truly believed in the ‘power of their men’, in a similar way they trust their computing machines; as if they have realized

they rely deeply on their human capital in order to beat the competition.

Their successful patterns are sorted in three thematics: bigger, faster, harder.

Bigger

The first type of practices are related to scale. How Facebook handles continuously over 1 billion users, Google and Yahoo! manage over 200

millions email boxes, Twitter delivers daily 400 millions tweets, is absolutely impressive. No former computer system had to handle such a

massive market.

Octo identifies three untraditional approaches that Internet players have used to scale:

Build vs Buy, which means the use of open source software vs software package such as ERP (enterprise resource planning) or

CRM (customer relationship management) applications package. Naturally software package license fee are an issue for start-up with

initially limited resources; the restriction in the use of software package also relies in their difficulty to scale. They unable to help the

start-up build a computing system specifically adapted to their business model: software package are generic in essence when start-

up are creating a specific activity analyses Octo. At last, Open Source, by activating the intelligence of the many, turns to be an much

more economical and powerful tool: Internet giants leverage on Open Source, and share back their developments to Open Source

(Octo lists: Cassandra by Facebook, Hadoop and HBase inspired by by Google and developed by Yahoo!, Voldemort by LinkedIn,

Bootstrap responsive design toolkit by Twitter, and last but not least, Android, Google operating system for mobile devices).

Networked commodity hardware : if scaling innovation in the 20th meant manufacturing, in the 21th, scaling innovation

relies on network connection. Considering computing, the most effective and economical ways to handle big data (over 10 To) and

high-rate transactions (over 1000 transactions/s) seem to manage networks of commoditized servers, rather than setting-up giant

servers. This network of servers shall enable easy and continuous access to server capacity through virtualization. It involves

mastering new techniques: one remembers that to boost the performance of its network of servers, Google’s 18 th employee was a

neurosurgeon who had qualified at Harvard and the Yale School of Medicine kinds of databases. Similarly, it leads to moving from

central relational databases to distributed databases (Sharding, distributed data management; NoSQL concept; technologies like

Hadoop or Cassandra) and new paradigms: availability must prevail, and facing partition, which happens when communications fail,

might turn out to be preeminent compared to consistency (re-reading of CAP theorem);

API ecosystem: we have talked about the power of API in our description of modular design. API is seen here as a way to scale

on various dimensions: catching additional revenues (Google maps), marketing your service through third-party applications (Twitter),

building a creative ecosystem, letting others build value on top of your platform. With ‘API first’ pattern, API is used to design its own

end-user app, the same way third-party would use it, a kind of “Eat Your Own Dog’s Food”.

Faster

That is where the ability to grow does not only rely on your capacity to scale. If some new customers will join as a result of marketing and brand

awareness, others will be attracted by new unique features: you need innovative products to fuel the growth engine.

According to Octo research, Internet giants have set out three peculiar approaches to accelerate innovation delivery:

Minimum Viable Product is linked to Lean Startup approach developed by Eric Ries: MVP corresponds to the most basic release of

the product that can be tested by a customer, and generate feedback. You have to select one single or a limited number of features to

simplify your product, and put it at the core of your first release. We see that MVP refers to the idea of Focus cherished by Steve

Jobs, and Fast Prototyping and Iterating, promoted by Design Thinking by Tim Brown. Similar thoughts are exposed in ‘Keep It Simple

and Sexy’ post. Nevertheless, it is not because the product is limited that the core feature should not be not perfectly up and running:

otherwise you are sure to fail your test. The challenge is to select the winning core feature, ‘the killer app’ as soon as possible. That’s

where the attributes of Meaning, Belief, Social Imaginaries based on user understanding, step in. They lead to designing something

which holds meaning for end-users, echoing their social imaginaries through simple metaphor, and funding your innovation on

your personal unwavering belief in the fact that it will change people’s life;

A/B testing, made popular by Amazon, prolong the former idea by setting up testing of a similar feature among 2 separate

populations with some changes in the lay out (home page, visual of an item, …). LinkedIn is even able to sort 2 populations of lawyers

in the only area of Boston. This easy-to-run mechanical approach helps to reach rapidly an optimized release by making successive

iterations smooth;

Unifying development and operations teams facilitates innovation delivery and accelerates go to market; following concepts are in

use: Infrastructure as a Code (where usual coding can manage the infrastructure system), Continuous Delivery (where new release

are delivered at fast regular pace), Cooperation Culture and common language among the teams. Amazon has extended this concept

to a modular organization, each team being accountable for running the system it has shaped: “you build it, you run it“.

Harder

Internet giants are fast to innovate and are skilled at scaling, but it would mean nothing without their ability to manage broadly their impact:

Internet giants really nail the disruptive formula, leveraging on their step ahead to generate exponential margins. How to reach this

efficiency?

Octo highlights four organizational patterns of their operating system:

A measurement oriented culture: “In God we trust, everything else we test” comments Octo; one could only say: “you can only

improve what you can measure”. Internet giants are in race for perpetual improvement of their response time, the number of pages

viewed, the items which interact the best with Internet users, or the mean time between failure (Google disk failure experience): these

performances directly impact directly their revenue stream. More unexpectedly, measures can also be used to build better HR

processes and management rules as in the Oxygen Google initiative.

Pizza Teams which means keeping teams small: 5 to 15 people (8 being the appropriate size of team you can feed with 2 pizze,

according to Amazon). Amazon’s CTO, Werner Vogels claims: ‘Small teams are holy’, they are agile and creative, and limit at the

minimum the bureaucratic flow;

Feature Teams, or multifunctional Project teams concentrating all necessary skills to achieve autonomously a functional module or

product;

Design for failure, assuming that outage is part of the game: Eventual Consistency (identifying ways to keep the system running

even if data are not consistent for a given moment of time), Graceful Degradation (degradation keeping the system alive with minor

shortcomings), Feature Flipping (activating features independently from delivery), Simian Army (completing an army of random failure

tests).

Other additional patterns from Internet Giants are described by Octo such as:

fluent customer experience: interface must display in a blink;

talented and perfectionist coding engineers, referring to Software Craftmanship, and motivation tools: stimulating environment,

Hackathons, Dojos;

perpetual beta: continuous cocreation with the users-developers;

device agnostic: maintaining optimum experience on any device;

cloud first.

Crossing with Rapid Innovation model

Though it is focused on accelerating innovation in large companies, the Rapid Innovation model share many commonalities with the Internet

giants patterns.

Let’s go through the four principles of the model:

1. Setting-up an agile and autonomous innovation entity: this first principle is obviously close to Pizza and Feature teams rules;

2. Designing within a framework of “creative tension”, an exciting environement mixing stimulating and stretched goals with a proven expertise in

innovation discipline. This second concept meets with the toolbox including MVP, A/B testing, Build vs Buy, Customer experience, Unified

teams;

3. Naturally, the third principle, aligning with innovation group strategy, across a shared portfolio and permanent connections, is not an issue for a

start-up, and not relevant for Internet giants at the beginning; but once the growth has come, the notion of alignment will certainly be precious

to share a common vision across multiple agile entities;

4. In the course of seeking adoption and engagement from the core corporation, we came to shape the fourth principal of modular design, an

“innovation by component” approach; no doubt it matches the API ecosystem pattern.

Formula to success

If the recipe is so widespread, why doesn’t anyone reach success?

First of all, what a difference between the plan of a recipe and its successful execution! It’s about talent: top chef or great performers show us

the gap.

Then, no one can rests on its laurels: you have to reinvent your initial formula, to change while remaining yourself, growing while keeping

your identity. In other words, ‘product that made you big may not always be your core business’ noted @JimmyDaugherty in his post about

Amazon. And who could demonstrate a better quintessence of continuous transformation than Amazon, which managed changing its business

model every three or four years?

image credits: nantes.fr, vision mobile, hamiltonianfunction.blogspot.com, thisweconfess.wordpress.com, businessweek.com,

tammyamorton.com

Nicolas is a senior VP at Orange Innovation Group. Serial innovator, he set-up creative BU with an international

challenge, and a focus on new TV experiences. Forward thinker, he completed a thesis on “Rapid Innovation”,

implemented successfully at Orange, and further developed at nbry.wordpress.com. He tweets @nicobry

Visualizing World Economic Forum Outcomes

Posted on January 25, 2013 by Braden Kelley

Sailing Towards a Circular Economy – The Values Context

As the World Economic Forum 2013 comes to a close I came across a BusinessWeek article that had the graphic below that made me laugh.

I’m not sure whether that’s a good thing or a bad thing. Oh well, I guess if nothing else a good laugh is beneficial for my health, but it remains to

be seen whether any positive benefits (other than connecting some of the smartest (or wealthiest) people on the planet) will be created for the

world as a result of the World Economic Forum 2013 taking place.

They did employ some live graphic sketching artists which resulted in the below images. If you want you can get larger versions on the World

Economic Forum’s Flickr Photostream.

Hope you enjoyed them!

As someone who makes his living writing and speaking about innovation I guess it is good to at least see the word innovation appear so many

times (even if few people take the time to stop and define what they really mean by the term). It still sounds good.

But what do you think, is the World Economic Forum a waste of time and damaging to the ozone layer, or essential for the advancement of

society?

FULL DISCLOSURE: This post was written while making my own little hole in the ozone layer on my way back to Seattle after finishing a

workshop on crowdsourcing for a global brewer.

Braden Kelley is a popular innovation speaker, embeds innovation across the organization with innovation training, and builds

B2B pull marketing strategies that drive increased revenue, visibility and inbound sales leads. He is currently advising an

early-stage fashion startup making jewelry for your hair and is the author of Stoking Your Innovation Bonfire from John Wiley

& Sons. He tweets from @innovate.

Broken Windows Innovation

Posted on January 26, 2013 by Scott Bowden

One of the best-known concepts in the study of criminology is the Broken

Windows Theory. This approach to fighting crime, first articulated by George

L. Kelling and James Q. Wilson in a 1982 article in The Atlantic Monthly,

asserts that there is a linkage between social order and crime that can be

explained by the parable of the broken window.

Kelling and Wilson based their arguments partly on research carried out by

Philip Zombardo, a Stanford psychologist who in 1969 parked abandoned

cars in the Bronx, New York, and Palo Alto, California, to record what would

happen to the vehicles. The car left in the Bronx suffered initial damage and parts theft within ten minutes and, over the course of time, suffered

significant destruction at the hands of the neighborhood residents. The car in Palo Alto sat intact for a week but once Zombardo smashed one

of its windows with a sledgehammer, the area residents soon began to attack the car and the vehicle ended up suffering substantial damage.

Zombardo’s research suggested that disorder breeds more disorder. Kelling and Wilson took Zombardo’s findings and added the results of their

own research in crime prevention in Newark, New Jersey, in which they studied the results of a community policing effort that focused on officer

foot patrols instead of car patrols. The authors noticed the different effects on public order attributable to the engagement of the foot patrol

officers with the community, as officers would tightly enforce a set of simple rules aimed at maintaining a sense of decorum, keeping an eye on

strangers versus regular community members, and targeting vagrancy and other anti-community behavior.

Intuitively, one would think that limited public safety resources should be devoted to preventing or solving major crimes, such as burglary,

assault, or murder, as these do the most damage to the individuals involved. From a cost/benefit analysis, a petty street crime that results in the

loss of a few dollars from the wallet of a victim pales in comparison to a home invasion resulting in the injury of a citizen. As such, the police

should focus on the “big” crimes and not waste their time worrying about an abandoned lot or a vagrant drinking in an alley. The Broken

Windows Theory, contrarily, postulates that a single broken window in a building, if not repaired quickly, soon leads to other broken windows

and, ultimately, to decay in the overall social order in an area.

According to Kelling and Wilson, the lesson for law enforcement and for community-minded individuals is to respond quickly to even the

smallest signs of disorder (abandoned properties, uncollected trash, vagrancy, gang-like rowdy behavior) lest their neighborhood descend from

a “stable” place into an “inhospitable and frightening jungle.” Former New York Mayor Rudy Giuliani notably applied the Broken Windows

Theory during his tenure, enforcing laws against the squeegee men and panhandlers who were at one time ubiquitous in the city. As former

New York Police Commissioner William Bratton puts it, the objective is to “[s]top the behavior when it’s small, stop the cancer when it’s small.”

Although the validity of the Broken Windows Theory is hotly debated (as is the case with almost any leading theory in sociology and political

science), there is an interesting ramification to consider for the study of innovation. Like the police officers focused on addressing the major

crimes, we as innovation practitioners have a tendency to focus our efforts on solving huge problems facing our enterprises. We strive to find a

big idea to disrupt our industry or a bold, transformational move that leads to a dramatic rethinking of how we operate. While these objectives

are indeed necessary and desirable for an innovation program, the Broken Windows Theory suggests that we should focus on more than just

these larger-scale objectives.

We should scan the area for smaller innovations (often referred to as low-hanging fruit

orq uick wins) that can demonstrate results even though they are not transformational

or disruptive. For example, an innovation team could focus some of its resources on a

big new product that will transform the industry, but not lose sight of the possibility that

in the course of that work the team could identify a small improvement to be made to

an existing product that would lead to more sales for the enterprise.

Likewise, a team could stumble across a small process change to drive greater

operational efficiencies in the course of working on a major initiative, such as

implementing a new agile development methodology.

In addition to providing us with quick wins and positive momentum for our efforts, by fixing smaller problems we also reduce the likelihood that

we spend so much time focusing on a major play that, by the time we arrive at a breakthrough, the enterprise has taken a turn for the worse

and does not have the resources to invest in our proposed solution. The small victories can also create a culture of innovation success in our

enterprise, increasing the chances that our larger scale efforts will be successful and spawning new ideas and creativity. As we are walking the

innovation sidewalk, we should remember to take the time to repair any broken windows we see lest our overall efforts struggle to gain traction.

Another theory that leverages the concept of the broken window is Frederic Bastiat’s Broken Window Fallacy. Bastiat, one of the leading

thinkers in the Austrian School of economics, introduced the Broken Window Fallacy, also known as the Glazier’s Fallacy, in h is influential 1850

essay That Which is Seen and That Which is Unseen. The Glazier’s Fallacy tells the story of the shopkeeper whose son accidentally breaks

one of the windows in his store. The shopkeeper hires the local glazier to repair his window and pays him a fee of six francs for the new

window. The glazier is pleased as a result of the new revenue opportunity, which Bastiat refers to as “that which is seen.” At first glance, the

event of the broken window seems to be a net economic benefit to the village, as the glazier who was previously idle now has a task to perform

and is compensated for that task.

However, what Bastiat identifies as “that which is unseen” is the fact that the shopkeeper could have spent those six francs on something else,

so the economic benefit that could have flowed to someone else in the village (perhaps the baker or butcher) does not occur and those other

individuals are worse off than before the window was broken. The Broken Window Fallacy demonstrates the concept of opportunity cost, which

states that for every action taken, one must consider the actions not taken as well. Time spent performing activity “A” must be analyzed not just

in terms of what it means for activity “A” but also what it means for time not spent performing activity “B.”

In the field of innovation, the juxtaposition of these two theories referencing broken windows presents an interesting paradox. The Broken

Windows Theory suggests that innovation practitioners should not lose sight of smaller scale innovation efforts because those can provide

intrinsic value, whereas the Broken Window Fallacy suggests that the time spent on these smaller efforts ultimately means less time spent on

the larger, transformational innovation initiatives that could reap huge gains for our enterprises.

A potential solution to this innovation paradox could lie in mimicking the behavior of the police officers referenced in the Broken Windows

Theory while considering the opportunity cost implications of the Broken Window Fallacy. A police force that spends all of its time focusing on

tracking down purveyors of graffiti or vagrancy would create an environment where those who commit major crimes feel emboldened to commit

more due to their lack of prosecution. Conversely, a police force that focused only on major crimes and let vandals and petty criminals run

rampant would create a society that is unlivable that could ultimately devolve into more serious criminal activity.

Perhaps the lesson for innovators is to think of our enterprises as a police officer would to his or her “beat” or local neighborhood. When we

start on an endeavor, such as working with a new client or new business unit within an enterprise, we should take a quick scan of the

innovation culture of the organization and determine if we are looking at the equivalent of a neighborhood with broken windows and graffiti or an

area with clean streets and a solid social contract. If we spot the former (social detritus), we should focus more of our innovation efforts on

smaller scale initiative that could result in quick wins, while keeping an eye on larger scale future initiatives that are truly transformational. If we

spot the latter (social order), then we may want to tilt the scale towards the big innovation plays that could be truly disruptive. There will always

need to be a balance between the two, but as we turn the knob depending on what we encounter in our daily innovation work, we should keep

in mind the lessons of the broken windows.

Sources: George L. Kelling and James Q. Wilson, “Broken Windows: The police and neighborhood safety,” The Atlantic Monthly (March 1982).

David Feith, “William Bratton: The Real Cures for Gun Violence,” Wall Street Journal (January 18, 2013).

http://en.wikipedia.org/wiki/Parable_of_the_broken_window. image credit: magnifying & shaddered dreams image from bigstock

Scott Bowden works on Innovation Programs for IBM Global Services.

Leadership Means Facing Challenges Head-on

Posted on January 25, 2013 by Mike Myatt

Many would say if you’re in the leadership business, you’re also in the

business of dealing with adversity. Regardless of where you are in your life

and your career, I can promise you one thing; you will consistently be faced

with challenges and obstacles along the way. In today’s post I will take a

brief look at the beliefs that cause some to succeed where others fail.

Life isn’t easy, it’s not fair, and it’s certain to challenge even the best of

leaders. You will face physical, mental, financial, relational, and resource

challenges among others. Instead of beating yourself up or giving in, it is

critical you develop the ability to learn from setbacks. In a nutshell, dealing with barriers, obstacles, and setbacks requires both attitude and

aptitude. So, do you have the skills and perspective to thrive under pressure and to succeed, or will you implode when faced with a challenge?

Sir Edmund Hillary was unsuccessful on three different occasions in his attempt to climb Mt. Everest before his successful summit in 1953.

People who lauded the praises of Sir Edmund’s ascent said, “You’ve conquered the mountain,” and Sir Hillary said, “No, I’ve conquered

myself.” The bitter experiences of the three failed attempts did not hold back Hillary from a fourth one. With a focused vision, a clarity of

purpose, a passionate outlook, and a great team, he pursued his goal and achieved it.

Anyone who has ever launched a new initiative understands the inevitability of running into numerous barriers over the life-cycle of any project.

The difference between those who succeed, and those who fail, is their perspective on how to deal with the barriers they encounter along the

way. People often stumble over even the smallest of obstacles, while all too easily considering these routine speed-bumps as rational excuses

for their failures.

Setbacks and difficulties are an inevitable part of life. While they will often challenge your skills and temperament, it is those who are willing to

spend the time assessing the obstacles as they arise, and who refuse to submit to their various trials who will succeed. The ability to blow

through barriers must become a passion if you want to achieve sustainable success in the business world.

I could certainly paint a more complex picture of what it takes to overcome challenges by citing esoteric theories, but the truth of the matter is

the only thing required to get beyond barriers is to stop complaining about the challenges and obstacles, and spend your time solving problems

& creating outcome based solutions. If my objective is to get to the other side of the wall, I don’t really care if I go over the wall, under the wall,

around the wall or through the wall… I just care I get to the other side. While I might spend a bit of time evaluating the most efficient strategy for

getting to the other side of said wall, it will ultimately be my focus on the tactical execution of conquering the challenge that will determine my

success. A bias toward action is always a better path than falling prey to analysis paralysis.

Generally speaking, there are only really two ways to address difficulties:

1. You can either change the circumstances surrounding the difficulty, or;

2. Change yourself to better deal with the circumstances or the difficulty itself.

You can deal with difficulties properly and leverage your experience (or better yet the experience of others) to enhance your confidence, or you

can deal with them incorrectly and let them seriously damage your confidence, performance and ultimately your reputation.

Following are 4 things to consider when setbacks do occur:

1. Recognize: Be honest enough to acknowledge what has happened. Don’t hide from the reality of the situation at hand. Setbacks happen –

don’t be discouraged, learn from them, deal with them, and move on.

2. Learn: Turn setbacks into development opportunities by asking positive questions such as: What are the positives surrounding this situation?

How can I make the most of this situation? What can I learn from it? What are the facts underlying this problem? How can I avoid this situation

next time?

3. Acknowledge: Setbacks are part of life – they happen to everyone. When they happen to you, it’s important to understand you are not being

singled out. Don’t take it personally, deal with it, and move on.

4. Perspective: View setbacks as a challenge to overcome rather than an issue or problem.

Just as a diamond cannot be polished without friction, neither can you fully develop your skills without them being tested by adversity. Use

obstacles and failures as an opportunity to polish your skills. I think Winston Churchill said it best when he noted, “The pessimist sees the

difficulty in every opportunity; the optimist sees the opportunity in every difficulty.”

Thoughts?

Mike Myatt, is a Top CEO Coach, author of “Leadership Matters…The CEO Survival Manual“, and Managing Director of

N2Growth.

Efficiency versus Value – The New Innovation Equation

Posted on January 26, 2013 by Rowan Gibson

When the economic barometer is pointing upward, all the talk in company boardrooms is

about growth, innovation and value creation. When the global economy lingers in the

doldrums, corporate strategy shifts inexorably back to the safe haven of operational

efficiency. Now you might argue that this reaction is both inevitable and understandable,

and I would accept that at some level. But remember this: something far deeper and more

significant than these periodic upswings and downswings is the fact that we are now in a

new kind of economic era. An era in which fanatical cost-cutting, downsizing, lean Six-

Sigma, mergers and acquisitions, supply chain management, off shoring or outsourcing are

no longer the basis for competitive advantage. These practices may undoubtedly have

created some value in the old days, for example when Jack Welch was running GE, but

business leaders on the whole are recognizing that times have changed. Jeff Immelt, GE’s

current CEO, says, “The only answer for us today is innovation.” And Ginni Rometty,

President and CEO of IBM, echoed these words when she stated that, “For CEOs today, it’s all about achieving growth through innovation.” In

fact, it’s no exaggeration to say that innovation is the only sustainable source of value creation we have left.

What organizations need to understand is that, at the macro level, productivity – which of course is central to profitable economic growth – has

always been determined by two elements. On one side, it is determined by the efficiency with which companies use their inputs – how much

labor and capital it takes to produce their goods and services. On the other side, productivity is determined by the value that customers place

on the outputs.

For most of the industrial era, the predominant focus was on efficiency as opposed to value. Yet when we look at the companies that are

creating most of the new wealth today, we find that they are not doing it by eeking out the last few percentage points of eff iciency from their

business processes. They are doing it by creating things that bring incredible new value to customers.

Think about Apple, or BMW or Porsche. What we find is that, while these companies are highly efficient in their operations, they do not

necessarily enjoy the largest economies of scale. It’s their ability to deliver value – to create things that are compelling, exciting and wonderful –

that has made them enormously effective engines of wealth creation. BMW and Porsche, for example, command the highest margins per

vehicle in the world. Contrast this with the meager performances of GM and Ford and we find that huge economies of scale do not per se

deliver an advantage. If a company is not capable of combining low operating costs on the one side with high value-creation on the other, it

simply becomes incredibly efficient at making the kind of products customers don’t want.

On the whole, large companies have spent about a hundred years building a ‘hyper-efficiency’ mindset into their organizations. But, until recent

years, they have given very little thought to the other side of the productivity coin – how to build a mindset around creating ‘hyper-value’ for the

customer. That’s why innovation goes so much against the grain in most companies. It has to fight against a whole set of management

principles, processes and systems that are basically set up to deliver something else.

Creating value requires a deep understanding of unarticulated customer needs. It requires enormous creativity. It requires a degree of

messiness – i.e. recursive cycles of experimentation and learning. It requires radical thinking in terms product configuration or value

proposition. But the industrial age has given us organizations that are not very good at doing any of that. It has given us organizations that treat

variety as the enemy – that believe variance from a quality standard, or from a budget, or from a production schedule is a fundamentally bad

thing. Yet creating value for the customer often entails challenging and deviating from these norms.

To use the language of complexity theory, most companies have been operating predominantly at one end of the spectrum – “the ordered

regime” – and hardly at all at the other end, which scientists refer to as “the edge of chaos.” It is this ‘other’ end – the messy, creative,

experimental end – that is so vital for value creation, wealth generation and long-term growth. Indeed, in his book, “The Hacker Ethic”, Pekka

Himanen wrote that, in today’s economy, the “most important source of productivity is creativity.” This is the sort of mantra that becomes

popular when the economy is growing; when companies find themselves drawn naturally toward the innovation end of the spectrum. But the big

challenge comes when things take a downturn and there’s pressure to cut costs again – which is exactly the situation we’re in now.

Organizations must ensure that the pursuit of radical, value-creating innovation does not get neglected as they pull back reflexively toward the

‘ordered regime’.

As Charles Simeon, a pastor at Cambridge University in the 18th century, profoundly observed, “The truth is not in the middle, and not in one

extreme, but in both extremes.” The same could be said of operational efficiency and innovation. Now more than ever, organizations need to

learn how to operate equally well at both extremes – they need to be both highly innovative and highly efficient at the same time. Apple is a

good example. Turn your iPhone around and you’ll read “Designed by Apple in California. Assembled in China”, which just about says it all. In a

value-based economy, companies must be able to continually dream up products and services their customers wouldn’t want to live without, yet

they must simultaneously have the capacity to deliver those things with brutal efficiency.

image credit: geloans.com

Rowan Gibson is widely recognized as one of the world’s leading experts on enterprise innovation. He is co-author of the

bestseller Innovation to the Core and a much in-demand public speaker around the globe. On Twitter he is @RowanGibson.

The Pricing of Social Innovation

Posted on January 24, 2013 by Stephan Liozu

Whether destined for emerging markets or developed markets, firms make

similar mistakes when designing and pricing social innovations. First of all, they

miss opportunities to respond to customer needs by over-engineering their

offerings or making them too complex. Secondly, they over-price these offerings,

thinking that customers will be willing to pay for “green” or sustainable products

or for products that serve social needs in developing or under-developed

markets. In other words, they over-design or over-price their products or

services.

Sustainability has received a lot of attention in recent years. Recent concepts of sustainable value for social innovation have been explored and

introduced by experts such Cooperider, Ross Kanter, Laszlo or even Peter Drucker. They characterize sustainable offerings as designed

around user needs, right-engineered for the sophistication of local markets, widely accessible to the target markets, simple in nature and

presenting little trade-off with respect to quality. In other words, products and services that fall in the social innovation sphere, carefully crafted

to local markets and subject to advanced, needs-based segmentation approaches. Johnson & Johnson, for example, has been very successful

at entering the larger Indian hygiene market by designing simple and basic products that respond to the needs of a large market, and priced

based on local willingness-to-pay. Apple is now thinking about a “strip-down”

version of the iPhone for emerging markets.

Many companies have entered emerging and developing markets by adopting a

local-local strategy: local products designed for local customers. They have

embraced the fundamentals of the value-based pricing methodology: careful

market segmentation, assessment of willingness-to-pay for value drivers, pricing

based on this willingness-to-pay, and communication to the market of the

sustainable value messages. Value-based pricing in that case does not mean high or premium prices. It means pricing sustainable and social

innovations based on the local customers’ willingness-to-pay. Many companies complain they cannot get additional premium in emerging

markets for their “green” or sustainable technologies. They are looking at this the wrong way. By over-designing their offering or mis-calculating

willingness-to-pay, they over-price innovations and miss their market target.

Laszlo and Zhexembayeva define embedded sustainability as follows:

“Embedded Sustainability is the incorporation of environmental, health and social value into the company’s core business with no trade off in

price or quality. The goal is not green or social responsibility for its own sake. It is meeting new market expectations in ways that strengthen the

company’s current strategy or help it develop a better one.”

Yes, ladies and gentlemen, that means using the fundamentals of value-based pricing for emerging markets and for environmental offerings.

Cell phone companies do it successfully on the African continent. GE and Interface have transformed their business models around

sustainability and eco-imagination. Other Fortune 500 companies are extremely successful in the BRIC (Brazil, Russia, India, China) countries.

The challenge resides in two critical elements of the innovation process: 1) right-engineering performance based on user needs; 2) pricing

based on customer willingness-to-pay.

Be bold! Join the value-based pricing revolution!

image credit: swlearning.com; midcenturia.com; paul rand

Stephan Liozu is the Founder of Value Innoruption Advisors and specializes in disruptive approaches in innovation and

value management. He is also a PhD candidate in Management at Case Western Reserve University and can be reached

at sliozu@case.edu

How Engineers Create New Markets

Posted on January 26, 2013 by Mike Shipulski

When engineers see a big opportunity, we want desperately to

move the company in the direction of our thinking, but find it

difficult to change the behavior of others.

Our method of choice is usually a full frontal assault, explaining

to anyone that will listen the opportunity as we understand it.

Our approach is straightforward and ineffective. Our

descriptions are long, convoluted, complicated, we use

confusing technical language all our own, and omit much

needed context that we expect others should know. The result

– no one understands what we’re talking about and we don’t

get the behavior we’re looking for (immediate company

realignment with what we know to be true). Then, we get frustrated and shut down – opportunity lost.

To change the behavior of others, we must first change our own. As engineers we see problems which, when solved, result in opportunity. And

if we’re to be successful, we must go back to the problem domain and set things straight.

Here’s a sequence of new behaviors we as engineers can take to improve our chances of changing the behavior of others:

Step 1. Create a block diagram of the physical system using simple nouns (blocks) and verbs (arrows). Blue arrows are good (useful actions)

and red arrows are bad (harmful actions). Here’s a link to a PowerPoint file with a live template to create your own.

Step 2. Reduce the system block diagram down to its essence to create a distilled block diagram of the problem, showing only the system

elements (blocks) with the problem (red arrow).For a live template, see the second page of the linked file. [Note - if there are two red arrows in

the system block diagram, there are two problems which must be solved separately. Break them into two and solve the first one first. For an

example, see page three of the linked file.]

Step 3. Create a hand sketch, or cartoon, showing the two system elements (blocks) of the distilled block diagram from step 2. Zoom in so only

the two elements are visible, and denote where they touch (where the problem is), in red. For an example, see page four of the linked file.

Step 4. Now that you understand the real problem, use Google to learn how others have solved it.

Step 5. Choose one of Google’s most promising solutions and prototype it. (Don’t ask anyone, just build it.)

Step 6. Show the results to your engineering friends. If the problem is solved, it’s now clear how the opportunity can be realized. (There’s a big

difference between a crazy engineer with a radically new market opportunity and a crazy engineer with test results demonstrating a new

technology that will create a whole new market.)

Step 7. If the problem is not solved, or you solved the wrong problem, go back to step 1 and refine the problem

With step 1 you’ll find you really don’t understand the physical system, you don’t know which elements of the system have the problem, and you

can’t figure out what the problem is. (I’ve created complicated system block diagrams only to realize there was no problem.)

With step 2, you’ll continue to struggle to zoom in on the problem. And, likely, as you try to define the problem, you’ll go back to step 1 and

refine the system block diagram. Then, you’ll struggle to distill the problem down to two blocks (system elements). You’ll want to retain the

complexity (many blocks) because you still don’t understand the real problem.

If you’ve done step 2 correctly, step 3 is easy, though you’ll still want to complicate the cartoon (too many system elements) and you won’t

zoom in close enough.

Step 4 is powerful. Google can quickly and inexpensively help you see how the world has already solved your problem.

Step 5 is more powerful still.

Step 6 shows Marketing what the future product will do so they can figure out how to create the new market.

Step 7 is how problems are really solved and opportunities actually realized.

When you solve the real problem, you create real opportunities.

Mike Shipulski brings together people, culture, and tools to change engineering behavior. He writes daily on Twitter as

@MikeShipulski and weekly on his blog Shipulski On Design.

The Reverse Innovation Revolution

Posted on January 27, 2013 by Greg Satell

Revolutions are funny things. They succeed in large part because nobody is paying attention.

The world appears stable, even comfortable and then out of nowhere someone sees a need,

attracts a following and change comes, seemingly out of nowhere.

The seeds of major events are usually sown in small places. From the American Revolution to

World War I, personal computers to the Web, the spark tends to come from the edge,

rather than from the center.

There’s something like that brewing now. Over 2 billion people are connected to the Web

and there are nearly 6 billion mobile subscriptions. As information technology reaches

increasingly remote areas of the world, new markets are being created and multinational

companies are finding that the lessons learned far away can lead to profits at home.

A Personal Story

On an early trip back from Poland in the late 90’s, I was recounting a funny story about the frustration of paying my bills at the post office. For

me, it was just one of many annoyances I experienced when dealing with the remnants of the post-communist infrastructure.

A family friend, who had built a successful business handling medical payments, somewhat unhelpfully suggested that I simply pay with a

check. “There are no checks,” I replied and laughed when I saw his eyes widen at the realization that his business model would have no

relevance in an emerging market.

Today, checks are still rarely, if ever, used in Poland. There is little need for them. Online banking quickly took over and people pay their bills

electronically. Adoption, perhaps not surprisingly, went much more rapidly than in more developed markets. If you are creating a new banking

system in the age of the Web, you don’t need checks.

That’s the potential of reverse innovation. Markets without 20th century technologies are ripe for the kind of 21st century innovations that lead

to lower cost, high performance products that can be deployed worldwide.

Greenfield Consumers

When I first got to Poland there were few consumer products available, so companies rushed to get in and build market share for their brands.

There were great profits to be had selling products developed in the West to millions of people entering the middle class who were eager to join

the consumer culture.

These days, however, things are going the other way. Major multinationals are finding that products developed in emerging markets are

demonstrating that they can become global brands.

Unilever developed it’s Pureit water filtration system for India, but thinks that it can market it much more widely. Gillette plans to bring home

the low cost razors they developed in poor countries and Wal-Mart’s aggressive convenience store strategy is a direct result of adapting to

the needs of poorer markets.

Wherever you look, some of the hottest things going on at global companies are originating in out of the way places.

Medical Miracles on a Shoestring

There is no greater economic issue than the rising cost of health care. Even the planet’s richest economies are struggling to deliver competent

medicine at a reasonable price. In America, with millions uninsured, the digital divide is being overshadowed by the health care divide.

The situation in developing countries is, of course demonstrably worse, where billions of people live on just a few dollars a day and many

are located in remote areas far from the nearest hospital. Having lived in emerging markets and travelled to others that were desperately

impoverished, I can tell you that high tech medicine is one thing that such places certainly do not evoke.

However, some global giants have found profitable opportunities in some of the most unlikely places. GE has developed and a portable ECG

machine that costs a few hundred dollars rather than thousands. Medtronic innovated their business model and found that they can profitably

bring cardiac care to rural India with their Healthy Heart initiative.

It goes without saying that the cost efficiencies developed for the poorest markets in the world are also much needed at home, where the need

to rein in health care costs is dire.

Mobile Payments and Banking

On tech blogs, nothing’s hotter than mobile payment solutions like Square, Paypal and Google Wallet. Sounds great. When does it happen?

Not for another 10 years, Wired magazine predicts. A combination of privacy concerns and inertia are slowing adoption. After all, our physical

wallets work just fine, thank you very much.

However, in Africa, where banking facilities are few and far between, payments are a serious problem. Most people don’t have bank accounts

and many are migrant workers who earn money in urban areas and need to send money back to their families who live in small villages.

Vodafone has bridged the gap with m-Pesa, a mobile payment service that achieved 250,000 subscribers in its first year and is now the leading

financial services company in Kenya. They are now rolling the service out to other countries like Afghanistan and Tanzania.

M-Pesa has been the subject of a number of research papers and case studies, so you can be sure that at least some of what’s being learned

in the planet’s forgotten lands will be applied to the developed world as mobile wallets gain traction.

How the Other Half Innovates

In an earlier post, I told the story of Ramanujan, a desperately poor man from rural India who, by chance, was discovered by G.H. Hardy and

became one of history’s greatest mathematicians.

At the end of the improbable tale I asked, “how many have we lost?” It’s impossible to say with certainty, but it’s a fair bet that poverty

squanders much of the world’s most precious talent .

While companies like Google and Facebook like the brag about the Hacker Way, in poor countries hacking is as natural as breathing. It is, in

fact, a necessity. When you live in a society that doesn’t fill your needs, you find a way to fill them yourself and you learn to do it in a low cost

way.

So, perhaps it is not surprising that even high tech companies like GE, Nathan Myhrvoid’s Terrapower and networking giant Cisco have begun

to develop specifically for emerging markets in order to create disruptive innovations for their most competitive markets in rich countries.

As rising living standards and mobile communications bring the brain power of billions of previously inaccessible brains, we all win. Those

huddled masses are more than just hungry mouths, they represent the next big wave of innovation.

image credit: jaronreport.com

Greg Satell is an internationally recognized authority on Digital Strategy and Innovation. He is available for consulting

and speaking engagements in the areas of digital innovation, innovation management, digital marketing and publishing,

as well as offshore web and app development. Check out his site, Digital Tonto and follow him on twitter.

16 Innovative Ways to Use Crowdfunding for Education

Posted on January 29, 2013 by Miriam Clifford

“Let us think of education as the means of developing our greatest abilities, because

in each of us there is a private hope and dream which, fulfilled, can be translated

into benefit for everyone and greater strength for our nation.” – John F. Kennedy

John F. Kennedy’s quote about the goal of education could very well be applied to a

discussion of crowdfunding today. Crowdfunding has emerged in education as a

means to make private dreams a reality through collective microfinancing.

Crowdfunding spread as an idea as artists, idealists, and entrepreneurs looked for

ways to harness the power of the technology to finance their ideas.

With success stories like a 3 million dollar crowdfunding on the Kickstart platform for

the video game, Double Fine Adventure, the trend is catching on fast. And with less

restrictions supported through recent laws, such as the JumpStart Our Business Startups Act in the US, it’s no wonder educators want to tap

into the new financial potential. Click to see the video

Technology has broken down doors and allowed many startups and individuals to pursue diverse goals. Today, crowdfunding has become a

practical way for organizations to meet fundraising budgets through many diverse platforms. It has also become a way for individuals to follow

their dreams. As you will see crowdfunding is a powerful tool. It’s also more than about money, it’s about the powerful exchange of ideas and

the betterment of society.

But how can we tap into this amazing tool to change education?

1. You can use crowdfunding to directly raise money for your education.

Gone are the days when it was parents’ responsibility to pay for college. Students find themselves looking for creative ways to finance their

education. Crowdfunding allows students to truly define their own future.

It takes some pressure off of sticking to a traditional career path. Students can create a platform and have friends, family and their communities

support their endeavors. For instance, using SmartMe students can request money for books, room and board, and tuition. In return, students

can promise to maintain a particular GPA, give time to a charity, or even promise years of work after graduation.

2. Fund scientific or academic research through crowdfunding.

One of the newest trends in crowdfunding is raising money for academic research pursuits. A new portal launched in April of 2012 called

Microryza just does this.

I had the chance to speak to Cindy Wu, one of the founders who discussed how Microryza got off the ground in response to their own

experiences with research. While at the University of Washington, the founders wanted to study the antibiotic effects of a potential anthrax

therapeutic they discovered using a videogame called Fold.it.

Despite being published, they found it was very difficult to raise money for seed stage ideas.

According to Cindy Wu, “Denny and I talked to over 100 researchers around the globe and every single researcher said that they struggle with

seed funding for new innovative ideas. NIH the United States largest federal funding source for research grants $30.9B every year. However,

NIH rejects 82% of proposals, that’s 41,000 ideas that never see the light of day and, that’s not including projects like mine.”

Drawing on inspiration from kiva.org and their own experiences, they went on to build a crowdfunding research platform. Scientists and

researchers can raise money for academic pursuits of their choice. The important distinction between Microryza and others is that researchers

do not provide concrete rewards. Instead, they share their research results and use rich multimedia to bring the public into their lab.

It is truly science at its best.

A recent project headed by Dr. Christian Sidor involved bringing a Triceratops found in Wyoming to the Burke Museum of Seattle. According to

Dr. Sidor’s page, the limited funding available to Paleontology makes crowdfunding an amazing resource to expand the museum’s collection

and share important discoveries.

3. Fund a simple idea, change the world.

Ideas are the driving force behind crowdfunding. Crowdfunding allows individuals to grow their ideas into tangible long term goals.

Accountability to the public creates a scenario that makes educational pursuits stay on track. Allowing students to explore the possibilities of

crowdfunding in the classroom can be invaluable.

Instead of doing a mock project, why not try to do a real, tangible research project backed financially by parents and the community? Besides

providing money, crowdfunding make students really bring their ideas to fruition. Professors might suggest undergraduates seek funding for

projects or talk about how ideas have the power to change the world, regardless of financing.

4. Use microfinancing to change a life.

Teachers can use crowdfunding to show students the power of one. For example, Kiva.org uses crowdfunding to alleviate poverty around the

world. They argue that much of the world does not have access to financial services, such as loans and savings accounts. Kiva can be used to

teach students how the power of ideas can create global change.

Students can track the history of their loan and see how the money is being used. Entire schools or classrooms might use Kiva as a learning

opportunity in global outreach. The personal stories provide learning experiences and serve to demonstrate the positive impact of social

involvement on a global scale.

5. Use your brain power as an investment.

Some students are using these platforms to give a small share of their income after graduation. In exchange, they can raise money for school

or startups. The difference between angel investing and crowdfunding financing is that the product and service is the individual person.

You are the investment in crowdfunding. The money can be used flexibly to finance artistic endeavors, pay for rent, tuition, or books. It allows

students to follow their passion and investors to backup someone they truly believe in.

6. Funding platforms allow you to reach the elite educational leaders and entrepreneurs.

Top players in academics and the tech industry are taking note of crowdfunding. Take Paul Gu, a computer science and economics major an

Yale and employee for Upstart, who raised 25K through crowdfunding. Investors include the VPs from Google, CEOs at various tech

companies, and professors from top tier universities.

They can see candidates’ academic progress and long term goals. Upstart was founded by former Google employees interested in education

and was recently featured in the NY Times and Forbes. It is definitely the new financial aid all students need to know about when applying to

college.

7. Crowdfunding addresses the great problem of higher education today: Rising costs.

The rising cost of education is a huge economic problem. As described by Economist Baumol in what he coined, “cost disease”, education has

a hard time keeping up with rising productivity in other jobs.

Unlike other fields, the productivity of education and medical careers stays relatively the same over time. Baumol studies focused on the

peforming arts sector. He argued that the same number of musicians is needed to play a quartet today as was needed in the 19th century.

Despite the productivity of other fields increasing, the service industry productivity stays the same and creates rising costs with inflation.

The rising cost of a higher education means something must be done to reach alternate sources of funding. Crowdfunding can be an alternate

source of financing that can alleviate the burden of higher education institutions.

8. Teachers can use crowdfunding to gather resources for their classroom.

As a teacher, on average I spent $400 out of pocket a year on supplies and classroom materials. Some statistics show that this is actually a

pretty common amount for teachers to spend on their students. A better idea would be to create a classroom wish list. Parents, PTA, and

community members might help gather interest in the page and generate funds for class trips, supplies, or workshops.

9. Educational organizations and schools can use crowdfunding to create fundraising goals.

The portals are a great tool to track financial progress that the entire community can see. Crowdfunding makes fundraising simpler and more

transparent.

The community tends to be more involved when they see where the money is going. They can make strides made to reach particular goals.

Instead of selling chocolate, schools might try to send a letter home explaining what crowdfunding is to parents and community members.

It can be a powerful tool for schools.

10. Crowdfunding is a way to reach greater audiences.

Rather than a local audience for a fundraiser, the global community can reach out to educational pursuits. Crowdfunding can be especially

beneficial in small communities that want to expand their reach.

For instance, a school team looking to raise money for a sports team might reach to alumni or people around the world with similar interests.

Principals might attend a “crowdfunding bootcamp” with industry professionals or similar workshops to see how these platforms can be used

to raise money for their schools.

11. You can customize funding for specific educational endeavors.

Platforms such as GoFundMe allow users to customize their funding to particular needs. Fundraising pages are categorized by need, such as

sports fundraising, volunteer trips, or creative projects. Social media can easily be incorporated to further spread awareness about your project.

You can easily share your project on Facebook and Twitter with your network and access people who will probably be interested in financing

your pursuits.

12. Funding can be used to finance non-profit and altruistic pursuits.

It allows students to tap into willing investors who are hoping to support the leaders of the future. For instance, several Yale students used

crowdfunding to create a nonprofit organization for college seniors called, ReadySetLaunch. The organization helps students from financially

disadvantage families through the college application process.

13. Crowdfunding makes us all responsible for the future of education and the arts.

In a recent article, “Crowdfunding: We’re all in this together”, Julie Robinson argues that crowdfunding allows the public to be part of the

creative process. We can directly support the arts and education in a time when budget cuts are common.

It allows us to learn more about the process artists and scientists take when funding a project. For instance, it shows the permits, materials, and

community resources that need funding to make a project a reality. As part of the requirement, candidates often have to share their progress

towards meeting their goal.

It is a great way to learn about the nitty-gritty details behind becoming an artist or scientist.

14. Use crowdfunding as an entrepreneurial exercise.

High schools might try to use platforms as a way to get students to think about future goals. Plus, having the responsibility to finance education

makes students develop an entrepreneurial mindset. It’s a win-win situation in that students are both financing their goals and learning how to

launch their future businesses or careers.

More focus is put on student goals than ever. The practical application is a learning device in itself. Crowdfunding can be used to showcase the

benefit of planning for long term goals and meeting your true potential. These platforms, even if financially unsuccessful, can teach students the

value of pursuing long-term goals. They can see examples from other students and business ventures.

Crowdfunding can be a tool to motivate students to succeed.

15. Fund student scholarships.

A Vancouver-based organization, Education Generation, just launched a crowdfunding platform to raise money for student scholarships. The

platform has allowed them to reduce overhead cost and partner with 600 donors from around the world.

16. Crowdfunding allows the opportunity for artists to thrive.

In fact, many platforms were started by starving artists as a means of pursuing their true passion. As a professional choice, pursuing art and

music is often discouraged for the risk of not being able to earn a suitable living after graduation. There have been countless success stories of

artists venturing or using crowdfunding platforms to develop amazing tools and projects for society.

What are some other important ideas to keep in mind? Well, pay a visit to crowdfunding.org to stay up to date with trends. They are a neutral

organization comprised of industry experts. The organization has even created a Crowdfunding Accreditation supported by an advisory board of

industry leaders and professionals to ensure high standards for the industry. You can find a list of accredited platforms for specific needs here.

Keep in mind to use a regulated and reputable crowdfunding platform, as many are out there. Lastly, teach students to follow their true passion

and harness the power available to them. You never know what small idea is going to change the world. Money shouldn’t get in the way of that.

Previously posted on informED

Miriam Clifford holds a Masters in Teaching from City University and a Bachelor in Science from Cornell. She loves research

and is passionate about education. She is a foodie and on her time off enjoys cooking and gardening. You can find her

@miriamoclifford or Google+.

The Productive Startup

Posted on January 28, 2013 by Rob Toledo

From passion projects to stock options, there are many reasons startups lure

some of the world’s most impressive talent. But in that casual culture, it can often

be difficult to keep that work chain flowing; in fact just the term “work chain” is

enough to induce spasms. How, then, can a startup make the most of its fun,

creative environment while still staying productive?

Know the Good and Bad of Open Plan

Creating a culture of innovation relies on the free flowing exchange of ideas. And there’s just not much “flow” at all when employees are

blockaded behind boring white cubicles, or sequestered in full offices with closing doors. An open plan office has the potent ial to keep

collaboration, camaraderie, transparency and response times high, as every employee can keep abreast of what the other is doing and offer a

friendly hand.

And yet, as anyone who has tried to work in a room full of loud friends can attest, there’s a time when even the most talkative worker needs to

just sit down and type in silence. While the strategic use of headphones and a good play list can be effective, a startup can encourage

productivity in the open plan space by setting aside separate quiet rooms for employees to book when they’re in full productivity mode or are

leading a sales call. These rooms needn’t be large, just equipped with the full range of technology, from phones to Wi-Fi.

Designate Time and Space for Socializing

For that matter, if you’re going to set aside space for quietude, why not a designated social area, too? Go beyond the regular break room

doldrums by setting aside a comfortable room with couches and tables people will actually want to use. In smaller startups with a more family-

like feel, you may even want to schedule communal lunches, either daily or once a week. This will help strengthen camaraderie without

disturbing those in the rest of the office who want to put their heads down and power through lunch hour.

Set Ground Rules for Meetings

The problem of being buddy-buddy with your coworkers again rears its head in meetings, which can be easily derailed with jokes about what

happened last weekend to insular drama about who did what to whom and in what manner. If you’re finding your startup’s meetings consistently

derailed, it’s worth taking a look through this guide to productive meetings and getting a few ground rules and procedures in place.

This doesn’t mean embracing corporate rigidity. In fact, Marissa Mayer, once of Google, now of Yahoo, was famous for whipping those

meetings into line. Her tips, combined with a few from other top companies:

1. Set an agenda. And stick to it. This might sound obvious, but it’s worth discussing this explicitly with your team so that it’s clear to everyone

just what this means. Politics, complaints, excuses, whatever; make clear that all of these things will have their day in the sun…in private.

2. Have “burst” or “flash” meetings. If your team uses the agile method, this will be easy for all to understand. Try to eschew lengthy

meetings where everyone tries to squeeze something in for short meetings of ten to fifteen minutes that focus intensely on one issue for the

day. You might even consider displaying a big clock in the meeting room for all to track.

3. Keep the invite list small. Of course, all hands on deck meetings are necessary from time to time, but for the most part, only rope

employees in who are directly relevant. You’ll be happy when they don’t distract the meeting with tangential concerns, and they’ll be happy to

be left alone to work on what they do best.

Design With People and the Environment In Mind

Sustainability isn’t just about looking out for the earth; it’s about maintaining the health of a startup, too. The best star tup offices will be

designed to maximize its use of natural light, and will make use of the best renewable furniture, paint, carpets and ventilat ion, so that

employees never have to worry about just what it is they’re breathing in, and health concerns won’t slow them down.

Likewise, an office with a finger on the pulse of the latest in ergonomic design will also keep employees working away. From office chairs to

desks (treadmill desk, anyone?), keyboard trays to phones, hire an expert to get everything set into the proper height and to choose the

products designed with the human body in mind. Everyone will get a whole lot more done if they’re not constantly massaging their lower backs

and reaching for the Advil.

Embrace the Cloud

Startups live and die based on how well they collaborate and communicate. The more transparency there is, the better every employee can

wear those multiple hats and lend a hand when a hand is just what’s needed. The cloud and mobile technology in general are bo th essential

tools for making this happen. Whether it’s working through Google Docs, Dropbox, Basecamp, or a range of other tools, the cloud will enable

everyone to access critical information from wherever they are, and sync it all together without a thought. One caveat here: you’ll want to pick

one mobile platform where it can all come together, rather than trying to operate across multiple competitive systems that don’t play nice.

Here’s a great guide to cloud computing for those less familiar with the process.

The productive startup is a powerful force with which to reckon. Getting the right structure, systems, and tools in place wil l free a startup’s most

creative forces to better have those big ideas, rather than spending their time chasing after the information they need or trying desperately to

block out distractions. Implement these measures, and you just might take this thing public in a year or so.

image credit: Shutterstock

Rob Toledo is Outreach Coordinator at Distilled, aka marketing coordinator with experience heavily focused online.

Technologically driven, with a love for SEO, outreach, link building, content creation, conversion rate optimization,

advertising, copywriting, graphic design, SEO, SEM, CRO, Google Analytics, social media, creative content…you get the

picture. He blogs at stenton toledo

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