Nottingham Spirk Strategic Innovation

I buried the link to this company in one of my previous blog post, but thought it was worth featuring on its own.  The company is called Nottingham Spirk Strategic Innovation, and they are developing game-changing products for many different markets.  The company was founded by John Nottingham and John Spirk after the two met in Industrial Design Department of the Cleveland Institute of Art.  Upon graduation both received lucrative offers from Fortune 500 companies, but chose to go a different direction and start their own company instead.

They currently do work for multiple clients in the medical, consumer, packaging, retail, business-to-business, and services industries.  Clients include Dirt Devil, AXE, and Swiffer.  Innovations include the Spinbrush, twist-and-pour paint container, and the M&M's Personalized Printer which allows consumers to print custom images on M&M's.

One of the more interesting features of Nottingham Spirk is there location. Housed within the First Church of Christ Scientist that was originally built in 1931, Nottingham Spirk renovated the space to create the Nottingham Spirk Innovation Center (pictures below).  The company is located in Cleveland, OH.

I thought it would be interesting to create this post in light of the previous post, which dealt with large corporation's inability to foster entrepreneurial environments.  Nottingham Spirk, on the other hand, thrives on innovation.

Corporate Entrepreneurship: Existing Roadblocks and Proposed Solutions

Corporations face many challenges when trying to encourage entrepreneurship within their organizations. One of the biggest challenges for entrepreneurs acting within large corporations is securing the resources and support needed to get their idea off the ground.  Large corporations tend to be extremely revenue driven, and senior management focuses on those projects that will be best for the company's bottom line.  Often such projects are the "safe" ones that are "at scale".  "The competitive advantage of the established global firms is in the operation of businesses with mature products, with substantial market penetration, credibility and relationships usually spanning multiple geographic regions."

In general the challenges that face corporate entrepreneurship can be broken down into three categories: strategy challenges, incentives and organizational challenges, and decision making challenges.

Strategy challenges can come from a lack of integrated decision making at the highest level.  In large corporations entrepreneurship is viewed as small business that requires a great deal of up-front investment, and has very few customers at the start.  Because of this, entrepreneurship opportunities are designated as low priority items, and therefore do not garner the amount of attention they may deserve.  Some entrepreneurship opportunities could potentially take business away from the established core businesses of the corporation, and thus create a tricky balancing act between supporting the new idea or continuing to forge ahead with the established one that is generating a steady stream of revenue.  Economic downturns also play a significant role in strategy.  When the economy is going well corporations are more likely to support entrepreneurial activities.  However, when the economy takes a turn for the worse, like it did just a few years ago, many corporations will immediately scale back on none-core activities of which, entrepreneurial endeavors are typically the first to get cut.  Thus, entrepreneurial endeavors tend to be very cyclical, following the ups and downs of the economy.  Another problem with corporate strategy is that large corporations have a tendency to view new opportunities in much the same way that they view established core businesses.  If the new idea doesn't fit within the established product line it may be given very little consideration by upper management because it does not conform to what the corporation is currently doing.  The main problem with this thought process is that it can leave corporations open to being blindsided by new entrants, who have game changing ideas, or by shifts in customer preferences.

At the same time, established corporations have a tendency to avoid risky endeavors.  Many view failure as a career-ending event, which leads top management to focus the corporation's activities on surer-bets that have a high probability of success.  Because of this entrepreneurial ventures will get kicked to the curb do to their high risk nature, and unknown ability to succeed.  Another problem regards where to house the new business within the established organizational structure of the corporation.  If the venture is located within an existing business unit it will have to mesh with current management that is in place, and might not be best suited for leading the new venture.  If the new venture forms a separate unit then they will likely be cutting themselves off from resources necessary to get the project off the ground.  Finally, if the new venture constitutes itself outside of the established organization all together there is a high likelihood that the objectives of the new venture will not jive with the ones of the established corporation.

In making decisions regarding new business ventures managers tend to not look far enough ahead when projecting financial outcomes of the new venture.  Often, they will look more at a short term view of the new venture, which typically is not enough time for it to get established.  When testing the waters for new ideas large corporations also have a tendency to use already established methods of market feedback analysis.  Traditional focus groups, or surveys will not uncover those new ideas that have potential to be disruptive or breakthrough in nature.  Large corporations are also known for their bureaucracy.  Bureaucracy and innovation typically do not work hand-in-hand, and the incredible number of steps necessary to make a decision within a highly bureaucratic corporation can stifle creativity and innovation.  Finally, performance measures and compensation in large corporations are tied directly to set targets and metrics, which tend to promote incremental change, but fall short stimulating interest in wholesale change.  Measurement of breakthrough ideas becomes difficult using set metrics and targets.

Having discussed the many problems that entrepreneurship faces within large corporations with established businesses it's now time to turn our attention toward some potential solutions.  Having now worked for two different large corporations I have seen how they operate, and have some suggestions on how they can change to better promote new ideas.  When I began work at my first job, which was for an established global organization, and again at my second job, also for an established large corporation, I entered at a time when both were bringing in a significant amount of new, young talent.  In each case, the new people are brought along to learn the corporation's standards for how things are done.  Such standards are essential to any business, but in my opinion will not lead to innovation.  In my mind corporations need to take better advantage of the new people they bring in who might be able to offer a fresh perspective on how to do things, which could lead to new and innovative opportunities.  I am not discounting the importance of learning and mastering the standards of the organization as they are essential for keeping the core business running smoothly.  I do think, however, that people need to be given more opportunities to be creative and challenge the established way of doing things.  Whether this means setting up some set-time for brainstorming during the workweek, or maybe having a monthly offsite where people can bounce ideas off one another I am not sure.  Steve Jobs had a yearly retreat in which he would select his top 100 employees and whisk them away to brainstorm ideas for the future of Apple.  Jobs also recognized that in order for Apple to remain successful that he would need to maintain design as a core competency.  Because of this, designers at Apple were considered to be the most important people in the organization and reported directly to Jobs.  As was mentioned early when discussing the problems that corporations face when trying to promote entrepreneurship, compensation can play a significant role.  Performance evaluations are based solely on one's ability to do work that meets established metrics, which funnel directly into the corporations core business roadmaps.  Nowhere is an employee evaluated based on their ability to innovate.  My current employer will offer an employee up to $1000 for a patented idea, which does provide some reward.  The only problem is that there is little time to work on such ideas in between completing tasks to support core business work.  At the same time, the risk of losing one's job because of a bad idea needs to be eliminated as it stifles the employee's desire to think outside the box for fear of being fired.

THE BRAULER

Awhile back I was reading through Popular Science magazine and came across an interesting invention.  Popular Science is always good at turning up new devices or gadgets that have the potential to change the way we live, work, and play while at the time also helping us spend our money.  What I found in this edition was something that appealed to the side of me that enjoys beer, but in particular good beer.  Craft brews often come in growlers.  The biggest problem, well maybe problem isn't the right word to use, the biggest issue with growlers is that once you open one it's best to finish it.  They don't store well as the beer tends to lose carbonation and become flat.  My dad's policy has always been, "once you open it you have to drink it", which made for some great times spent between the two of us polishing one off.  Typically this is reserved the holidays like Thanksgiving or Christmas.

Anyway, some further digging around the web led me to The Zythos Project who are responsible for the design of The Brauler.  On their website they label themselves as a "Portland, OR-based brewing, design, and engineering firm. Dedicated to innovating the art, science, and enjoyment of craft beer℠."  What they created was the world's first virtually indestructible stainless steel modular growler system.  For more information on the company including its vision and mission statement check out this link.

http://thezythosproject.tumblr.com/brauler

What surprised me the most about this was that they were established in 2011.  People have been using stainless steel water bottles for years now, so I thought it was interesting that no one decided to make the leap into other potable liquids until 2011.

By going with stainless steel the group offers several advantages over the more traditional glass bottles.  These include weight savings, which makes transportation easier.  Stainless steel will not chip or shatter like glass.

Also, like so many companies nowadays they offer a green advantage.  Stainless steel is 100% recyclable and because it's shatter proof their is no loss in the cycle do to shattered containers.  The metal also allows for faster cooler, which cuts down on energy usage.

They have already begun to think of enhancements for the product such as various caps that be used to suit different purposes from the traditional carabiner attachment to the more applicable CO2 cap tap.

Right now the product is being targeted at breweries and is currently available for order in bulk.  Once they are able to make enough bulk sales I believe they will be expanding to more one-off sales at which point I will definitely consider picking up one or two of them for myself, and will be buying one for my dad as well.

Shark Tank

Have you seen Shark Tank?  If not I definitely recommend it.  It's all about entrepreneurs who have developed great ideas, and are then given a finite amount of time to pitch them to 5 venture capitalists, the sharks.  The classic elevator pitch, but with much higher stakes.  Some of the ideas you can tell at first glance are going nowhere, but others have huge potential.  Many of the great ideas are often so simple that I am left wondering why I never thought of them myself.  And then I remember that's because I am an engineer and when trying to come up with great ideas I often move past the simple and directly into the incredibly complex.

Unfortunately it airs at 8pm on Friday nights, which means you will probably have to set your DVR.  Enjoy!

Google knows too much about you

I happened to run across this article on CNN.com today.  As one of the millions of people who have hit the "dismiss" button when Google tries to bother me about reading their new Privacy Policy I have to say I am somewhat shocked at what Google has on me.  I know this has been in the news ever since Google changed it and I guess I now know why.  I had no idea that Google could save all of my past searches.  Pretty much everything else I do through Google I realize will be saved in some form or another even after I have deleted it, but saving searches is interesting.  Just one of the many things people do on the internet without even thinking about it.

Between Facebook and LinkedIn I already know that I am not invisible on the internet.  People can willingly find out most things about me through either of those sites.  I have my privacy settings jacked-up on Facebook so that really only my friends can see my full profile, but on LinkedIn I know almost anyone can see what I have posted.  One reason I know this is because I get at least one phone call per week from a recruiter who has seen my profile on LinkedIn and wants to see if I would be interested in a particular position they have available.  The best part is that they call me on my desk phone which I don't even have listed on LinkedIn, but they are able to see which company I work for and then look me up in the company directory.

In the internet age it is almost impossible to maintain a low profile on the web.  Luckily for me that my name is common enough where a simple Google search doesn't turn up too much.  Thanks Mom and Dad for not being too unique in coming up with a name!

Check out the article here...

An airplane in your garage?

I found this article on CNN.com the other day and thought it was interesting.  It's about a company named Terrafugia, which was cofounded by a graduate student in the Department of Aeronautics and Astronautics at MIT, Anna Dietrich. The goal of the company is to take advantage of a new rule put in place by the FAA in 2004 that lowers the barriers of entering into the personal aviation business.

Their product, The Transition, is what they like to call a "roadable aircraft."

"As a light-sport aircraft, the Transition must be operated in and out of designated airports by certificated pilots. (Because this aircraft is easy to fly, the appropriate pilot license can be earned in weeks, instead of months or years.)  Unlike any other airplane on the market today, the Transition can fold its wings on command, shift power from the propeller to the rear wheels and drive as a fully street-legal vehicle on any road in the United States. Designed to meet the Federal Motor Vehicle Safety Standards, it is the first light airplane to incorporate automotive-style safety features such as dash-mounted airbags, a passenger safety cage and energy-absorbing crumple zones. For added safety in flight, there is a full vehicle parachute for use in case of emergency."

(Clicking the images above will make them larger)

Maybe we aren't all that far away from living a Jetson's type lifestyle after all.

"Creative Abrasion"

"Creative Abrasion" is brought about by creating an atmosphere where ideas are continuously being challenged and new intersections are constantly being made. The idea of "creative abrasion" would seem to fly in the face of the collaborative team environment that most companies establish to create new and innovative ideas and products, however, the man attributed with first conceiving "creative abrasion" would beg to differ. 

Jerry Hirshberg, founder and president of Nissan Design International (NDI), first came up with the idea when he was poached from the corporate stalwart, General Motors, to established a new venture within Nissan Automotive. Hirshberg discerned that "sometimes the right person for the job is two people." In hiring people to work at NDI he would create "divergent pairs" in which he would bring in two people at the same time and pair them because of their differences. Hirshberg found that the continuous tension between the pairs, as well as, their opposing views on things created an incredibly innovative environment that spawned some of Nissan's greatest vehicles including the Pathfinder, and the Infinity Series of automobiles, which now represents Nissan in the high-end automotive market.

Another example of where "creative abrasion" succeeded is in the design of the first Macintosh computer. In setting out to create the Macintosh Steve Jobs assembled a diverse team of musicians, artist, and others.  Obviously all of them qualified as a proficient software people as well, but it was their other more creative talents that Jobs valued.  Diversity is an enabler of "creative abrasion" because there are so many viewpoints to be drawn from that ideas are bound collide. Jobs also took this team and housed them in a separate building away from the main Apple campus so that they would not be influenced by the hierarchical and bureaucratic systems that were in place there.

From Wikipedia, intrapreneurship is defined as the "practice of a corporate management style that integrates risk-taking and innovation approaches, as well as the reward and motivational techniques, that are more traditionally thought of as being the province of entrepreneurship". An entrepreneur is "one who undertakes innovations, finance and business acumen in an effort to transform innovations into economic goods." In either case, both the intrapreneur and the entrepreneur strive to defy the norm. They both seek to think outside of the box in an effort to come up with an innovative product or new way of doing things that had previously not been thought of.

So then what are the pros and cons of "creative abrasion" in a start-up setting, from both entrepreneurship and intrapreneurship perspectives?

From the perspective of intrapreneurship "creative abrasion" is often necessary in order to develop new and innovative products.  Many companies have established standards that all employees are trained to follow in order to do their work on a daily basis.  Those employees that tend to think outside the box can be viewed as being creatively abrasive because they are challenging the status quo.  After several attempts of knocking on the door some of these employees are able to get their voice heard and it can often lead to key product innovations.  "Creative abrasion" when exemplified by individual employees within a large company can also be viewed as non-conforming, and thus might be looked upon as detracting from the greater good of the company.  

The same can hold true from an entrepreneurship perspective as well.  Entrepreneurs by nature tend to be creative thinkers.  It is also to the benefit of the entrepreneurial group to include people from different backgrounds who can bring fresh ideas and different ways of thinking to the table.  In doing so, the group is able to continuously challenge itself from within, which in most cases will lead to a product that is very well thought out.  Unfortunately, this same tactic could lead to rifts forming within the group that might detract from the group dynamic and ultimately the end product.  In order to create an environment of "creative abrasion" all of the individual pieces need to be very secure in themselves and also be able to positively respond to criticism.

In short "creative abrasion" can be viewed as an enhancer of innovation because it simply means that someone saw something that someone else did and challenged it.  Without this sort of thinking the world would not be what it is today.  Where would be if no one ever asked, "what if"?

Strategy and the Internet

In his piece, "Strategy and the Internet", Michael Porter included a breakdown of how the internet influences industry structure.  In that breakdown he listed five main areas of focus, also known as Porter's 5 Forces; rivalry among existing competitors, threat of substitute products and services, bargaining power of suppliers, barriers to entry, and buyers.  In this post I will discuss how the internet has influenced the power that each of these five forces has within industry.

"Many have argued that the internet renders strategy obsolete.  In reality, the opposite is true.  Because the internet tends to weaken industry profitability without providing proprietary operational advantages, it is more important than ever for companies to distinguish themselves through strategy.  The winners will be those that view the internet as a complement to, not a cannibal of, traditional ways of competing."

Rivalry Among Existing Competitors

When it comes to competition in the marketplace the internet has had a profound impact.  Prior to the existence of the internet, companies only had to compete against their neighbors within a given geographic area.  With the advent of internet technology these same companies are now competing in a global marketplace.  Not only are the local shops forced to compete with online giants such as Amazon.com, but a quick Google Shopping search for any given product can yield several results.  With so many options now out there many retailers are forced to offer increased price discounting in order to draw people to their product.  In this new, internet dominated, global marketplace competitors are sparring with one another mainly over the price of the product.  Those that are able to offer the best price will most likely win out in the hearts and wallets of consumers.

The internet has also greatly enhanced the flow of information to the point where it is often hard for competitors to keep things proprietary or maintain a certain level of secrecy.  A simple Google search allows many companies to glean information about what their competition is working on.

Threat of Substitute Products and Services

As has already been mentioned the internet laid the world flat, and created a global marketplace that is now available to almost anyone.  In this sense the internet has increased the efficiency of industry, but at the same time it has also made it easy for substitutes to enter the market.  While some industries are more prone to substitutes entering the market than others, the internet has none the less made the threat of substitution more tangible than it was prior to its existence.  Take for example the local machine shop.  In the past some people would might have explored using such a shop to have something made.  Now, such local shops are forced to compete against online machine shops such as eMachineShop.com, and internetMachineShop.com that provide customers with the tools necessary to design, create, and manufacture custom widgets.

Bargaining Power of Suppliers

One of the most profound impacts of the internet on the power of suppliers has been its ability to grant them instant access to the end users.  In the past many suppliers had to reach end users through a third party.  Now they can go directly to the end user.  Take a company like Sony for example.  Prior to the internet Sony products could be bought through several third party locations such as Best Buy or Walmart.  With the advent of internet technology Sony has gained the ability to reach the end user directly through the establishment of an online store.

Barriers to Entry

Because of the internet many industries have seen a flood of new entrants.  Anyone with something to sell can now start up a website and directly reach their desired customer.  There is no longer a need to have an effective sales force peddling the product from door-to-door.  Everyday new and interesting products are being developed and marketed on the internet.

Buyers

The internet has effectively put an end to some of the most powerful channels and also greatly improved the bargaining power that competitors now have over traditional channels.  At the same time, it has also created a shift in bargaining power to a model that is now more focused on the end user.  Customers (i.e. buyers or end users) are now flooded with product information, which allows them to make better decisions and also become more well informed.  Personally, I tend to do a great deal of research before making significant purchases such as televisions, cars, or other expensive electronic devices.  Sites such as Consumer Reports, CNET, or Cars.com can help educate buyers about products and provide them with valuable information before making costly decisions.