Tech Beat— A Fine Line

by Andy Marken, CEO, Marken Communications

"He owns Pan-Am. He owns Congress. He owns the Civil Aeronautics Board. But he does not own the sky." —Howard Hughes, "The Aviator," Warner Bros, 2004

One of the biggest frustrations in working at Xerox's PARC (Palo Alto Research Center) or Bell Labs had to be having out-of-focus images of what new ideas, technologies, products were going to be here in 10 to 20 years while working with materials that were introduced five years ago. At the same time, the board of directors and stockholders were constantly hammering on you to instantly deliver the next breakthrough innovation NOW! The stress has been even worse the last few years because budgets were cut across the board and everyone was forced to do more with less. The funny thing is though, the approach/process management had for developing new ideas and turning them into products/services didn't change that much during the financial crisis.

You could be depressed with where we are, where we're going and how we're going to get there. It takes events like the TED (Technology Entertainment, Design) conference to give you a sanity check and renew your optimism. The great thing is you can catch the best of TED online such as Peter Diamandis' Abundance presentation this year.  

Suddenly you realize "Hey! We've made quite a bit of progress and we CAN meet tomorrow's challenges!" It makes you proud to be in the technology industry. It makes you want to go out and innovate… something. Despite giving technology changes a lot of lip-service, the challenges still exist— finding the right talent, encouraging risk-taking/collaboration, organizing innovation. [We're not completely certain that it's possible]. 

The one thing that has returned is our investment in advancing technology and making true innovation a part of the company's strategic planning activities is correlation. Research and development spending rose 9.3 percent in 2010 and promises continued growth in the years ahead. The financial crunch in 2008 and 2009 had a decided impact on research and development investments and the results that appeared recently. Because new products are the fuel for company growth, many companies cut other areas before research and development, like staffing and marketing. [source— Booz & Company www.booz.com/] We've gotten over that business phase of growing by "buying" into new markets with mergers and acquisitions focusing more and more on producing organic growth with new products/services and new customers in existing markets.  

What we've seen in recent years is that simply throwing money at research and development doesn't produce innovation. In fact, the consistent innovators spent less on research and development and more on developing/managing the process:

The big difference, according to people who study these sorts of things— Booze, McKinsey and others, is that there was a clear set of strategic corporate goals  clearly articulated, focused direction. The first priority on every company's goals list is a solid gold hit. The big difference is true innovators want a clearly superior product in terms of performance and quality. Low on the priority list are cheap goods or the volume of new products [source— Booz & Company www.booz.com/]. You'll notice that few organizations placed having the cheapest product, getting there first or making very sure it was going to be a successful product at the top of their lists.

This sounds simple enough, but the true test is when senior management only gives lip-service to the first four of their "goals" and holds the innovators accountable/responsible for the goals at the bottom of the list. You know, "Yes…but..."