INNOBLOG

As the daughter of a clinical social worker and a social psychologist, I read with interest the findings of a recent study assessing the effectiveness of Internet-based psychotherapy. While the approach will likely overcome barriers for some patients, the potential impact on non-consumers seems limited.

The authors conducted a randomized trial of online, real-time cognitive-behavioral therapy in which each patient was assigned to a single therapist and communication took place via typed free text. At eight months, 42 percent of the intervention group had recovered from depression compared with 26 percent in the control group.

That online therapy can be effective is good news, as this approach can overcome barriers of convenience and access for the patient. Web-based counseling might also minimize the stigma of going to a public setting for mental health care and could cut down on a provider’s overhead costs. But a disruptive innovation? Not so fast. Unless online therapy is offered by a less-skilled provider at a lower cost, I’d wager that some current consumers of care will transition to this new channel but few non-consumers of therapy will be swayed to partake. My assumption is that cost and stigma are the biggest barriers to consumption, and that the largest portion of care costs derives from the compensation required by highly-educated providers. In the online model, these provider costs remain high. Additionally, the stigma of therapy that comes from simply participating in mental health care, regardless of the location, is not addressed by the online approach.

A truly disruptive offering might look more like the model employed by Cogito Health (full disclosure: the founder is a classmate and friend of mine … but that doesn’t make the business any less wicked cool). Using voice-recognition technology to identify and monitor the progress of people who could benefit from behavioral health support, the company improves diagnosis while cutting out the cost of a psychologist in screening people for depression. Lower-cost, decentralized care without the involvement of an expensive expert? Now we’re talkin’.

Microsoft’s recently launched OneApp software has the developing world talking. The application ‘smartens’ standard, basic phones — technically known as ‘feature’ phones — by allowing users one-stop access to applications like Windows Live Messenger, Twitter, and Facebook. Given that billions of people in the developing world do not own computers or smart phones, the feature phone is their only computing device. By allowing feature phones to tap into apps, Microsoft is bringing both convenience and access to the developing world. The addition of applications to phones is stale news for smart phone users. Yet, for those with cheap, crummy phones, OneApp has exciting disruptive potential.

For a number of reasons, OneApp is quite special. The product is as easily downloadable as a ringtone, which drastically reduces unnecessary installation time while enabling processing within meager memory capacity. Unlike apps on ‘smart phones’ like the iPhone that are accessed through app stores, OneApp software is offered through network operators who pre-determine the bundled set of offered apps. Such a configuration allows operators to centrally store and update the apps, increasing convenience for users. Under such an arrangement, users would have no concern for the local storage of their apps and would not have to comb through a store in search for an appropriate app. Also conveniently included is cloud service, a feature that improves overall performance and assists by offloading processing and storage to the Internet.

Equally intriguing is OneApp’s potential to “trickle-up.” Traditionally, sophisticated products are created in rich countries and later de-featured and repackaged for the emerging markets. Recently, a few products have reversed this process. One example is GE’s $2,500 echocardiograph machine. Initially designed for Indian and Chinese doctors who typically travel long distances to see their remote patients, the device is now making inroads in developed countries due to its effectiveness, compact size, energy efficiency and very low retail price. With similarly profound market potential, OneApp could be a major coup for Microsoft.

Although Microsoft eventually intends to unveil OneApp to the rest of the developing world, the application is currently only available in South Africa. Microsoft offers OneApp through a partnership with Blue Label Telecoms, a “mobile wallet” offerings company that is already revolutionizing the South African payments space. In a country where carrying cash is very dangerous because of high crime rates, mobile wallet allows customers to access and transfer money using their handsets. With this application, and the help of BLT, Microsoft has taken a step towards turning every phone in the developing world into a sophisticated, cost effective and user friendly device.

Microsoft’s OneApp software is highly attractive to markets in the developing world by virtue of being simple, convenient, affordable and accessible. By sacrificing raw performance in order to give customers something that is more accessible and more affordable, OneApp holds true disruptive potential. Of course, the ultimate success of the product depends on Microsoft’s execution, and competitor’s reactions. But for now, courtesy of OneApp, that $20 phone just got a lot smarter.

A recent article in the Wall Street Journal caught my eye, as it described a shift away from hourly billing by law firms that seems an apt analogy for needed changes to healthcare pricing.

While past Innoblog posts have looked at innovations targeted at those overshot by the current legal services model, law firms’ high-end customers are also demanding fundamental changes. With the recession in effect and law firms scrambling for work, large companies that consume millions in legal services each year are telling law firms they must agree to fixed-fee contracts rather than charging by the hour. Pfizer, for example, says it plans to cut its domestic law firm expenditures by 15-20% through flat-fee contracts. The pharma giant will pay lump sums to firms to handle specific areas of work, such as litigation or tax issues, telling law firms that they will no longer make their historical profit margins. This change in profit margin necessitates business model innovation for law firms, as it does for healthcare providers under pressure to lower rates.

In both the legal services and healthcare industries, consumers are not currently paying based on what matters to them – results.  In legal services, results mean completing an entire project, case or workstream.  In healthcare, results mean improved health. Currently, however, providers in both fields are incented to do more work, whether or not the customer really needs it.

Law firms have experimented with flat fees for repetitive, predictable assignments (e.g., patent applications) but stress that hourly billing will likely always be used for more complex, high-risk/-return projects.  Similarly, healthcare providers such as MinuteClinic have moved to charging relatively-low, flat fees for a finite range of standardized treatments for clearly-diagnosed ailments. More complex conditions requiring greater skill for diagnosis and care continue to be treated at higher-cost hospitals/clinics for fees and services that are not known at the beginning of care. In both fields, providers can and should scrutinize which procedures are routine enough and sufficiently standardized to be offered profitably at a lower, set price.

Using lower-skilled providers

For these more routine tasks, law firms and medical providers can hold down costs by employing lower-skilled staff. In order to offer flat rates, Orrick, Herrington & Sutcliffe LLP, for example, hires fewer grads from elite law schools and also employs college grads to perform more routine tasks.

Increasing efficiency

By realizing efficiencies, Orrick has increased by 300 percent its revenues from non-hourly billing in the last year while remaining profitable. How? First, the firm is incented to accomplish the same amount of work in shorter time. Second, tools provide information on efficiency to allow educated adjustments in time allocation. For example, a software system alerts lawyers when they hit certain percentages of a flat-fee budget and biweekly reports indicate how a lawyer is spending his/her time.

The biggest shift required of law firms and healthcare providers, however, is a change in the value proposition they offer to customers. As Pfizer’s general counsel commented, while the company could have simply demanded a discount from law firms’ hourly rates, it instead hopes to create a system in which the firms work more collaboratively with Pfizer and Pfizer’s other law firms.

• When Open Innovation Becomes A Gimmick: Lessons From Campbell Soup Company, by Stefan Lindegaard | Leadership+Innovation blog

  Lindegaard identifies what appear to be problems with Campbell's new open innovation initiative, including a lack of focus.

• Unraveling Complexity: The (Heretofore) Missing Link for Achieving Collaborative Innovation, by Chris Jones | Driving Innovation in a Digital World blog

  Musings on the role of social media in collaboration for innovation: "I now believe that innovation in complex ecosystems will depend on an improved collaboration process – a new middle ground for problem solving – that balances large-scale central organizational approach with grass-roots contributions by individuals."

• Social Technology Growth Marches on in 2009, by Josh Bernoff | Groundswell blog

  Forrester's newest report on the adoption of social media finds that "in 2009, more than four out of five online Americans are active in either creating, participating in, or reading some form of social content at least once a month. " Interesting as a view of technology adoption and also for insight into the changing "jobs" of those embracing social media.

• Happiness: A Buyer's Guide, by Drake Bennett | The Boston Globe

  New research into behavioral economics has proved that money doesn't buy happiness. However, the same research has shown that some things we spend money on -- such as providing great experiences like restaurant meals and vacations -- provide more happiness than spending money on material possessions. So should companies be innovating more around providing experiences for customers as opposed to goods?

On Tuesday, Sony announced plans to introduce an intriguing new e-reader in time for the Christmas season. Analysts immediately asked: Is the device a Kindle killer?

That's actually the wrong question. The right question is whether Sony can create a viable growth business with its new reader. I suspect it can — if its device delivers on the features it promised earlier this week.

It's been painful to watch Sony's struggles in the e-reader space. It entered the category in 2006 with an elegantly designed device that sold slowly because actually getting reading material onto the device was cumbersome and slow.

Then Amazon brought out its Kindle product.

The first generation Kindle was not the most beautiful of products. But Amazon nailed the business model. It partnered with Sprint so customers could get content delivered to their device wirelessly. Not only did it take me less than a minute to download The Silver Lining onto my Kindle for my television interview on FOX, I now use my Kindle to review Word documents and PDF files.

Amazon's position as the world's leading online retailer certainly helped its sales efforts. While Sony spent more to advertise its products, Amazon had the benefit of showing the Kindle on the front page of its storefront to millions of potential customers.

The 2000s really have been a rough decade for Sony. There's no reason it couldn't have created the iPod, Wii, Flip Video Camera, and Kindle. Instead the company has always seemed to be a step behind.

That's why Tuesday's announcement was so encouraging. Sony finally realized the importance of a simple business model. Its new device (called the "Sony Reader Digital Edition") will access AT&T's wireless network to simplify content delivery. Sony has formed partnerships with a number of content providers to help customers find great material. Its device features a touch screen (a feature missing in Amazon's device).

If Sony delivers on the promised feature set, it has a chance of creating a nice e-reader business.

Will it "kill the Kindle?" Who cares. Remember, the e-reader category is still in its infancy. Analysts estimate that only three million devices will have been sold by the end of 2009. Other companies like Plastic Logic have plans to introduce devices; everyone expects that Apple will jump into the market as well. Amazon surely has more innovations up its sleeve.

Read the rest at Scott's Havard Management blog, Innovation Insights.

The digital edition of Strategy & Innovation launched in September 2008, and we now have four times as many subscribers as we had for our print edition. So in this last month before the anniversary of our digital launch, we’re continuing to reach into our archives for some great stories that many of our readers will not have had a chance to see. This issue, that includes “A 'Culture of Innovation' — Separating Myths from Truths” by Steve Wunker and Natalie Painchaud, which debunks familiar myths about creating a culture of innovation. Here is an excerpt:

Time and again, firms pronounce their goal of creating a "Culture of Innovation." Many executives, it seems, feel that the ability to create sustainable growth is largely rooted in the attitudes and behaviors that govern a firm. They see snippets of how the culture of certain innovative firms can manifest itself — from kooky work environments to frequent, direct communication with the CEO — and hope these practices can engender a transformation of the organizations and business prospects. Much of this conventional thinking about a culture of innovation is deeply misguided. Culture is fundamentally a lagging variable: It is the result of a set of decisions about strategy, structure, people, and processes. Starting a transformation by focusing on culture is like selling a failing car by changing the brand.

In this issue’s Innovators’ Insight, Scott Anthony tackles the question of how a big company can continue to grow when it’s very size sets the bar for innovation initiatives impossibly high. Here is an excerpt:

If you work in a large company and you want to become humble quickly, check out the Stall Points Initiative, a fascinating stream of research by the Corporate Executive Board. The research shows that almost all companies hit a point where historical growth rates decelerate. Once the corporate growth engine stalls, it is very hard to restart. The study involved close to 500 companies that have appeared on the Fortune 100 or international equivalents over the past 50 years. Close to 90 percent of those companies experienced a stall, or “secular reversals in company growth fortunes.” Only 50 percent of companies that stalled were able to grow even moderately over the next decade. One reason for stalling that’s not directly on the Corporate Executive Board’s list, but perhaps should be, is “inappropriate hurdles for innovation efforts.”

Featured in the InnoBlog, Renee Hopkins, Editor of Strategy & Innovation, reveals the emerging technology of the bluetooth stethoscope. Senior Associate, Natalie Painchaud, discusses lessons for innovators from the TV show 'Shark Tank' in her blog post and Associate, Krystin Stafford, discusses the standards war that often accompanies new technologies.

As always, thanks for reading Strategy & Innovation! All issues are available and free with registration here.

On August 19, 3M introduced the first electronic stethoscope with Bluetooth functionality. Adding Bluetooth solves a problem that has plagued electronic stethoscopes -- they can capture sounds that are hard for the ear to hear using an analog stethoscope, but taking those sounds off the devices for analysis has proved difficult. The new stethoscope can send its data to a Bluetooth-enabled computer, and comes with software to allow doctors to interpret the data. The sounds can also be sent as an audio file to other doctors for second opinions. The goal is to give physicians better information with which to make diagnoses and potentially cut down on the use of unnecessary referrals to specialists in some cases. While the stethoscopes now are only compatible with Windows XP and Vista, reportedly there will be Blackberry support in the future, which could make the electronic stethoscopes attractive for physicians who use PDAs.

Most companies have turned from feeling paralyzed by the economic shocks of 2008 to plotting response strategies appropriate for today's tough markets. One thing companies need to carefully consider is how to confront the new reality of increasingly value-conscious customers. 

For example, earlier this year Quiznos decided to create a completely new sandwich at a reasonable price point. In March, it rolled out the "Toasty Torpedo," a 13-inch sandwich on ciabatta bread cost a mere $4. Sales spiked. Based on consumer feedback, Quiznos created an eight-inch version called the "Toasty Bullet" for a $3.

Not only did Quiznos appropriately set a target of creating an affordable product (just like Martin, whose sub-$1,000 Series 1 guitar I discussed last month), the company adjusted its strategy based on market feedback.

Both of these elements are key parts of the success pattern described in "Learn to Love the Low End," Chapter 7 of The Silver Lining. That chapter draws on examples like the Flip Video, First Solar, and McDonald's original "Speedee Service System" to describe how to innovate in ways that connects with value conscious customers and accelerates growth in emerging markets.

While Quiznos chose innovation, other food service companies have tried to reach value conscious customers through discounting. As discussed in a recent Wall Street Journal article, this approach has proved problematic for some restaurant chains.

The problem chains have seen with discounting is they end up serving customers they would have served already. Companies are learning that discounts aren't enough to entice customers that weren't interested in visiting the chain in the first place.

Of course, companies always need to think about how to deepen their connection with their core customers. And experimenting with non-product innovations is almost always worthwhile.

Read the rest at Scott's Havard Management blog, Innovation Insights.

• Tips on Innovation & Entrepreneurship From Jeff Bezos by Om Malik | GigaOm blog

  Comments from on innovation an entrepreurship from Amazon's founder during a recent interview, such as "The trick to being an entrepreneur is to know when to be stubborn and when to be flexible: Be stubborn about the vision, but flexible about tactics."

• Innovation Perspectives for August, by multiple authors | Blogging Innovation

  Roundup of blog posts by six authors answering the question, "please describe the importance of innovation strategy to the success of an organization's innovation efforts."

• The 21 Heroes of Data Visualization by Maria Popova | BusinessWeek

  Slide show of interesting and inspiring visualizations of data sets by top designers illustrates the value of pattern-seeking.

• The New, Faster Face of Innovation by By Erik Brynjolfsson and Michael Schrage | MIT Sloan Management Review via Wall Street Journal

  Article on the ramifications of technology that makes innovation initiatives both speedier and cheaper to produce. Will this result in more disruptive innovation or will companies still be tempted to speed up incremental innovations?

   

When making a pitch for your idea be sure to describe how the business will become big and be specific in your ask.

Shark Tank is an adaption of the Japanese television show Dragon’s Den, which gives entrepreneurs the chance to pitch their plans to venture capitalists (“the sharks”) with the goal of securing investments to pursue their ideas.

The show provides useful lessons to not only aspiring entrepreneurs but to any innovator who needs to pitch a new product idea to their bosses for continued exploration.

When we conduct workshops at Innosight we have teams present their ideas in short pitches answering the following questions, much like on the show.

1. What problem are you solving for consumers?
2. What is your idea?
3. What is the business? How will you make money?
4. What specifically are you asking for?

People in our workshops and people on the show do quite well on the first two questions. They have personal stories of how they identified the needs (or Jobs) in the marketplace and have creative and compelling presentations of their ideas (songs, prototypes, samples).

The area where we have seen the biggest room for improvement is in the third area, demonstrating how they will make money and make the business big. The “Sharks” (and your bosses) want to see that there is real interest from customers in the innovation and a clear path to develop a big business. Questions you should be prepared to answer are:

• Do you have sales? How many units have you sold?
• How do you know people are interested in this product?
• Who is the customer? How much do you expect them to pay?
• How many stores are you in? Have you shown this to a retailer who said “I like this, I want to sell this”
• How do you know people will buy that?

The other shortfall is not being specific enough in “the ask”. People who ask for money to build the brand so they can then go to trade shows or retailers do not fare well. Whereas people who ask for money to fulfill production for orders they have in place already do well. Be specific. You need to show how what you’re asking for will help build the business and help make them money.

As you pitch your innovation ideas be sure to describe why the business is compelling and make a specific “ask”.  To see the process in action check out the show (Sundays on ABC at 9pm EDT).

The AP reported this week that Toshiba Corp. is joining the Blu-ray Disc Association. Why is that such a big deal? Because until last year in the U.S., Toshiba Corp.’s HD-DVD was battling it out with Blu-ray in a standards war.

Across industries, standards wars often accompany the emergence of new technologies, as players pit their proprietary technologies against one another. We’ve all likely experienced this at some point and have had to make the decision of whether to buy now or to hold off until a standard is established. Think Betamax versus VHS or iTunes’ formerly DRM-protected music versus DRM music from other providers.

When there is a highly fragmented market without an established technology standard, consumers have to recognize that what they purchase may become obsolete in the short term if a different technology becomes the standard and the product stops being supported. When a victor is about to be declared in a standards war, an opposing company has a few options: 1) they can march on and fight what is likely a losing battle, 2) they can ally themselves with others (‘the enemy of my enemy is my friend’ mentality), or 3) they can cede to the competing technology. Depending on the situation, different paths should be taken.

If the company’s foothold is weak, marching on can lead to wasted resources that could be better used developing or acquiring other technologies. Allying with others can help to fight a strong market leader, but defeating the enemy will mean sharing the market with those allies. Ceding to the competing technology may be favorable if there are few players in the market and there is an upside that can be gained.

Thinking to the future, what kind of standards conflicts might we expect? How about eBook readers that have associated stores with proprietary formats preventing the use of those purchased books on other eBook readers? In the healthcare world, standards wars may play out in hospitals, as a fragmented marketplace offers electronic medical records (EMR) to a wider user base. Will there be a clear winner for EMR adoption? Alternatively, consider the auto industry. The U.S. government just granted billions of dollars for the development of batteries and parts for electric cars. Instead of engaging in a standards war over the charging plugs they use, companies have banded together to create a standard for charging electric cars, which may help adoption of those vehicles.

The fight to become a standard and a leader is all around us. When you consider new or emerging technologies, the competition to establish dominancy is incredibly important. When you don’t become the standard, your options are to join the competition or to come back, alone or with allies, with something bigger, stronger, faster, newer, etcetera. It will be interesting to see how all these technologies evolve — and who knows, these could be the B-school case studies of the future.

• The Disruption of Scientific Publishing, by Bruce Sterling | Wired's Beyond The Beyond blog

  Description of a new "flourishing ecosystem of startups that are experimenting with new ways of communicating research, some radically different to conventional journals" and the "gradual rise of science blogs as a serious medium for research."

• The New Media Crisis of 1949, by Terry Teachout | WSJ.com

  A look back at 1949, at the start of the television era, in which TV disrupted other forms of media and entertainment. Author notes that CBS and NBC, which had been big radio players, also came out on top in TV by the 1950s: "The old media of today have a similar chance to prosper tomorrow if they can survive the heavy financial losses that they're incurring while they develop workable new-media business models."

• Start-Ups Are Poised For Latest Space Race, by Andy Pasztor | WSJ.com

  With its budget eroding and virtually certain not to keep pace with stated space exploration goals, NASA is increasingly turning to outsource portions of its programs that have never before been outsourced. Smaller firms and "scrappy entrepreneurs" are expected to win contracts.

• How to Build a Culture of Innovation, by Jessie Scanlon | BusinessWeek

  Description of the top-down innovation culture at Tata, including the Tata Group Innovation Forum (TGIF), a 12-member panel of senior Tata Group executives and some CEOs of the independently run companies.

   

The digital edition of Strategy & Innovation launched in September 2008, and we now have four times as many subscribers as we had for our print edition. So in this last month before the anniversary of our digital launch, we’re reaching into our archives for some great stories that many of our readers will not have had a chance to see. One is “Constraining Innovation” by Joe Sinfield and Scott Anthony, about why constraints are important for innovation and how to smartly set those constraints.  Here is an excerpt:

During the dotcom era, many businesses focused their attention on creating a workplace environment that was thought to encourage creativity and innovation. Stories of offices full of bean-bag chairs, videogames, and ping-pong tables were commonplace. Managers were encouraged to "think outside of the box," to dream up the best new idea that they could, and this often created an environment that let chaos reign. But does all that creative freedom really lead to meaningful innovation? While there is some merit to the notion that talented people should be able to work when and how they feel most productive and creative, simply allowing employees to wear flip-flops is not a sustainable path to creating an innovative organization. In fact, our work with leading corporations in a wide range of industries has led to a perhaps surprising finding: Properly constraining innovation can actually lead to superior results.

In this issue's Innovators' Insight, Scott Anthony discusses the power of 'starting' questions saying that different starting questions can expand or contract the opportunity space for innovation.  Here is an excerpt:

The start of the innovation process almost always begins with some kind of question. “What if we did this?” “Why don’t we go after this market?” “What could we do with this technology?” It pays to choose your starting question carefully. The right question can send you down the path to disruption. An overly narrow question too focused on competitors or existing capabilities can unintentionally wall off disruptive options.

Featured in the InnoBlog, Editor, Renee Hopkins, discusses the emerging technology of self-assembling DNA.  Innosight Manager, Robyn Bolton, writes about the importance of circumstances and how it relates to innovative products.  Kai Itameri-Kinter analyzes the disruptive potential of 3-D printing and Innosight Analyst, Andrew Laing, discusses Apple's newest product and its place in the disruptive landscape.

As always, thanks for reading Strategy & Innovation! All issues are available and free with registration here.

Most observers agree that large companies aren't optimally organized to innovate. What's less clear is a better alternative to current organizational designs.

An article in the Wall Street Journal last week about a radical organizational experiment at Cisco Systems kicked off a fierce debate on this topic. The article described how Cisco has moved from a traditional top-down hierarchical structure to a more amorphous structure build around close to 60 different committees.

At the top of the organization sits an "Operating Committee" of 16 top executives, including Chief Executive Officer John Chambers. Twelve "Councils" with an average of 14 senior leaders report to that committee. Close to 50 "Boards" with an average of 14 less senior leaders report to the Councils (except for four Boards that report directly to the Operating Committee).

The more amorphous structure allows Cisco to bring together leaders from across its business to tackle critical problems, such as selling to small businesses. Of course, all these committees take time — estimates suggest that some senior leaders spend 30 percent of their time dealing with issues raised in committees.

It's certainly different, but is it good for innovation? Most pundits don't think so. For example, Silicon Alley Insider's Henry Blodget sprinkled an article titled "Has John Chambers Lost His Mind?" with words like "nutbag," "insane," and "awful." Author and consultant Geoffrey Moore told the Journal, "Right now it's chaos because there's so much on everybody's plate."

Generally speaking, I look for a structure that addresses five inter-related problems.

Read the rest at Scott's Havard Management blog, Innovation Insights.

Innosight's Scott Anthony will present a webinar as part of a series put on by the organizers of the BrandManageCamp conference. Scott will speak on "Leading Innovation in the Great Disruption" at 1 pm EDT, Friday, August 14. In the webinar Scott will discuss how you can learn how to:

• Spot and seize innovation opportunities
• Increase innovation productivity
• Reduce investment in organization initiatives through strategic experiments
• Build a common language of innovation
• Use innovation as a management tool to get the most out of your executive team   

The webinar is free to BrandmanageCamp resgitrants. For more information, go to this link — http://www.managecamp.com/events/ — and scroll to the bottom.

I love books. I love going to bookstores, browsing through the shelves, feeling the paperbacks conform to the curve of my hand or the weighty strength of hardcovers as I lift them off the display tables. I love getting home and cracking the spine of a book, tracking my progress with dog-eared pages or used boarding passes, and filing the book away on one of my many bookshelves like the trophy it is.

For me, reading a book isn’t just about language or plot, it’s a multi-sensory experience. Which is why I swore I would never own a Kindle.

Sure, Kindles are amazing. The e-ink technology is (literally) studied by scientists and business school students. The compact size is great for traveling. And the ability to automatically download books, magazines, and newspapers saves time, money, and paper. Despite all these very functional benefits, I felt like the Kindle was robbing me of the experience of a book and that was something I was simply not willing to give up.

Then my circumstances changed. Shortly, I will be going on an extended trip which will (hopefully) allow me plenty of time to read. As I started planning, I realized that I would probably need an extra suitcase for all the books I wanted to take with me. The thought of carrying yet another bag (and a very heavy one) was not appealing but neither was the thought of bringing fewer books or reading slower. Suddenly, a solution that I wouldn’t even consider became the perfect solution.

At Innosight, we talk a lot about Jobs, but this experience highlights a component of our Jobs approach that often gets overlooked: Circumstances. In this case, my Jobs – read a good book, have access to the books I want, enjoy my reading experience – did not change. What did change, however, are the Circumstances in which I need to satisfy those jobs (e.g. at home vs. on the road, unlimited storage space vs. limited storage space). Simply changing these circumstances completely changed my set of acceptable solutions, shifting it from traditional books to a digital reader.

So I bought a Kindle.

It’s not perfect. The pages turn a bit slower than I expected and I’m afraid of hitting the wrong button and doing who-knows-what to the book I’m reading. But for 3 weeks on the road, these seem like small sacrifices to ensure full access to a library of wonderful books.

• Hey, AP: Here Are 7 Money Making Ideas for You, by Erik Sherman | BNET Technology Blog

  Is the Associated Press doomed in an Internet age? Some have suggested this, and their increasingly protectionist stance seems to indicate they think so too. Business blogger Erik Sherman disagrees, offering seven ways AP can make money on the Internet.

• Stressed Brains Rely on Habit, by Jeff Akst | The Scientist

  "Rats that had been stressed repeatedly and unpredictably for three weeks were more likely than unstressed animals to continue performing habitual behaviors, even when it no longer made sense to do so." These findings have implications for innovation, since innovation requires an ability to break free of pre-existing patterns.

• Too Much Networking? by Alan Boyle | Cosmic Log Blog on msnbc.com

  "An overabundance of connections over which information can travel too cheaply can reduce diversity, foster groupthink, and keep radical ideas from taking hold" says the journal Science, citing that as a reason why most open-source software shows only incremental improvements from version to version. The article stops short of blaming the Internet and social networking for groupthink, probably because the Internet also fosters the kinds of weak ties that lead to breakthrough thinking.

• Vendor Sparks Art Concepts by Sarah Junek | The Southlake Journal

  A hand-restored cigarette machine rescued from the scrap metal pile after legislation banished them in 1997 now vends cigarette-pack-size art in a Keller, Texas, art gallery for an accessible price of $5.

This Wired article discusses advances in structural DNA nanotechnology, a field now beginning to show promise. DNA has a unique capacity for precise self-assembly, and scientists have been experimenting with using DNA as a building material for nanotech. According to the article, "Scientists in the burgeoning field of structural DNA nanotechnology are exploring DNA’s potential as raw material for next-generation circuits, sensors, and biomedical devices. Advocates say it could become the new go-to material for engineers, scientists, and clinicians." 

One example of a use for structural DNA nanotechnology: "biocomputers" made from DNA, RNA, and protein that respond to biological signals. For example, A DNA-based sensor that recognizes RNA messages produced because of cancer or viral infection could trigger the release of RNA or DNA strands with therapeutic properties.

The article also notes challenges: many in the scientific community are still skeptical, and it is difficult to recruit scientists to work in a field noted for its interdisciplinary nature — structural DNA nanotechnology brings together elements of biology, physics, chemistry, computer science, and materials.

By Kai Itameri-Kinter

People often try to determine if a technology is disruptive in and of itself, and the short answer is usually: it depends.  On a lot of things. But one of the biggest determinants of disruptive success is the business model with which a product, or technology, is applied.  Some of the most exciting breakthroughs occur when new technologies and new business models come together, like Gillette's Mach 5 "razor and blades" model or the open application platform of iPhones.  That is why I got excited recently when reading a Fast Company article which discussed a technology that looks like it has serious disruptive qualities and the ability to unlock an entirely new business model.  What is this silver bullet? 3-D printing.

3-D printing, sometimes referred to as rapid prototyping or fabbing, boils down to the use of computer controlled machines to "print" 3-D objects.  The technology has mostly been used for various polymers, and printers usually only manipulate one type of material, but better printers are emerging that can mold metal and other feedstocks, as well as combine various materials into a single product.  The price has typically been too high and the quality too low for any significant applications outside of labs and techies' basements, but both of those are changing. The result is a technology with just good enough quality, low enough price, and the requisite stripped-down features to be a real disruptive gem.

However, what makes 3-D printing really exciting is the discussion around the potential of these printers to disrupt many manufactured goods industries.  The general gist is that instead of manufacturing at a central plant and shipping to customers globally, manufacturers would develop digital plans for a product and then manufacture locally at a smaller scale, or license to local sub-contractors, and avoid long-distance shipping altogether.  So instead of getting your desk lamp designed by a Swedish firm, made in China, and shipped to you, you could buy a lamp designed by a Chinese firm, made in your own city and shipped across town. 

Of course, there are plenty of remaining issues concerning quality control, the price of labor, and availability of feedstocks across an industry's various markets.  However, decentralization of manufacturing seems increasingly likely as you look into the future, and for one major reason:  It is generally agreed that carbon will become more costly, and some pessimistic scenarios are predicting that the foreign manufacturing model cannot be sustained due to inevitable increases in fuel prices, forcing a return to local production.  Therefore, a company that can find a foothold in 3-D printing and produce a just good enough product can simultaneously build environmental credibility by burning less fuel in shipping now while moving ahead of the curve to prepare for a huge market shift down the road. 

The potential for 3-D printing to become a real disruptive business in and of itself, as well as being the jumping off point for loads of other industries to develop new disruptive business models makes me want to say that, this time, if you asked me, the short answer is: yes.

• Tide Turns 'Basic' for P&G in Slump, By Ellen Byron - WSJ.com

  Interesting story of how P&G learned to "love the low end" not by introducing a new low-end brand but by the riskier bet of introducing a low-end version of a premium brand.

• A123Systems Awarded $249m Federal Grant, by Sean Sposito - The Boston Globe

  Federal stimulus money finds its way to a Boston-area electric battery company, but the batteries will be made in Michigan. Story notes that another Boston start-up, Boston Power, which had planned to manufacture batteries in Massachusetts, got none of the stimulus money.

• Culture at Netflix | SlideShare.net

  Lengthy slide deck released by Netflix offers insights into its recruiting and talent management, optimized for innovation. Example: "We're like a pro sports team, not a family. Coach's job at every level of Netflix is to hire, develop, and cut smartly, so we have stars in every position."

• Le Whif: Inhaled Chocolate

  Inhaled chocolate -- a new product meant to offer benefits of chocolate without the calories. Illustrates the principal of "de-featuring"!

  
  

Microsoft and Google's increasingly captivating competitive dance took another turn on July 29 with the announcement of a search partnership between Microsoft and Yahoo. The deal could create a viable competitor to Google--or even more enticingly build very different kinds of growth businesses.

The move is a clear attempt by Microsoft to intrude on Google's core search business. Greater Bing usage will allow it to further optimize its search offering. But Google has been eyeing Microsoft's business as well. The other week Google announced plans to introduce an operating system in the netbook market in fall 2010.

Some pundits think that Microsoft should just admit it has decisively lost the search battle to Google. Indeed, Microsoft is investing billions fighting against Google (analysts estimate it has already blown through more than $100 million marketing Bing), and our research suggests that trumping a powerful, well-resourced competitor in its core market is incredibly difficult.

But I disagree. The search game is still in its infancy. While it is hard to see another company one-upping Google with superior search algorithms or better search-based advertising, today's offerings are still pretty blunt instruments for information-seeking consumers or business-seeking advertisers.

What's more, when you reframe the issue around advertising instead of search, the competitive lens shifts completely. After all, Google isn't really a search company. It is a company that sells advertising, with search as a proven, effective way to drive advertising revenue. However, search-based advertising still doesn't really get the advertising job done for companies who remain frustrated by their inability to precisely target and track their advertisement, or predictably run campaigns that achieve their business objectives.

Read the rest at Scott's Havard Management blog, Innovation Insights.