Sunday, December 21, 2008

4 types of risks every innovator should be aware of

If innovation is so ‘cool’ then why aren’t all the businesses pouring money into it? There is a valid reason for it. Innovation is inherently risky. For example, look at following facts from BusinessWeek (Sept 11, 2008) on scenario in the US:

Since 2000, the nation's public and private sectors have poured almost $5 trillion into research and development and higher education, the key contributors to innovation. Nevertheless, employment in most technologically advanced industries has stagnated or even fallen. The number of domestic jobs in the computer and electronics sector continues to plunge while pharmaceutical and biotech companies lay off as many workers as they hire. And even the industry category that includes Google —Internet publishing and Web search portals—has added only 15,000 jobs since 2003.

Let’s listen to what the wise men say: the best way to conquer fear is to understand it deeply. Similarly, as a first step towards managing innovation risks, let’s understand them well.

What are the types of risks involved in innovation process? Prof. Stephan Thomke of Harvard Business School says in his book “Managing product and service development” there are 4 types of risks involved in every innovation: (1) Need risk: What do customers really want? How do we know? How do they know? (2) Technical risk: This relates to solutions (e.g. materials or physical changes) that have not been combined or tried before. What happens if components are reduced in size? (3) Production risk: What happens when something works in lab or in prototypes but now must scale up to much larger quantities? Can that be done – at all? (4) Commercialization risk: Is the price point right? Is it better than competition? Are we getting the message across? Are we reaching the real customers?

These risks are depicted with iPod example below. It is a thought-experiment. Actual risks associated with iPod might have been completely different.

What kind of moat does your business have?

It is good to re-visit basics from time to time. One such fundamental concept I like to ponder upon is that of “economic moat” which Warren Buffett popularized. To characterize a good business Warren says:

In business, I look for economic castles protected by unbreachable ‘moats’.

Having visited a number of forts in the last couple of years, I am beginning to appreciate the concept of moat. Moats are interesting to me for two reasons: (1) I run a business myself and I definitely would like my business to have a moat and grow it wider over time; and (2) As a consultant, I assist my customers strengthen their moat. It helps to understand what kind of moat a business can have and where I can make a difference.

Morningstar gives a good introduction to economic moats. I also liked the interview of Pat Dorsey, Director, Equity Research at Morningstar on economic moats. They classify moats into 4 categories:

1. Intangible assets: These are assets an organization has that are hard to replicate. The most widely recognized intangible asset is company’s brand. A typical test used to test strength of a brand is its ability to ride inflation. Ask yourself the question: Will I continue to buy the product or service if the price goes up? Think of your favorite doctor or your favorite cigarette brand. Another type of intangible asset is Intellectual Property Rights (IPR). Many pharma companies differentiate based on IPRs. Another intangible asset is regulatory protection.

2. Cost advantage: Whole of offshoring in India is based on this type of moat. However, one needs to see where the cost advantage comes from. As Pat says, a process based cost advantage is relatively easily replicated. Southwest Airlines and Dell were icons of low-cost business model innovation once upon a time. Competition has since caught up and they are re-inventing themselves. A cost advantage due to economies of scale is more enduring. Think Wal-Mart.

3. High switching costs: It is ok for a techie to use Windows and Linux interchangeably. However, I know what a nightmare it would be to convince my parents to switch from Windows to Linux. For most people it won’t be worth the effort. There lies Microsoft’s moat. Apparently bank accounts are sticky in a similar way. Although a savings account does not differ much from bank to bank, people don’t like to switch.

4. Network effect: You create a network effect when a whole industry gets built around your product. eBay is a classic example where its attractiveness improves as it gains more buyers and sellers. Lego has created similar effect by producing modular bricks which can be used interchangeably. A visa card or American Express has the same effect.

I am visiting a marine fort Sindhudurg (100km north of Goa) this week. Perhaps I will see moat from a newer perspective.

Saturday, December 20, 2008

Technology captives in India and crossing the cost-value chasm

It was nice to participate at the International conference on Doing Business in India held at IFIM Bangalore on 18-19 Dec. I presented a paper on the study I and my research partner Dr. Pradeep Desai did over last 8 months on how technology captives are Moving Up The Value Chain (MUTVC). We met business leaders (MD, VP, Business head, Innovation leaders) at four technology captives of sizes varying from 800 engineers to 6000 engineers. We addressed following 3 questions:

1. What are the challenges technology captives facing in MUTVC journey?
2. What approaches are they taking?
3. What do they view as the critical success factors in these initiatives?

We discovered a chasm what we call "cost-value chasm" in the MUTVC journey. The presentation below gives our findings. You can see the paper here.

Thursday, December 18, 2008

Immersive research: P&G’s approach of getting deep customer insights

Getting deep consumer insights: How do you get deep customer insights? P&G asked this question when it realized in 2001 that in spite of having one of the finest market research organizations, it does not have enough consumer insights. Since then it has turned the market research organization into a consumer-understanding powerhouse and consumer-insight generator. Between 2002 and 2007 it has invested more than a billion dollars in what it calls “immersive research” involving more than 4 million consumers a year. What is “immersive research”? Let’s look at it briefly in this article. (source: Game-changer by A. G. Lafley and Ram charan)

Immersive research: In 2002, P&G launched 2 programs: Living It and Working It. Living It enables employees to live with consumers for several days in their homes, eat meals with the family, and go along on the shopping trips. Employees experience firsthand these consumers’ demands for their time and their money, the way they interact with their social networks, what’s most important to them, which products they buy and how they use the products, and how the brand and products fit into their lives. Working It provides employees with the opportunity to work behind the counter of a small shop. This gives them insights about why shoppers buy or do not buy a product in a store. They also gain appreciation of how the innovations they bring to market make life easier or difficult for the person stocking the shelf. Let’s look at the story of Downy Single Rinse as to how Living It helped P&G.

Downy Single Rinse story: By spending time with lower-income Mexican households P&G gained following insights:
  • Lower-income Mexican women take laundry very, very seriously. They cannot afford to buy many new clothes very often, but they take great pride in ensuring that their family is turned out well. Sending your children to school in clean, ironed, bright clothing is a visible sign of being a good mother. Mexican women spend more time on laundry than on the rest of the housework combined.
  • More than 90 percent use some kind of softener, even women who do some or all of their laundry by hand.
  • Softening process is really demanding; it required a lot of energy and time. A typical load of laundry went through following six-step process: wash, rinse, rinse, add softener, rinse, rinse. No problem if all this is just a matter of pressing a button every once in a while. But it’s no joke if you have to walk half a mile or more to get water.
DSR, a product to match the insight: With this insight, P&G came up with Downy Single Rinse which reduced the six-step process to three: wash, add softener, rinse. Cutting down on the number of rinses saves enormous time, effort and water. DSR was launched with endorsement of the Mexican water and environment agency. There were lots of in-store demonstrations so women could see it work. DSR was a hit from the start.

Saturday, December 6, 2008

Story of “Plan B”

I have a friend whose favorite past-time is to talk about “Plan B”s. We used to work together and every time we went for a walk after lunch, he would talk about what he would do if he were not doing the current job. Sometimes it was about “writing a book”, other times it was about “designing new tools”. Recently he actually changed his job. And guess what he is doing in the new job? Pretty much the same thing he was doing in the old job.

I am not a great believer in “Plan B”s. May be because I am not very good at creating them. The last time I went for a job interview was more than 10 years ago when I was returning back from the US. I stuck with one company I joined till the time I felt that I am completely satisfied with “employee” phase of life and the phase is now over. The feeling was similar to feeling in 10th standard that school was a fun place but we need to move on to the next phase. At that time (2 years ago) I started my new career as an independent consultant.

During the initial days of consulting career people used to ask me what I am going to consult on. I am sure whatever I used to say wasn’t convincing. Because immediately the next remark would be: You can always go back to a job if this doesn’t work out. Isn’t it? Frankly, that is not how I looked at the situation. You don’t say that if you don’t like a college, you will go back to school, do you? The idea is to enjoy college while being there.

Perhaps you have a much better experience with Plan Bs. In that case it will be good to exchange our notes some day.

Friday, December 5, 2008

Want to increase capacity of your innovation factory? Check your C-E-O

Innovation factory: Conventional wisdom says that “Innovation” and “factory” don’t go together. Factory is meant to be for producing pre-specified goods and picture of a factory with new ideas getting converted into cash appears more like a surrealistic painting. But conventional wisdom also says that don’t trust conventional wisdom all the time. Especially when an innovation guru and CEO of Proctor and Gamble A. G. Lafley (called AG) says, “We started from the premise that it is possible to run an innovation program much the same way we run a factory” in his book Game-changer co-authored with Ram Charan. Can we create a simple and yet useful model of the innovation factory? A model that can tell us where we should build more capacity? Let’s give it a shot.

3 stages of innovation factory: Let’s assume we are looking at for-profit organization. This model has 3 stages: (1) Opportunity identification (2) systematic Experimentation and (3) Commercialization. Combining the initials of our three underlined keywords O, E and C leads us to our tagline: C-E-O in the reverse order. Ideally the title should have said: Do the opposite of CEO. Let’s look at each of stages briefly.

Stage-1: Opportunity identification: This stage is the eyes and ears of your factory. This stage has 3 distinct characteristics. 1. Its output is insights and not ideas (see Innovation trigger: idea vs insight). As AG mentions, insights come from deep understanding of your customer’s and non-customer’s anxieties and aspirations. Sometimes these needs are articulated; many times they are unstated 2. Throughput of this stage may not increase by investing in market research. P&G having one of the finest market research departments wasn’t creating enough insights. 3. Throughput of this stage may not increase just by conducting more brainstorming sessions. This is especially true if the group is homogeneous like people from only one department like engineering or marketing or research. An insight may look something like this: Lower-income Mexican women like to use softner; they have high standards for performance; and doing the laundry is arduous, time consuming and requires plenty of water for multiple cleaning and rinsing steps (from Game-changer).

Stage-2: Systematic Experimentation: If opportunity identification stage is your eyes and ears, this stage is your hands and tools. Output of this stage is learnings which results from answers of 2 types of questions: 1. What works under what context and why? 2. What does not work under what context and why? For example, the red balls correspond to “failures” and green balls correspond to “successes” in experiments, both contributing significantly towards the throughput of the factory. For every green ball, there is an associated prototype which gives glimpse of benefit the idea offers. Every quarter or half-year you should ask, “How many prototypes did we create? What are the learnings from the failed experiments?” You can read more about this in Stefan Thomke’s Managing product and service development.

Stage-3: Commercialization: This stage is similar to your traditional production, marketing selling stages with following exceptions. If it is a completely new product, you may have to develop new production factory (e.g. Nano), find new channels, create new sales force etc. More often than not your output will be new features, processes or brand proposition which may need tweaking of one or two existing processes.

Map this to your innovation factory and you should be able to find out your weakest link. Are you ready to check your CEO?

Thursday, November 20, 2008

Clean slate enquiry & strategic insight: Story of Intel’s exit from memory business

Intel’s exit from memory biz: In 1985, Intel decided to exit memory business and focus on microprocessor business. According to Andrew Grove, former CEO of Intel, this decision was equivalent to Coca Cola exiting soft drinks business. How did Intel come to take such a bold step? Let’s look at this story from Andy Grove’s eyes.

Clean slate enquiry: Andy narrates the incident in Only the paranoid survive when the moment of truth hit him and Intel’s chairman & CEO Gordon Moore. We just went on losing more and more money. It was a grim and frustrating year. During that time we worked hard without a clear notion of how things were ever going to get better. I remember a time in the middle of 1985, I was in my office with Intel’s chairman & CEO Gordon Moore and we were discussing our quandary. I looked out the window at the Ferris wheel of the Great America amusement park revolving in the distance, then I turned back to Gordon and asked, “If we got kicked out and the board brought in a new CEO, what do you think he would do?” Gordon answered without hesitation, “He would get us out of memories.” I stared at him, numb, then said, “Why shouldn’t you and I walk out the door, come back and do it ourselves?” Post this insight, Intel identified microprocessors as their future. They had been supplying microprocessors to IBM-compatible PCs for nearly five years already. And the rest is history.

2 good things & 1 bad thing: In an interview with innovate, Andy talks about two things that were good and one thing that was bad about this decision. First good thing was that Intel management had allowed microprocessors to grow spontaneously, not because management realized microprocessors were going to be very important. In 1985 the business had grown enough to become a viable alternative to memory business. Second good thing was that management had the ability to look at the sick business (memories), look at alternatives (microprocessors) and had the courage to take a decision and act on it. The bad thing, according to Andy, was that the management wasn’t conscious of “why microprocessors?” in spite of the messages they received. In fact, Andy narrates an exit interview where Steve, a young employee said, “Andy, if I were you, I would take microprocessors seriously. We should learn how to use microprocessors and become an expert.” Andy said, “Sure” and never paid any further attention.

Role of clean slate enquiry: It is good to do a “clean slate” enquiry once in a while and ask, “If a new guy comes in my place, what is the first thing he would do?” Perhaps this will open doors to new alternatives. However, what is much more difficult to do is to decide when to take “Steve” (the guy in the exit interview) seriously and when not to.

Sunday, November 16, 2008

Prototyping: A foundational competency of every innovator

Guy Kawasaki on prototyping: Economic Times interviewed Guy Kawasaki when he visited Mumbai a couple of months back. He was asked, “What are the few steps that an entrepreneur should get right?” To which Guy answered, “Prototyping is the first thing. That’s the first, second, third, fourth, and fifth thing. The sixth thing is to write a business plan.” I couldn’t agree with him more. Guy answered this question from an entrepreneur’s point of view, but I feel it is equally relevant from innovator’s point of view. Let’s explore this concept called “prototyping” with the help of two examples, one for a product and the other for a banking service.

Prototyping is less expensive & less complex: Ideo, a leading design firm from Silicon Valley, helped a group of surgeons develop a new device for sinus surgery. As the surgeons described the ideal physical characteristics of the instrument, one of the designers grabbed a whiteboard marker, a film canister, and a clothespin and taped them together (see picture on the left). “Do you mean like this?” he asked. With his rudimentary prototype in hand, the surgeons were able to be much more precise about what the ultimate design should accomplish (see picture on the right).

Prototyping is not restricted to products
: In the summer of 2004, Ray Chinn, Bank of America’s Senior VP for New Products Innovation and his team held twenty brainstorming sessions. These sessions generated 80 ideas from which the team narrowed down to the concept of rounding up consumer’s financial transactions and transferring the difference to savings. To prototype the concept, the team created a web-based cartoon that a showed a woman buying a cup of coffee in a store for $1.50, and then displayed rounding the purchase up to $2.00 and placing the 50 cents into a savings account. They tested the conceptual cartoon in an online survey of 1,600 consumers, and the concept won phenomenal reviews for its uniqueness. Eventually the bank launched the new service “Keep The Change” based on this idea in October 2005 and the program has been smash hit.

Why is prototyping important? Prototyping provides two key benefits (1) It reduces uncertainty associated with realization of an idea – addressing the typical question to a new idea – “Show me it works” (2) It provides a learning opportunity by getting an early feedback on the idea from customers. Ideo innovation principle says, “If a picture is worth a thousand words, a prototype is worth ten thousand”. If I were to modify IBM's innovation mantra, I would say, "Stop talking, start prototyping"

Wednesday, November 12, 2008

Lego: story of an innovative company that forgot cost of innovation

How can an innovative company do badly? I am a loyal and satisfied customer of Lego for the past seven years. After all, our son literally grew up playing with Lego bricks since he was four year old. Initial small kits for making cars slowly gave way to Hogwarts Express (from Harry Potter) and Dr. Ock’s house (from Spiderman-2). And today he makes and programs NXT robots and writes a blog My Legos: Guns & Robots. Naturally, with all these innovative products and the value they brought us, whenever I think of innovative companies, Lego’s name comes to mind. So, it came to me as a surprise to learn that Lego was going through its worst patch in its 87 year old history as I was buying more kits in 2003 (see Rebuilding Lego, Brick by Brick). I decided to find out, why?

Brief history of Lego: Lego is a Danish firm founded by Ole Kirk Christiansen in 1916 (it got named Lego in 30s). Godtfred Kirk Christiansen (called Christiansen), the third of four sons, started working in father’s shop when he was 12. In 1947 father and son came across the building bricks from a British firm Kiddicraft. They bought the rights to the patent and started production in 1949. In 1951 Christiansen marketed the Lego bricks as a platform – something that becomes more valuable the more you buy. They were compatible with each other, letting children build elaborate constructions.

A strategic decision: In 1960 Lego faced one of its biggest challenges when a fire wrecked Lego’s wooden toy warehouse, wiping the inventory. Building all those toys would be costly. At this point, Christiansen made a strategic decision. Bricks, which made up a minority of the company’s sales, was made the firm’s sole product. By the turn of the century, Lego became a national treasure and grew into one of the strongest brand in toy industry. Its colorful bricks are sold in 130 countries: everyone on earth has, on average, 52 of them.

Trouble in Lego-land: After six years of slowing sales and falling profits, Lego’s crisis peaked in 2003, when it made a whopping DKr1.6 billion ($240m) operating loss on sales of DKr6.8 billion and was sitting on DKr6.8 billion debt. Rumors abounded that America’s Mattel, the biggest toymaker, would take over its long-coveted European rival. PE companies found a perfect prey: a mismanaged, medium-sized firm in the hands of a single owner. Christiansen family injected DKr800m of its own money and appointed Jorgen VIg Knudstorp as CEO.

The “Kitchen” and supply chain woes: Knudstorp narrowed down the root-cause to three possible issues: (1) Over-diversification (2) unwieldy costs and (3) lost market window in video game market. They decided to scrutinize every aspect of operations closely: product development, sourcing, manufacturing and distribution. Soon they realized that recipes coming out from company’s “Kitchen”: product development lab, were increasingly intricate. A pirate kit includes eight pirates with 10 types of legs in different attire and positions. This reflected a culture of craftsmanship, but also its disregard for the costs of innovation. The company designers were dreaming up new toys without factoring in the price of materials or the costs of production. Lego group had 11,000 suppliers, nearly twice as many suppliers as Boeing uses to build its aircrafts. “We had a supply chain that was 10 to 15 years behind the times”, says Knudstorp.

Looks like the supply chain transformation is working for Lego. In Aug 2008, it announced that its sales were up 20 percent and its pre-tax profits were more than doubled in 2008’s first half. This is how an innovative company learnt to manage its cost of innovation.

Sunday, November 2, 2008

Executing a contrarian view: story of two investors

Being a contrarian: It isn’t difficult to take a contrarian view. After all, what does it take to start saying, “From tomorrow, sun will rise from the west”? However, it is much more difficult to execute a contrarian view as it involves getting a buy-in from the very people whose beliefs you are contradicting. Let’s see this phenomenon with the example of two contrarians, one who executed his views successfully and the other who didn’t. Let’s start with the latter.

Dr. Doom is doomed: Numbered among the UK’s most powerful people in the 1990s, Tony Dye managed more than £50 billion as the Chief Investment Officer of Phillips & Drew Funds Management (PDFM), one of the biggest UK pension funds. In 1995, believing that share prices were too high, he moved £10 billion of his clients’ money out of stocks and into cash and bonds. His decision made front-page news, and TV crews camped outside his home to film the man who was portrayed as gambling with people’s pension funds by placing it in cash. By the start of 2000 the markets were still booming, and the media started to ridicule Dye’s warnings and nicknamed him “Dr. Doom”. Under pressure, because of PDFM’s increasing underperformance in a bull market, he stepped down in March of that year. Sure enough days after Dye’s exit and before the management had time to change the strategy, market crashed. By June 2000 PDFM soared to the top of pension fund performance tables earning its clients 6.4 percent in three months. Hundreds of fund managers who were proved disastrously wrong kept their jobs because they were all wrong in a big herd. In the hindsight, Tony was right but he still lost his job.

Warren, what’s wrong? Across the Atlantic in the Midwestern city of Omaha, Nebraska there lives another contrarian who carried views similar to Tony’s. In July 1999, Warren Buffett addressed corporate bigwigs at Allen & Co.’s annual bash in Sun Valley, Idaho (source: The Snowball: Warren Buffett and the business of life). The audience included Media moguls like Eisner of Disney, Hefner of Playboy and technology moguls like his friend Bill Gates and Michael Dell. By looking at two 17 year periods that American investors experienced from 1964 to 1981 and then from 1981 to 1998, Warren forecasted that returns from stocks were due to fall dramatically. Warren’s Berkshire Hathaway (BRK) had not invested in technology stocks. By December 1999, BRK share was down to $56,100 from its June 1998 peak of $80,900. On the eve of the millennium, Barron’s, a weekly must-read on Wall Street put Buffett on its cover and asked, “Warren, what’s wrong?” Buffett did not respond. Not only did Buffett & BRK survive the dot-com bubble and bust, he rose more than anyone else and is back with a bang with his “Time to be greedy” view during the current downturn. BRK has invested more than $10 billion in just one month (Sept 2008) in GE, Goldman Sachs, and Constellation Energy!

Role of credibility: What makes Warren execute his contrarian view while people like Tony can’t? In my opinion, what differentiates Warren from the rest is the credibility he has built over 50+ years since he started his hedge fund in 1956. In fact, 1999 bubble wasn’t the first bubble where Warren held a significant contrarian position. Exactly 30 years earlier, in 1969, when Warren felt that the market was overvalued, he closed his firm, Buffett Pertnership and returned moneys (over $100 million) back to his clients. He wrote in his 1969 letter to partners, “I am not attuned to this market environment, and I don’t want to spoil a decent record by trying to play a game I don’t understand just so I can go out a hero.”

But then you may ask, “Sure enough Warren didn’t have the credibility when he started out. How did he carry out his contrarian view then?” Ah! There lies the beauty of Warren’s foresight. When he started his hedge fund, Warren was extremely cautious of choosing from whom he is taking the money. In fact the first seven partners he invited were his family and friends, people he was sure trusted him. And even to them he laid out his ground rules at a dinner party at Omaha Club and he told them, “If you don’t feel this way you shouldn’t join, because I don’t want you unhappy while I’m happy and vice versa.” (source: The Snowball: Warren Buffett and the business of life).

Moral of the story: To execute a contrarian view, credibility plays a big role. Position (like Chief Investment Officer) does not guarantee credibility; it needs careful nurturing over long enough period with or without a position.

Tuesday, October 28, 2008

Impossible problems and successful approaches: Story of Fermat’s Last Theorem

Fermat’s Last Theorem: When do people commit themselves to solving seemingly impossible problems? And how do some of the successful ones approach such problems? Let’s explore these 2 questions with the example of how Prof. Andrew Wiles of Princeton solved Fermat’s Last Theorem (called FLT henceforth) 14 years ago on 25th October 1994. When Andrew released a manuscript presenting the proof of FLT, it was a significant event in the history of mathematics. It put to rest a problem which remained unsolved for 357 years in spite of various attempts by top mathematicians of each century. (Source for all the information is a classic book from Simon Singh: Fermat's Enigma.)

Moment of commitment: Andrew’s affair with FLT began at the age of 10 when he found the problem in a book in a library. By the time he entered graduate school in Cambridge, he had studied all the past attempts to solve the problem. However, FLT wasn’t an acceptable topic of study towards PhD. As Andrew says, “The risk of working with FLT was that you could spend years getting nowhere”. Andrew’s PhD supervisor, Prof. John Coats, suggested that he should work in an area called elliptical curves. A turning point came in summer of 1986 when Ken Ribet of Berkley proved a strong linkage between a conjecture called Taniyama-Shimura (TS) conjecture and FLT. This effectively meant, to prove FLT all you need to do is to prove TS conjecture. TS dealt with two disjoint areas of mathematics elliptical curves and modular forms, one of which Andrew was already a known expert. When Andrew heard this news at a friend’s place, he knew, “At that moment that course of my life was changing … It meant that my childhood dream was a respectable thing to work on. I just knew that I could never let that go.”

Andrew weighs affordable loss: Andrew says, “Of course the TS conjecture had been open for many years. No one had any idea how to approach it but at least it was a mainstream mathematics. I could try and prove results, which, even if they didn’t get the whole thing, would be worthwhile mathematics. I didn’t think I’d be wasting my time. So the romance of Fermat which had held me all my life was now combined with a problem that was professionally acceptable”.

Andrew’s approach: Andrew knew that any serious attempt on the proof could easily require ten years of single-minded effort. For the next 18 months Andrew spent time familiarizing himself with every bit of mathematics that had ever been applied to, or had been derived from, elliptical equations or modular forms. He also knew that anything to do with FLT generates too much interest and that could distract him. He made a remarkable decision to work in complete isolation and secrecy in his attic. For the next seven years Andrew was to make a series of extraordinary discoveries, none of which would be discussed or published until his proof was complete.

Andrew on moment of insights: “Often you write something down to clarify your thoughts. In particular when you’ve reached a real impasse, when there’s a real problem that you want to overcome, then the routine kind of (mathematical) thinking is of no use to you. Leading up to that kind of new idea there has to be a long period of tremendous focus on the problem without any distraction. You have to think about nothing but that problem – just concentrate on it. Then you stop. Afterwards there seems to be a kind of period of relaxation during which the subconscious appears to take over, and it’s during that time that some new insight comes.”

To summarize: People commit to seemingly impossible problems when two things happen: (1) The problem is close to their heart (e.g. childhood dream in case of Andrew) and (2) Affordable loss doesn't look intimidating anymore. Serious players are in the game for a long haul (e.g. Andrew committed 10 years for the problem) and spend significant time in sharpening the tools (18 months in case of Andrew). Do check out the striking similarity between Andrew's view of how insight occurs and what we presented in Innovation trigger: idea vs insight.

Friday, October 24, 2008

Insight, entrepreneurial mindset and principle of affordable loss

Separating insights from non-insights: Let’s say your organization has this tool where employees, customers, partners log ideas. And you are part of this committee that selects ideas from this pool of ideas to be taken to the next stage. Now, you have read somewhere (perhaps in Innovation trigger: idea vs insight) that ideas with insights are better candidates for selection than ideas without insights. So you ask the question: How do I know which of these ideas came with insights from the authors? Let’s see if understanding of a species called “entrepreneurs” known for its commitment to one or more insights helps us here.

Entrepreneurial mindset: Let’s say our friend Seema realizes one day that it would be great if there is someone who home delivers simple meal on a need basis in the evening in her neighborhood. There may be enough number of working women who might use such a service. Seema might take any of the following approaches:

  • Approach-1: Analyze the market (go around in the neighborhood with a questionnaire), do the cost benefit analysis for various demand points (50 meals a day, 100 meals a day etc), rent from the place where she needs to operate, employment cost etc. And eventually see what all she needs to start the business. Seema might say I need at least Rs. 5 Lakh to start this business considering all the rainy day scenarios.
  • Approach-2: Talk to a few friends and see if any of them would use such a service. A couple of friends actually show interest and Seema starts supplying them the evening meals. She operates from home. After a couple of months the number grows to 10 meals a day. Her menu slowly stabilizes, she gets a hang of negotiating with suppliers etc. After a year and 70 customers Seema rents a small place to operate this business.
Well, according to Prof. Saras Sarasvathy of Darden School of Business, Univ of Virginia, most of the entrepreneurs go with approach-2 (see What makes entrepreneurs entrepreneurial?) and she calls the principle behind this approach as “Principle of affordable loss”. Unlike approach-1, where you ask “What all do I need before I jump into this?”, principle of affordable loss asks, “What can I afford to lose before I get further clarity?” Note that in approach-2 your destination can keep changing. For example, Seema may find out that instead of ready meals, her customers value packets of fresh cut vegetables more and she may focus on that service rather than meals.

How does Principle of affordable loss help? Let’s go back to our original question: How do I separate ideas with insights from those without insights? You say to the idea owners: Well, we don’t have the luxury to allocate separate time for ideas. Only ideas with prototypes qualify for selection. Now, only those people with insights (and deep conviction) are likely to spend time say over the weekend (or afford to lose something) to come up with a prototype. Or if you are a Google, you will say: Take 20% of your time off to show me a prototype but make sure you meet your current project commitments. We know what that means.

Tuesday, October 21, 2008

Innovation trigger: Idea vs insight

Where do I start? One question that invariably comes up during my innovation workshops is: “Where do I begin?” And when I throw the question back at the participants, one typical reply comes, “Start with an idea”. Let’s do a simple thought exercise. Ask yourself “How many ideas did I come across last week?” These ideas could be your own or you saw them on TV ads or in meetings or a friend told you etc. I am sure the number will be in 10s if not more. Now ask yourself, “How many ideas did I pursue?” We know what the answer is. A couple of months back I co-moderated a strategy planning exercise along with a colleague. A number of seemingly good ideas came up during the day. However, when it came to taking ownership for execution, people starting looking at each other. So here is a fundamental question: What is it that makes some people pursue some ideas some times and not do anything other times? Is it possible that this thing called “idea” is, after all, not the starting point of innovation?

Insights about “insight”: Let’s turn to a distant cousin of “idea” called “insight”. An insight is that “Aha!” or “Eureka” moment when you are convinced the problem is solved. What does science say about insights? Psychologists and neuroscientists have found out following essential features of “insight experience” (see Eureka Hunt):
  • Phase-1: First phase is called “preparatory phase” where brain devotes considerable power to the problem. Many times we call this “focusing on the problem”.
  • Phase-2: What happens next is “search phase” as brain starts looking for answers in all the relevant places.
  • Phase-3: The next phase is when the brain “gives-up” or reaches an “impasse”. While solving word puzzles, this happens in a few seconds.
  • Phase-4: This phase is what scientists call the most important phase and it is the phase of relaxation. During this phase the cortex seeks out more distant associations in the right hemisphere. As Jung-Beeman says, “That is why so many insights happen during warm showers”.
  • Phase-5: This is the last phase where the brain connects and restructures existing information (dots) and sees the same old thing in a completely new way. Miller, a neuroscientist from Princeton says, “Once that restructuring occurs, you never go back”.
So what? You are a lot more likely to pursue “insights” rather than “ideas” because they come with strong convictions. And the best place to start is with those problems which are pain in the neck today. Because, only for such problems you are likely to give undivided attention (or focus). And finally, don’t forget phase-4: the relaxation phase. Now, I am not surprised that most of my moments of insights have come when I am jogging.

Sunday, October 19, 2008

Centenary of a blue ocean: Ford Model T

Blue ocean: This month, 1st October to be precise, marked 100th birthday of Ford Model T. It was 100 years ago that Ford Motor built the very first of the iconic gasoline-powered automobiles to be sold. By the time formal production halted in May 1927, more than 15 million had been built. Model T created a blue ocean, a new market for affordable cars built through standardization. Till then the custom made cars cost around $1500, twice the average annual family income. In 1908, the first model T cost $850. In 1909, it dropped to $609 and by 1924 it was down to $290. In comparison the price of a horse driven carriage, the car’s closest alternative at the time, was around $400.

Challenges: I liked this tour of Model T pictures. I particularly liked the above picture as it depicts difficulties associated with blue oceans. While the cars came out, roads weren’t ready. I am sure the same would be the case with gas stations and service stations. Creating an eco-system in the new market while continuing to make profits is a characteristic of blue ocean winner.

Ocean turns red: Over the years, blue ocean starts turning red (competitive) and from it new blue oceans are created. For example, in 1924 GM introduced "a car for every purse and purpose" and in the 70s Japanese introduced small, fuel efficient cars. Today, the ocean has turned bloody red (fiercely competitive). Ford and GM, the heroes of the automobile revolution, are struggling to keep afloat. And yet, out of this red ocean, a player called Tata Motors is trying to create a blue ocean for ultra low cost cars. Perhaps one of your great grand daughters will create a similar picture gallery of Nano in 2109.

Thursday, October 2, 2008

Indian Robot Olympiad (South Zone) experience

What happens you toss creativity, collaboration, competition and loads of fun together with school kids? I am sure there won’t be one answer to this question. However, what we experienced at Indian Robot Olympiad (South Zone) last weekend at Indus International school can’t very different. Kids from 40 schools in Bangalore, Kodaikanal, Ooty, Mumbai participated in the event.

This picture shows a practice session on the playing field for primary school category. The robot which has just left the start line should follow the dashed line, pass through the gate and topple 3 cans kept in three corners (first one is at bottom left corner).

This is a practice session in junior high category. The track is more difficult due to stair-case and other hurdles.

For making & programming a robot, kids used Mindstorm kits from Lego. It was the first such event in the southern part of India and I am sure it will catch on in the coming years. For coverage in The Hindu check here and that in Times of India here.

Wednesday, October 1, 2008

Bangalore innovation forum and Pasteur’s quadrant

Bangalore Innovation Forum Launch: We had the kick-off event of CII organized Bangalore Innovation Forum at IIMB last Wednesday (23rd Sept). Kris Gopalkrishnan, Chairman of the forum, presented his vision of making “Bangalore an innovation hub”. Prof. Balaram, Director of IISc, gave a special address on the role of basic and applied research in innovation. I am summarizing below what I understood from Prof. Balaram’s talk.

Pasteur’s quadrant: There are some basic questions when it comes to research and more importantly funding research. This is especially important for policy makers. If you have Rs.100, how much to allocate for basic research (which may or may not have any real life application)? And how much to allocate for applied research? Typical assumption is that one can focus on either of these but not both. Donald Stokes questions this assumption by creating following 2x2 in his book “Pasteur’s Quadrant: Basic science and technological innovation”:

Bottom left quadrant represents most of us (“common-man”) who are doing neither basic nor applied research. Top left quadrant is epitomized by Niels Bohr whose work in quantum mechanics was inspired solely by understanding “what is?” rather than “what is useful?” Bottom-right quadrant is epitomized by Edison who worked (and extremely productively) on only those areas which are useful (like light-bulb). Well, what is not commonly known, is that Pasteur has made significant contribution to both basic research (crystallography) and applied research (pasteurization process). The question is: how can we make Pasteaur’s quadrant more populated? It is interesting to ask this question at a time when American economy which epitomized its emphasis on basic and applied research is going downhill in spite of all the funding. See recent Businessweek article: Can America invent its way back? (end of Prof. Balaram's talk summary)

Bangalore innovation ecosystem: Forums such as this can go a long way in strengthening the innovation ecosystem. It was evident from the discussion that various academic institutes, research institutes, industry and government are all working in isolation. Currently the participant profile looked more “engineering and researchy-type” (an important element of the ecosystem). However, I hope it becomes more diverse over a period where brand managers, product managers, psychologists, sociologists, neuroscientists, venture capitalists, government representatives etc. participate. Looking forward to it.

Saturday, September 20, 2008

Bill Gates, the technical leader

Everybody knows Bill Gates, the business leader. He visualized the impact of Personal Computers and systematically monetized it to create monopolies in OS and applications markets. Bill Gates also played the role of a technical leader with passion. Here I have tried to create an image of Bill, the technical leader based on Cusumano’s classic book Microsoft Secrets and Bill’s interview at National Museum of American History. Unless stated all the statements below are from Bill.

Seeing “The most technical” as competitive edge: "We were more comprehensive. We weren't the largest. There was a time that MicroPro with WordStar was bigger. There was a time when Visicorp was bigger. There was a time when Lotus, with the early years of 1-2-3s incredible success, was bigger than we were. But we were always the most technical. Whenever anybody else in the software industry wanted to know where we thought things were going, they'd come and talk to us. Because our vision, we shared; we didn't view that as some competitive edge."

Bill’s product understanding: Dave Maritz, former test manager, Windows/MSDOS says, “He is a maniac. Bill knows more about the product than any of us. And you go into the meetings and you come out just sweating because, if there is any flaw, he will land on it immediately and pick it to bits. He is just unbelievable.” Bill himself says, “The products that comprise 80% of our revenues, I choose to understand very very deeply”.

Bill’s strategic memo: Bill used to write strategic memos four to five times a year. One such memo was on “Some of the big technical challenges we face and who is going to own particular solutions and what solutions are the right ones from the strategic point of view”

Bill on code review: If a project really appears to be broken, then you want an independent review of the code. Very early in the company I’d say, “Hey, give me the source code. I’ll take it home.” I can’t do that now. So I take somebody a D14 or D15 (top technical ranks) and say, “Go dig into this thing and let me know”.

Bill on code sharing: I believe in code sharing across the groups. I’ve imposed on them the necessity to get this thing from this group and that thing from that group, and those groups don’t work for them. If they want to point out some massive bug, it’s important to bring that out in the discussion.

On letting go: Well, at first, I wouldn’t let anybody write any code. I went in and took every statement that anybody else had written in BASIC and rewrote it myself, just because I didn’t like the way they coded. But then we had products like FORTRAN and COBOL, where all I did was make sure that we were designing to the right spec and review the basic algorithms… I have not delegated the general idea of products to develop (in early 90s).

Sunday, September 14, 2008

Overcoming idea resistance#2: Apollo13 technique

How do you push your idea in a highly process oriented culture? Well, a lesson from Apollo13 story says, you don’t push it, you just shove it in! All you need a deep conviction as to what is “the right thing to do”.

Most of us are familiar with the story of Apollo13 through Tom Hank starrer Oscar winning movie with the same title. Apollo13 was brought back to earth in a miraculous manner after it was crippled due an explosion right after its launch on April 11, 1970. The explosion damaged its main engine (Service module). The crew used back-up engine from Lunar module as a “lifeboat” in space. What few of us know is how the “lifesaving” backup engine capability was built. Let’s look at the sequence of events from the eyes of our hero Ken Cox who was the Technical Manager for the Control System program (story from 4th Generation R&D: Managing knowledge, technology & innovation). The development work involved people from Rockwell, Grumman and MIT Instrumentation Lab.

Late 1967 (30 months before Apollo 13 launch): Ken discusses the scenario with MIT folks “We really ought to have a contingency mode for coming back from the moon if something happened and you could not fire the big command service module engine”

· Ken talks to his counterparts in the propulsion engineering design group, and they said, "Oh, no, we would never have an explosion like that. No, no, no. That's not a credible scenario."

· When Ken took it to Apollo Program Office (like any other Program Office) it asked, “What is the problem, and what is the probability?” Ken didn’t have, in his own words, foggiest idea what the probability was. So the Program Office said, “Well, but you haven’t proved yet that this is really needed.”

· Ken brings the issue with Apollo Software Control Board which was run by Chris Craft. Chris said, "Ken, I think that you've done good work here, but you haven't proven that you need it, and therefore your request to put this in the basic capability of the Apollo program is disapproved."

· Ken is crushed. He said to himself, “I don't give a damn whether I can prove it or not! It's the right thing to do!”

· As Ken is walking out of the door, Chris motions him to the other side of the room. He looked me right in the eye, and there was a twinkle in his eye, and he said "Put that mother in as soon as you can”

· In the next Software Control Board meeting, Ken says, “We have done this action, we have put it in the main line configuration control and if you turn this proposal down at this point, it will impact the program because you will have to take it out." And Chris had a twinkle in his eye, and he just said, "Well, if that's the case, I think we just ought to keep it in and accept the design.”

Which one do you think is more difficult to find? Conviction as deep as Ken's or people like Chris with twinkle in their eyes?

Tuesday, September 9, 2008

Overcoming idea resistance: Judo technique

Say you have an idea: it may be a new tool or a new feature you thought of or a new product altogether. And you want to really give your best shot at getting it accepted. What do you do? Well, you may say, I will start with building a prototype or Proof of Concept (PoC). So you spend anywhere from a couple of days to a month working extra in developing this PoC. What next? You may say, I will show it to my manager or product manager or someone else in my business unit I have a good rapport with. This approach-1 looks like this:

Is there anything wrong with approach-1? Nothing wrong, except that the idea may not have enough weight of its own yet. And chances are high it may not get appropriate priority in the list of things the business leaders want to focus on today. You may say, well, is there any other approach? And this where John Seely Brown, ex-Director of Xerox PARC shows us a different approach he calls “Operational Judo”.

This is how John describes his approach in article How does your knowledge flow? First, we got customers turned on to the idea by showing it secretly to them. That helped us make improvements by learning from customers. Once we got customers behind the idea, we unleashed them on the other parts of the company. We did that because we knew an idea from a customer would have greater credibility than one that came directly from us.

John’s Judo Approach looks like this:

It is easy to see which approach has higher chances of overcoming the resistance to your idea.

Thursday, September 4, 2008

Story of how Google’s AdSense almost got killed

Adsense: Google’s AdSense technology has enabled arguably the most successful business model innovation of this decade (at least so far). Google’s VP of search products and user experience, Marissa Mayer narrates the story of AdSense innovation in a podcast at What makes this story interesting is to see that even an AdSense kind of innovation underwent near death experience. Let’s look at the events briefly below.

Sequence of events:
1. Paul Buchheit, tech lead of gmail project and Marissa, that time the Product manager for gmail, shared an office and got into discussing how they will make money from gmail. Marissa says, “We will give small mailboxes for free and upsale on the large mailboxes.” This was the prevalent business model that time. To which Paul says, “I am not so sure. May be we should put ads there.” Marissa immediately reacts saying, “Paul, Paul, Paul. Ads are not going to work. We won’t be able to find relevant ads and then there will be privacy concerns”.

2. 3am – Marissa is about to leave the office. She leans back from the door and says, “Paul, we agreed we are not exploring the ad thing, right?” Paul responds, “Yeah”.

3. 7am – Paul leaves his office after finishing a throwaway prototype implementation of adSense (see Paul’s interview)

4. 9am – Marissa is back to office and logs into gmail and sees ads everywhere on the screen. First reaction is “Oh my gosh! What has he done?” She feels like calling him immediately to take this off. However, she resists it because she feels Paul should sleep for at least a couple of more hours before she disturbs him.

5. Between 9am & 10am – Marissa gets 2 emails. One from a friend about going hiking. And an ad pops up for hiking shoes. Then another mail comes saying Al Gore is visiting Stanford. And an comes up showing Al Gore’s books.

6. 10am – Marissa is beginning to appreciate this ad thing.

7. 11am – Sergei comes in and he likes it too.

Rest is history.

My takeaway: So what is the moral of the story? I can think of 2 possibilities from which we need to pick only one (I guess a story should have only one moral, right?)

1. Don’t react to others’ ideas negatively. Be supportive. (Don’t be like Marissa)
2. Listen to others, and do what you feel to be the right thing, anyway. (Be like Paul).

I would any day go with the latter statement (#2) because I don’t have control over others reactions. And, more importantly, Marissa’s reaction is the most natural reaction to radical ideas like AdSense. I would have reacted the same way, if I were Marissa. And hence, “Being like Paul” helps.

Wednesday, September 3, 2008

Homebrew Computer Club: A role model for communities of practice

Homebrew Computer Club, a role model: When Apple co-founder Steve Wozniak writes “Without computer clubs there would probably be no Apple computers” he is actually referring to Homebrew Computer Club. The Homebrew Computer Club was an early computer hobbyist club in Silicon Valley, which met from March 1975 to roughly 1977. From the ranks of this club came the founders of many microcomputer companies, including Bob Marsh, George Morrow, Adam Osborne, Lee Felsenstein, and Apple founders Steve Jobs and Steve Wozniak.

How did Homebrew Computer Club operate? Homebrew members were hobbyists, most of them had an electronic engineering or programming background. They came to the meetings to talk about the Altair 8800 and other technical topics and to exchange schematics and programming tips. According to Steve, each session began with a "mapping period," when people would get up one by one and speak about some item of interest, a rumor, and have a discussion. Somebody would say, "I've got a new part," or somebody else would say he had some new data or ask if anybody had a certain kind of teletype. This would be followed by “Random Access Period” during which members would wander outside and find people trading devices or information and helping each other. Steve would bring Apple I and II to the club and demo the progress as the designs evolved. In fact, Apple’s first major order came from a retail shopkeeper who was a member of the club as well.

What made Homebrew Computer Club special? Well, I have been part of various Communities of practice myself. And I have not seen anything like Homebrew. I find Homebrew special because it created an amazing innovation platform from which a whole new (PC) industry was born. Here are a few characteristics of Homebrew that I find interesting:
  • Homebrew members were all passionate about one thing: making home computer (which was an unmet customer need at that point of time).
  • Many of them were expert hackers and playing with circuits by hand themselves (Steve would go visit some of them and fix their circuit problems)
  • Members also included component traders and people who ran businesses (and some who closed them) and it gives an interesting business perspective to this geeky game (Steve writes, occasionally somebody would show up and say “"Is there anyone here from Intel? No? Well, I've got some Intel chips we want to raffle off”)
My takeaway: (a) Having a common binding vision which is linked with unmet customer need (b) having expert and passionate practitioners as members and; (c) having members with business perspective (like component traders) looks to me an ideal combination of an innovation platform.

Sunday, August 31, 2008

Role of deliberate practice in making of a star performer

Are stars born or made? There are two schools of thought concerning star performance. One says that stars are born talented (get the “stuff” through the genes) and the other says that it is mostly your practice that makes you perfect. Psychology Prof. Anders Ericsson of Florida State University clearly belongs to the latter school. However, what is different about Prof. Anders is that he does not stop at taking a position like most of us. He delves deeper into the concept of “practice” and tells us what kind of practice differentiates a star performer with the rest. He calls this kind of practice “Deliberate Practice”.

What is deliberate practice? Deliberate practice involves following:
1. Learner’s motivation to attend to the task and exert effort to improve the performance (are you passionate about it?)
2. Design of the task should take into account the preexisting knowledge of the learner (is the practice customized for you?)
3. Learner should receive immediate feedback
4. Learner should repeatedly perform the same or similar tasks.

How long does one do deliberate practice before one becomes super-expert? Hold your breath. To achieve highest level of performance, typically learners take 10 or more years. Apparently Boby Fischer was an exception in the last century and he took 9 years to become super-expert.

A classic essay on deliberate practice: If you are interested in reading more about deliberate practice, you should read A stars is made essay from Freakonomics-fame authors Steven Levitt and Stephen Dubner. They show how deliberate practice can explain the anomaly that “Elite soccer players are more likely to have been born in the earlier months of the year than in the later months.” If academic papers don’t cause any indigestion to you then you might want to try Prof. Anders Ericsson’s paper “The Role of Deliberate Practice in the Acquisition of Expert Performance

Saturday, August 30, 2008

Winning the boxing game: Art of personal branding

Boxing game: During my workshop on technical leadership, we have a session dedicated for understanding “influencing without authority” as Influence is one of the three Is critical for technical leader (see 3I model). Another term I use for this is “Personal brand”. Rajesh Setty introduces this concept beautifully in his eBook Personal Brand for Technology Professionals. Whether we like it or not, people around us – inside organization and outside – are boxing us with various labels such as software engineer, consultant, good for nothing, terror etc. Similarly, we are boxing others as well. However, unlike competitive boxing, this boxing game can have win-win outcome. Do people around you (who matter to you) remember you with the right kind of box? Do you have a personal brand in the organization?

Image of “Personal brand”: When I asked this question about personal brand in the last workshop, one participant answered, “Personal brand is a necessary evil.” What came as a bigger surprise was that most others (budding technical leaders) agreed with this opinion. So I asked, “How will people in other projects come to know that here is an expert whom we should invite for technical review?” The answer was, “My actions should speak for themselves. I don’t want to boast about myself.”

Art of personal branding: Well, “necessary evil” may sound like an extreme view. But the truth is, most technologists don’t consider “brand building” as an important activity. It is no surprise that many of them find it difficult to grow as technical leaders. When you grow as an architect or principal engineer, you don’t get a large team reporting to you. In fact, you may be an individual contributor. This means your span of control is not large. However, organization expects you to create significant value by assisting delivery teams, by grooming and mentoring juniors, through innovation and by assisting in business development. So, to excel as a technical leader, you have to learn the art of personal branding and start enjoying the boxing game.
And don’t forget to read the classic essay by Tom Peters “The brand called you”.

Monday, August 25, 2008

Going beyond idea contest #3: Building innovation sandboxes

Sandbox: My study room (cum bedroom) faces a sandpit. It is a joy to watch playful kids engrossed in the sand creating forts & castles of different kind each day. The rigid walls of the sandpit make their game a controlled one. They have a minimal and yet useful tools with them. And more importantly they have flowing sand which they mould whichever way their imagination takes them. Wonder why can’t we build such sandboxes in our organizations?

Metaphor of “sandbox”: I am certainly not the first one to link innovation approach to sandbox creation. C. K. Prahalad introduced an approach called “Innovation sandbox” in an article published in Strategy+Business. This approach is called an innovation “sandbox” because it involves fairly complex, free-form exploration and even playful experimentation (the sand, with its flowing, shifting boundaries) within fixed specified constraints (the walls, straight and rigid, that box in the sand).

What is an innovation platform? Taking the sandbox metaphor, I feel that innovation platform contains following 4 elements:

  1. A set of constraints (corresponding to the walls of the sandbox)
  2. A lab for experimentation (corresponding to the sand)
  3. A set of tools (corresponding to the tools in the sandbox)
  4. A critical mass of passionate people (kids playing in the sandbox)

An example: Let’s take a concrete example. RIA (Rich Internet Application) is a hot technology. Let’s say we would like to develop an innovation platform around it. Hence, our constraint #1 is: RIA. Another important constraint I will fix by asking the question: What market trend do we want this platform to exploit? The answer may be social networking or e-commerce (or something else). This would be constraint#2. Then I would ask the question: What are we really good at which we want to leverage? Answer may be “testing” or “system integration” or “end to end development”. I would fix the answer as constraint#3.

Next we need to answer the question: How can we build a prototyping lab for this platform? Is there an open source platform already available? And what kind of tools do we need?

Defining criteria: You may say, all this is fine, where are the people? And you are right. We got it all wrong. We first need to ask the question, what do (at least a few) people in my organization excited about? As a KM head in a large IT organization told me today, you need at least 6-7 passionate folks to keep a platform going.

Sunday, August 24, 2008

Thin line between passion and obsession

Most useful lesson from the world camp: Vishwanathan Anand talked about his life in the past few years when the number 1 title was eluding him in an interview with Times of India. Vishy said, “Before Mexico (last September), I came close to the number one spot or the world title in 2005 and 2006 too. It didn’t happen. That is when I got my most useful lesson: If you obsess over something, you won’t get it. I went back to my play-chess-enjoy-it philosophy then. By 2007, I had more or less stopped thinking about goals. But then, almost miraculously, I won Linares after 10 years. I became a 2800 player again and also climbed to number one spot.”

If you obsess over something you won’t get it: As an entrepreneur, having chosen to follow my passion, it has been an enjoyable journey. However, a few months back, I seemed to be overly worried about the impending recession and how much the business will be affected in the coming months. My wife said, “You seem to be tense.” Even a friend made a similar remark looking at my face. And suddenly there was a realization that I had (unnecessarily) become obsessive about the business (and how much it should progress etc.) And that is when Vishy’s lesson came handy.

Identifying your alarm bells: It is only human to cross lines. But then wouldn’t it help if we have our own alarm bells which will go off when the line is crossed between passion and obsession? So I asked myself, “What are the signs that I have become obsessive?” I few things came to mind:

1.     Did I jog in the last week?
2.     Did I go for a walk / watch movie / play / concert with my wife?
3.     Did I listen to Hindustani classical music in the past 2 weeks?
4.     Did I practice flute in the last 2 weeks?
5.     Did I go cycling with my son in the last 2-3 weeks?
6.     Did I get out of the city in the last 2-3 months?
7.     Did I read any fiction, especially a Marathi book in the past 2-3 months?

It has been only a few months since the last obsession-period. Let’s see when the next round comes. And let me see if this list helps.

Saturday, August 23, 2008

In love with the villain: Curse of knowledge

I am addicted to reading. And like any addict, I look for excuses to indulge. When my friend RamP sent me an email a couple of weeks back that I should buy the book “Made to stick”, I immediately went and bought one copy.

Made to stick” written by Dan and Chip Heath is about how to design a message such that it becomes more sticky. All of us know how much we remember from the last presentation that we attended. On the flip side, the same thing must be true about the last presentation we made as well. The book talks about attributes such as simplicity, unexpectedness, and concreteness that are common to all sticky messages.

Apart from these interesting attributes, the story has a villain too. The villain who makes it really hard for us to generate sticky messages. And it is this villain which has got stuck to my mind more than anything else. In fact, I would say I am in love with the villain! Who is this villain, after all? It is called “Curse of knowledge”. When we, as experts, know something, it is extremely difficult to imagine what it means to “not to know” that something. I don’t know about you, but I have felt this “villain” in me active many times during my training sessions.

It is no surprise that the Stickiness Aptitude Test created by Guy Kawasaki & Co takes away 3 points if you are an engineer and takes away 4 points if you are an MBA. It does not even consider PhD worthy of mention (perhaps, you are not even qualified to take the test). I have learnt my lesson.

You may want to check out Chip Heath's interview with McKinsey Quarterly. And Guy Kawasaki's interview with Dan Heath. And Chip Heath's interview podcast at