The Secret to Accelerated Innovation

 

Every thought of how to Accelerated Innovation? One answer is Constraints!

Constraints help innovation through one simple truth: constraints create conflict. In a Pixar Studios’ experiment for example, the constraint on personal workspace forces employees to discuss, negotiate, disagree and eventually compromise on a new, innovative solution. Indeed, innovation arises when problems are faced through a new perspective. Constraints lead to faster feedback and focus attention. They offer the opportunity to problem-solve, forcing the innovator to approach problems, not through the front door, but through a side door they found while discovering how to work with the constraints placed in their way.

All in all, limitations enhance innovation. Struggling against others who have different views on an idea/project, figuring out a way to share common resources, working together to achieve shared goals and giving/receiving direct feedback all create an imaginative synergy with the power to drive creative innovation further and faster than unlimited resources, time, or freedom.

 

Tech Private M&A Activity Report for 2012

CB Insights just released its M&A activity Report for 2012

The report breaks down the 2,277 private tech companies that were acquired globally in 2012, and examining corresponding trends.

Followings are some of the interesting facts to note:

 

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As expected California saw the most private tech companies acquisitions.

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Position on the top 3 markets globally suggests that India’s entrepreneurial tech community is becoming more established.

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Google and Facebook have been the most aggressive acquirers last year, doing 12 acquisitions each. Five of Facebook’s acquisitions were for talents.

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From the companies what were acquired,  eight have been valued on more than $1 billion. Otherwise more than 50% of deals are less than $50M and more than 80% of the acquisitions are less than $200M.

Innovation Challenges of established companies

It is no secret that established companies have major challenges with Innovation.

Based on analysis of 750 companies Marla Capozzi and Ari Kellen from McKinsey provide some guidance.

Game-changing innovation is a beautiful thing. Disruptive products and services are unleashed. New markets are created. Customers smile, employees cheer and shareholders win. What’s not to like?

The problem is that large companies find game-changing innovation staggeringly difficult to achieve. Recently, we analyzed the performance of 750 large companies in the decade before 2008. Apple was the only incumbent in this period to grow by creating new markets repeatedly through disruptive innovation.

Our analysis suggests that big companies should focus instead on what we call “innovation at scale” – that is, achieving repeatable and sustainable organic growth from new products, services and business models that build on the core business. This approach, too, is challenging: just 6% of the companies we analyzed managed to innovate at scale consistently through the period. But innovation at scale seems to be within reach of many more companies than might succeed in creating brand new markets.

What does it take to innovate at scale? The first element is robust strategy. In our work with clients, we find that companies that innovate at scale have a deep understanding of their assets, capabilities and what makes them successful. They understand at a granular level where growth came from in the past and where it is likely to come from in future. Aspiring to double revenues by 2020 may be a terrific stretch goal, but it is not a strategy.

Robust strategy is important because it creates the framing and focus needed to drive greater innovation. Ask people simply to “innovate” and the likely response is a mishmash of ideas. Focus, which can come in the form of simple guard rails, provides the crucial guidance on what really matters to the company’s future success and what types of innovation are required. These factors allow people to experiment and take more risks.

The second element needed for innovation at scale is careful attention to organization. While there is no set formula – organization must follow strategy, not be the starting point – our work with innovative companies points to a few areas on which to focus:

  • Innovation cannot be a side show. Companies that integrate innovation into strategic planning, budgeting and resource allocation are six times more likely to achieve desired financial targets. Leadership, especially in the C-suite, is closely correlated with innovation outcomes.
  • Stay “open” longer. Many companies now use open innovation principles to harvest ideas from consumers, employees and other stakeholders. But once the idea portfolio is set, the process is often surprisingly insular and linear. War gaming innovations early, and testing across multiple economic scenarios, can provide a market view and help to further refine ideas.
  • Structure to execute. It is hard to find a clear correlation between organizational design – that is, use of innovation centers, incubators and labs – and successful innovation at scale. That said, these structures can be helpful ways to bring people together, allocate resources and track progress.
  • Hand-pick talent. Innovation projects staffed by volunteers tend to underperform those run by people selected for the role. This shouldn’t disqualify people who raise their hands for the right reasons (e.g., passionate about the idea, hunger to contribute) but it is a reminder that raw enthusiasm is no substitute for the right expertise and capabilities.

 

 

R&D Spending versus Rate of Innovation

According to Booz & Company’s annual Innovation report there are three approaches to innovation:

Need seekers (think Apple): These are companies that actively and directly engage current and potential customers to shape new products and services based on superior end-user understanding, and strive to be the first to market with those new offerings.

Market readers (think Samsung): These companies watch their customers and competitors carefully, focusing largely on creating value through incremental change and by capitalizing on proven market trends.

Tech drivers (think Google): This category includes companies that follow the direction suggested by their technological capabilities, leveraging their investment in research and development to drive both breakthrough innovation and incremental change, often seeking to solve the unarticulated needs of their customers via new technology.

As with companies mentioned above, each of these three strategies can produce superior financial results and there are always individual companies outperform others within each strategic group. The success in each category depends closely to company’s culture and mindset.

One highlight of the report is that R&D spending and rate of innovation do not necessarily correlate which is illustrated in the chart below:

 

 

 

“Shared Nothing Architecture” for large scale analytics

“Shared Nothing (SN) Architecture” is an old technology that is increasingly gaining popularity.

SN Architecture (or SNA) is a distributed architecture where each node is independent and self-sufficient, which eliminates single points of failure/bottleneck in large scale systems.

Today TIBCO announce the release of new ActiveSpaces 2.0
To improve scalability and facilitate more in-depth analysis of “data in motion” TIBCO is relying on SVA for storage. (in Google world it would be called “DB Sharding”).

(As a side note Teradata uses SNA as well)

With this release TIBCO is pushing further into the big-data market which according to Wikibon is predicated to be a $53.4 billion hardware, software and services market by 2017.

Business intelligence startup Domo pulls in another $20M

The funds come from Silicon Valley-based Institutional Venture Partners, and brings the company’s total funding to $63 million.

Domo hopes to give executives and managers a single, customizable, sharable view of the business metrics that matter to them, delivering its product as an online service, similar to the way Salesforce.com, Omniture, Microsoft’s Office 365, and other software-as-a-service (SaaS) solutions work.

According to the founder Josh James, Domo aims at addressing the static and non-collaborative nature of existing BI offerings. It will aim at collecting a slice of the estimated $10 billion annual market for business intelligence services.

 

 

BI startup Good Data raises $2.5M

Good Data, a San Francisco startup that allows companies to collaboratively view and organize business data, has raised $2.5 million in a first round of venture funding. The company says it creates a secure space where teams can access, share, and collaborate on their data in a way that’s easy and affordable.

GoodData provided pre-built Apps to help users get started with their BI projects. For example “Subscription Analytics” tracks the Metrics That Matter in Subscription Businesses: