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Innovation Blog

The Seven Innovation Secrets of Steve Jobs

By Shlomo Maital

 Steve Jobs

Carmine Gallo is a consultant who has specialized in a close study of Steve Jobs and what innovators can learn from this remarkable man.  His latest book is:  The Innovation Secrets of Steve Jobs, and it’s already a best-seller.  Here are the seven things we can learn from Steve Jobs, excerpted from Gallo’s book.  My own comments are in italics. 

Principle One: Do what you love. Steve Jobs once told a group of employees, “People with passion can change the world for the better.”  Jobs has followed his heart his entire life and that passion, he says, has made all the difference.  It’s very difficult to come up with new, creative, and novel ideas unless you are passionate about moving society forward.  This has become a cliché, but I meet people daily who continue to violate it. 

Principle Two: Put a dent in the universe. Passion fuels the rocket, but vision directs the rocket to its ultimate destination. In 1976, when Jobs and Steve Wozniak co-founded Apple, Jobs’ vision was to put a computer in the hands of everyday people.  Many of us aim far too low.  Aim so high you need an oxygen mask. The act of aiming high will itself create a powerful dynamic that helps you.

Principle Three: Kick start your brain. Steve Jobs once said “Creativity is connecting things.”  Connecting things means seeking inspiration from other industries.  It’s amazing how you can ‘import’ ideas from other industries, when other people fail to do so. Henry Ford imported the idea of an assembly line from a Chicago meat packing plant! 

Principle Four: Sell dreams, not products. To Steve Jobs, people who buy Apple products are not “consumers.”  They are people with hopes, dreams and ambitions.  In other words: We buy, because we like why Apple does things, not just what it does. 

Principle Five: Say no to 1,000 things. Steve Jobs once said, “I’m as proud of what we don’t do as I am of what we do.”  He is committed to building products with simple, uncluttered design.  And that commitment extends beyond products. From the design of the iPod to the iPad, from the packaging of Apple’s products, to the functionality of the Web site, in Apple’s world, innovation means eliminating the unnecessary so that the necessary may speak.  Innovate by subtracting, not by adding. Simplify, simplify! Apply this to your life, too!

Principle Six: Create insanely great experiences. The Apple store has become the world’s best retailer by introducing simple innovations any business can adopt to create deeper, more emotional connections with their customers.  There are no cashiers in the Apple store!  Create not a store, not a business, not a product – create a customer experience!! 

Principle Seven: Master the message. Steve Jobs is the world’s greatest corporate storyteller, turning product launches into an art form.  You can have the most innovative idea in the world, but if you can’t get people excited about it, it doesn’t matter. Start your business with a powerful mantra, three words.  Disney: “We make people happy!”.  The mantra is not for your customers, it is for you and your fellow workers.  If you work at Apple, and you learn “think different”, how likely is it you will come up with a dull conventional design? 

 

Global Crisis/Innovation Blog

Iowa Is The Answer: What is the Question?

By Shlomo Maital

 NOT Iowa’s Strength!  

 

In the Kennedy administration, intellectual staffers liked to play this game.  Someone gave an ‘answer’.  Then the group had to come up with an appropriate question. 

   Here’s an example.  “Iowa”.  What is the question?

   The question is:  What state has the solution to American’s current economic woes: unemployment, lack of jobs, recession?

   Here are the numbers.  Iowa’s rate of unemployment is about 6 per cent, 3 percentage points lower than America’s average.  Some 30 per cent of Iowa workers are employed in manufacturing (not in agriculture, as many people familiar with the term “Corn Belt” believe), double the American average.    Iowa has some of America’s most advanced factories.  At the moment, President Obama is in Iowa, visiting factories and touting the Iowa solution.  It was here that he began his campaign for the Democratic nomination for the Presidency. 

  According to  Teresa Wahlert, director of Iowa Workforce Development,  “Manufacturing continues to be the driving force in the Iowa recovery.”  Manufacturing employment was up 1,400 jobs from March, the highest of any employment sector. Growth was concentrated in the wood product and machinery manufacturing sectors, as well as beverage and food production.

   Indeed, Iowa is the answer. Bring back manufacturing. Bring it home from China.  Why don’t the other 49 states in America benchmark Iowa, visit its factories, speak to its governor, and act to develop manufacturing?  America’s House of Representatives and Senate are a write-off, stuck in the quagmire of partisan politics. It is up to the people and to the states.  State governments have the authority to offer tax incentives to companies willing to locate factories in the state.  They have the authority to initiate vocational schools, training programs and college programs focused on lean manufacturing. 

  Here is what Iowa’s Economic Development agency says: 

    Iowa’s success in advanced manufacturing supplies cutting-edge, innovative products in a myriad of industries – agricultural and construction machinery, chemicals, food manufacturing, aerospace engineering, aluminum, and steel– and is building the world’s diversified manufacturing economy of the future. Some of the world’s leading companies manufacture in Iowa, reinforcing the state’s position as a center for advanced manufacturing. Companies that have manufacturing operations in Iowa include: Rockwell Collins, John Deere, Alcoa, HNI Corporation, Winnebago and Vermeer.  Iowa has approximately 4,100 manufacturing establishments, employing over 198,000 people. The state’s manufacturing sector contributes the largest share of state gross domestic product (GDP) of any major sector with $23 billion contributed in 2009. Iowa ranks seventh among all states in the percentage of total GDP derived from the manufacturing sector.

   Iowa is the answer.  Why don’t other states realize this?

Global Crisis/Innovation Blog

America in Crisis: Political Gridlock, Leadership Vacuum, and an Accident Waiting to Happen

By Shlomo Maital

  America’s Debt Mountain

 

America’s government has run out of money. Unless Congress passes legislation to increase the legal ceiling on the debt the U.S. govt. can owe, by August 2, parts of the federal government will shut down. At a time when the economy is teetering already on the brink of a double-dip recession, this will be disastrous. 

  The Democrats and the Republicans are deadlocked. The Republicans want massive spending cuts. The Democrats want higher taxes on millionaires.  Neither side will budge. 

  Somehow, America’s budget deficit must be cut. According to The Economist, the deficit is 9.1 per cent of GDP.  In contrast, Greece’s budget deficit is only 8.4 per cent of GDP – and Greece is deep in crisis.  America’s trade balance in April was (at annual rate) $681 b. (the gap between goods exports and goods imports).  These two deficits are massive and endanger not only America and the world.  Yet there is political gridlock.

     It gets worse.  With Asian economies recovering, there is growing demand for capital and this is leading to higher interest rates. A year from now, short-term interest rates in the U.S. will be two per cent higher.  America does a lot of short-term borrowing. On its total national debt of $15 trillion, a rise of two basis points in interest costs amounts to $300 b. in added spending!  The historical average interest rate on America’s debt is 6 per cent. At present, the U.S. is paying two percent.  So if you factor in the higher cost of borrowing, America’s deficit is getting worse, not better.  And as expert Eugene Bowles notes:  This (debt crisis) is the most predictable crisis in history – yet the politicians in Congress cannot sit down and agree on a plan of action. Obama and the Democrats are as much to blame as the Republicans.  It is an accident waiting to happen. 

  When Greece is in crisis, the euro becomes shaky. When America is in crisis, the whole world becomes shaky, because the American dollar is still the only global currency.  Contrast America’s political gridlock with China, whose Premier Wen Jiao Bao, on a visit to Europe, has pledged China’s resources to buy Greek bonds.  He realizes it is not in China’s interest to have a euro crisis, or indeed a crisis of any kind.  Imagine the irony – China is acting to bail out the euro, while Germany’s narrow self-interest is endangering it.   

    China gets it.  America’s politicians do not.  And all we ordinary citizens of the world can do is sit and watch America and the world fall of the cliff….    

Global Crisis/Innovation Blog

How to  Get Health Care in America: Rob a Bank

By Shlomo Maital

  This is a true story, reported on CNN.

   James Verone, from Gaston County, North Carolina, is 59. He has serious medical problems (a growth on his chest, two ruptured disks and a problem with his left foot). He has no job, no money and no health insurance. 

  So – how do you get urgent health care in America, one of the wealthiest nations in the world? 

  You get creative.

   Gaston walks into a bank and slips a note to the teller: “This is a bank robbery. Please only give me one dollar.”  He then tells the bank employees, “I’ll be sitting right over there in the chair waiting for the police.” He then perches himself on a chair just outside the bank and awaits the police. 

  He hopes for a 3-year sentence, so he could reach 62 in jail and then get Social Security.

  CNN reports, “The police charged him with larceny, not bank robbery, because of the $1 amount he demanded at the bank.  Verone told his hometown paper, if the jail penalty isn’t great enough, the crime will happen again.”

  In jail, Verone says, the prison doctor who treated him accused him of “manipulation”. 

  In America, you get health care by committing a crime and going to jail. It seems there is no other way. 

   America.  The country only a mother could love.  Or could she? 

Innovation Blog

How to Transform Crisis into Opportunity: Big Time Brands, Big Time Innovation

By Shlomo Maital

  

   

Zanybandz                             SLAP watch           Splash Watch

 Big Time Brands is a company founded only about a year ago in Tulsa Oklahoma.  It has three enormously successful products: SLAP Watch, Zanybandz, and Splash Watch.  Each is a hip product, totally cool, have-to-have, with very low price tags, and we can learn much from this incredible company.

    First, the products:  

* Zanybandz, a silicone rubber band bracelet that became an international success almost overnight.  Big Time Brands gets 800 calls a day for this product, and others.

 * Splash Watch. Unique packaging and bright vibrant colors.

*  SLAP Watch is a twist on the spring coil bracelets  popular in the 80’s and 90’s, created  by combining the mechanisms with a watch. Available in 9   colors with interchangeable faces

  Now, the lesson.

  All these products are bright, colorful, eye-catching, and above all, really cheap.  They are all based on silicon plastic.  The founders say (on CNN):  our business was created by the economic downturn. People have stopped buying expensive gifts, and instead buy the Big Time Brand products, which are attractive and unusual enough to be appealing, yet cost very little.  When an economic crisis makes consumers very price-sensitive, innovators seek the low end of the market, and use clever design to make cheap products look great.  Some small businesses tell Big Time Brands these hot products have saved their business. 

   Check out Zanybandz, Splash Watch and SLAP Watch.  What do these products tell you about your own product innovation?  And how much do you invest in, and believe in, great design?

Innovation Blog

A Startup on $32,000 – And Zero VC’s!

By Shlomo Maital

Today’s new issue of Bloomberg Business Week recounts, according to Vivek Wadwha, how David Park and partner Eric Bahn launched a startup Web-based business for a total of $32,000.  There are valuable lessons here.  It is no longer necessary to pursue a Venture Capitalist with a big check for a humiliating and often frustrating year or more.  Instead put your valuable time into building your business.  Here is the story:

“Earlier this year David Park shifted gears, embarking on a new version of the site that he describes as a social network for business school applicants. It includes new features such as aggregated GMAT prep and MBA admissions news, a way for members to connect with one another, and social gaming elements to keep members motivated. It makes money advertising test prep services. Amazingly, the new site took only four months and cost just $32,000 in total.

   No one says they can build their products for less than the cost of a BMW 328.  But Park and Bahn did. How? To start with, they crowdsourced the design. Instead of hiring a bunch of marketing people, as tech companies usually do, they asked their user community for volunteers to help conceive a new site. Then they selected a handful of the most eager users and trained them on the basics of Silicon Valley-style product management. Next, Park and Bahn needed to find a designer. They used 99designs.com, which hosts design competitions, for a two-week contest that attracted hundreds of designers, yielding a design they used as the theme for the new site. The contest, prize, and designer’s time cost $9,200.  They broke up Web development into two tasks: front-end engineering (turning design artwork into code) and back-end engineering (making the code actually function). They built their technology on top of WordPress, phpBB, and Drupal—which are free, open-source platforms. Front-end engineering usually requires sophisticated coding done by contractors who earn as much as $100 an hour. Instead, the Beat The GMAT team turned to a service called PSD2HTML.com—which converts Photoshop design files into HTML and CSS code. This service costs $160 to $220 per Web page, totaling $4,500. For back-end engineering, they hired four developers from Hungary and Ukraine on the outsourcing website oDesk. They paid $15 to $20 per hour. The entire back-end engineering cost $18,000.”

   ” In software development, things don’t usually go as planned. Park and Bahn had their share of missed deadlines, buggy code, and product problems. Outsourcing always makes things more difficult, because developers are in different time zones, speak different languages, and don’t always understand what is expected of them. It took many sleepless nights and lots of caffeine to surmount these obstacles.”

And here is the punch line.   You do NOT need, or want, a venture capitalist.  

   ” If entrepreneurs can build sophisticated technologies so cheaply in the Web world, who needs venture capitalists any more? Software startups often spend the first few months of their existence polishing business plans and pitching investors. They can instead be working with smart people all over the world and focus their energy on perfecting their technologies.  When law school grads can build successful technology companies—Park says his site has been profitable since its inception, with annual revenue close to $1 million—the notion that website founders need computer programming backgrounds is outdated. “

Innovation Blog

“Ignite 2.0” Fizzles: The Unreality Show of the Competitiveness Council

By Shlomo Maital 

     America’s Council on Competitiveness has issued a report, called Ignite 2.0, prepared by Deloitte, about how to boost America’s manufacturing capability. The report is based on the views of distinguished U.S. college presidents and heads of National Research Labs. It contains some 40 detailed recommendations.  And the clash between the theory of the recommendations and the reality on the ground is stark.  Here, in italics, are a few of the recommendations, along with the reality that contradicts them.  Ignite 2.0 is an “UnReality” Show.

 * Benchmark best practices from other countries and reform immigration policies to better attract the world’s most advanced workforce, and retain foreign talent educated in American universities upon graduation.

“The UK has now upstaged America as the most preferred campus destination for Indians. Blame it on the declining job opportunities in the US which is battling the worst downturn in decades or it could as well be that America is still more expensive to study in than Europe.”   “The Indian students are finding their chances bleak to be associated with the dream US destination universities like the Harvards, Michigans, Yale and Stanford – which no longer guarantee the top-dollar jobs – and are increasingly mending their way towards top UK-based universities such as London Business School, Oxford, Cambridge and Imperials among others.”  Source:  www.trak.in

     Paul Almeda, AFL-CIO:  “Last year,690,000 foreign students came to study in U.S. universities. Foreign students now earn more than half of all PhDs in math, computer science, and engineering. Fewer of these students say they want to stay in the U.S. after graduation. They are more likely to leave the U.S. because the economies are improving in their home countries, namely China and India. We have created a system that makes us dependent on foreign students and discourages U.S. students from entering STEM (science, technology, engineering, manufacturing)  fields. This is not sound education or economic policy.”

* Fuel private investment by ensuring globally competitive corporate tax rates and strengthening and making permanent research and development tax credits, especially for U.S.- based innovation.  

“Massachusetts Sen. John F. Kerry and former North Carolina Sen. John Edwards have said tax law rewards corporate expansion overseas.  Both would cut taxes for domestic manufacturing and offer temporary tax credits for hiring manufacturing workers in the U.S.”  Nothing has been done in this regard so far.

* Implement university programs that promote student interest in math, science and manufacturing.

“In many states, vocational training is available to workers who have been previously laid off or whose previous employer is defunct; such training was expanded under the American Recovery and Reinvestment Act of 2009. The success of these programs has been questioned, and a 2009 study by the United States Department of Labor showed that the difference in earnings and chances of being re-hired between those who had been trained and those who had not been was small.”  Wikipedia, “vocational education in the US”.  In the early 20th C., America tried to implement the German system of vocational education, but failed and dropped the attempt.

   Great report, team.  Problem is, it probably isn’t worth the paper it’s written on.

Global Crisis/Innovation Blog

The Rich  Grow Richer, or…Crisis?  What Crisis?

By Shlomo Maital

 

no. of people with $1 m in investable assets    

The Bible says, you will always have the poor among you, meaning poverty is perpetual.  This is true, because of how we define poverty in relative terms – say, half the average income or less. 

  The Bible does NOT say, the rich you will always have with you, and they will constantly grow richer.  But they do.  Somehow, even though financial markets globally remain unstable and volatile, even though real estate still declines,  somehow the wealthy continue to grow wealthier, while ordinary people struggle just to find a job. 

  According to The Economist (June 23, 2011),   

An annual survey estimated that the combined wealth of the world’s 10.9m rich people (27% of whom are women) stood at $42.7 trillion in 2010, more than in 2007, the year the financial crisis was brewing. More than half of the monied classes live in the United States, Japan and Germany, though Asia has more in total than Europe for the first time.

There are 10.9 million people with at least $1 m. in investable assets.  Their wealth, $42.7 trillion, is staggering.  Suppose, just suppose, these 10 million people, the population of New York City, decided to give one tenth of their wealth to those in need, to help them study, go to college, learn to read, pay for crop seeds or start a business.  That comes to $4.27 trillion!  Suppose there are a billion poor people on this planet, who earn about $1 a day.  That gift would give each of the poor $4,000 !  Would that change their lives forever?  And it would leave the millionaires with 90 per cent of their wealth, for most enough to remain millionaires, comfortably.

    Okay, if that is impractical, what about this?  Ask the world’s 10.9 millionaires to contribute just the increment, the increase in their wealth, between 2009 and 2010, so they remain as wealthy now as they were a year ago.  I think that alone would amount to several trillion dollars.

   It won’t happen.  And in America, the Republicans have placed a poison-pill requirement on their approval of raising the debt ceiling – no new taxes, not on millionaires, not even on billionaires.  The Democrats are unhappy, but I bet they swallow it.  Good work, Republicans. You might even win the Presidency in 2012.  Let’s watch the rich grow richer – and the poor grow poorer, in America, the world’s “greatest country”.    

Global Crisis Blog

Global Crisis & Homeopathy: Larry Summers’ Solution

By Shlomo Maital

 Larry Summers, homeopath

  

We’ve tried everything else to dig America’s economy out of its deep hole. Why not try homeopathy?  

 Homeopathy is a form of alternative medicine in which practitioners treat patients using highly diluted  preparations that are believed to cause healthy people to exhibit symptoms that are similar to those exhibited by the patient. The collective weight of scientific evidence has found homeopathy to be no more effective than a placebo.

     Basically – you give sick people medicine that is toxic, causes illness, but in doses so tiny it cures them.  And it doesn’t work.

   Well, here is Larry Summers’ diagnosis for America’s ills.   Summers was Clinton’s Treasury of the Treasury (1999-2001), devised Clinton’s economic plan that killed America’s budget deficit 1992-5, was President of Harvard (2001-6), headed Obama’s National Economic Council – in short, the top economics honcho.  He was also the youngest tenured professor in Harvard’s history. 

    Summers says (FT, June 19): “The central irony of financial crisis is that while its caused by too much confidence, borrowing and lending, and spending, it is only resolved by increases in confidence, borrowing and lending, and spending.”

   Is that homeopathy or what?  Cure the illness by restoring the underlying causes. 

   When one of the world’s top economists with a proven track record comes up with homeopathy as the remedy,  it’s time for us ordinary folks to be seriously worried.

Innovation Blog

Pro-Bono: What We All Can Learn from U-2

By Shlomo Maital

 U-2’s BONO

 

A new case study by Harvard Business School Professor Nancy Koehn (with  Katharine Miller and Rachel Wilcox)  analyzes the remarkable sustained success of the Irish rock band U-2 and its phenomenal leader Bono.  She discusses her case in the latest on-line issue of Harvard Business School’s Working Knowledge. 

  Here are some of the key points that underlie U-2’s success:

*  Make meaning, not money.   “U2’s appeal has always been about our common humanity and the yearning we all experience to follow a higher path. People are looking for the light, and U2’s music has spoken to that search since the band started recording more than two decades ago.”

 * Built to last.  “In an industry notorious for its focus on short-term hits and for taking control of an artist’s work and profits, the band members and their long-time manager Paul McGuiness always looked to build an enterprise that would have a long life.”

*  Innovate, not just the music, but also the business.   “U2 was always innovative, understanding from the get go that technological change and the creative destruction it unleashed would have a big impact on the business of making and distributing music. In 1981, for example, U2 made a video for the song “Gloria,” which was one of the first videos to slide into constant MTV rotation. Some two decades later, in 2004, Bono connected with Apple for an early release on iTunes of the single “Vertigo,” and the video was featured in an Apple ad campaign. “We turned advertising into a rock video,” Bono said at the time. That’s not selling out, he said. “It’s exciting.” “

* Embrace change constantly.   “A leader’s mission is not static; it evolves. Bono continuously sets new goals around several related global challenges. For example, he started advocating for famine relief in Africa in the mid-1980s, and then in the early 1990s began raising awareness of the conflict in Sarajevo, playing live footage of the war during U2’s Zooropa tour. After working to get eight industrialized nations in 1999 to agree to $100 million in African debt relief, he continued with a campaign to cancel debt owed by Third World nations to the World Bank and the International Monetary Fund. Then he began lobbying the administration of George W. Bush for additional funding to fight AIDS (in 2003, the US government pledged $15 billion toward the disease).  

* People don’t buy what you make, they buy why you make it.  “Who you are and what you stand for as an organization have great relevance to the people who buy your product. Many of U2’s supporters embrace the band because the causes the four members work to address—from social injustice to hunger—are issues the fans themselves are concerned about.  The backstory of organizations is now part of the value proposition for consumers. The lads from Dublin understood that early on and they still understand it.”

  In 2009 U-2 made more profit than any other rock group in the rich U.S. market.  They did very well – and they also did a lot of good.  Doing good and doing well are tightly linked in today’s age. Any CEO who thinks it is still all about maximizing shareholder value should first listen to any U-2 album, and then visit a shrink.

Blog entries written by Prof. Shlomo Maital

Shlomo Maital
June 2011
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