T R O J A N

I N N O V A T I O N

McDonald's is always where you "expect" it. Carrefour is "not" a retailer . . . Trojan Innovation is a term created by my friend Mr. Martin Ertl, CIO of Bombardier Transportation resulting from our in-depth analysis on innovation practices.

The concept is that the innovator chooses a perceived benefit (PB) as the prime (tried and proven) method of business, while capitalising on a real benefit (RB) as the strategic business approach. The two companies mentioned above are real estate plays i.e. RB first and food industry and retail industry leaders i.e. PB second.

Interestingly, McDonald is one of the first companies to use predictive modeling to map population growth and hence the "M" where one wants it.

More details to follow soon ...

Singapore + China - Free Trade Agreement

"China is Singapore's third-largest trading partner and Singapore is China's eighth-largest trading partner."

The article cited above is here and goes on to discuss the Free Trade Agreement reached after two years of working on it between Singapore and China.

Singapore is a fascinating experiment that has remained ahead of its time in being a successful, let's say a terribly successful, city state when compared to the other current sovereign city states of the World - Monaco, San Marino and Vatican City. Today, Dubai and other Gulf megalopolis are attempting to build their "Singapore". Other close competitors to Singapore (non-sovereign) city states are Hong Kong and Macau, perhaps City of London.

Click here to read about some inspiring quantitative details on Singapore from The World Fact Book, a small place with a population that is less than that of Denmark.

The FTA between Singapore and China will resolve/cover some of the sticking points as cited in the article:

"... the deal covers trade in goods, rules of origin, trade remedies, trade in services, movement of persons, investment, customs procedures, technical barriers to trade, sanitary measures and economic cooperation."

At a population of approximately 4.5 million, $62 billion in trade with China shows that Singapore's strengths cover more than manufacturing. Here is an example of what Singapore was thinking and doing about four years ago - unrestricted research for bioscientists. With such foresight, I believe Singapore will continue to lead all sovereign and non-sovereign city states of the World for at least half if not all of the 21st Century.

Dubai - Financial Health

A good article here (by way of Dharm Kapadia) evaluating the concerns and possible ramifications of Dubai's current financial leverage and the US economic crisis. The article states:

"Dubai's biggest risk is its daring reliance on debt to drive its breath-taking building boom. Last week, Moody's estimated that in 2006, the most recent year for figures, Dubai's government and public sector company debt was at least $47 billion, a staggering 103% of Gross Domestic Product. The investment rating agency said it expected Dubai's debt to continue outpacing GDP for another five years, exposing Dubai to pronounced financing and geopolitical risks."

Yet the article goes to conclude in positive terms providing regional insights and a little bit of history of Dubai and Abu Dhabi's relationship:

"An underlying reason for the relative lack of panic so far is that Dubai real estate remains a financial haven for wealthy individuals from riskier nearby countries like Iran and Pakistan. What's more, Dubai's real estate sector is dominated by a handful of major companies — collectively dubbed "Dubai Inc." — that are directly or indirectly owned and controlled by the government. This means, analysts say, that Dubai authorities could effectively stave off a bubble burst by keeping finished projects off line until market conditions improved. In the event of a systemic threat, Dubai can probably rely on super-rich Abu Dhabi for a bailout. "We consider it highly likely that the authorities will step in at some level to support entities that are strategically important for the economy," Moody's analyst Tristan Cooper tells TIME."

UPDATE: The above article on TIME online has sparked exciting and interesting conversations among my friends in Dubai. The insight is that over 90% of the demographic represented by my friends engaged in the discussion (male-70% and female-30%) (1) South Asians, Middle Easterners and North Africans, (2) Are between the ages of 28 and 44, (3) Married (or about to be), (4) Educated in the West (or equivalent Western University in the region) and lived there prior to moving to Dubai, and (5) Have lived in Dubai for over 2 years - (a) Are not planning to leave Dubai, (b) Are happy to see "small timers", "short timers" leave or "Go Dubizzle" (as one person stated), (c) Are confident in Dubai claiming and taking the place of being "The Financial Center" of "Middle Earth" (as one person put it).

I like to suggest ~10% margin of error to the above qualitative analysis to what the individuals actually do.

Could it be that Dubai "may" have created the method of capturing the Knowledge Worker? See my future post on challenge from Qatar in the from of Qatar Foundation, see here.

Artificial Intelligence

The word "never" does not exist in a scientists vocabulary. Will Wright (see biography here) stated that "Machines will never achieve human intelligence." I believe this to be a strong assumption. Mr. Wright further states, "Intelligence is whatever we can do that computers can't." See the text and video of the interview on Popular Mechanics here.

This has rekindled a long standing discussion with Franz Dill again, see his post "Prophecies about AI" here.

Computing is currently limited, yet moving at exponential speeds (in gaining speed). As soon as the silicon wafers in integrated circuits are replaced with diamond wafers, we will have a factor of 10 increase in the ability to withstand heat in an IC. What does this do to speed? Currently the science has pushed the existing formula (in practice) to roughly state that (in CMOS based technologies) the heat generated by a processor is approximately proportional to its clock rate, see detailed paper here. So Tera-Hertz is not far.

With such speeds more data processing occurs faster. Generically speaking, human brain stores all, applies patterns of learned behavior and hence the decisions - the key to move from one node to the next in the decision tree, or jump, or, etc. With increase in computational speeds, machines could be preloaded with "human" patterns - resulting in human like decision making. Excellent primer on human brain functionality here.

Yet, with Quantum Computing and organic memory storage and processing available one day... I have to go back to the word "never" as stated by Mr. Will Wright... I am tempted to say that there is never such a thing as never!

Virtual Worlds - Second Life

Second Life (SL) is one of the more successful virtual (online) worlds. I met with SL folks at SIGGRAPH when they first handed out T-shirts! I have one of the original green hand shirts...

I experimented with SL and found it lacking as my expectations are to incorporate all the human senses into an experience... hence, I await haptics. See details on Haptic Technology here. Yet, I feel that generation X/Y/Z are perhaps more apt at relinquishing some of the sensical facilities to establish virtual/online communities.

See detailed reviews and discussion on SL from my friend and colleague Franz Dill here. See Second Life virtual world here.

Report Card for U.S.A.'s Infrastructure

America's infrastructure boom occurred roughly with the industrial age and continued till after World War II. Similar activities are taking place today in places like Dubai, Macau, Beijing, Mumbai, Banglore, parts of Africa, etc.

One of the keys to economic development for a region is quality of life and of various lifestyles that attract the top paying knowledge worker and retains them. America's "report card" on this subject here developed by the American Society of Civil Engineers (details here) is indepth and educational.

World Perspective / Photo - 3 [India Institute of Technology]

Above is the picture of Hijli Dentention Camp at Kharagpur established during the British Colonial Rule in 1930 to accommodate those who were involved in the armed struggle for freedom of the Indian Sub-Continent or the non-cooperation movement.

On the same grounds of the infamous detention camp on the right is the picture of the first Prime Minister of India, Mr. Jawaharlal Nehru (see biography here), laying the foundation stone for the first of India Institute of Technologys (IIT) at Kharagpur.

At the ceremony on April 21st, 1956, Mr. Nehru said:

"Here I stand at this place and my mind inevitably goes back to that infamous institution for which this place became famous not now but 20 to 30 years ago- the Hijli detention camp. Here in the place of that Hijli detention camp stands this fine monument of India (IIT) today representing India's future in the making."

Read historical details of the Hijli Detention Camp and IIT Kharagpur here.

IIT Kharagpur today (see the University website here)  is ranked among the top Universities of the World and continues to gain ground in delivering the best in class talent.

[Below is the renovated detention camp serving as part of IIT]

As I post this blog I find it difficult to imagine the pride that the students and alumni of this institute must feel - to deliver and create knowledge through the passion and persistence of humans from the place of human misery created by humans. At the same time, I am confident that the experiences of these student's grand fathers and great grand fathers must reach deep within their hearts to kindle the desire to be the best that only the results we see in the World today can show. I will attempt to obtain a list of IIT Kharagpur alumni conducting the business of the World to post here in the near future.

The statement I make here is not that India has achieved such. The insight is for the astute - that if this has been achieved in such a short time then what is to come in a shorter time from South Asia?

Japan - International Growth Through Purchases / Acquisitions

"Thanks to conservative managers and years of record profits, Japanese public companies are sitting on cash reserves of more than ¥60 trillion, estimates Nikkei, a financial-news company."

States the article in the Economist "The Japanese are coming (again)" here. The figure below gives a visual insight on how Japanese companies have done this at the end of the last two decades also:

Another good article on the subject here from the International Herald Tribune. An excerpt:

"But aggressive expansion also presents challenges, especially cultural ones. Traditionally, Japanese firms emphasize seniority and stability over individual incentive and profits."

Aren't individual incentives and profits couple of the key ingredients to breakthrough innovation?

The Economist's explanation of market destabilization

Excellent diagnosis and analysis of the current economic downturn by the Economist in their special report "When fortune frowned" here.

Wired: Jagdish Bhagwati - Keep Free Trade Free

I wrote a review here of Mr. Parag Khana's letter to the next President of the USA. Below are some of my thoughts on a similar letter to the next President of the USA from Dr. Jagdish Bhagwati, see here.

In one word "brilliant". Or is it because he shares or states insights that are similar to how I look at the global market place? Here is an excerpt:

"... China may never be as innovative as the US, which has a stable venture-capital model and an entrepreneurial culture that promotes creativity. Globalization helps nations discover their unique strengths."

[Portrait on right of Dr. Bhagwati by Mario Hugo]

Dr. Bhagwati discusses IP in his article in context of constrained free trade, NAFTA being his example where he states:

"Agreements like Nafta are for free trade among members but increased protection against nonmembers."

Economic constraints (or sometimes protectionism) have an interesting quality that for a short period of time they benefit the ones within the boundary(s). If such continues, different models of conducting business emerge outside the boundary(s) that directly compete with the constrained model.

An extreme example of this would be the difficulties Israel faces in bringing its IP and ideas to the global market place, due to the reasons that are. As the US is one of the most open and international business friendly places for new ventures, at times trumping politics when the economic will is stronger, the US has benefited from a plethora of Israeli breakthroughs using it as the global launch pad. I wonder of the economic impacts if this IP had Asian launch pads for success?

I believe "Political will" to be perception and "Economic will" to be reality - both must be leveraged and managed with a balance. An unfortunate example of the imbalance is the Kyoto Protocol (details here).

[Click the figure above to maximize]

Further emphasizing my thoughts on this subject is a current example of yet another unsuccessful attempt to drive towards free trade and economic models of conducting business on agriculture, industry and services - the Doha Round (details here). An excerpt on the Doha Development Round from Wikipedia:

"As of 2008, talks have stalled over a divide on major issues, such as agriculture, industrial tariffs and non-tariff barriers, services, and trade remedies.[1] The most significant differences are between developed nations led by the European Union (EU), the United States (USA) and Japan and the major developing countries led and represented mainly by India, Brazil, China and South Africa. There is also considerable contention against and between the EU and the U.S. over their maintenance of agricultural subsidies—seen to operate effectively as trade barriers."

Dr. Jagdish Bhagwati brings to the forefront the key driver for all decisions that politicians face... economic will. It drives global trade and its leverage can help create better conditions for humanity and development of sustainable products and services.

See Dr. Bhagwati's website here.

Join the Online Debate: "The Value of H20"

The Economist puts forth a proposition for an online discussion:

"Water, as a scarce resource, should be priced according to its market value"

Join the debate here.

TheFunded.com - VC Evaluation

Are you an entrepreneur? If so, do you know about TheFunded.com? A decent place to look at evaluations of VCs across the globe and more being added daily.

See details in a Wired article here.

Rashid Khan and Business Process Management

While at Procter & Gamble, I became interested in exploring how to take the company out of Workflow and into something closer to Artificial Intelligence (AI) for business management. Of course, Franz Dill and I joined forces on it who had led multiple efforts in this field at the soap company. See Franz's AI expertise here.

If time allows, I will cover the learning from the research at a later point in time.

AI is still a ways away, yet research led me to the market place of Business Process Management (BPM). I wanted to meet the person who first thought of it and digging through the noise of perceptions and self-proclamantions, I discovered Mr. Rashid Khan who had coined the term "Business Process Management" when he founded Ultimus in 1994 - a BPM software solution company. See here some of Rashid's patents.

Rashid took Ultimus from an idea to I believe now delivering solutions in 80 countries. Rashid also wrote a good primer on BPM called "Business Process Management: A Practical Guide", see here. Franz wrote about the book in a blog, "Good, mostly non-technical overview and easy read... BPM can be seen as a way of modeling processes within a corporation, along with the people who do the work. It has been criticized for too strongly regimenting process steps."

Rashid recently left Ultimus after 14 years to pursue a new venture - a consultancy for senior executives called Leadership BPM. He is also blogging here.

Is it all about Design and Experience?

SCAD

While conducting a seminar on Design Innovation and a Design Charrette at Savannah College of Art & Design (SCAD), I left the students with the question whether in the final analysis it was all about design and experience of any product before they began their Charrettes?

The deep consumer understandings gleaned at places such as the Innovation Centers at Procter & Gamble enable product companies to capture the sale at the point of purchase - First Moment of Truth (FMOT) as P&G puts it, see definition here. My work at the various Innovation Centers around the world continuously helped me realize that P&G had captured the essence of reaching the consumer - Design enables success at FMOT.

See my friend and colleague Franz Dill's blog here discussing P&G's Innovation Centers and some of the work we did as detailed in Mr. A. G. Lafley's book "The Game Changer". Franz was also the founder of the first Innovation Center there.

While the above is a commercial venture for increasing shareholder value, I was happy to see that in academia SCAD has introduced anthropology and psychology to compliment their excellent curriculum in Industrial Design program, see here.

The quality of experience offered by the product or service may or may not result in repeat business. This is where the product companies of the world are engaging in immersive and experiential environments for learning consumer behavior. See another of Franz's blog here regarding Cargill's Innovation Center.

The SCAD students produced impressive results for the dilemmas I brought to them from UAE and Germany. My friends and faculty at SCAD that is; the Industrial Design Dean - Mr. Victor Ermoli, the Chair - Mr. Tom Gattis and a dedicated Professor - Mr. Robert Fee, should feel proud of their accomplishments as the No. 3 Industrial Design program in the USA.

This Charrette helped me solidify my belief that in the end, yes, it is all about design and experience. Or did Dr. Ivan Pavlov already discover this indirectly in the late 19th century when he developed the concepts of Classical Conditioning?

Company Highlight - live|work

live|work

I want to highlight a service design company, live|work, and a friend Mr. Chris Downs, founder of live|work, with whom a conversation began about three years ago whether it is all about the experience? Chris (if I am remembering it right) was of the opinion that it is all about the service as in the end all products have to provide a service. A lesson learned at Procter & Gamble and the result being the concept - Second Moment of Truth i.e. what happens when the consumers try the product after making the purchase decision. Here is an interesting blog providing insights on this.

I have not seen a "Services Design" firm such as Chris's in my international work that has successfully combined all the varied pieces of use and usability, incorporation of the five senses, pre-present-post emotions, and so on and delivered hard ROI. Have a look at few of the case studies of live|work here.

Read more about "Service Design" here.

See an insightful conversation here that Chris had with NextDesign Leadership Institute's (NextD) GK VanPatter.

Wired: Parag Khana - Embrace the Post-American Age

Wired magazine has published fifteen letters to the next President of the USA from fifteen talented individuals. One of the letters is from Mr. Parag Khana here.

I found the overall impression of Mr. Khana's abandonment of historical lessons enjoyable. Here is an excerpt from the article:

"[Mr. Khana] describes a planet dominated by a trio of superpowers: the US, China, and Europe. In this tripolar era, America's fate depends on tough national choices, not lame historical analogies. If the US wises up — by tightening trade and energy ties to the rest of the hemisphere, pursuing economic innovation at home, and establishing a "diplomatic-industrial complex" — it can grow stronger..."

In the long cycles of gains of power by nations and then losing them, USA has a handicap that it is but a child among the ancients. Especially enjoyable above is the term "lame historical analogies", if America does not learn from its successes and failures then... what?

Regarding Mr. Khana's comments on India and China - In my daily international activities, I work and engage with more South Asians across Fortune 500 companies second only to Caucasians in senior executive positions. One of the main winning assets (proven anthropologically) for a society in fast growth is unhindered communication across all spheres of conduction of business. South Asia's language is English and the world does business in English. It is interesting to note that Mr. Khana's background did not ground him in realities of his birth place.

In my opinion, the future economic giants will be the ones who develop and harness Intellectual Property. I disagree with Mr. Khana when he discounts India against China. See this article at WIPO (World Intellectual Property Organization) on insights on approach by the two nations. Creativity is not regime-able, at least in my belief. Creativity must have a choice otherwise when an edict (let's say of "thou shall create") is driven upon a society, documented human history does not show positive results... aaa! I forget that Mr. Khana does not believe in "lame historical analogies".

My personal experiences have shown South Asian to be second or on par to Americans and Israelis when it comes to being entrepreneurial and aggressive at business. A comparative analysis of the most recent millionaires and billionaires between China and India will reveal some parallels yet striking differences as the Indian billionaires have literally attacked the global markets when it comes to growing the business, from Mittal Steel acquiring Arcelor (Arcelor Mittal) or Tata acquiring Land Rover / Jaguar and a plethora more of them.

This is unique to India or anyother developing economy. In comparison, China is currently focused internally... it has much to grow with-in than out, hence, that global growth may be a secondary consideration?

As Mr. Khana himself stated, "I think I'm the only person who went to Davos ten times by the age of 30... I'm not sure that's a good thing." A good observation?

I will comment on World Economic Forum in Davos if I go next year.

As to Mr. Khana's comments on Iran - I have to question the assumptive generalization: Does all that the West has to offer is great? In a world rapidly being democratized through commoditization of essentials of life, where the owners of this commoditization are India and China, where the beneficiaries of such democratization forces are mostly in Asia and Africa... this assumption by Mr. Khana is a dangerous one.

Overall, this article is uniquely insightful and entertaining, about and from an educated 31 year old World Economic Forum alumni.

Marketing for "Individualism" vs. Word-of-Mouth for "Mass Production"

I worked on developing IP and technologies for Procter & Gamble's breakthrough and game changing word-of-mouth marketing ventures - Tremor and VocalPoint. See details here and further links.

While browsing my friend and colleague Franz Dill's blog on WOM here, it has occured to me that the viral marketing space is going to find itself at slight odds when the consumer becomes more educated, with more choice and is interested in a product that "fits their" needs. See another blog by Franz here on WOM.

WOM is still playing at the head of the demand curve (Click here to read about the Long Tail). Yet, the world has moved on from mass production to mass customization to the 21st century where indivudalized products / services will come to be. See my related blogs extrapolating this further into the concept I call "Tail Spike" here and here.

Influencers and influenced masses are a key to developing WOM push and pull marketing strategies and tactics. Yet, a new burgeoning class of "choice devisors" is coming into being. Perhaps it has always existed and we are now discovering it. These are the folks who are not influenced, they do not care to influence... yet, they are creating and devising the new / next generation of product / service that will be used by the mutually inclusive class of masses mentioned earlier.

A leading work currently under way that looks at these "choice devisors" is the work of Dr. Eric Von Hippel, Dr. Christoph Hienerth (bio & current) and Dr. Marion Potz around "Lead User" concept.

Lead User work is facinating and I plan to publish more in the near future with Dr. Hienerth's and Dr. Potz's guidance. For now, here is an excerpt from Wikipedia:

"Lead user is a term developed by Eric von Hippel in 1986. His definition for lead user is:

1. Lead users face needs that will be general in a marketplace – but face them months or years before the bulk of that marketplace encounters them, and
2. Lead users are positioned to benefit significantly by obtaining a solution to those needs

In other words: Lead users are users of a product that currently experience needs still unknown to the public and who also benefit greatly if they obtain a solution to these needs."

World Perspective / Photo - 2 [Farming Investment]

Global trends are the excitement for the hedge funds, banks and investors. One that has been gaining steam / noise in the past six to twelve months has been farming for food supplies to regions of the world where farming is cost prohibitive and / or not possible at all.

It is interesting to see the investments out of the Gulf into South and South East Asian farms. A great article on the subject from the Economist here. The not so fortunate part is that the agreements / contracts are mostly at a governmental level, which leave a lot to be desired when it comes to the application of the rule of law in those regions. The loser is and will be the uneducated farmer of these nations. See another good article from Asian Times here.

On the other hand lessons can be learned from the USA where the large corporations have caused the small farmer to cease to exist in an economically viable / successful fashion and other difficult issues have emerged. See explanations, insights and further links in an interesting article here from the Food & Water Watch.

For me it is exciting to see a new opportunity for the Frontier Markets such as Pakistan, Vietnam and Thailand. The topic to watch would be that does the "openness" in business practices that are driven when the individual investor come into a market happen? Does healthy regulation gets developed and then executed consistently? I believe it will.

World Perspective / Photo - 1 [Wireless Communication]

A donkey cart in Pakistan with the owner using a cell phone.

Interestingly, Pakistan's cell phone connectivity system will become the leader in Asia, beating the Far East Asian nations around 2010. Couple of examples of investments in this industry in Pakistan are China Mobile and Mobilink.

Breakthrough Innovation in The 3rd World - A Tail Spike Example

In the mid 80s in Pakistan, an idea started that Compressed Natural Gas (CNG) could be used in gasoline engines by doing minor tuning to existing and new gasoline automobiles. The Hydrocarbon Development Institute of Pakistan provided funding to further the cause. Today Pakistan is one of the leading countries that has a plethora of Japanese automotive being built in Pakistan with dual fuel options (petrol and CNG) for retail sales.

What truly and literally started as shade-tree mechanic experiments now is an alternate fuel solution for tens of millions of automobile owners in Pakistan.

Click here for an example Suzuki.

Click here for the large number of dual fuel setup kits that can be purchased and installed in a gasoline car.

Telescope@400YearsOld.Today

It is hard to imagine where mankind would be if Mr. Galilei had been thwarted by the power that was and is. The most reliable accounts place the invention of the telescope by Hans Lippershey. Galileo was the extreme refiner of the telescope that brought the fundamental changes to human understanding as we know it.

Here is a link to a series of very good articles from the Wired on the history of the instrument and where it may yet take us. An excerpt:

"This invention was also the most seditious, blasphemous instrument of all time, shaking the very foundations of society."

Can we learn from our mistakes?

Context Over Dogma

Chris Bangle defines the new concept car GINA as simply - "Context Over Dogma". Chris's talk below has implications across product design holistically... Enjoy!