AbleBrains

BSG Alliance Acquires Don Tapscott's New Paradigm

Don and I go back a few years.  So I am so happy to see this happen for him and the rest of the New Paradigm team.  BSG alliance  a company trying to deliver "Enterprise 2.0 technology, operating models and applications to the market" has acquired New Paradigm for an undisclosed sum.   

I think this is a good deal for both parties. 

For New Paradigm, Don's company receives

1. Needed infrastructure -- the company needed to establish an infrastructure to support its growth plans among its predominantly American client base.  BSG provides this and needed cash flow as well.
2. Linking Research to Execution -- as a New Paradigm client, one of my criticism's of Don's team were that they were great on strategy but light on execution.  With this marriage, the BSG arm of the company will be able to deliver on the Innovation strategies that Don's team focuses on.
3. Freedom to Focus on Research -- Additionally, this deal provides more freedom for the New Paradigm team to focus on expanding existing research lines and broadening into others such as its Government 2.0 research initiative.

For Steve Papermaster and BSG:

1. Enhanced Web/Enterprise 2.0 Innovation Platform - from my discussions with Steve Papermaster, CEO of BSG and Stephen Douty, President of BSG Applications, the long term vision (and this is still fuzzy in my head) is to build an application platform for  old world vertically integrated companies to leverage Enterprise 2.0 capabilities and move into a more collaborative, Net-generation friendly work mode.  Whether or not BSG is going to attempt to productize  Enterprise 2.0 capabilities or not, I couldn't glean from our conversations but it is clear that they intend to deliver Don's content and strategic consulting as part of their business transformation portfolio of services.  I do have concerns about trying to productize innovation...  I don't think that's possible. 
2. Gives BSG an entre into a Government client base with the the NP Govt. 2.0 project
3. Net Generation adaptation - Don's thinking will also inform BSG's Talent 2.0 and Talent sourcing programs which are aimed at helping enterprises integrate and adapt Millennials into their workforces as well as adapt their talent strategies as the 80 million some odd digital natives enter the work force.

Both New Paradigm and BSG see an opportunity to teach enterprises how to use Web 2.0  and social media to drive the change so many enterprises desperately need to adapt to new ways of doing business and doing business with a generation that fundamentally thinks and acts in different ways.

At the end of the day, New Paradigm was not in any way geared for execution.. which is as it should be. But to take his vision of business innovation and generational transformation to the next level Don needed a strategic partner.  BSG is that partner.

Failure Is An Option, Part II

Last week I wrote on failure as a critical component of Innovation and the fact that there are many organization's both large and small which fear failure so much that they automatically relegate their market position to the 2nd or 3rd tier because of their inability to experiment - fail - experiment again - succeed! So the question begs itself, how can firms begin to create a culture that embrace failure as an integral component of success?

A caveat first. It ain't going to be easy. Companies have been cutting costs and employees for years, resulting in growing job insecurity.  So many EE's don't feel like putting themselves in a position to fail and subsequently lose their jobs.   Couple that with increased expectations as to employee job performance and you have a perfect storm keeping employees tied up in the play it safe harbor.

So here are a few tactics that can be leveraged to build a "good failure" culture:

1. Leadership - place leaders in the trenches who not only foster an environment where it is safe to fail but who have failed themselves - and can turn failure into eventual success by enabling the team to learn from it and try again.  This may mean bringing in new blood from outside the team or outside the organization to deliver that new perspective and new methods of doing things.
2. Recognize and Rationalize Performance and Learning based cultures.  Lets face it, if you are bonused on discrete MBO's, there is no way in hell you want to fail, your livliehood is resting on it. But then how do you ever get a chance to learn from your mistakes?  Systems need to be put in place that don't put these two cultural imperatives on a collision course.  At IBM Research for instance, there are two performance and review cycles. A standard one year cycle which accounts for an employee's bonus in that year and a 3 year cycle for performance on salary and rank.  In this way, if a researcher has a year of failures, his rank and salary in the corporation is not affected.  This is especially important as any of us researchers can tell you,  as more often than not the beginning of a project has many more failure points or get results you didn't expect than later in a project. These failures though can take you in completely different yet very serendipitous directions... can you say rubber?
3. Celebrate your failures.  Most companies bury their failures under the rug, move the manager of the team to some insignificant role as a hand slap or pretend the whole thing never happened.  You want to ingrain in your teams that its ok to fail? Celebrate them!  Recount your failures as a team and even party around them, but don't sweep them under the rug. 
4. Examine your past. Where else can you find a wealth of information on your organization's successes and failures. Set up learning sessions for managers and employees to look at projects and initiatives that did not meet internal and or external expectations.  Its the the only way to learn!
5. Co-create with Customers and Partners Early.  Co-creation is one of the key ways in which you can afford to fail early and often because when the rubber meets the road, its your customers and partners who use the solutions you create.  If you bring them into the innovation cycle from the beginning you are more likely to develop services and solutions that meet their needs... from the beginning
6. Hire employees who have failed and learned from their past.  Managers who have failed and failed hard AND have learned from them should be hugely prized. These are individuals who are able to learn from their mistakes and put practices in to place that exploit them for good.

There's a lot of good reading on Innovation that you should digest.   Initial recommendations  include:

• Dealing with Darwin, Geoffrey Moore
• The Innovator's Dilemma, Clayton Christenson
• The Innovator's Solution, Clayton, Christenson
• 10 Rules for Strategic Innovators, Vijay Govindarajan & Chris Trimble
• What Customer's Want, Anthony Ulwick

Failure Is An Option (Or Should Be!)

I've been reflecting back over my last few posts regarding innovation and the thought occurs to me, why don't more companies - large and small -  encourage failure?  My mother used to tell me that I will learn more from failing than by succeeding and I've repeated that mantra to my kids.  I've always felt, hey, lets go for it and if we fail we'll try again.   So what is it with failure and why are companies so anathema to it?

At the end of the day, I think many companies face tremendous internal inertia.  As Geoffrey Moore says:

... as more and more processes in an establishment become context [versus core - that which creates sustainable competitive advantages for a company, contextual items are everything else a company does] the total population of risk averse mangers beings to exceed that of risk-taking management. Now the ability of the organization to change strategy [innovate!] by embracing the next set of changes becomes seriously impaired.

Large enterprises may feel they don't have the luxury to fail because their categories have become so competitive and shareholders so demanding, that failure can result in lost market share or Wall Street confidence.  Let's be clear here, its not that these companies can't innovate, can't afford to fail...they can, but there is so much inertia built up in the organization that there is no way for the company to experiment, fail, innovate (shampoo, rinse repeat!). Why?  Because the company has the majority of its resources tied up in just keeping the lights on... couple this with risk aversion in the culture and you have a powerful anti-innovation anti-failure culture.

Small companies on the other hand may feel they don't have the luxury of failure because they are constrained from a human and financial capital perspective. Failure is deemed a waste.  Folks who have spent any time with startups though, know that they fail every day and that as my friend Charlie Federman likes to say, those startups that face their crises and failures and successfully navigate them tend to succeed, while those that ignore them will later fail because that crisis or failure magnifies over time if not dealt with quickly.

So does failure play a role in Market success? You betcha! Lets look at the market leaders.  From the Washington Post:

While Google places a premium on success, it appears to shrug off failure. The resulting culture of fearlessness permeates the 24-hour Googleplex...  Google employees are encouraged to propose wild, ambitious ideas often. Supervisors assign small teams to see if the ideas work. Nearly everyone at Google carries a generic job title, such as "product manager." All engineers are allotted 20 percent of their time to work on their own ideas. Many of the personal projects yield public offerings, such as the social networking Web site Orkut and Google News, a collection of headlines and news links.

Philip Remek, an analyst who follows Google for Guzman and Co., sees the many initiatives as a series of lottery cards. "A lot of them aren't going to work," Remek said. "Maybe there will be a few that take off spectacularly. And maybe they're smart enough to realize no one is smart enough to tell which lottery card is the winner five years out."

Google's success is clearly a result of failure being an option at Google. In fact, its expected.  Many of the ideas that employees work on never make it to market but with such a broad innovation base to draw from, its clear that they will continue to drive many innovative products to market in the years to come.  But many folks point to Google so lets look a formerly small company acquired by a large organization.

Linksys' (a leader in home networking, acquired by Cisco) product development model was to take a volume operations approach to product innovation.  Product development was completely out-sourced, thereby lowering the cost of product innovation but allowing the company to test many new ideas in multiple categories simultaneously.  When they failed, and they did many times, the strategy was to simply discard the idea and start again.  When they hit it, as they did with home networking, they quickly ramped up their sales channels to get product to market as quickly as possible.

Ok, one more.. this time from the medical device space.  Medtronic - the folks who gave me my insulin pump!  Medtronic is the world leader in the medical device market. And the company goes a long way to foster innovation and encourages failure as part of the outcome. The company even offers grants to employees who want to chase ideas. Winners get up to $50,000 for whatever they decide they need, including hiring outside experts or contracting with research universities, and they can devote part of their regular workdays to their project - very similar to Google's approach.

Those are three quick but powerful examples of embracing failure to drive innovation and ultimately category leadership. What we'll discuss in a follow on post are the practical steps that organizations large and small can take to move in the Failure Breeds Success direction.