Innovation - 1 © Minder Chen, 2012 Creativity and Innovation in the New Economy Minder Chen Associate Professor of MIS California State University Channel Islands at Shanghai University MBA Program Dec. 2012

Innovation - 2 © Minder Chen, 2012 The Rate of Innovation: Product vs. Process

Innovation - 3 © Minder Chen, 2012 Key Factors at Three Phases FluidTransitionalSpecific ProductRadical, frequent Dominant design Incremental, rare ProcessRare, rely on skills General equipment Specialised equipment OrganisationOrganicSemi- structured Hierarchical MarketFragmentedSegmentsCommodity CompetitionIncreasing, different Decreasing, more similar Few similar

Innovation - 4 © Minder Chen, 2012 S-Curve or the logit function for rate of diffusion adoptation. The cumulative distribution of innovation adopters who are characterized by the timing of their decision to accept and implement the innovation. Innovation Diffusion Everett M. Rogers ( ), Diffusion of Innovations, 4 th edition (1995) Invent Adopt Persuade Decide Reject Accept Implement Abandon The Process of Innovation Diffusion Innovation Diffusion Function to Saturate a Market

Innovation - 5 © Minder Chen, 2012 Technology Forecasting “I think there is a world market for maybe five computers.” –Thomas Watson, Chairman, IBM (mainframe giant), 1943 “This telephone has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” –Western Union (telegraph) internal memo, 1876 “There is no reason why anyone would want a computer in their home.” –Ken Olsen, Founder, Digital Equipment Corp. (minicomputer giant) 1977

Innovation - 6 © Minder Chen, Factors of Innovation Adoption Decision (Roger) FactorDefinition Relative Advantage How improved an innovation is over the previous generation. Compatibility The level of compatibility that an innovation has to be assimilated into an individual’s life. Simplicity or Complexity If the innovation is perceived as complicated or difficult to use, an individual is unlikely to adopt it. Trialability How easily an innovation may be experimented. If a user is able to test an innovation, the individual will be more likely to adopt it. Observability The extent that an innovation is visible to others. An innovation that is more visible will drive communication among the individual’s peers and personal networks and will in turn create more positive or negative reactions.

Innovation - 7 © Minder Chen,

Innovation - 8 © Minder Chen, 2012 Questioning “The important and difficult job is never to find the right answers, it is to find the right question.” -Peter Drucker “question the unquestionable.” -Ratan Tata

Innovation - 9 © Minder Chen, 2012 Risk Taking Culture “Fail often to succeed sooner.” – IDEO’s motto Risk taking: Take enough chances and you risk a few big failures. Prototyping Embrace mini-failure Large firms tend to be more risk-averse

Innovation - 10 © Minder Chen, 2012 QuestionStorming What are your questioning patterns? What kinds of questions do you focus on? What questions yield unexpected insights into why things are the way they are? What questions surface fundamental assumptions and challenge the status quo? What questions generate strong emotional responses (a great indicator of challenging the way things are)? What questions guide you best into disruptive territory? Innovator’s DNA, p. 88 Also andhttp:// Questionstorming differs from brainstorming in its focus on questions, not ideas

Innovation - 11 © Minder Chen, 2012 Example A QuestionStorming which is a brainstorming but you brainstorm to generate questions to ask, such as what questions we should ask to improve ABC Compnay's innovation initiative? "Idea" now becomes "Question" Examples: –Who should be in charge? –What are the major barrier? –Which area has the most potential?

Innovation - 12 © Minder Chen, 2012 Observation: Learning From Nature Burs of Burdock Velcro is a company that produces the first commercially marketed fabric hook-and-loop fastener, invented in 1948 by the Swiss electrical engineer George de Mestral. electrical engineerGeorge de Mestral

Innovation - 13 © Minder Chen, 2012 Source: Innovation DNAs, p. 184

Innovation - 14 © Minder Chen, 2012 Associative Thinking: Connecting the Dots

Innovation - 15 © Minder Chen,

Innovation - 16 © Minder Chen, 2012 What is the answer? = ? ? + ? = 10

Innovation - 17 © Minder Chen, 2012 Kindergarten Classroom

Innovation - 18 © Minder Chen, 2012 High School Classroom

Innovation - 19 © Minder Chen, 2012 Office Cubicles Radical innovations are spawned by the interplay of different ideas and domains that don’t usually belong together, through connectivity and conversation. Source: Innovation to the Core

Innovation - 20 © Minder Chen, 2012 Pixar Office Building Stimulating innovation via chanced encounters.

Innovation - 21 © Minder Chen, 2012 Meeting at Pixar Brain trust Give advice not command No PowerPoint, please Daily Reviews (Dailies) Overcoming Inhibitions Showing unfinished work each day liberates people to take risks and try new things because it doesn’t have to be perfect the first time. Peer Culture

Innovation - 22 © Minder Chen, 2012 Creativity and Teamspirit One doesn’t manage creativity [but nurtures] One manage for creativity (i.e., creative process) Tap ideas from all ranks (using multidisciplinary teams) Lone inventor myth  Encourage and enable collaboration Enlightened trial and error (of a creative team) succeeds over the planning of lone genius.* * Source: (1of 3)

Innovation - 23 © Minder Chen, 2012 Left Brain vs. Right Brain Imagination is more important than knowledge - Albert Einstein Imagination Intuition Knowledge Rational thought Logical thinking Analogical thinking correctively Solving problem correctively creatively Solving problem creatively

Innovation - 24 © Minder Chen, 2012 Left Brain vs. Right Brain Left brain functions uses logic detail oriented facts rule words and language present and past math and science can comprehend knowing acknowledges order/pattern perception knows object name reality based forms strategies practical safe Right brain functions uses feeling "big picture" oriented imagination rules symbols and images present and future philosophy & religion can "get it" (i.e. meaning) believes appreciates spatial perception knows object function fantasy based presents possibilities impetuous risk taking

Innovation - 25 © Minder Chen, 2012 Comparison between Creative and Receptive Hexagrams Hexagram 1 ( 乾 )Hexagram 2 ( 坤 ) CreativeReceptive Creative talentsTolerance attitude Divergent thinking (open)Convergent thinking (close) Visioning and planningImplementation & execution LeaderFollower ChangeSimplify Facing & taking risksDealing with resistances Big picturesSmall details TimeSpace 乾知大始，坤作成物。

The End is the Beginning! 生生不息