Practice of Innovation

"Our most important innovation is the way we work." Observations by Curt Carlson

The Transparent Company

A New Model Is Required

In a previous post, A Transparent World, properties of our increasingly transparent world were discussed.  Here we discuss what these ideas mean for companies.  I will focus on three themes:

  1. Employ a Value-Creation Playbook focused on the customer.
  2. Use web-based collaboration platforms to create a transparent value-creating enterprise.
  3. Work globally with the best talent inside and outside the company.


The Transparent University

Education Will Be Transformed

In a previous post, A Transparent World and The Transparent Company, the properties of our increasingly transparent world were discussed.  Here we discuss what these ideas mean for universities.  There are four main themes emerging that will profoundly change education and research:

  1. On-line education that emulates the most effective learning-science principles.
  2. Development of value-creation skills through project-based learning.
  3. R&D and innovation initiatives using value-creation best practices.
  4. Global experiences and perspectives through both real and virtual collaborations. 


The Transparent University

Thriving in a Transparent World

In a previous post, The Transparent World (see here), the properties of our increasingly transparent world were discussed.  Here we discuss what these ideas mean for universities.  There are four main themes emerging that will profoundly change education and research:

  1. On-line education that emulates the most effective learning-science principles.
  2. Development of value-creation skills through project-based learning.
  3. R&D and innovation initiatives using value-creation best practices.
  4. Global experiences and perspectives through both real and virtual collaborations.

On-Line Education:  In response to the global innovation economy, there are four converging trends in education.  The first is on-line learning, or MOOCs – Massive Open Online Courses.  They allow anyone in the world to take courses from the most notable people in a field.  Today’s MOOCs v1.0 leverage multi-media platforms, the internet, and the curricula and teaching styles of outstanding educators.

MOOCs are effective but they do not yet embrace many of the most important learning-science principles.  These principles include:

  • Performing the task.
  • Providing real-time feedback.
  • Using multiple representations for best student learning and the ability to reason.
  • Working with a tutor.
  • Collaborating in teams.
  • Supporting positive incentives.
  • Focusing on the big ideas of the discipline.
  • integrating all the elements into a complete system.

The potential for MOOCs is great because implementing all of those fundamentals in a traditional large classroom is impossible. 

MOOCs will improve enormously over the next few decades.  For example, since they are online, each MOOC must compete with all others.  This competition puts in place a feedback mechanism that assures continuous, rapid improvement. 

MOOCs are beginning to transform education.  Currently we have hundreds of economics professors teaching basic economics.  In the future a few dozen versions of MOOC-delivered economic curricula will dominate the world’s market. This argument applies to almost all basic university courses, which will result in the elimination of tens of thousands of professors.  That is, we are on the verge of a major restructuring of university education.  This restructuring is also inevitable because higher education has become prohibitively expensive for most students. Some universities, like Stanford, are putting their MOOCs on line for free.  This gift to the world will be an additional challenge for universities without Stanford’s reputation and endowment. 

Many people still question whether MOOCs will ever be truly effective.  MOOCs v1.0 are limited in effectiveness and application because they are still based on immature technology.  They are like the first 9.6 k’bits/s smart phones from NTT in 1999.  Most current MOOCs provide limited feedback, few learning representations, limited team involvement, and no tutor.

SRI International has created a blended online curriculum, Cornerstone Math, that straightforwardly addresses most of those limitations. It teaches first year algebra, which is where many children struggle and drop out of school.  This is especially true in inner city schools like Los Angeles, California, District 31, where the graduation rate is 36%. 


Cornerstone Math (CM) integrates all the learning principles listed above into a digital platform.  The children work in teams of three and the classroom teacher acts as the tutor.  In two trials in the U.S. and one in England with over 6,000 children, 100% improvements in learning outcomes were achieved.  CM is now in a trial with many tens of thousands of students in Florida and, even as a prototype, it has been integrated into the curriculum of the sixth largest US educational district, Broward County.  In its current embodiment, Cornerstone Math’s curriculum uses basic iPad technology


MOOC v2.0 will use a family of artificial intelligence (AI) applications to provide student-specific feedback, understand the student’s best learning approach, and assure that each big educational idea is mastered before moving on to the next idea. Stevens University, for example, has been using a system like this from Gradarius  to achieve a 97% completion rate for first year calculus. The combination of technologies and educational advances made by today’s MOOCs, Cornerstone Math, and Gradarius show that education will be transformed through future MOOCs.  Individualized learning will become a reality.

Although it is impossible to predict the future of university education decades from now, it is clear that on-line education and wholly new on-line universities will make many universities uneconomic. What remains central to the university will be experiences, networking, experiential learning, research and innovation.

Value-Creation: The second major trend in education is teaching students the fundamentals of value creation through project-based learning. A core education principle is that learning is best when it is on task.   That is, learning about teamwork by reading a book is vastly inferior to learning when interacting in an actual team.  And much better is learning about teamwork while working on the team’s project.  Learning while doing is the best of all learning methods. 

It is widely believed that artificial intelligence and robotics will eliminate tens of millions of task-oriented jobs in the U.S.  For example, autonomous vehicles may eliminate two to three million taxi and delivery drivers.  In the global innovation economy, having value-adding skills is a necessity.  Already low-skilled males are increasingly leaving the job market.

Around the world schools have responded to this challenge.  Notable examples include Aalto University in Finland, the and Bio-X programs at Stanford, Lehigh’s Mountaintop initiative, Olin University’s entrepreneurial focus, Worcester Polytechnic Institute’s Plan, NSF’s I-Corps program, and many others.   Communities and universities have responded with commercial incubators, maker-movement programs, pitching competitions, and robotic and other kinds of challenges.         

Students understand the importance of these programs and are gravitating to them.  Just at Stanford the, a non-degree program, has 600 students each year.  It was started in 2005 in a Stanford trailer without financial support from the university.  In Finland the goal of Aalto University is to provide similar programs across the entire university through their Design Factory.  Aalto’s vision is: “An innovative society:  breakthrough discoveries deeply integrated with design and business thinking enable systemic solutions and accelerate innovation.”

These programs are increasing for younger students.  Australia has a year-long innovation and entrepreneurship program for students in the 5th and 6th grades.  They get a basic education in entrepreneurship and then form teams and run their own companies for a year.   The program is in 500 schools across Australia and the goal is to make it a national program.  In Silicon Valley the Girls Middle School has a similar year-long Entrepreneurial Program where 7th grade girls form and run their own companies.  I have interviewed these young ladies after their entrepreneurial experience.  The positive impact on them is palpable.

R&D and Innovation:  Around the world there is disaffection with the results being obtained from government funded R&D and innovation initiatives.  This is true in the U.S., Japan, Singapore, Taiwan, Finland, and many other countries. 

The dissatisfaction is because of poor national economic performance, with GDP often half what it was only a decade ago. In the U.S. it has dropped from 4% to under 2% per year.  As a result, there are insufficient new jobs being created.  This poor performance will likely be exacerbated by the coming automation revolution.  Ominously, new company formation in the U.S. is continuing to decline.  The deficit is over 200,000 more companies dying each year than are being being born. 

Government R&D and innovation agencies around the world rarely use value-creation best practices.  Few government agencies have a Value-Creation Playbook and there are usually major barriers in place that suppress positive outcomes.  Of course exceptional people can always succeed, but overall the waste is enormous.  Given the practices being used, systemic high-value results cannot be achieved at the rates needed.  Only the best practices can succeed in a world that moves so fast and is so competitive.

In the U.S. DARPA is the best model.  It strictly adheres to best practices.  It tackles paradigm-shifting opportunities, hires the best managers, uses a Value-Creation Playbook, and recruits and drives the best teams.  Anything less is almost guaranteeing failure.

With this in mind, new approaches are being tried around the world based on best practices.  Examples in the U.S. are ARPA-E for energy research and I-ARPA for the intelligence community, modeled after DARPA.  In Japan the new ImPACT program, on which I consulted, is also modeled after DARPA, but for developing major commercial innovations.

The future of government funded R&D and innovation programs must embrace models being used by on-line sites and industry such as Kaggle, the X-Prize, Google X-Prize, and numerous privately run R&D initiatives. In the government, an excellent model is DARPA’s Grand Challenges. These initiatives have in common the goal of tackling major societal problems, assembling the best teams, and using best practices. The results from these initiatives show they work.  They consistently produce impressive results.

Global:  The forth trend is to gain global experience and perspectives. Universities are increasingly forming both real and virtual partnerships around the world.   As the world has become more transparent and competitive, universities have reached out to add global elements for their students.  These efforts go beyond the traditional “year abroad” programs where students take classes at an overseas university and study the language. 

Rather, today many students go abroad to work on projects in small teams.  For example, Worcester Polytechnic Institute’s Global Project Program sends teams for a semester to places in the middle of India, China, and South Africa to solve real societal problems.  Almost all of the students go abroad for these experiences.  These students learn some of the most important lessons for how to be successful innovators in our world.

Another thrust is for universities to set up regional divisions to perform joint research with global partners.  Singapore’s CREATE program has partnerships with some of the world’s best universities, including Berkeley, ETH, MIT, Technical University of Munich, Hebrew University of Jerusalem, Peking University, Shanghai Jiao Tong University, and Cambridge University  A Google search lists over ten million entries for “university global experiential programs.”

A Synthesis:  This series of posts on the Transparent World, Transparent Companies, and Transparent Universities indicates how companies, universities, and other enterprises, such as government R&D and innovation agencies, must change to be successful in the global innovation economy.  In the last decade remarkable advances have been made in government programs that support innovation, local initiatives that foster innovation and entrepreneurship, use of innovation best practices in companies, and innovation and entrepreneurial education programs from elementary school up to graduate school. 

But economic performance has not yet shown notable improvement from these activities.  From the experiences of my colleagues and myself, one reason is clear.  Very few companies, government R&D and innovation agencies, national laboratories, or universities are using anything close to value-creation best practices.  Until a majority of them use best practices, we should not expect much progress.  The good news is that there are now, as described, excellent role models for what works.  But as with Japan and the TQM revolution, it will take time. 

Ultimately progress is limited by a country’s workforce and the skills they possess.  In this case they must have a solid education in a core discipline and know how to be productive innovators.  As indicated, great progress is being made here too.  But the number of graduates with these skills is still too small to make the impact required and, even when sufficient numbers of workers have these skills, it will take several decades for them to become leaders across society.

A positive development is the synergistic properties the trends described here.  Today it is expensive to provide a solid education in a discipline along with yearly experiential projects and an understanding of innovation best practices.  It is even more so when projects are performed by teams in another country.  Fortunately, the trends described in these three posts address many of today’s limitations.  MOOC-based curricula delivered either as stand-alone or as blended-classroom applications will eventually replace cost-effectively most traditional classes and achieve better educational results. 

Experiential, project-based learning will also become more efficient and effective using sophisticated collaboration platforms.  For example, the fundamentals of innovation can be built into the platform.  Thus, for the first time, value-creation skills can be provided to students at scale. 

These platforms will also enable many different forms of global collaboration.  For example, student teams in India are creating solutions to local problems with teammates online in the U.S.  This approach is not as compelling as being in India, but it is effective and much less expensive.  Additionally, students working globally this way are modeling how future innovators will work during their careers.

These results and the others mentioned will change how university R&D is done and how it is funded by government R&D agencies.  For the same reasons that industry is changing its value-creation practices, universities and government agencies will eventually respond.  They must:

  • Work on important societal opportunities
  • Assemble the best teams from around the world
  • Use a Value-Creation Playbook
  • Employ a collaboration platform with the latest collaboration services and applications to:
    • Accelerate value creation
    • Allow mastery of value creation skills
    • Add and subtract experts from around the world as needed
    • Provide metrics to continuously measure progress
    • Motivate and incentivize collaborative, unrelenting value creation

These practices make teams, enterprises, and universities more transparent, which will produce higher-impact R&D and innovative results.  They will provide students with the education and skills required in the global innovation economy.

These imperatives will require major changes to both research universities and government R&D funding agencies.  But any country that can excel in putting these ingredients together will have a major competitive advantage and be much better able to create new jobs and prosperity for society.

There’s another compelling reason why all this matters.  All those jobs that are being eliminated through automation could produce a large underclass of poorly educated citizens for whom there will be no jobs.  Only by improving their chances will we avoid the prospect of increasing unemployment and societal disruption.


Special thanks to Norman Winarsky and Greg Eyring

How to Change an Organization’s Culture

Find a Partner, Stick to the Fundamentals, and Start _DSC5673v3 copy

I gave a webinar to The Learning Consortium in May about how SRI International went from failing to being one of the world’s most productive R&D and innovation enterprises, having created Siri, HDTV, and many other world-changing innovations.  The presentation is here.  Throughout the presentation the hundreds of participants were asked questions. The answers are in the slides.  After the presentation the audience asked me additional questions about SRI’s transformation, which are given below with my answers.  For background, here is Steve Denning’s Forbes article about culture change at SRI while I was CEO.  The first rule was to never mention “culture change.” 

Never Stop Learning

James Madison University Commencement unspecified-12

On May 7th I had the honor of giving the graduation commencement address at James Madison University in Harrisonburg Virginia.  It was raining but we kept going and everyone had a wonderful time. The students were terrific.  Below is the speech I gave to the students. (more…)