Some of the answers to our innovation challenge will come from within the U.S. We remain in many ways the most dynamic country in the world, with more top universities and multinational corporations than any other nation. But it's foolish to imagine that the best innovation ideas in the world already have a home in policies coming from Washington, D.C. Here is a world-wide tour of the best ideas that our government should import to jump-start innovation.



Several lessons for the U.S. to continue reigning atop the world but sadly no one in Washington is listening and the squabbles continue.

Trigger-happy investors have historically been prone to trading on Apple whenever news about its head honcho, Steve Jobs, arose. But in the wake of his death yesterday, shares of Apple have only risen 1.5 percent as of 7:30 a.m. today, only dropping 0.12 percent at their lowest level from the company’s opening price.

Apple, the most valuable technology company in the world, is back to vying with Exxon-Mobil to claim the title of most valuable company overall, although it’s value fell on Tuesday when the company unveiled an incremental upgrade to its iPhone smartphone lineup instead of a much-anticipated major upgrade.

Apple is also noticeably absent from the options market, where a move like this would typically send traders into a frenzy of speculation over what direction the company will go in. Only two significant put orders (a bet that the company’s share price will fall) crossed the Chicago Board Options Exchange as of 7 a.m. Thursday — each for fewer than 700 shares and at a modest strike price. At the same time, a much larger call order has already crossed the wire at a strike price of $385.

“This is business as usual for Apple, it would be a mistake to count them out,” Gartner analyst Michael Gartenberg told VentureBeat. “Yes, the tech world has lost a significant icon and a visionary, but Apple is more than just one person — Jobs built something truly special that was much greater than himself.”

Jobs was known as a visionary, creating products that he knew people would be fighting tooth and nail to get their hands on. They were products you didn’t even know you needed: the tablet market was basically non-existent before the introduction of the iPad, and the iPhone is now one of the most popular smartphones in the world and is an industry standard. Jobs arguably jump-started the smartphone revolution with the iPhone and its associated App Store. ”It’s a phone, it’s an iPod, and it’s an Internet communicator — are you getting it yet?” he said on stage when he unveiled the iPhone.

His track record is undeniable. As VentureBeat’s Dylan Tweney wrote yesterday, “The Macintosh was the first commercially successful computer to use a graphical user interface and a mouse, a decade after the technologies had debuted at Xerox PARC and SRI. The iPhone threw out the book on how to make a smartphone and reoriented an entire industry around touchscreens and apps, well after touchscreens first appeared in PDAs like the PalmPilot. The iPad succeeded in making a popular tablet computer after Windows-based computer manufacturers had tried to do so for nearly a decade.”

Apple regularly smashes expectations for its quarterly performance and its press events are almost Hollywood-esque, with live reporting and glamour. In Silicon Valley, working for Apple — like Google, Twitter and others — is worn as a badge of honor, like attending an Ivy League school.

“There are few people who could build something so successful and so magical and do more than (Jobs,)” Reddit co-founder Alexis Ohanian told me. “It’s humbling as an entrepreneur, more than anything else, to see what he’s done.”

Filed under: mobile

Dear Steve,

We've never met. And yet nearly everywhere I turn in my house, I see your imprint. You don't know my family, and yet each of us has had our lives made better because of your work. As I put my kids to bed, I wanted to share some belated thank yous for all you have done for me and my family.

Thank you for bringing music back into my house. I was an aspiring classical musician in my early years And yet with the busyness of life, music had fallen by the wayside until you gave us the iPod and iTunes. Thank you for the ability to instantly share the soul of James Brown with my son, Taylor Swift with my daughters (I think), and, now, letting me express my sadness with Samuel Barber's Adagio for Strings — all with one device.

Thank you for the mini-MBA my 7-year-old Miya is getting via her favorite app, Bakery Story, where she is learning the joy and stress of running a business without even knowing it. Thank you for the cool factor of reading bedtime books to my 5-year-old Audrey via iPad. Thank you for Talking Tom, the cartoon cat that makes my 3 year old Luke laugh even with a skinned knee and gets him to eat his vegetables when I can't.

Thank you for turning my wife into Ansel Adams and Steven Spielberg. She was always a serious scrapbooker, but iPhoto and the iMac (plus Shutterfly) have been the equivalent of the Gutenberg printing press for her. She's used iMovie to help my parents feel closer to their grandkids and bridge the 8,000 mile gap that exists today.

And thank you for the master class in business. I recently wrote about category creation, but no one is more expert on it than you. Thank you for the cannon of case studies that Apple has created across product innovation, retail innovation and business model innovation. Thank you for the object lesson in investing and delayed gratification that I was able to share with my 17-year-old niece Emily, with whom I 'co-invested' in Apple shares 3 years ago which taught her that one dollar not spent today can be worth three dollars tomorrow.

Thank you for Pixar, which is my favorite of your creations. Thank you for creating a new category of "computer animated cartoons" for both kids and adults. Thank you for creating positive yet real father figures like Mr. Incredible, who go beyond the classic bumbling idiot father of yesterday's animated movies. Thank you for showing us the truest depiction of true love and loyalty in an amazing and dialogue-free montage at the beginning of Up that goes beyond the traditionally superficial narratives of love at first sight. I could go on and on, but thank you for being the modern day parables that have taught my kids the value of aspiration and perspiration, love and loyalty and friendship and family.

Thank you for showing us that in all of what we do in business, that the mission can be more than just margin. For showing us that creation much more fun than just conquest. For showing us that the $3 billion you have paid out to developers via the App Store is what a real job creation program looks like. For showing us that pursuing artistry brings more lasting joy than just adulation. And for showing us that fractional thinking about just market share is more likely to limit your future, while an exponential mindset around category growth will expand your horizons.

Mahalo and Aloha to you and your family.

For more commentary on Steve Jobs, see our special section, The Legacy of Steve Jobs.

"We were too busy being strategic to do something obvious," said Mr. Harish Bhat, the COO of the Time Products division of Titan Industries Limited.

That was just one of many choice lines I heard when listening to Bhat talk about Titan's efforts to create new growth businesses, including two new and successful watch lines: RAGA, for women, and Fastrack, for younger consumers.

Titan is about a $1.5 billion unit of The Tata Group, a massive Indian conglomerate. The world's fifth largest watchmaker, it owns 60% of the Indian market, and has been growing robustly. As Bhat went through his presentation, I wrote down the following lessons:
"Live" new markets. It would be easy for Titan to focus most of its efforts on deepening its penetration in its strongest market segments. But Titan consciously chose to go after markets in which it had significant growth potential. For example, Titan's research suggested that as few as 20% of Indian females owned watches. For both its RAGA and Fastrack lines, Titan put people who "looked" like the target consumer in key leadership roles, and spent a good deal of time trying to understand target customers in a deeper way. Importantly, senior leaders invested time in understanding the markets and consumers as well. "We didn't just sit and watch a presentation or engage in long-winded analytical debates. We did it." Involvement helped Titan make bold decisions later on. "When a leap of faith is shared by the senior leadership team, it is that much easier to take."
Rethink the offer. Titan found that potential female consumers were put off by relatively utilitarian watches, but they would happily wear multiple bracelets, rings, and chains. The team at Titan wondered what would happen if they turned a watch into an elegant piece of jewelry that a woman would happily wear. Growth exploded.

When targeting the youth markets, Titan ran different types of advertisements and created very different looking watches, under the racy brand name, Fastrack. As Fastrack watches took off, Titan decided to stretch the brand into new categories such as sunglasses. In both cases Titan rethought key elements of its offer, and reaped the benefits.

Expect some failures. While the innovation program has largely been a success, Bhat noted there have been some bumps along the way. "We had some horrid failures, and I am sure we will have some more. Fortunately, we learned very quickly from these, and that's what matters." That's typical. Even the best venture capitalists are wrong 70% of the time. If you are working only on one or two innovation efforts, the odds of achieving breakthrough growth are pretty low.
RAGA and Fastrack have had strong commercial success, given Titan's confidence that innovation efforts based on consumer insights can pay off. Living new markets, rethinking the offer, and preparing for failure are three important lessons for any would-be innovator.

There’s been a lot of attention paid recently to the new “social reading” apps that were launched by a number of publishers and content companies — including The Washington Post and The Guardian — at Facebook’s f8 developer conference. Some of that has focused on the “frictionless sharing” that these apps enable, where all of a reader’s activity from the app is shared through the social network, and we’ve pointed out the risks of putting so many eggs into a basket controlled by a large platform owner. But there’s another aspect of these launches that’s troubling, and that’s the pride so many publishers seem to take in having produced a Facebook app, as though it’s the pinnacle of media innovation.

Don’t get me wrong; obviously, creating a nice-looking Facebook app the way The Guardian has takes some skill, and I’m not demeaning that ability by any means. (I don’t like the look of the Washington Post or Wall Street Journal  apps as much, but that might just be a personal preference.) But how much time and effort could these kinds of apps possibly take? There are plenty of people who have created functional Facebook and iPhone apps in a weekend, and some pretty good-looking ones in a matter of weeks. Is something like that going to make a big difference to an entity as huge as the Washington Post or the Journal? That seems unlikely (I realize that most of these apps involved a lot of work and probably took much longer).

Creating a useful or even fun app that allows people to share your content is great, whether it’s a Facebook app or an iPhone app or an app that runs on Amazon’s new Kindle Fire tablet. And Washington Post publisher Graham is quite right that reaching out to readers wherever they are and trying to engage them around your content is a good idea. Experimentation is also a good idea, especially for newspapers — which aren’t typically known for that kind of thing. But if all you are doing is creating widgets for people who live inside a specific walled garden, then I think you are missing the boat.

Why play in someone else’s sandbox?
As I tried to argue in my previous post, doing this is no different from setting up a presence inside AOL or CompuServe, or distributing those “multimedia” CD-ROMs that newspapers were so enthused about back in the late 1990s. Having a Facebook app does take advantage of the social-sharing activity that has become a bigger and bigger part of the media landscape over the past few years, thanks to Twitter and other tools, but in many ways it’s no different (and in some ways worse) than having a Twitter button or a Facebook “like” on your content — which has effectively become table stakes for media at this point.

So what does innovation consist of? For a start, it involves rethinking not just where your content lives, but how it’s created and what it consists of — in other words, taking apart your business to really look at what has changed thanks to the web and social media, and how you can adapt to that. No app is going to do that for you, and tinkering around in a “lab” probably isn’t going to do it either.

Some media outlets are trying to do this, and rethinking aspects of what media companies do: Forbes, for example, — has blurred the line between “professional journalists” and other content producers, including those who primarily do marketing or advertising-related content. In the new Forbes, posts from marketers show up alongside posts from staff writers for the magazines, just as blog posts by unpaid contributors at The Huffington Post appear alongside those from paid staff. Not everyone likes the gray area Forbes is living in, but you can’t say editor Lewis Dvorkin isn’t trying to rethink his business.

The Atlantic and some other publications, meanwhile, have been focusing on things that don’t even involve what most people would consider journalism — such as live events that are related to the content they are publishing. That’s helped turn the company’s fortunes around, just as similar real-world events have for other content companies like the non-profit Texas Tribune. And the Journal-Register, which I’ve written about before, is rethinking how its newspapers work from all kinds of different angles, including the launch of a “community newsroom” at one of its papers.

Why not think of your paper as a platform?
But The Guardian has taken by far the most dramatic steps of any newspaper in rethinking what its business consists of, with what the paper called its “open platform” project, which launched last year. Instead of spending all its time trying to put walls or sandbags around its content and control where it appeared, the Guardian released an open API that allowed outside developers to make use of its content — provided they agreed to either pay for the data, or form an advertising partnership with the paper. Instead of doing a deal just with one platform vendor like Facebook, they made it possible for anyone to become a partner.

More importantly, The Guardian‘s approach — along with other innovations like the crowdsourcing effort behind its feature on MP expenses in 2009 — was driven by a fundamental rewiring of the way it thought about its purpose and function as a newspaper. Editor Alan Rusbridger has talked about a “mutualised” newspaper, one that includes its readers as partners in discovering and reporting the news, and one that doesn’t think about itself in terms of what particular medium it uses to distribute that news. In other words, not a “news-paper” company at all, but just a news-distribution company.

The Financial Times  hasn’t done anything quite that radical, but it has broken its own ground by pinning its online future on a fully open HTML5 version of the site that works on virtually any device, because all it requires is a browser. That feels a lot more innovative than rolling out a Facebook app or an Amazon app so that readers who use one specific device can interact with your content inside some walled garden.

Post and thumbnail photos courtesy of Flickr users Sandy Honig and Jeremy Mates

Related research and analysis from GigaOM Pro:Subscriber content. Sign up for a free trial.
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This post is part of the HBR Insight Center Growing the Top Line.

Finding that first market — a few customers willing to pay for your early product — is hard enough. But there's one thing that may be even harder. And that's finding the second market. Especially because companies are often so focused on protecting what they already have.

In 1996 when Steve Jobs returned to Apple, I was in charge of an industry-recognized channel program for the company that was responsible for growing a $2M business to $180M business in 18 months. By working with a few dedicated partners — some were called "value-added-resellers" and some were national retailers such as Best Buy — Apple was able to grow its sales exponentially.

So, as I went into the full business review, it never occurred to me that Jobs wouldn't appreciate the channel program. It was the most profitable part of Apple's business at the time and a needed source of revenue. But Steve's take on it (in his words, not mine): "Fuck the channel; we don't need the fuckin' channel."

And he was right. Getting to that next growth market takes more than being unhappy with your current results (in this case, abysmal sales margins and underperforming stock), and it takes more than being willing to change. You have to be willing to do what feels unnatural.

As you become successful in something, you develop a feel for how to do it. You know when something is "right." You've built up the equivalent of a hand callus in response to the friction and pressure of what it has taken to get to that first-market success. So, when you try to replicate that in a new context — a second market in this case — all courses of action just feel...off.

In the late 90's and early 00's, a good channel strategy made the key difference between a $100M and a $2B company in the tech world. If you had enough money, you could buy distribution and thus sales. The channel, therefore, had a powerful position in relationship to the brand.

But Steve wasn't willing to play that game. Steve wasn't going to use the past to shape the future. At the time, even though the World Wide Web was just coming into its own, it was easy to see that online commerce would allow a more direct relationship between brands and their customers. Every tech company knew this change was coming but few were bold enough to embrace change. Some still haven't.

There are plenty of examples of companies who've used the past to determine in the future. Both Blockbuster and Borders relied heavily on brick-and-mortar stores when they knew they were being disrupted by click rivals. Nokia and RIM missed the smartphone application market by a mile. GM ignored the move to more efficient cars for nearly 10 years. Most of the publishing industry continues to think of its product as 90,000-word printed things, when it's clear that nuggets of sharable information make most sense for spreading ideas. These businesses seem committed to doing what they already know, and despite Roger Martin's guidance that you can't analyze your way to growth, companies continue to think of growth creation using the rearview mirror.

When Jobs said, "Fuck the channel," he taught me something: our job as innovative business leaders is to manage the present while inventing the future. We must recognize that we are always a product of what we've done and who we aspire to be. It is not enough to lead our current businesses; we must also lead our future businesses.
Over the past dozen or so years, I've learned that to do this, the best leaders do five key things well:

Master unlearning. One of the most difficult tasks for corporate innovators is to learn how to unlearn the legacy business models they have perfected. Often, maybe even always, companies take the standards they have for their current business and use that to measure the new model. Start unlearning by explicitly recognizing that these metrics or assumptions are from the past and not necessarily useful for the future.
Augment expertise. The knowledge you need for future growth may not exist inside your firm's walls. You can augment — but not skip — the internal learning process. If you're investing in a new project and the options look like this: (a) 10 months by doing it alone, or (b) six months with an additional $200K in outside expertise, or (c) outsource it entirely, choose (b). Knowledge can be conveyed, but wisdom is only earned by the experience of trying.
Pilot, invest, experiment. Obviously you won't get "the new thing" right the first time. Peter Sims talks of this as "little bets." It's okay to invest in something you know is going to fail. It's the equivalent of letting kids explore. This is part of unlearning, saying, "Our goal is X, we tried Q, we learned K so our next pilot should be T." The iterations take time, but it is a "go slow to go fast" play.
Reward learning and cooperation. Peg people's bonuses to the new projects. Here's how one compensation model I worked on said it: "Base pay covers the core business; of course we need to do that right to keep the core engine working, but bonuses cover the new ideas and unlearning, which will require us to stretch our minds/hearts/abilities." And regardless of anyone's focus area, everyone gets bonuses on the shared new area of growth. This doesn't eliminate but greatly reduces potential checkmate behavior within the company that can block change.
Know your aspiration. You cannot find a second market without having a vision of who you serve and why. This doesn't mean you can see into the future; it means you've committed to a process of discerning which unique abilities you have now, and which you'll need to win a decade from now. Apple ended up not defining itself by its hardware or software expertise but by its design point of view.

We're often told that we should do what we're good at, leveraging those unique gifts. Gosh, that does sound like we should do more of what we've already been doing, right? Well, selectively, yes. If you draw a Venn diagram of not only what you have achieved but what you imagine you can become, you leave yourself room to navigate new waters. That doesn't mean it comes easily. It means that you get to grow.

To grow new markets means making yourself uncomfortable. It means you can't keep doing more of what got you here. You need to also look into the lens of the future and imagine what you could be. Just as people are always living at the intersection of our history and our dreams, so too are companies. Until we decide to stop avoiding risk and embrace the discomfort of creating, we will keep measuring nascent ideas against established, proven businesses. That is the epitome of managing to yesterday's business, rather than inventing the future. Which only leads to more of the same. And that's not enough anymore.

Looking for more of HBR's insights into Steve Jobs, all in one place? Purchase Decoding Steve Jobs: Select Commentary from HBR.org.

The tragedy—small in the scale of things, no doubt—of this film is that practically everyone watching it will miss this point. Practically everyone walking out will think they understand genius on the Internet. But almost none will have seen the real genius here. And that is tragedy because just at the moment when we celebrate the product of these two wonders—Zuckerberg and the Internet—working together, policymakers are conspiring ferociously with old world powers to remove the conditions for this success.

An otherwise brilliant movie, Lessig's point is well taken. 'The Social Network' is about characters more than the business aspect. In spite of the fact that this country is pro-business, the only example you will hear frequently of a business movie is 'Wall Street'. And even that isn't exactly a good one.

Netbooks were an established consumer-electronics market with devices that people thought were pretty cool, but often frustrating and with serious shortcomings and design flaws.

Then this happened:

Marco Arment predicts the form of future tablets using the smartphone analogy. Imitation is indeed the highest form of flattery. It is a win-win for consumers and imitation is fine but you would wish other companies would get their innovation groove on at least sometimes. Ironically, the "We were there first" argument is used most by Apple haters in touting multitasking features in smartphones.

"Then Steve comes in," Evangelist recalls. "He doesn't look at any of our work. He picks up a marker and goes over to the whiteboard. He draws a rectangle. 'Here's the new application,' he says. 'It's got one window. You drag your video into the window. Then you click the button that says burn. That's it. That's what we're going to make.' "

"We were dumbfounded," Evangelist says. This wasn't how product decisions were made at his old company. Indeed, this isn't how products are planned anywhere else in the industry.

"Tim O'Reilly is Silicon Valley's leading intellectual and the founder of O'Reilly Media, a steadily growing $100 million company. His life is a vivid demonstration that interesting things can happen when you are working for more than money."

"Any bank account will work with Square, and the only charge to use the service is $1 for the application and the card reader accessory; however, Square can afford to give away the dongles because they will be banking 2.9% of each transaction. Users can also pick their favorite charity and Square will donate a penny to it from its cut of each transaction."

Unlike other companies, Microsoft never developed a true system for innovation. Some of my former colleagues argue that it actually developed a system to thwart innovation. Despite having one of the largest and best corporate laboratories in the world, and the luxury of not one but three chief technology officers, the company routinely manages to frustrate the efforts of its visionary thinkers.

We can sit here in our geeky little dorkosphere arguing about it all day, but as much as Apple clearly enjoys our participation, the people Jobs wants to sell this to don't read our rants.

Pentagram’s Luke Hayman, designer of, among others, Time, New York, and Travel + Leisure, was asked how this new format would change the world of magazines and came up with five ways off the top of his head.

Nearly 80% of those with temporary visas surveyed in 2007 said they planned to stay; more than half had definite plans to do so.

"Color Picker is an innovative design of a concept pen that can scan colors from anything around and instantly use the color for drawing." Sounds too good to be true and currently is only a prototype.

The best way to counter the Tea Party movement, which is all about stopping things, is with an Innovation Movement, which is all about starting things.

It will take you more than 16 hours to watch all of these videos. So, make some popcorn, turn off the lights and enjoy.

...or as it is otherwise called, biomimicry.

So what kind of teachers could a school get if it paid them $125,000 a year?

"What struck us most during this field trip is that most Indian innovators — both large and small — are now single-mindedly targeting the rural market, which accounts for 70% of India's population."

The biggest fan of India on the NYT Columnist Team

This is an innovative mobile payment solution developed for the under banked market.

As a personal and mobile water purification tool, LifeStraw® is designed to turn most of the surface water into drinking water

This amazing invention uses a persistance of vision display to spell out Taxi when you wave your hand.

Check out the work of 10 professionals working at the very edges of their disciplines in order to redefine their industries.