Christensen Wins - Again!

Clayton Christensen has topped the list of best Business Thinkers, for the second time in a row.  His seminal book, The Innovator's Dilemma was published in 1997, but by 2001, he was only ranked 39th on the list.

Why did it take so long for him to be recognized? The Innovator's Dilemma proposes a number of counter-intuitive explanations of why 'great companies fail'. When I first met Clay in 1997 and heard these ideas, they hit me like an bolt of lightning "Ah that explains so much!" But I had had a somewhat unorthodox business background by then, and I was totally unschooled in and untainted by traditional business and MBA thinking. For most people it took years for these powerful ideas to percolate.

Today, Christensen's thinking has profoundly influenced management thinking, although the words 'disruptive innovation' are applied to just about any new idea or product, even when they are not in the least disruptive. In any case, it's great to see my hero recognized and I'm betting this honour will stimulate even more people to read his important books.

Note that Kim and Mauborgne, authors of Blue Ocean Strategy sit at #2. Blue Ocean Strategy is an elaboration of the theory of disruption, with the addition of a great visualization approach that enhances explainability of disruptive innovation.  Canada can be really proud to see Roger Martin and Don Tapscott in third and fourth spot.  Women hold 4 of the top 10 spots on the list, representing a significant breakthrough, and Chinese squeeze into 31st and 50th positions for the first appearance of Chinese thinkers on the list.

MOOCs - A Coming Onslaught

I've been writing about, talking about, thinking about and taking MOOCs (Massive Open Online Courses) for quite a while now.   I've just read Thomas Friedman's recent New York Times article about MOOCs.  He and I are pretty much on the same page - although a lot more people read his page than mine!  Of course, Clayton Christensen has been talking about education being ripe for disruptive innovation for years and published Disrupting Class five years ago.

Friedman points to the emergence of Professor as Rock Star.  I've long made the point that, with the globalization of education, the few will rise to the top and drive out mediocrity. Friedman describes how  Harvard Humanities professor Michael Sandel, has become a rock star in Korea and China.  I first heard Sandel speak at the TED conference in 2010 and I've just signed up for his upcoming Justice course on edX, the joint MOOC platform of Harvard and MIT.  Regular readers of this blog may soon read more about that course.

Who wants to learn high school math from a crappy, or even mediocre, high school math teacher when you can learn from the incredibly popular and engaging Salman Khan at Khan Academy?  Who wants to learn history from a schmuck at a third-tier university when you can learn at the feet of Jeremy Adelman of Princeton?  (see my rave review of his Coursera course here.)

I've mused about this rock star phenomenon with my students in the Managing Innovation course I've been teaching in two different MBA programs since retirement from full time employment.  I consider myself a 'pretty good' teacher, regularly earning Teaching Excellence awards at University of Toronto's Rotman School of Management and complimentary comments from students.   But world class?  I think not.  Clayton Christensen is not teaching online yet, but if someone were to be given the chance to learn from this rock star, the pre-eminent world expert on innovation, or from Lib Gibson, they'd be crazy to choose me.

So what are the prospects for a good-but-not-world-class professor?  As lectures become available online, institutions are experimenting with flipping the classroom model: watch the lectures online in your own time at your own pace  and do homework or discussions during class.  San Jose State is flipping that classroom with MIT's introductory Circuits and Electronics course and College Preparatory School in East Palo Alto is doing the same with Salman Khan's math videos.   Perhaps there'd be scope for people like me running those discussions.  But this prospect would be rather gloomy if teaching was my chosen career.  Such outsourcing would definitely diminish my value.

Another of Friedman's points is about the coming shift from the Time Served model of education to the Stuff Learned model.  Sitting through high school, and getting a graduation certificate (of uncertain pedigree since different high schools have such different standards), will no longer be the benchmark.  Rather, your actual competence in a subject will be measured.

A good example of this is my own abortive registration for Calculus: Single Variable by Professor Ghrist of University of Pennsylvania.  I had two motives.  One was a crazy desire to refresh my memory about calculus and one was to see Professor Ghrist's teaching methodology, which looked downright exciting.  I was advised to take a self-administered test before starting the course to ensure I had the right background: if I scored less than 80%, think twice about registering.  So, I have a Masters in Math, and I've even taught first year calculus - a mere 43 years ago - although I've never used a stitch of what I learned.  The Axiomatic Foundations of Algebraic Topology (my thesis topic) doesn't exactly come up in everyday conversations.  Well, I was even rustier than expected and I didn't come near scoring 80%.  So I self-selected out of the course.  (Maybe I'll go to Khan Academy and brush up on some of that prerequisite stuff).

So how does this differ from what happens now?  I'm sure that with a credential like a Masters in Math, I'd have been accepted into that course.  In the bricks-and-mortars world, my bum in that seat would have denied a chance for another more worthy student.  In the world of 'infinite' capacity, I can decide whether to take the course or not, without impacting access for anybody else.  And there was a great online tool to help inform my decision.

Clayton Christensen on the early days of Disruption Theory

There's a short video of Clayton Christensen on the HBR Blog Network.  In his quiet way, he  describes the wide applicability of his theory of disruptive innovation, in spheres as diverse as chip manufacture and the military.  Well worth a few minutes of your time to hear about the early days of the idea of disruption exploding in the marketplace of ideas.  Click here.

Innovation and Getting Out of Recession

Clayton Christensen has revolutionized our understanding of innovation - and in fact business - by providing a theoretical framework around sustaining and disruptive innovation[1].

A couple of days Christensen published an article in the New York Times, showing how different types of innovation either created, destroyed or just maintained jobs in the overall economy.  And without new jobs, the US will not emerge from recession.

Empowering Innovation (what he has called new market disruptive innovation in the past) creates jobs, whereas efficiency innovation (what he has called low-cost disruptive innovation) destroys jobs.  Sustaining innovation doesn't create jobs, but does manage to preserve reduced job numbers in an industry that might otherwise fade away.  Very interesting analysis.  It takes his thinking about innovation at the level of an individual company to a thoughtful analysis of how innovation affects a whole nation.

He goes on to discuss the perniciousness of some of our financial metrics for measuring company success.  Let me take one he mentions, RONA, or return on net assets.  You can improve this ratio, like any other ratio, by increasing the numerator (return or profitability) or reducing the denominator (net assets).  Too many companies have focused on the denominator, clearing net assets off their balance sheets.  Outsourcing manufacturing activities to another party gets those big expensive factories (assets) off your balance sheet, improving RONA but outsourcing jobs and reducing your own control of your destiny in business.  And it certainly doesn't grow jobs in your own country.

I highly recommend reading this article.  It'll get you thinking.

[1] Disruptive innovation is a term of art coined by Christensen.  It's means something quite different from what you'd read in a dictionary by looking up disruption.  Read The Innovator's Dilemma to get the whole picture, or my post here to get a quick summary.

Revolution in Education

Adelman and the ivied walls of Princeton

When my daughter attended Princeton, I was filled with immense pride and a dollop of envy.  The pedagogical experience was awesome - the small classes and individual attention from world class faculty showed the wisdom of her decision to eschew Harvard in favour of Princeton.  


Now I've just registered to take A History of the World Since 1300 from Princeton professor Jeremy Adelman, starting this September.  How, you might ask, is this woman in Toronto taking a course at Princeton?  Coursera is the answer.  Coursera offers online courses from 17 of the world's top universities, free. I certainly won't get the individualized learning experience of an undergrad at Princeton, but I will learn from one of their top faculty.


And that's not all:  I also registered for Healthcare Innovation and Entrepreneurship taught by Bob Barnes and Marilyn Lombardi of Duke, and Critical Thinking in Global Challenges by Celine Caquineau and Mayank Dutia of University of Edinburgh.  The breadth of choice, even at this early stage, is amazing.  To peruse the courses on offer at Coursera is to be a kid in a candy store.

There is one downside - in Adelman's email to me confirming registration, he already handed out pre-reading.  

Thank you for your interest in global history.  This is a course I have taught for many years, and I never cease to find it a source of excitement.  We will be in touch with more details when the class starts.  But in the meantime, you should feel free to start reading the recommended textbook, Worlds Together, World Apart (3rd edition), Volume 2.

Hmm, some things are the same about online education.

This course will run for 24 lectures of 50 minutes each, with regular assignments of map tests and short essays.  The lectures are expected to take two hours, including the embedded assignments, plus two hours for writing and three hours for reading each week.  

In 1997, Clayton Christensen introduced the concept of disruptive innovation in his book The Innovator's Dilemma (named one of the six best business books of all time by The Economist) and Coursera is disruptive innovation at its finest - a product that is "not as good as" that offered at traditional institutions.  At least not by traditional standards.  You can forget the ivy-clad walls, the chance to talk to the prof in person after class, parties, football games, and most importantly, that certificate on the wall saying you're a Princeton grad.  However, it's vastly more convenient and accessible for people who would not otherwise be able to attend university, let alone storied Princeton.  Many advocates argue that, for many topics, online learning is actually better, because of the frequent progress testing, and the ability to proceed at an individualized pace.   And did I mention it's free?  That's what disruptive innovation is all about, less good on traditional attributes, but 'disrupting' an industry through the introduction of some new attribute that overturns our whole view of the industry, in this case the opportunity to take a Princeton course while staying at home in Toronto, doing it on my own time, and doing it for free. 


A typical reaction of people vested in an industry threatened by disruption is to treat the disruptor with disdain.   It's no different in education.   I've met people who sneer at a degree from University of Phoenix, a pioneer in online education and the largest university in the US, and liken it to a mail-order degree.  And an MBA from Athabaska?  Pshaw.  It doesn't hold a candle to an MBA from one of Canada's prestigious programs.  


However, disruptive innovations undergo continuous improvement over time, and ultimately challenge the leading incumbents.  Just look at the universities involved in Coursera, and it's hard to justify disdain: University of California (Berkley and San Francisco), California Institute of Technology, Duke, Ecole Polytechnique National de Lausanne, University of Edinburgh, Georgia Institute of Technology, University of Illinois, John Hopkins, University of Pennsylvania, Princeton, Rice, Stanford, University of Michigan, University of Toronto, University of Michigan, University of Washington.  Then, there's edX, started by Harvard and MIT and recently joined by University of California at Berkeley, offering mostly courses in Computer Science.  Clearly, the big names are jockeying for position in this new arena.  

The limitations of online education are sure to be diminished over time.  New generations find online social media as satisfying as real-life interactions and they may not miss university social life quite as much as the older generation expects them to.  For this history course, Princeton is not offering an official credit, but will provide, with my approval, data documenting my progress and performance.  This is definitely inferior to a course credit or degree from Princeton, for students or potential employers. 


However, it doesn't take much imagination to envision testing centres, similar to those for SAT tests, to enable those taking courses online to get official credits for the courses they take.  How will an employer respond to an applicant who has a full load of course credits, spread over 8 world-class universities, but no degree from a single one of them?  It unbundles the idea of a 'degree' as we've known it.   


Will students get very picky about where they take course and from whom?  Think of a student given the choice between taking a course from a local university, potentially from an unseasoned or just plain weak professor, or taking the same material from a renowned professor who's earned a global reputation for this course?  As a adjunct professor in a couple of MBA programs myself, I can certainly understand the threat of this competitive breeze down my neck.  Teaching faculty could be disrupted as much as the institutions themselves. 


Coursera's founders are from Stanford and they are funded by two Silicon Valley venture capitalists.  It's not been stated what the eventual business model will be - is the initial free offering to be superseded by fee-based courses once the concept is established?  Stanford Department of Engineering was a pioneer in online courses online: a graduate course in Artificial Intelligence last year attracted a remarkable 160,000 students from 190 countries.  


Of course, it's not an either/or decision.  Online courses are already popular with 'regular' college students.   As reported in the Sloan Consortium 2011 report, almost one third of students at college in the US are taking an online course.  Online education can also be a supplement to traditional education.  Perhaps the greatest success story of online education is the Kahn Academy.  Started 'accidentally' by Salman Kahn who was tutoring some cousins at a distance through online lectures - no fancy technology, just a YouTube video of Kahn with his engaging manner and the equivalent of a black board for notes.  Those first efforts have led to a site with over 3,000 videos and millions of views (see Kahn's TED talk for more information about some of the revolutionary techniques being used in K-12 curricula).  


As education costs continue to spiral upward, the cost effectiveness of online education will become even more important - consider that one Stanford prof teaching 160,000 students!  It could also lead to the unbundling of university degrees, the enhancement of the brands and success of the top universities and the erosion of second-rate institutions, the need for much fewer teaching faculty - in short a revolution in education.  It's happened in many other industries.  There's no reason education would be exempt.


Education is in for a revolution.  I'm excited to be a small part of this revolution as a student of my first online course.

Defining Innovation

I've just finished teaching a course called Managing Innovation at the Rotman School of Management at University of Toronto.  It's a second year MBA course and I always start the course with a discussion of the real meaning of Innovation.  Most students arrive at the class with a pretty narrow definition of innovation - and for most it centres on technological invention.

My definition is much broader than that and we had an extended discussion about our different views of innovation.  Perhaps it has something to do with me being the professor, but we ended converging on my favourite definition, namely.

I like this definition for several reasons.  I like the use of the word value.  Value doesn't just relate to profit.  The value can arise from cost reduction, or social value, or even a new way of thinking about the world.  So the definition holds for corporations, governments, or non-profits.  If we're going to solve the world's social problems, we're going to need a lot of innovation, so it's important that our thinking about innovation extends to social situations, not just profit-seeking enterprises.

The definition requires you to have more than just a great idea; you have to implement something to create value.  I like that concept of creating value.  An invention alone might not create value, and that's why I would argue an invention is not by itself enough to qualify as an innovation.

I like the use of the word fresh instead of new.  Taking an idea that's been used in one area and applying it to another fits in my definition of innovation.  Fresh captures that idea of taking an idea from one arena to another; I would classify that as innovation too.

This year, we had a particularly spirited discussion about value, and whether something had to have significant and immediate impact to qualify as an innovation.  We concluded that something had to have a measurable impact in order to be considered to deliver value.  It was an thought-provoking discussion.  You always learn from students!

TED Book Club Selection - November 2011

 Today, the lastest TED Book Club Selection arrived, Walter Isaacson's biography Steve Jobs.  What an appropriate choice!  Both TED and Jobs stand for Technology, Entertainment and Design. I've received many comments on my posts about TED book selections, showing that many people enjoy hearing what the folks at TED have chosen.  So I decided to post this, even though I've barely begun the book.
 

Jobs life is linked to three inspirations in my own life: Clayton Christensen, TED and Ian Sharp. 

 

It's said that Jobs was inspired by Clayton Christensen's book The Innovator's Dilemma, and that it was pivotal in molding his views about innovation.  I've talked about Christensen's ideas in previous posts (such as this one).  I celebrated the fact that The Innovator's Dilemma was chosen as one of the six best business books of all time(click here), and that Christensen was named the top Business Thinker (click here).  These posts explain why I think Christensen's ideas are so important, and if you examine the trajectory of Jobs' career, you can see his products as an illustration of Christensen's theories.  Consultants from Innosight (the firm founded by Clayton Christensen) had a great article about the innovation lessons learned from Steve Jobs.  I've seen lots written about Jobs recently, but that assessment is my favourite.

Jobs' life is an illustration of the very essence of the TED conference.  So many conferences bring together people with shared interests in a particular field.  They are very focused, and can often provide deep information, but seldom any true inspiration because they simply reinforce an industry's entrenched way of thinking.  TED is different - it brings together people from a wide variety of disciplines and the sparks of creative and innovative thinking fly.  Jobs similarly capitalized on the breadth and depth of his interest in technology, entertainment and design in the breathtaking innovation in his products.  In just the first few chapters, there have been appearances by people I've met at TED like Larry Brilliant and Stewart Brand, and the index reveals more to come.

The description of those early days in Silicon Valley brings back memories of my early days in  timesharing (now called cloud computing) in the early 70s in Canada.  I worked for I.P. Sharp Associates, a pioneering software and network communications company, led by the brilliant and unassuming Ian Sharp (shown at left).  Ian's penchant for hiring bright people resulted in a company full of them.    Like Jobs, many 'Sharpees' had dropped out of university  (often leaving the US motivated by the Vietnam draft).  Like Jobs, some of them had nevertheless earned a BA (brilliant & abrasive) or a BE (brilliant & eccentric).  Ian exhibited huge tolerance of eccentric behaviour as long as people were contributing and were respectful of their colleagues and focussed on solving customer problems.   Jobs' success arose, at least in part, from the diversity of his interests and his appetite for ingesting ideas from many fields. Ian's disregard for people's area of specialization meant that I.P. Sharp was seething with people from diverse backgrounds - computer science as well  as education, mathematics, biology, music and many fields.  (It was also full of 'minorities', because Ian seemed blind to nationality, religion, skin colour, or sexual orientation).

Authorized biographies often present a somewhat varnished version of events.  What has surprised me so far about this book is that it shines a glaring light on both Jobs' brilliance and his less desirable traits.  Jobs and Wozniak have just founded Apple, and Jobs' trademark chutzpah, passion and single-minded drive are already evident.  The reality distortion field has made its appearance.  So has Jobs' arrogance, although that aspect of his personality remains to be polished and honed.  His penchant for abuse and his 'anti-loyalty' is disturbing to read about.   Perhaps it's a final comment on Jobs' unfailingly high  self-esteem that he was willing to support a book that could present him in such an unforgiving light.

 

Does the World Still Want Curators?

A curator is defined as 'a keeper or custodian of a museum or other collection'.  You can think of an independent bookstore as a curator of a book collection that you might want to buy. The staff actually read the books, and they know how to match books to their customers.  They can be instrumental in building readership for a new book because they stimulate that first groundswell of support in the first few months of release.  This is one of the points in this Huffington Post article about independent bookstores.  The article goes on to pay tribute to such bookstores' ability to create community around the people who frequent their bookstore, and to deplore the possible loss of such important community centres due to disruption of the bookselling and publishing business.

I think of newspapers in much the same way: the editors are curators of the news, selecting from a wide range of possible news items just which ones will be published in their newspaper.  They further create a community among the readers of the newspaper.  And they are equally threatened by disruptive forces.

But it's not only economic forces which are affecting the fortunes of these two businesses.  It's also cultural forces.   People increasingly lean on social media for recommendations as to what books to read, or what news to pay attention to.  As we rely on our friends we move into a deep spiral of self-reinforcement of our views.  Not that newspapers don't have a view themselves. They do.  But the best report the news objectively, try to be wide-ranging in their selection criteria, and give space to columnists of many different views.  Our friends don't usually do this.

In my humble view, the world needs curators for our intellectual input.  The title of this article was about whether the world wanted such curators.  Sadly I suspect now.

I'll be looking forward to part two from Huffington Post, which promises to offer suggestions of how independent bookstores can survive.

The Lean Startup

Last night, I attended a talk by Eric Ries at the Rotman School of Management, here in Toronto.  Ries is the author of The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses.  Ries is an engaging speaker and presented a number of down-to-earth ideas about how to be successful at a start-up.  They mirror ideas I teach in my course, so of course I thought he was brilliant.

I had a hint that I was going to like what he would say when early in his talk he said that he was a fan of Christensen's concepts of disruptive innovation and Jobs to be Done.  Any fan of Christensen is a buddy of mine!

Students recall concepts better when there's a catchy phrase that captures the idea and I really liked some of Ries' sound bites and will integrate them into my Innovation course.

If you're building something customers don't want, why be proud of being on time and on budget?   

The Jobs to be Done concept says that customers hire products to do a job for them.  If customers don't want to hire your product, then nothing else matters.  You need to find out - in the quickest and cheapest way - whether customers want to hire your product.

Ries gave an example of a company that developed - at considerable expense and pain - a software app that you could download.  When they launched, people could go to a web page, read about the product, and hit the red button if they wanted to download.  Nobody hit the red button.  This was a valuable lesson: they had built a product that people didn't wanted to hire.

The question was - did they need to actually build the software to learn that lesson?  Could they have built that web page with the red button, and a second landing page for people who hit the red button, which said something like 'oops - still in production'.  For zero effort they could have learned that virtually  nobody landed on that second page.  Back to the drawing board. 

Customers Don't Know What They Want

Henry Ford is famously quoted as saying "If I'd asked people what they wanted, I would have built a faster horse".  This is a critical problem in innovation that is customer-driven: people who are already using a certain product to do a job for them seldom are able to break out of that framework and think of how the problem could be solved in a completely different way.  I call this 'solving solutions'.  A better approach than asking them is to observe them doing the jobs they normally do and think of how you could improve that task.  Then give them an experimental product and observe their behaviour in using it.

Pivot - a change in strategy without a change in vision

When you're introducing a new product or starting a new company, you can almost guarantee that your initial strategy is wrong.  So, your job as a startup is to experiment continuously and to figure out when you have the right strategy. Ries calls these changes in strategy pivots.  I'm a basketball fan and I love this expression - a basketball player pivots when s/he finds the way to the basket blocked and pivots to continue to the basket, just on a different path.  And the player keeps one foot firmly planted during a pivot, suggesting that the strategy is continuously grounded in what went before.  What a lovely graphic image.


 Pivot? or Persevere?

Timing is everything, and I've been pulling my thoughts together for a whole session on timing in my next courses.  Ries added a nice sound bit to my repertoire for these sessions.  His question of whether to pivot or to persevere is a fundamental one - and the ability to figure out which approach is correct is key attribute of a good innovator.


The great advantage small companies have over big companies is their agility, the ability to pivot to a new strategy based on what they learned from initial reaction to their products.  Is it possible that small companies also have less cultural resistance to the pivot?  They may have fewer people invested in the current strategy and this may make it easier to pivot.  On the other, a passionate founder may be very invested in a particular strategy and resist a pivot.  It's hard to fight the founder.

Invest in Agility, not Prevention

A common challenge to an innovation is around scalability.  What if this product is wildly successful and we're not able to scale to meet demad.  So, to prevent this possible calamity (we should be so lucky), some companies will invest considerable resources to make sure a product is scalable from the outset.  And they'll often invest before they even verify if the product is something that customers want to hire.  This is quite typical in a big company where there's concern that a failure in a new product can besmirch the reputation of the whole company.

Ries' advice is to invest in agility, not prevention.  Make sure everything about the process of getting a product to market is flexible, enabling scaling at quick notice. 

After listening to Ries' talk, I am definitely going to read The Lean Startup - and that's the whole point of a book tour, isn't it?

One of my former students in part way through the book.  He is most taken by Ries' definition of waste.  Until you figure out what people want, execution that doesn't contribute to that search is waste.  Thanks Neil.

Steve Jobs

How sad to see Steve Jobs unable to continue at Apple.  From when he was very young, Jobs has broken all the rules and made it work for him.  I wonder how many university drop-outs have used him as a justification for their actions.

And so the speculation swirls as to what will happen with Apple.  Tim Cook, Jobs' successor, has been written about in very flattering terms, but he's all about how to do business: he's fixed various supply chain problems and been critical to Apple's success in bringing products to market.  Jonathon Ives, Apple's famous and revered designer, is all about how to design obscenely beautiful and usable products.  But Jobs is the one who has decided what to do.  His vision, his passion, his uncompromising expectations, and his micromanaging attention to detail have pushed Apple to deliver only the best.  How do you replace an influence like that?

There's been a lot written about Steve Jobs this week - almost like eulogies while he's still alive, although deeply imperilled.  He's certainly been a significant force in society beyond just business.  He came full circle at Stanford when he gave the commencement speech in 2005.  It's worth listening here for his take on life in general.  You've probably heard the value of telling stories as a way of making your point.  Jobs' three stories prove the point.

ING Direct Cafe: A Breath of Fresh Air

How often do you sit around with friends, lamenting ignorant, disinterested service reps, punitive service conditions, stranglehold contracts, confusing interfaces, or misleading entry prices with surprise surcharges?  If you're like me, it makes you appreciate those companies that deal with you competently, fairly and transparently.  I can get excited about companies as diverse as the company that so smoothly rents out our cottage or the arborists who took down our diseased tree so proficiently.

But one company consistently blows me away and that's ING Direct Bank*.  Their products are simple and work as advertised.  The web site is intuitive and easy to navigate.  Their communications are clear and understandable.  Their client reps know their stuff and are unfailingly pleasant.  (In fact, at the 2011 Contact Center World North American Finals in May, they won best mid-sized contact centre in North America).  As an innovation specialist, I respect their passion to change the way banking is done: without traditional branches, they deliver superb products over the Internet and the phone.

ING Direct has now found a new way to surprise and delight me as a customer - the new ING Direct cafe in downtown Toronto.  They've transformed a heritage building at 221 Yonge with heritage brick walls, and lots of natural wood and light, and there's only one word for the result: gorgeous.  It's a place where ING Direct wants to interact their customers in a new way, to be a vibrant part of the Toronto community, and to manifest their commitment to sustainability.

Main floor of the ING Direct Toronto Cafe

 As you can see, the main floor of the ING Direct Cafe really has a cafe, where you can make your own coffee from fair trade coffee from Haiti in a fancy machine, or, if like me you don't drink coffee, you can juice your own oranges in an equally fancy juicer or make some tea.  The coffee and juice, and organic pastries, are not free, and neither are the other 'orange' ING items; all the profits are donated to charity.  There's free WiFi (of course), and a bank of lovely iPads to try out ING's industry-leading mobile apps.  The ING staff are there to answer your questions, not to pitch ING products.  Or you can just gravitate to the comfortable seating to just hang out in this space and read some magazines, as I saw folks doing the day I was there.

On the main floor ING features companies whose principles coincide with ING's, dubbed Saver's Friends.  There was bike from Curbside Cycle on display the day I was there.  The $650 bike was being sold for $400 - again with all the money being used to build cycling education and mechanics facilities in St. Jamestown as well as purchsing bicycle helmets and locks for kids.  The bright orange bike embodied many messages - saving your money, saving the environment, community partnerships, and of course the link with the Netherlands famous for biking (ING's parent is Dutch and the bike was the Batavus brand from the Netherlands).

ING Direct Cafe's Green Wall

As you walk up to the second story, you pass by the gorgeous Green Wall as you enter the co-working space.  (See this article in Globe and Mail for an interesting perspective on the growing trend toward co-working). A modest working area, access to great meeting rooms and top-of-the-line technology - great big LED screens, facilities for webcasting, digital whiteboards - everything an independent entrepreneur would dream of, all available for a modest fee (also donated to charity).  The informal 40-person meeting room can be booked free by nonprofit or community groups and is already becoming a favourite venue for many.

The third floor is a satellite office for ING Direct staff - a place of experimentation and innovation.  It's a coveted place for ING employees to work.  Once you've experienced this fresh and friendly space, it might just become a coveted space for you too.

* full disclosure:  I am on the board of ING Direct Bank.  However I was a delighted customer long before I was a director, and this post is written form the point of view of a customer.

Clayton Christensen

For many years I've admired the groundbreaking work of Clayton Christensen on innovation.  I first met Christensen back in 1998.  I was working at the Globe and Mail and Thomson Newspapers (the owner of the Globe at the time), invited me to an all-day session in Boston where Christensen was presenting his theory of disruptive innovation.  We were given a copy of The Innovator’s Dilemma (judged by The Economist as one of the six best business books of all time), and treated - and I do mean treated -  to Christensen’s eloquent explanations.   It was an epiphany.  So much of what I had observed in the world of business suddenly clicked into a framework.  And so much of what I’ve done with my professional life since then has hinged on that original exposure to his ideas. 

The big ideas that I took away with me from that day, and subsequent exposures to his theories are:

• Technology improves faster than users’ ability to absorb, or willingness to pay, for those improvements
• Incumbent companies, seeking to maximize profits and margins and cater to their biggest and best customers, focus their attention on the possibilities at the top end of that technological curve, overshooting the majority of the market
• Disruptive innovations offer just good enough quality on traditional attributes, but provide exceptional cost effectiveness, convenience or accessibility that appeal to the least demanding consumers or non-consumers
• Technology improvements make these products good enough to take over the core markets of the incumbents (see first point above), while incumbents are loath to compete because to do so would attack their own business models

As this little summary suggests, it’s all about the business model and doing things in a radically different way – usually starting by offering less than what’s already there.

Give me 5 minutes and a cocktail napkin, and I will draw the above diagram to explain disruptive innovation to anyone who'd like to hear  - and many who would not!

Fast forward to my taking a job as Corporate Advisor to Michael Sabia, the CEO of BCE.  The  first thing I did was recommend that he should read The Innovator’s Solution, Christensen’s second book.  BCE, as Canada’s largest telephone company, was the prime victim in an industry which was being totally disrupted.  Could understanding the process of disruption help us on the path to seizing opportunities in this new world instead of being victimized?  I thought that getting the boss to read Christensen would be a good start.  I arranged a copy of the book for Michael.  He said he’d try to read it on the weekend.  On Monday, I eagerly called to see whether he'd found time in his frenetic schedule to read it.  “No”, he said.  There was a big pause while I swallowed my disappointment.  He went on to say, “I read it twice”.

And so began my fantastic journey in getting to know Christensen better and in working with him and learning from him.  We did several projects with him at BCE, involving him speaking to groups of executives, from which sprang various workshops to discuss specific implications of disruption theory for the communications business.  He would start such talks and workshops by expressing his honour to be there, learning from a great company.  (Over the years, I came to see this humility was not assumed but real).  He would then present his ideas with crystal clarity.  Questions were welcomed with remarks such as “You know, that’s a great question.  It really gets to the heart of the matter.  Thanks for asking”, after which he would deliver a succinct and lucid answer to the question.   He was always generous with praise for his students and  anyone who had contributed to his thinking.  When he invited my comments on his upcoming book, he took my modest input and criticisms seriously and, to my surprise and delight, I was mentioned in the acknowledgements.    You always walk away from a conversation with Clay impressed by his wide-ranging intellect (not to mention his 6'8" height!), but, remarkably, you also say to yourself “Gee, I never knew I was that smart”.  He just has that effect of making you feel good about yourself.

So, what prompted me to suddenly write this paean?  It was Clay’s recent address to the Ontario Hospital Association.    Clay was invited to speak because of his recent book The Innovator’s Prescription.  He’s been tussling with the ideas of disruption and how they apply to healthcare for several years now.  So he was a logical speaker for the OHA’s annual conference.   

However there was a little glitch in the plan.  After fighting off cancer last year, a heart attack before that, and diabetes since he was 30, he suffered a stroke in July which left him with expressive aphasia, the loss of the ability to produce language (spoken or written).   Wow, what a crime to have this happen to this most eloquent of men. 

As you might expect from what you’ve read so far, Christensen did not cancel the engagement, but pushed himself to deliver the talk.  He started by expressing his gratitude to the organizers for their patience with him.  Then he explained that for his whole life, he’d been learning words by writing them on little file cards and storing them away in a file cabinet in his brain.  They all had bar codes on them and a little gatekeeper in his head would pull out the words as he needed them.  However, since his stroke, the gatekeeper had been on holiday.  Would we the audience please excuse him if he sometimes used the wrong word, and shout it out if we could see him struggling to access a particular word without his gatekeeper helper.

Despite the caveats, Christensen delivered to the audience of 2,500 a clearly organized, highly relevant, spectacularly cogent and highly fluent account of disruptive innovation and what it could mean to healthcare.  Indeed, there were a handful of instances when he searched for a word.  You could almost sense the audience leaning forward to help him.  It was a masterful presentation – for someone who hadn’t had a stroke.  It was a stunning triumph for someone who had.  It met with a heartfelt standing ovation and thunderous applause that just didn’t stop.   How well deserved.

In a future post, I'll tell you what he actually said.