Monday, February 28, 2011

Innovation : Open and Closed Models

What are some of the key characteristics of open and closed business models?


1.) Speed to market
2.) Iterative design (constantly being virtual and scrumming)
3.) Release smallest subset of functionality - test for consumer /customer demand and build on learnings vs assumptions
4.) Strong in monitoring competitors
5.) Absorb ideas in real time - so agility is typically in founder DNA
6.) Use contract labor vs FTEs
7.) More aggressive in orientation
8.) Focus on Customer Traction and Sales traction vs IP (tail that wags the dog)
9.) Value is placed on financial performance vs projected
10.) Tend to be B2C vs B2B


1.) Slower to market: focus on perfecting working protoypes before hitting the market
2.) Brand sensitive and protectionistic
3.) Tend to be B2B vs B2C
4.) Dragged down by legacy infrastructure and processes that require customization
5.) Scale and Size matters so tight scrutiny on approach
6.) IP Matters and often complexities lose out on innovation as arrive too late to market
7.) Can be great if the recognition in the market is early enough ahead of the curve to continue to refine models

In the prior blog I wrote on open or closed business models, I indicated that knowing which approach to take is highly predicated on the type of innovation and the type of company you are in.

I always recommend if large global companies are trying to innovate emergence they do so outside the core, and have separate practices and processes from the core, and use the channel/sales capability of the core, but not ingest NEWCO.

I also question the needs for IP protection when in technology web centric models these are nearly impossible to protect and energy I believe is best spent on securing real paying customers.

Companies such as Apple, Google (Android) typify the new world of more open business models. The ecoystems they are building to allow others to take advantage of are simply mind boggling..... abundance rules and scarcity is for dinosaurs.

Sunday, February 27, 2011

Communities of Practice Leading Perspectives

Knowledge Now is a world class collaboration and CoP program in the United States Air Force. I was recently speaking at a global conference with the Air Commander from USAF where he discussed their Knowledge Now, program.

The program is full of stories of how people have collaborated on the ground to save time, money, resources and lives.

The initial projects was to integrate three existing knowledge sets:

1.) Lessons learned from across the Air Force
2.) The Air Force Deskbook, an annually validated set of processes and procedures, along with forms, key words and references
3.) A Smart Web based training program

The Director of the Center of Excellence for KM and Collaboration at the US Department of Defnse is Randy Adkins and "our collaboration and CoPS have thrived because of our over 300,00 plus people are accomplishing the mission and creating a knowledge market that we have clearly defined - collaborating, sharing, posting information in your communities is vital to our mission. This can help save lives."

Since the launch, over 16,000 active Communities of Practice (CoPs) are flourishing, with strong participation across the ranks, over 100,000 visitors viewing over 12 million pages a month, with 10,000 new users per month, more than 575,000 users since the program's launch and is not the largest implementation and most successful CoP environment in the Federal Government.

Lessons Learned

Randy shared some of the key lessons learned in their early days were:

1.) Identify the business purpose or value - be clear and compelling.
2.) Security and sharing are not compatible - better to be open than closed and trust your people.
3.) Organizational culture grows and is enhanced through collaboration.
4.) Experienced human support is critical for sustainability.

Key Seeding Strategies

1.) Work with the willing, not the wounded or the dead!
2.) Engage C level and middle management stakeholders - if they are not role modelling - few will follow!
3.) Focus on ensuring validated content add values.
4.) Include expert profiling and people search features that connect the right people FAST.

If I knew what I know now, seeding these are number ones:

1.) Focusing on creating a nurturing and sharing obsessed culture is critical
2.) Be creative about the metrics and have fun with them
3.) Make everything incredibly easy and simple to use -- avoid feature creep!

Invest in sustaining marketing and communication strategies and constantly engage the managers in the learning process, especially middle management as if they are not pumped - no one is going anywhere fast.

Creating a sense of urgency will require the most senior executives engaged and seeding messages around faster faster faster and seeding ongoing incentives and recognitions.

Sustaining the dialogue will be critical for operational success.

Perhaps is most important message shared and that we like to hear is: Engage with the best and the brightest in Adoption and Change programs at the seeding stage, they know how to influence the technology design, and get things up running effectively, and won't get dragged into technical perfection.

Our firm specializes in collaboration, innovation and next generation models. We just finished writing a strong leading practices book on CoPs and this can be found at:

We just finished doing some of the most innovative CoP and Customer Excellence planning at RIM, as noted at the IBM Lotus Sphere events held in Florida, and most recently in Toronto.

We were generously recognized by Rex Lee, Director of eCollaboration at RIM, our client who ensured Helix had the opportunity to do the global strategy for their collaboration and CoP programs. We were in a fortunate position as IBM allowed us to be subcontracted under them and do the work as RIM asked for us, putting aside their internal best talent to allow Helix and our secret sauce and methods take the lead.

RIM's program is now one of the most innovative collaboration and CoP environment's scaling rapidly worlwide, why everyone is asking us now.

Three key reasons we say are:

1.) RIM's leadership had the vision and empowered their people to engage and hire the best.
2.) RIM's center of excellence vision (full time resources) were embedded to sustain the program from the get go and are now approaching over 8 FT resources, plus certifying in each line of business collaboration advisors to get the embedded behaviors in the culture, something we knew was critical as we are also specialists in organizational transformation. This does not include the technical, architecture and other support resources.
3.) We seeded all the human performance systems to be aligned - these projects are not about technology and we see too often IT executives making the wrong decision as they get enamored with the tech.

Helix has the depth in tech in both the IBM Lotus Collaboration and Microsoft solutions - but distinguishes us is are three key factors:

1.) We lead with business value and case for action - client messaging as the foundation - we get the vision right first.
2.) We ensure stakeholder engagement = skin in the game in the seeding processes.
3.) We use agile iterative design and scrumming tactics to engage the organization culture to own vs do to them.
4.) We know the most important filter is "finding the right experts - so investing in profiling and incentives here - is number one!

So to achieve a winning Collaboration solution like AFKN or RIM, contact us.

New Rules of Thinking

Today consumers are changing companies continually. Overall attrition rates are seeing attrition rates as high as 40-65%. While this trend is growing, companies are searching for increasing bonding stickiness.

We all know that it costs 3-5 times more to acquire a new customer than it does to keep one. What this means is that every company, big or small must have a customer growth plan to keep in touch with its strongest and most loyal customers.

We also have to increase our innovation knowledge on disruption. The old adage if it ain't broke, don't fix it needs to be destroyed.

Reed Hastings of Netflix did not reinvent the movie rental business. Rather he capitalized on a weakness. People hate late fees, he simply created a simple model deployed over the web with subscription fees instead of unit sales.

Learn from other's mistakes

I love to shop at Pottery Barn, Crate and Barrel as their furniture and products are beautifully styled and appeal to the home maker in me. However, look at Home Decorator's Collection (HDC) -- a no frills, discount offer that look the same as the beautiful ones in the expensive furniture catalogues and everyone loves a bargain.... so finding market holes is an important scanning skill to cultivate in your organizations. Every company has weaknesses - just need to look for them.

A few questions to ask:

1.) Would the Founder of Netflix been successful if he had followed the traditional video distribution model?
2.) Would Amazon continue to be be successful if they had stayed focused on pure bookselling strategy only?
3.) Would Apple be successful if they had not thought ecosystem vs product - ie: iPhone , iPAD, etc?
4.) Would Android be successful it had not been open?

The Cluetrain Manifesto is now an old book, but one thesis still holds true: Markets are conversations.

What Cluetrain failed to discuss is that human nature remains the same. For any conversation to continue their needs to be trust and reciprocity. You can expand your reach, but if the consistency in the experience, expansion of customer connectedness, people simply drift.

My partner, Alex Blom has the approach right to his over 40,000 twitterer followings, and now as one of the top digital media influencers in NA, he takes pride in responding to each of his followers, and returning their tweets, or building on their tweets, yes and he does not sleep very much.

There is a point where he and I both know he cannot sustain this personally and he is now at the tipping point, but he knows that the conversation is valuable and needs to continue and needs to be genuine.

In summary, as executives concerned about innovation and creating cultures that flourish on new ways of working, we need to develop practices that reward talent for thinking outside the box, giving them opportunities to break practices/processes as reinvention keeps you on the edge and agile.

To survive in an increasingly interconnected and web smart world - companies need to embrace change. It is the only constant fuel for growth and sustainability.

Innovation: Open or Closed Models

As a former Venture Capitalist and founding member of the Toronto Angels, and now running a small strategy firm specializing in innovation and growth models using next generation technologies (collaboration and community based), it is fascinating to watch the shifts in business models and impacts on valuation under traditional IP thinking.

In today's web centric world, where the meaning of proprietary has shifted as many solutions are leveraging open source code in their production processes, the focus has shifted from IP (closed models) to valuation on the reach of their models.

One starts to see the realities of pumping in sums of scarce dollars into IP protection vs just driving the reach as models on the web and their returns depend on pervasiveness.

Our business world still works with old assumptions with non disclosures, non competes, patents and trademarks as protective strategies, disclose as little as possible, and valuation predicated on more closed than open models.

Yet the returns on models on web centric models are higher on more open models than closed. The economic theories are shifting to abundance vs scarcity - what many of my colleagues in complexity science have been saying for some time.

For web social/collaboration and community exchange models - open innovation is the right approach for rapid reach, but for models in bio science, or pharmaceuticals etc, the old models on patent protection still hold true.

What we need to teach CEO's and emerging leadership teams is to understand their business models and then select the right approaches - riding the traditional and more complicated historical ways of valuing companies is broken now and in time abundance will prevail... we just don't all understand this yet.

Friday, February 25, 2011

RIM Growth Challenges

RIM is a world-class Canadian company that is now a world-class Global company. We have a hard time as Canadian's praising our children.

Once you get to be the size of RIM, you have the priviledge of being attached on all fronts. Who could not be losing ground to the likes of Apple. Their iPhone is brilliant and has set the soncumer standard for smartphone innovation. The Google's Android platform is also gaining share as its powerful operating system, and zero cost to channel partners, makes it an attractive solution to sell.

Consumer polls that are measuring product desirability consistently favor the iPhone and the Android is now squeezing Rim as well.

What should Rim do and is doing?

1.) Remember the line - Focus on your Core.

RIM has a powerful enterprise niche and must retain its high margin and loyal customers. To do this, enterprise services must always be ahead of the Apples, and Androids (whose dominance is more consumer)

2.) Expand footprint into the consumer garden but not at the expense of preserving the core.

It is easy to have Apple envy, however, my belief is it is better to have a strong foothold and preserve /fight to keep the core strong, as dilution will only erode the foundation on all sides.

Perhaps the biggest disappointment I had was RIM went to market too early on its new iPAD like product (The Torch), it did not deliver product superiority and shipping has had its challenges.

In summary, RIM may have its unique challenges, what it needs to do is not compare itself to Apple or the Android and look beyond these otherwise they are caught in a cat and mouse, function feature game, here are some ideas:

1.) Bring together the brightest engineers (top engineer from each university around the world (say 20) and offer them a $ prize to invent a new product to extent the Torch to levels unimagined (4 month co-op assignment)

See what unfolds - great PR and recruiting benefits, new ideas will emerge as with diversity comes more wisdom.

RIM is highly concentrating with R&D based in Waterloo and increasingly in the valley. It is now a global company, yet when one tests for harmony of culture and vision alignment of what the future holds, there is a worrisome level of concern by RIM employees (the enemy is now us is in RIM's tent), and their practices for engagement (doing business) is well understood to be plagued with difficulties.

All this aside, RIM will find a smart pathway forward, but it has to start with its internal engineers believing they can solve the challenge. This confidence is critical to evolution, feeling like you are in a shadow will breed mediocrity and erode confidence.

If Jim andMike spent one week each working side by side with their most brilliant engineers - some new energy would be unleashed, sometimes as executives we caught up in internal or external meetings and what is really important is ensuring our talent believe in the dream and know they are making a real difference.

Wednesday, February 23, 2011

Facebook - Your Stories can be real time ads now!

Facebook has just launched its new initiative allowing you to become the star of the marketing your friends see on their profiles.

I have to try this as I am likely the Starbuck's queen at Brookdale /Yonge in Toronto.

Sponsored stories will allow advertisers to copy certain pieces of information from a Facebook user's news feeds and pin those posting tot he profiles of their friends. It's a new way for marketers to increase the visability of certain stories that show in their new feeds.

Word of mouth, recommendations, and endorsements are a major value to marketers.

Now when a Facebook user presses a like button for a certain product or service, or checks in at a location using Facebook Places, and downloads an application, marketers can now take that information and use it as a sponsored story.

Users can prevent what they share appearing by adjusting their privacy settings of their news feed.

Stores to sell products or services are effective, and entertaining. These types of approaches extend the reach of marketing professionals as they have more content to leverage, and voices to leverage to echo their brands.

Tuesday, February 22, 2011

Intelligent Cities: Megacity Mergers in China

Imagine joining nine cities together to create a metropolis or mega city of over 42 milion people, a population bigger than Canada's ( we have 34 M).

City planners in China are looking at merging the nine cities around the Pearl River Delta, which would create a land mass of city dwelling that is 65 times greater than Toronto, and if merged will account for more than 10% of China's economy, due to the heavy manufacturing heartland.

Plans are underway over the next 6 years to invest in over 200 infrastructure projects (transport, energy, telecom, etc), cost of over $300B - now that is urban planning extreme.

By the end of the decade, China plans to consolidate more cities to strengthen services and consolidate costs for greater efficiencies.

As the megacity China growth strategy gathers momentum, investment is anticipated to exceed $US1Trillion, with an investment of $500B in high speed rail.

Monday, February 21, 2011

Reflections on the Internet on a Monday Morning

For many of us the internet was something we were introduced to in the mid to late 1990's, when AOL became prevalent, giving us services to the web and content that we never knew was even possible.

Then if you recall we had the early search engines like Alta Vista, Yahoo and eventually Google appeared and the internet's vast content and possibilities became more real.

I remember when I was a VC in the late 1990's we still had people questionning the feasibility of buying goods on the internet, despite the early and evident success of eBay. Although when I look back and appreciate we were in our early content days, there really was a limited amount of good quality content back then, even Wikipedia did not exist.

Today there are literally billions approaching trillions of pages and we have literally too many options to choose from, exacerbating a new problem of drowning in possibilities - making search and profile intelligence even more important.

However is the Web dead? - if we can spend an entire day making use of the internet but never in the browser on the web via applications, IM, streaming services, then one needs to think of the evolution - with smart tablet applications with access to only the content the want - we need to be reminded that the power still lies in aps and servicing my needs.

Will we start to have a new generation of curator guides like in museums that are experts on searching for your needs and being your search coach and keep finding us the best content possible. We have crawlers that source content based on our needs, but still the context is often missing let alone the filter of a human mind, and also the coaching back on content value.

Facebook is rapidly shifting their strategy to integrate technology through its site, as you can now use Facebook to log into sites such as CNN, New York Time, recommend stories you have read to your friends, making the environment more porous.

Apple with the iPAD is pursuing a similar strategy with its IOS Platform.

Let's not all forget the internet is not even two decades only .... and it is the environment we rely on daily to do our work, support our personal lives, and stay connected.

What the future holds we can start to see with the increasing consumer electronic companies like Sony, LG integrating the internet with smarter appliances, media and entertainment, cell phones - striving to keep us in their ecosystem.

No one has done this as well yet as the Apple experience. We are in the process of upgrading our office equipment, and my team has finally convinced me the Apple is the only way to go.

What do you think is next?
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