Apr 29, 2012

Steve Jobs: Innovation is the only way to succeed

INSEAD Knowledge has published an interview with Steve Jobs from 1996 which has a few very important points for R&D managers:  Innovation is the only way to succeed - you can not cut costs to get out of problems.
"All I can say is I think it was true back when we built Apple and I think it is just as true today which is innovation is the only way to succeed in these businesses. You can’t stand still.
You can’t cut expenses and get out of your problems. You can’t cut expenses and get out of your problems. You’ve got to innovate your way out of your problems.
image from Insead Knowledge
So, lets dig in...

Apr 28, 2012

Unilever's Kees Kruythoff: Enthusiastic Employees Key to Success

A quick post about a lecture by Unilever's Kees Kruythoff in Knowledge@Wharton (Global Leadership Lessons from Unilever's Kees Kruythoff ).  Kruythoff mentions that a sense of enthusiasm and excitement is key to a company's success and makes progress possible.  He sees that sense of enthusiasm has been a key to his own success:
"Kruythoff said that his enthusiasm for his job has always been what has propelled him. There is really no substitute for that, he noted, and, in reality, enthusiasm should be the primary reason anyone should work for an organization. "When you join a business, the most important part is to ask yourself how you can improve the values of the company," Kruythoff stated. " 
One way to get an enthusiastic workforce is to hire employees that clearly demonstrate the sense of excitement:

Apr 24, 2012

Why Open Innovation is Hard to Implement (Netflix Example)

We have discussed the difficulties in implementing open innovation.  Netflix did an amazing job of leveraging open innovation with Netflix Prize. For a while they were receiving amazing results from the exercise. That is why, I was surprise when I read the article Netflix never used its $1 million algorithm due to engineering costs:
"Netflix awarded a $1 million prize to a developer team in 2009 for an algorithm that increased the accuracy of the company's recommendation engine by 10 percent. But today it doesn't use the million-dollar code, and has no plans to implement it in the future,"
Let us dig in to see what we can learn...

Apr 18, 2012

What You Wear Can Influence How You Perform

An interesting article in the Sloan Management Review discusses a paper that shows what you wear can influence how you perform.
New research suggests that clothing can have an effect on our behavior if that clothing has a symbolic meaning and if we have the physical experience of wearing the clothes. 
Three experiments showed that knowing that you are wearing a doctor's coat actually improved performance:
 In the first experiment, the researchers found that wearing a lab coat identified as a doctor’s coat did, in fact, increase subjects’ selective attention. In the second experiment, they found that people who wore the same coat but were told it was a painter’s coat did not have increased attention. And in the third experiment, they found that just looking at a doctor’s coat did not increase attention.
Here is the link to the research paper.

Apr 17, 2012

Update on Sony's Future Plans

Two months ago, Sony's president to-be had announced his plan to turn Sony around. Now, the new President has actually reconfirmed his plans and provided a few more details (Sony CEO wields ax, sets turnaround targets):
via engadget

Apr 13, 2012

Toyota aims to spice up cars with new development methods

We have discussed Toyota's R&D management processes extensively (here and here). You might also remember Toyota's recalls and problems a couple of years ago.  Toyota's president (Mr. Toyoda) had announced that he would beef up the quality control processes to address these problems.  In fact, Toyota did announce an increased cycle of quality control (see Devil's Advocate Policy).  We had discussed that the root cause of Toyota's problems was increased system complexity, and that increased quality control would not be able to address underlying problems. This analysis was later validated by others. Now Toyota is talking about changing their R&D processes (See Toyota aims to spice up cars with new development methods)
image from engadget

Apr 10, 2012

Vertical Integration Works for Apple -- But It Won’t for Everyone

An interesting article from Knowledge@Wharton has good info for R&D managers Vertical Integration Works for Apple -- But It Won’t for Everyone. Apple's success with iPhone has increased the emphasis on vertical integration - controlling most parts of the value chain to the consumer:
"Vertical integration dictates that one company controls the end product as well as its component parts. In technology, Apple for 35 years has championed a vertical model, which features an integrated hardware and software approach. For instance, the iPhone and iPad have hardware and software designed by Apple, which also designed its own processors for the devices. This integration has allowed Apple to set the pace for mobile computing. "Despite the benefits of specialization, it can make sense to have everything under one roof," says Wharton management professor David Hsu."

Apr 8, 2012

Does the compensation plan provide the right incentives?

Incentives are key to driving R&D manager behavior.  We have often discussed different approaches to improve financial incentives. A new article from McKinsey Quarterly has a unique take on how to evaluate compensations plans (Does the CEO compensation plan provide the right incentives?).  The premise is that in addition to the remuneration for the current year, the accumulated wealth from the entire tenure drives executive behavior.
Boards, shareholders, and journalists often look at a chief executive’s annual compensation plan to determine whether the company is offering the right incentives to increase shareholder value. But few consider another key question: how does the compensation that the CEO has already received over the years in the form of stock and stock options influence managerial decision making?