Capturing the Asian (Innovation) Opportunity

From s+b

See Strategy+Business article

“One thing Asian companies are not reducing is their interest in innovation. (See “Profits Down, Spending Steady: The Global Innovation 1000,” by Barry Jaruzelski and Kevin Dehoff, s+b, Winter 2009.) Asia’s emerging economies, particularly India and China, are following the pattern originally set by Japan and Korea. They, too, were once known for low-cost manufacturing and mimicry of Western design. Over the years, Japanese and Korean executives deliberately built up their companies’ design and manufacturing skills and became global innovation leaders in everything from cars to mobile phones to plasma televisions. Now, the Chinese government’s five-year plan includes a similarly deliberate emphasis on creating an innovation-oriented economy. India’s innovators, although they have less government support, are active in such fields as health care, finance, agriculture, and public–private partnerships. (See “The Innovation Sandbox,” by C.K. Prahalad, s+b, Autumn 2006, and “Not Just for Profit,” by Marjorie Kelly, s+b, Spring 2009.)

Innovation is usually born of need and opportunity. And Asia has some of the greatest unmet customer markets and societal challenges in the world, with its vast rural areas, huge demands for natural resources, significant environmental problems, and aging populations. Many Asian governments will rely on private-sector innovation to help meet these challenges. For example, after paying little attention to air quality during its initial burst of industrial development, China has announced a plan to become the leading producer of hybrid and all-electric vehicles by 2012. Companies whose capabilities dovetail with this green strategy could find a lucrative welcome. Meanwhile, Toyota is developing personal-care robots that can perform housekeeping and nursing chores, which it intends to target to Japan’s growing senior citizen population. For the same reason, the Japanese pharmaceutical firm Kowa has set up a joint venture with Teva, an innovative Israeli drugmaker, to bring 200 new drugs to market by 2015. If such innovations succeed, other companies may follow.”

China pricing strategies – cash in on desperation

Last month, sudden snow falls across China caused havoc to the airline schedules and gummed up countless airports. But the smart ones don’t let that hit their profits… Here’s a case study for you MBA types (we know you just love case studies) from Xi’an Airport Coffee Shop.Large numbers of passengers arrive at the airport, after having checked out of their hotels, only to find that their flights are delayed by up to 12 hours due to the weather (thanks a lot Weather Modification Bureau).

The airlines apologise, but offer nothing in the way of compensation – not a food coupon or a hotel voucher in sight. So, the (by now resigned to their fate) passengers retire to the airport coffee shop and buy themselves a smallish cup of tepid and distasteful coffee in an attempt to keep their spirits up faced with a long wait. The coffee arrives, suitably diminutive, typically tepid and priced at RMB38 per cup. They grin and bear it – Chinese airport catering facilities are hardly the spot for bargain hunting.

After four hours of dozing and smoking, they go back to the coffee shop to try and pass another hour. They order the same tepid cup of coffee. The bill arrives – RMB58 per cup.Four hours later on and they can think of nothing else to do but return for a third cup of coffee to keep themselves awake and for something to do (it’s now ten hours since their flight should have left). They order the coffee – it’s just as small and just as tepid but this time its RMB78.

So, there you have desperation pricing in action. Keep the customer hanging around with nothing to do and within eight hours the price can more than double!!! At least one coffee shop in China is hoping for a long and very white Christmas!!

www.accessasia.co.uk

10 Steps To Getting What You Want

From Tara Stiles

1. Be YOU. There is only one YOU on this planet. Take advantage of that. You are inspiring, creative, intelligent and capable. Spending any energy trying to be like someone else is foolish.

2. Do What You Love. When doing something you love, no matter what you’d be getting paid, or think the outcome might be, not only will you enjoy yourself more, but you have a better chance of actually creating a sustainable life. Happiness is contagious.

“If opportunity doesn’t knock, build a door.” Milton Berle

3. Trust your instincts. “I feel there are two people inside of me — me and my intuition. If I go against her, she’ll screw me every time, and if I follow her, we get along quite nicely.” Kim Basinger

4. Work hard. No one is going to do the work for you.

“Hard work has made it easy. That is my secret. That is why I win. If it were easy everyone would be a champion.” Nadia Comaneci

5. Be nice to people. “Your Karma is a continuum, part of the process that is happening to you now, not something far away in future life.” – OSHO

6. Don’t listen to your critics. “If I were to try to read, much less answer, all the attacks made on me, this shop might as well be closed for any other business.” Abraham Lincoln’s words: via Ed and Deb (love this one!)

7. Be Patient. Things might not (and usually don’t) happen in the timing that you want. Patience can be your biggest asset. Cultivate it.

“If I have ever made any valuable discoveries, it has been owing more to patient attention, than to any other talent.” Isaac Newton

8. Take Care of Yourself. Your health is a responsibility that is completely in your control.

“Every human being is the author of his own health or disease.” Buddha

9. Stop Complaining. If you don’t like how something is, change it. We can’t change everything, but we can do quite a bit about our circumstances when we drop the complaints.

“Instead of complaining that the rosebush is full of thorns, be happy that the thorn bush has roses.” Proverb

10. Have Fun. If you’re not having fun then what’s the point?

“If you obey all the rules, you miss all the fun.” Katharine Hepburn

How do hammerheads see?

Hammerhead Sight

Hammerheads keep an eye on Dr. McComb, photo by S. Kajura

Hammerhead sharks are some of the most improbable looking beasts in the sea. Dr. Michelle McComb, a researcher at the Shark Lab of Florida Atlantic University in Boca Raton, has been studying how these strange beasts see. The fact that their eyes are out at the ends of their oddly shaped heads was thought to be a problem for their vision. This, Dr. McComb has discovered, is not the case. In fact, the several species of hammerheads have remarkable binocular vision, and their widely-spaced eyes give them excellent depth perception. In addition, they also have an extremely wide field of view – up to 360 degrees. What this means is that hammerheds are well equipped to see their prey – and their predators.

Listen to the interview (scroll down a little)
[cbc.ca]

Why Experimentation Matters More Than Ever

Too often, innovation centers are little more than steel and glass monuments to a company’s greatness. Needed: IT with less hubris and smarter thinking

By Kevin Bolen

“Please review the document in detail and sign if you are comfortable with the terms. Those who do not sign will not be permitted on the tour.”

I received this greeting back in 2005 as I embarked on two separate visits to the future. Although conducted months apart on separate corporate campuses halfway around the world from each other, both tours began with nearly identical lectures from rather severe individuals on the need for complete secrecy. We were about to witness tomorrow and beyond—just as soon as we read and signed a detailed lifetime confidentiality agreement in front of witnesses. Having been duly sworn in, we stepped through the looking glass.

At every predetermined stop on our tours—one at Microsoft’s (MSFT) Home of the Future and the other at Deutsche Telekom’s (DT) Future Center—we were given a chance to hear a well-rehearsed description of an engineering marvel, and see and experience these wonders for ourselves. Not clunky prototypes scattered around a lab, either. We were interacting with products and form factors that looked ready to ship, all arranged in high-gloss environments designed to show us mere mortals what the engineering gods at these two technology powerhouses were preparing to bestow on us.

Because I know those confidentiality agreements had no expiration date and because I still have nightmares about German security personnel, I will not divulge in detail what I saw those days. Rather, I will share what I didn’t see, as I feel there are far greater lessons there.

What I didn’t see on either tour was any type of experimentation. No one from the host companies even took note of our reactions. In each instance, the group consisted of approximately 20 upper-income, IT-savvy, twentysomething-to-fortysomething consumers. Given the pervasive nature of what was being displayed, and the anticipated retail price of some of the gadgets, I have to believe we made up at least a portion of the key target demographic for these “innovations.”

CORPORATE EQUALS TO ROME’S COLISEUM

Yet not one word of our comments was recorded as feedback for future design considerations. There was no debriefing after the tour to capture our reactions or ideas, just a polite thank you and a reminder about confidentiality. They didn’t want our opinions, just our awe and supplication.

The hubris on display was astounding. These were not innovation centers, they were the corporate equivalents of the Roman Coliseum, steel and glass monuments to each company’s own greatness—and eye candy for the chosen few who were permitted a glimpse into the future.

Flashing forward nearly five years, the flaw in this strategy has been exposed. Technology has migrated from a creation > channel > consumer model to a conceive <> co-design <> co-exist model. New, easy-to-use tools and social media frameworks enable people to see products not just for what they are, but for what they can become, and then help to make their vision a functioning reality.

What does this mean for the traditional technology development model? It, too, is undergoing a reimagining as the relationship between user and producer is again redefined.

In this dynamic, co-ownership world in which the customer is also the co-designer and business partner, experimentation in the IT sector takes on new meaning. It is no longer about displaying a screen shot to gauge input on a new UI layout. Rather, it’s about demonstrating a willingness to experiment in the first place and then providing a vehicle to experiment with the value proposition itself and the business model that enables it. Experimenting in the new norm of the IT industry must therefore follow three core rules:

Engage early. The market won’t wait for you to get it right. It will hack you and force the product to bend to its will. Don’t fight this, embrace it.

Apple’s (AAPL) iPhone is a strong example of this new ethos. Apple didn’t seek to conceive and perfect all the ways in which someone might want to use the iPhone. The company simply provided the development and publishing platform for others and let the market sort out which offerings were most desired. Now, the library of apps, not the phone’s core functionality—which is actually on the receiving end of a good many complaints regarding sound quality and dropped calls—otivates people’s purchase decisions and keeps the iPhone ahead of similarly designed touchscreen devices.

Treat the market as a business partner. An expanding channel is mutually beneficial. Allow others the chance to experiment with their ideas and in turn create expansive new sources of revenue for you. Google’s (GOOG) release of Maps and other functionality for use by real estate sites and others willing to display ads alongside the map is another example of rethinking the business model. Google essentially enabled others to create profitable businesses using its functionality. In so doing, the company created thousands of new distribution channels for its ads.

Don’t try to own it all. You have limits, the market does not. Define your differentiated space and allow others to sublet and improve upon the rest of the landscape.

37signals’ decision to release its homegrown development platform, Ruby on Rails, was inspired. The company proved the platform’s effectiveness on its own portfolio of apps. Knowing it would be similarly effective for all manner of Web apps, 37signals acknowledged that it would design just a fraction of these. In choosing to turn the platform loose, 37signals’ technology now serves at the heart of growing businesses such as Twitter and Hulu.

When I reflect on this new reality, I often wonder whether those innovation centers designed to showcase the way things will be are still in use today—as a reminder of the way things were in the days before IT learned to experiment.

Kevin Bolen is a senior director at the Watertown (Mass.)-based innovation consultancy, Innosight.

Shark fin traders back restrictions on hammerheads

Note: Hong Kong’s shark fin trade merchants seem to be open to restricting sales of hammerhead fins and adding the species to others like Great Whites and Whale Sharks. Still, the association’s head in Hong Kong states that he hasn’t seen any shortage! Outright falsehood. Cheung Chi-fai and Agence France-Presse Updated on Dec 02, 2009

Local shark fin merchants would not oppose restricting the international trade of the scalloped hammerhead shark, after a study found that Hong Kong consumers were the impetus behind the harvesting of sharks as far away as the western Atlantic.The study, conducted by scientists from Stony Brook University’s Institute for Ocean Conservation Science in the US, soon to be published, used DNA testing to trace shark fin samples bought in Hong Kong. It matched the DNA of 57 out of 62 samples with a genetic database of the scalloped hammerhead, and found that 21 per cent of them came from the western Atlantic. “Our work shows that the scalloped hammerhead fin trade is sourced from all over the globe, and so must be globally tracked and managed,” said the institute’s Dr Demian Chapman, a lead author of the research. The study’s forensic testing, applied on sharks for the first time, is thought to be a useful tool to prioritise areas for conservation, and ensure that sharks are not wiped out in particular regions. The findings have reinforced calls for trade restrictions for sharks threatened by overfishing for their fins and meat. The US has already proposed enlisting six shark species, including the scalloped hammerhead, with the Convention on International Trade in Endangered Species of Wild Fauna and Flora, at a meeting to be held in Doha in March. Under the convention, the great white, basking and whale sharks have already come under trade restrictions. Chiu Ching-cheung, a representative of Hong Kong shark fin merchants, said that since the scalloped hammerhead was not popular, merchants would not oppose trade restrictions. “It is not going to have much impact, as they are infrequently consumed in local banquets,” said Chiu, vice-chairman of the Shark Fin Trade Merchants Association. Chiu said that hammerhead fins mostly originated from Central or South American waters, but there were also supplies from Australia. “Its market share is less than 5 per cent, far less than the 80 per cent of the blue shark,” he said. He said he had never heard of a shortage of the species, the fins of which are sold at HK$800 to HK$2,000 per 500 grams. Dr Guillermo Moreno, head of the marine programme at WWF Hong Kong, said the study indicated that fishermen were moving farther afield for shark fin harvesting, after the stock in Asia was exhausted. “The stock of this shark species has been heavily fished in Southeast Asia, and the fishing fleets have been moving around for the remaining stock,” he said. Quoting a 2007 study by shark specialists at the International Union for Conservation of Nature, Moreno said that up to 2.7 million of three species of hammerhead sharks were killed for their fins each year. The group has asked 57 corporations and hotels to stop serving shark fin. [scmp.com]

An Obituary Of Mr. Common Sense

Found this in my email this morning from Wayne. It was attributed to a London Times article but I’ve learned it was originally from 98 from an Indianapolis newspaper. Still rings true, if not more so, today. Read on.

‘Today we mourn the passing of a beloved old friend, Common Sense, who has been with us for many years. No one knows for sure how old he was, since his birth records were long ago lost in bureaucratic red tape. He will be remembered as having cultivated such valuable lessons as: Knowing when to come in out of the rain; why the early bird gets theworm; Life isn’t always fair; and maybe it was my fault.

Common Sense lived by simple, sound financial policies (don’t spend morethan you can earn) and reliable strategies (adults, not children, are incharge). His health began to deteriorate rapidly when well-intentioned but overbearing regulations were set in place. Reports of a 6-year-old boy charged with sexual harassment for kissing a classmate; teens suspended from school for using mouthwash after lunch; and a teacher fired for reprimanding an unruly student, only worsened his condition.

Common Sense lost ground when parents attacked teachers for doing the job that they themselves had failed to do in disciplining their unruly children. It declined even further when schools were required to get parental consent to administer sun lotion or an Elastoplast to a student; but could not inform parents when a student became pregnant and wanted to have an abortion.

Common Sense lost the will to live as the Ten Commandments became contraband; churches became businesses; and criminals received better treatment than their victims.

Common Sense took a beating when you couldn’t defend yourself from a burglar in your own home and the burglar could sue you for assault. Common Sense finally gave up the will to live, after a woman failed to realize that a steaming cup of coffee was hot. She spilled a little in her lap, and was promptly awarded a huge settlement.

Common Sense was preceded in death by his parents, Truth and Trust; his wife, Discretion; his daughter, Responsibility; and his son, Reason. He is survived by his 4 stepbrothers; I Know My Rights, I Want It Now, Someone Else Is To Blame, and I’m A Victim.

Not many attended his funeral because so few realized he was gone. If you still remember him, pass this on. If not, join the majority and do nothing.

Chanel in-store online misstep

While taking a purposeful stroll through one of Hong Kong’s many shopping cathedrals, I happened upon Chanel’s use of their online presence in the store. The luxury retailers are doing this more to have easy access to the broader product set that may not all be displayed in the hyper-expensive, cramped quarters like Hong Kong. Nice presentation on all accounts, premium materials, beautiful Apple display and then, wait, what’s that?…yes the ‘other’ operating system drops the ball and disconnects the overall luxury experience. Retailers have to pay attention to the details at all times.

Hyundai-Kia Ties With Microsoft For “In-Vehicle Entertainment”

Bill Gates, after meeting with Korean President Lee, announced Microsoft will invest $100M+ in setting up the “Automotive IT Innovation Center” jointly with Hyundai-Kia Motors, the nation’s premier auto company. According to Reuters, the first product under the partnership would be a voice-controlled system linking mobile devices to car stereo systems; Later versions are expected to include multimedia and navigation-related features. In plain English: the US-bound Hyundai and Kia vehicles will soon have Microsoft-powered gadgets and interfaces inside the cars. As evidenced by Ray Ozzie’s “Mesh” plan, Microsoft is working hard on its new corporate vision to provide ubiquitous connected experience across all devices and environments, including the driver’s seat. Meanwhile, BMW has begun offering on-board internet access. Other companies like Nissan and Apple should also be looking at similar opportunities.

[From Web 2.0 Asia]

Asian Execs Pick Top 20 Most Innovative Companies

In a 22 April post, BusinessWeek columnist Bruce Nussbaum lists 20 most innovative companies as selected in a poll of Asian executives. An interesting, divergent list and series of comments, especially about why no Chinese companies made it.