Innovation and Location: They Go Together!

After years of sending manfuacturing to offshore facilities, America has realized that it’s damaged our economy. As US factories close, millions of jobs were lost and many workers were not able to find other sources of work. The trade deficit ballooned and it may have reduced our innovative edge. Indeed, President Trump campaigned on a platform to bring jobs back to America and won the election.

Gary Pisano  and Willy Shich, in “Producing Prosperity: Why American Needs a Manufacturing Renaissance”,  suggest that another key benefit of moving some manufacturing back to the United States is to revitalize innovation.

Theses Harvard businness professors, argue that when a company loses it’s capability to manufacture, it also loses the ability to innovate and compete. “ Instead of job creation, we believe that the central objective of a national manufacturing strategy should be keeping America’s innovation capabilities healthy, because innovation drives productivity and productivity drives wages.”

Pisano notes that the trend to deindustrialize the US started with the globablization of supply chains. Companies thought they could move manufacturing elsewhere to be cost-competitive, yet keep design (innovation) here.  Solar power technologies offer an example. While solar cells (Photovoltaic (PV) cells) were first invented in the United States in 2012, only 3% of PV production was based in the US and Canada; 81% is Asia, with China and Taiwan leading the market.  “Once you lose the capabilities, you can bring them back, but the level of investment, activation energy to bring back is higher”, says Pisano.

Indeed, Shih discovered this first hand while working with Kodak. “ Because of earlier decisions to outsource camera manufacturing and consumer electronics assembly to Asia, the innovative capability no longer existed in the United States.” Today’s “endangered species” of American industries include semiconductors and rechargeable batteries.

Andrew Liveris, Chairman and CEO of Dow Chemical, notes “without a vibrant manufacturing secor, R&D will be done not by the US but by its major competitors. Over time, that will leave America dependent on intellectual property that’s created by other countries; American’s ability to generate its own growth will atrophy.” (Make it in America: the Case for Re-Investing the Economy by Liveris.)

Two companies that appear to be aware of this great risk include Intel, which controls the manufacturing of its proprietary process for making chips, and Corning, which maintains leadership in all its business, including Gorilla Glass, a very thin, damage-resistance glass display for mobile devices.

The authors make a second important point: that distance matters in certain industries. For example, biotechnology and life sciences are mainly clustered in Boston, San Francisco and San Diego. Semiconductor manufacturing is amassed in Taiwan, South Korea, Singapore, Shanghai and Beijing. High-end shoe producers are located in the south of Venice, Italy. Hi-tech and Venture Capital grew in Silicon Valley; the auto industry grew in Detroit, Michigan. Why?  Because these industries form “industrial commons” that operate within an “ecosystem” and share know-how and capabilities. To stay innovate, they stay close to one-another, so there are frequent interactions between workers, companies, suppliers, universities, etc. This also permit these companies to cultivate a workforce to meet expanding workforce demands in these industries, through apprenticeship and internships.

In sum, innovation is fueled by close contact and communication – not by distributing parts of the process to the four corners of the world. We must facilitate the development of ecosystems for design, innovation, teaching , manufacturing, etc. of critical industries so jobs which will enable people to stay creative and innovate new solutions for delivering superior products.

What do you think?  Share examples!

Is Recruitment Part of Your Innovation Strategy?

Most of the time, people who embrace innovation is focus on the structural and cultural context of the company and how supports a strategy of innovation. For instance, many companies choose to take the team responsible for building a disruptive innovation and locate them elsewhere (It’s often referred to as the “skunk-works” group.)

 But we should go back a step – are we hiring people who embrace innovation? When we interview candidates are we looking for risk takers and entrepreneurs, people who thrive on a diverse set of experiences and interests? Or are we looking for people who are focused on their area of competence, attended top schools in that area and done very well and have some experience in that arena.

As an executive coach and consultant, I increasingly am encouraging executives to ask whether they’re looking for people who could become future leaders or not. If they are seeking the former, they need to investigate the person’s diversity of interests, experience with creativity and respect for innovation.  Standard job competencies like teamwork and collaboration, make them good workers – but may not be indicators of leadership skills which will encourage risk taking,

All too often, executives tell me they are considering merging or acquiring another firm in order to internalize more innovative energies. While inorganic approaches are good, better still is to do so organically. How do you recruit for your innovation strategy? Share some of your best practices.

Mindset: What’s Your Perspective?

Several months ago, I wrote a blog about the difference between Growth and Fixed Mindsets, as described by Carol Dweck in her excellent book, Mindset: the New Psychology of Success. After several studies, especially one in which subjects were asked to solve a difficult problem, people with a growth mindset believed, despite failing the first time that they could solve it by improving their strategy. Indeed, despite the fact that the problem was originally designed to be too difficult to solve, some actually did!  In contrast, after similarly failing, people with a fixed mindset believed that they would not be able to solve the problem by denigrating their abilities (e.g., I’m not very smart, I have a bad memory, I’m no good at these things.)  In other words, as Matthew Syed notes in Black Box Thinking, people with a growth Mindset see mistakes as their friends, spurring them to learn more and try new things.  Indeed, to use Angela Duckworth’s framework of grit (see Grit: The Power and Passion of Perseverance, people with grit have a growth mindset, which is why they persevere.

As you know, I work with lots of people, especially CEOs and other leaders, and recently someone recommend that I read Leadership and Self-Deception: Getting Out of the Box, by the Arbinger Institute. It too, speaks of contrasting mindsets – but attaches a different meaning to mindset. Arbinger is not focused on self-belief concerning internal capabilities versus external circumstances, but how people view other people with whom they connect such as co-workers, family, friends, etc.  When people have an inward mindset, they are self-focused – seeing others as objects or tools to be used for their own purpose. So you might get very angry when someone inconveniences you by coming late.

In contrast, with an outward mindset, we connect with people and others-inclusive way – seeing people who matter like we view ourselves. We show equal respect by understanding why the person was late, knowing it could happen for lots of reasons that might be beyond the person’s control.  Another example: When you do something you think is nice for others, are you doing it because it’s something you want to do or something they want done for them?

So the implications of the inward-outward dichotomy are completely different. Its focus is on understanding why people are more likely to work together collaboratively and productively with others: they have an outward-focused rather than self-focused mindset. Indeed, whatever one’s self-belief (growth or fixed), our performance with other depends on how we see and respond to others!

Try using these two different mindset perspectives to understand you and your interactions with others. Then, with us share the insights you gained about yourself and how these tools help you!

The Human Side of Automation

In the short run, the automation of physical and knowledge work advances, many jobs will be redefined to permit and encourage human creativity and innovation. Are we up to the challenge?

Watching IBM’s Watson, Rethink Robotics’ Baxter, Google’s driverless car, automated check-in kiosks and automated passport control processes at airports, and aircrafts’ autopilots guiding the majority of the flight, and you realize the potential of artificial intelligence and advanced robotics to perform tasks once reserved for thinking humans.  In a McKinsey study, the authors recognized that our focus, in the short run shouldn’t be on occupations but on specific activities that are replaceable.  For instance, they estimate that activities consuming more than 20% of a CEO’s working time can be automated using current technologies. These include analyzing reports and date to inform operational decisions, preparing staff assignments and reviewing status reports. As technologies improve, the percentage will grow.

Thus, as we progress, we should increase our focus on core human experience – creativity and sensing emotions – which are more difficult to automate. They estimate that only 4% of work across the US economy requires creativity at a median human level of performance; the comparable number is 29% when it comes to sensing emotion.  While these estimates reflect on the impoverished nature of our work lives, they also suggest the potential to generate a greater amount of meaningful work, as people reduce their level of routine and repetitive tasks.

One example that is beginning to take place: financial advisors might spend less time analyzing the data underlying clients’ financial situations and spend more time understanding their future needs and develop and explain creative options. Similarly, interior designers could spend less time taking measurements, developing illustrations, ordering materials, etc., and spend more time developing innovative design concepts based on clients’ desires.

Think about your job. How much of it can eventually be replaced by smart machines? What could you that would be more meaningful – to you, the organization and the customers – with that extra time?  If you come to the same conclusion that you can increasingly be freed up for more creative and meaningful activities, maybe it’s time to focus on “humanizing” the workplace!

What are your experiences now?  What do you think the future can bring with it? How do you plan to get “from here to there”?  Share with us.

Drive the Longevity Economy

Today, 60 million Americans are 60+ years old; every day for the next 14 years, 10,000 people turn 65. By 2030, 20% of our country will be 65 years of age or older. In 1935, when Social Security was introduced, life expectancy was 61.7; current average life span is mid-80s; the fastest growing segment is people 100+. Then, 17 workers were supporting each beneficiary; by 2035, the ratio drops to 2:1.

As we live longer, stay healthier and have greater financial resources than prior generations, we have the opportunity to create a longevity economy in which new products and services can be developed, marketing and consumed to meet the growing needs of adults living to 100+. Indeed, probably half of the products and services used by this audience in 2050 haven’t even been developed.

As Paul Irving notes in The Upside of Aging, we can take advantage of the opportunities by understanding the trends and being creative. Indeed, it’s heartening to know that older adults outnumber millennials as entrepreneurs (e.g., Kauffman Foundation) and that several organizations are focused on helping people of all ages develop the new products.

To stimulate your thoughts, here are some categories to consider:

  • Technology
    • Robots to help around the house, with travel and provide company
    • Exoskeletal equipment and driverless cars to provide greater mobility
    • Smart clothing to adjust to temperatures
  • Healthcare
    • Telemedicine for diagnosis and treatment
    • Micro-sensors to boost eyesight, hearing and neurosensory functioning
    • Human Biomarkers using genomics
  • Antiaging, human enhancement
    • Nutraceuticals to fight aging and increase energy
    • Cosmeceuticals to keep skin and hair youthful longer
    • Brain enhancement supplements and hormones
  • Financial services
    • Longevity insurance
    • Robo-advisors for wealth preservation
  • Lifestyle Support
    • Lifelong learning alternatives
    • Specialty services for travel, entertainment
  • Housing Alternatives
    • Progressive living improvements
    • Ergonomic home supports
  • Work Improvements
    • Virtual work-settings, flexible schedules
    • Age-friendly work-ergonomics

So, find your innovative passions and either become an entrepreneur or an investor, and help create the future!

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