Perspective # 24 – Web 2.0 Innovations

Web 2.0 Innovations: For enterprises great innovation opportunities await for exploiting the new ‘rich’ Internet, which is branded as Web 2.0 and 3.0. Remember and compare those good old static yahoo pages (web 1.0) and yahoo today (web 2.0) which is much more engaging. Web 2.0 is many things to many people. For many of us it is social networks like Myspace or Facebook or Twitter the microblogging service .. for some it is Wikipedia, the free encyclopedia that anyone can edit or Second Life the 3-D virtual world entirely owned by its residents or Flickr online photo management tool or…. The list goes on! Nevertheless the business impact is profound – watch this youtube video in which the gurus like Bill Gates discuss The Impact of Web 2.0 at the Davos Annual Meeting 2007.

Organizations across the globe are trying to leverage the ‘new Internet’ to better serve their customers and improve productivity. Yes - it is not just the Facebook kids or Secondlife avatars but even nano scientists are using Web 2.0 . nanoHUB, the science gateway for nano-science and nanotechnology housed at Purdue University is an example. The Web site is a required bookmark for people who get excited about stuff like algorithms, carbon nanotubes, nanoelectronics and quantum dots. Michael McLennan, a senior researcher says “ the secret sauce of nanoHUB is a software application that is between the supercomputers at national research facilities that power the site and the Web interface. This "middleware," named Maxwell's Daemon, also finds available computing resources on national science grids and sends job requests to those computers faster than the blink of an eye.”

Innovations also await those who leverage mashups. A mashup (which may get replaced by semantic web later) is a web-based application that combines two or more different applications into a single view. For example do you want to know who speaks better –McCain, Clinton or Obama? Check this Speech Mashup. You don’t need to be a nerd to create mashups – just see how simple and easy it is to create this vacation request application mashup.

And behold. We are seeing just the beginning – ‘Rich Internet Applications’ a.k.a Web 2.0 plus ‘Cloud Computing’ plus ‘Software as a Service’ plus ‘Telepresence’ the high-definition video conferencing system will transform our business landscape. No – This is not a bubble like we had in the past as today there are strong business drivers like co-creation and prosumers who produce and consume – also Web 2.0 is not built on vanilla HTML ..now we have solid tools and technologies like Flash, Flex, AJAX, Folksonomies, Microformats, REST, XML, JSO, XHTML, RSS, Atom, Wikis, WebTop, Ruby on Rails etc.

This year Arcelor Mittal is going to host their annual shareholder meeting in the second life virtual world. The website says, “To access the ArcelorMittal virtual meeting centre, please ensure that Second Life is installed on your computer and that you have an avatar.” ☺ note this is a brick n mortar steel company..Julien Onillon, the head of investor relations gets excited and tells Wall Street Journal, “At a real shareholders event, people come for drinking and not for the event. We want people who are really interested to attend the event. Though anybody can attend the meet, security will be tight. Though there won't be any bouncers if a guy starts to get naked and says bad things to Mr. Mittal, he will be kicked out” and then the profound punch line “We’re going to be touching a population that has never been touched” They also plan to legitimize the virtual Linden Dollars with which you can buy real Arcelor shares! Geddit? The writing on the wall is clear – endless innovation possibilities!!

Perspective # 23 – Look around and leverage!!!

Look around and leverage!!! : It is not necessary to create something ‘new’ when you can ‘leverage’ what we have already. The key is to connect (or visualize) the business need with existing innovations. Steve Jobs once saw a crude demo of worlds first GUI at Xerox PARC Labs and he was able to ‘visualize’ the potential and was the driver for Apple’s famous UI …Which in turn gave ‘inspiration’ to Windows.

Every quarter Apple sells 10 million iPods whereas Sony, Microsoft Zune, Creative etc. languish – interestingly there were many MP3 players in the market before iPod but they never caught fire like iPod.

Sometimes ‘novel’ innovations can be detrimental! In fact the study of Brian Uzzi, professor at the Kellogg proves that truly novel products have a very high failure rate. It is not just products - the same applies to business model innovation also. Overture invented the ‘paid search’ business model innovation but it was Google who made Billions by executing better. Net net ---- Look around and leverage!!!

Perspective # 22 – Strategic Innovation

Strategic Innovation: Vijay Govindarajan and Chris Trimble, professors at Tuck School of Business at Dartmouth College introduce the concept of Strategic Innovation in the book Ten Rules for Strategic Innovators: From Idea to Execution. 'Strategic Innovation' as per these gurus is different from product innovation, process innovation, value innovation, service innovation or business model innovation. Strategic innovation is an experiment usually done by well-established organizations involving a sizable investment in an unfamiliar new business that may take years to produce a profit. The book includes case studies of some of the companies who ventured into this space - New York Times Digital, Corning Microarray Technologies, Hasbro Interactive, Capston-White and Analog Devices.

Their research explains how some firms are able to execute the big idea they had and how to build a new cash cow while sustaining the bread and butter existing business. The authors explain the three challenges (a: The need to 'forget' the parent company success recipe b: 'Borrow' some assets of the parent, such as brand, manufacturing etc. c: 'learning' on how to succeed in a new environment) The Key message is as fol. "The core competencies and routines you have developed to succeed allow you to innovate in an incremental way around the current business But, those same competencies and routines will hamstring entrepreneurial efforts in new businesses. If NewCo cannot forget the old, then it will have trouble learning the new.” and this means rewiring the organizational DNA across four areas: staffing, structure, systems, and culture.

Tough job indeed..Considering the shorter CEO life spans and the danger of missing the quarterly earnings estimates! Reminds of the famous Jonathan Swift quote "He was a bold man that first ate an oyster." Yes, it needs lots of courage and boldness to do a strategic innovation experiment, but it is worth it.