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April 24, 2009

Postcards: From the pinnacles of power by Fortune editor at large Patricia Sellers

Filed under: News — hypeplug @ 4:09 am

From the pinnacles of power by Fortune editor at large Patricia Sellers

April 23, 2009. 12:57 PM

How to innovate in turbulent times

by Doreen Lorenzo, President of frog design

The firm where I work, frog design, helps Fortune 500 clients like General Electric (GE), Hewlett-Packard (HPQ), and Microsoft (MSFT) stay innovative. Innovating is never easy, but it’s really challenging when times are tough. Former Starbucks (SBUX) CEO Jim Donald makes a good suggestion in his recent guest post about managing through a crisis: Turn to your best people for ideas.

At frog, that’s exactly what we do. In the spirit of reaching out to our best people, I asked some of our top clients to share their ideas for innovating in difficult times:

Collaborate. “In a downturn, innovation is an imperative, not an option,” says David Christopher, AT&T’s (T) chief marketing officer. AT&T convenes teams of diverse people — engineers, marketers, sales reps, financial analysts — to stretch high-potential talent beyond their usual scope.

HP similarly pushes collaboration.”We have a rotation program where individuals in our labs and our strategy and marketing functions can work on special projects outside their areas,” says HP CMO Michael Mendenhall. And at Cisco (CSCO), a program called Idea Zone Wiki, or iZone, brings together people across the company to discuss new-product opportunities. iZone has evolved into an innovation breeding ground. Members post new-product ideas and business cases to a community forum; the forum decides which ideas are viable. “In one year, we had hundreds of product ideas submitted, ” says Sheila Jordan, Cisco’s VP of communications and collaboration IT. “Several have resulted in the development of actual products.”

Fish for ideas. LittleMissMatched is a quirky fashion brand for girls. Co-founder and CEO Jonah Staw began with socks and now sells a variety of products, from books to bedding to furniture. He and his team at the New York-based company offer employees lots of opportunities to contribute ideas. There are weekly open discussion forums and thrice weekly snack times and an Idea Jar in the lobby. Anyone walking by can drop an idea into the Idea Jar. The ideas are reviewed at a monthly Innovation Meeting.

Somebody on LittleMissMatched’s customer service team suggested the Socktop hair band. “She was always cutting the tops off of our sample socks and making hair bands out of them,” explains Staw. “So she put the idea in the jar. Now we offer the product. Innovation comes from everyone in the company and we do everything we can to harness it.”

Reward ingenuity. “Rewarding people solely for return on investment won’t encourage them to develop long-term projects,” says Mike Linton, former CMO at Best Buy and eBay. You have to create an environment that rewards employees for trying something new. So, Linton advises: “Don’t put an ROI demand on Ben Franklin’s kite — or you won’t discover electricity.” The best innovators, he adds, give employees a chance to put their idea into the market or test it in some other way. “Then they can have a real idea of its impact,” he says.

Give your people a stage to act. At frog, one of our most recent and most successful efforts is our own media channel, called design mind. Employees write blogs and articles, speak at events, create videos, and come up with concepts related to technology, design and innovation.

One example of design mind at work: Ashley Menger, a designer in our Austin studio, wanted to live without a garbage can for two weeks to see exactly how much trash she produced. We encouraged her to chronicle her experiences, so she wrote a blog called Trash Talk. Inspired by Ashley, frogs from our studios around the world decided to take on the challenge, two weeks at a time. Witnessing this grassroots enthusiasm for greener thinking, we established a broader initiative called frogware. We dedicated $1 million in otherwise billable time to design teams across our global studios, and they produced several high profile concepts. One is the frog LED light bulb, which got media coverage and has helped us recruit clients who might not be aware of our “green” expertise.

So listen to your own people. Sometimes the best ideas are right in front of you — and maybe priceless.

Doreen Lorenzo is president of frog design, a 40-year-old global innovation firm based in San Francisco. She operates out of Austin, Texas.

April 22, 2009. 7:24 PM

Power Point: If you build it, they will come

“It could well be that we are witnesses to the birth of yet another Apple ecosystem.”

– Sanford Bernstein analyst Craig Moffett in the New York Times Wednesday. After the bell, Apple (AAPL) reported a 15% jump in second-quarter net income to $1.21 billion. Sales of the iPhone surged 123% over the last quarter, with 3.79 million units sold.

“The iPhone has quieted any skeptics who thought this was a one-time event and for only the Apple enthusiasts,” Moffett said. “The iPhone App Store is creating a self-sustaining competitive advantage for Apple.” The iPhone’s success offset a 3% drop in Macintosh computer sales–the first decline in five years. The stock was up 3% in after-hours trading to $125.08.

Meanwhile AT&T (T), the iPhone’s exclusive U.S. carrier, announced a 9.7% profit decline. But that beat expectations, and the stock rise slightly. –Jessica Shambora

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