IN THIS ISSUE:

• Letter From Sarah
• Feature Article - Ready, Aim, Reset: Linking Innovation Teams to Your Business Model
• Out of the Box
• Events and Resources
• The Edison Awards
• About Sarah Caldicott

www.powerpatterns.com

Dear Innovator:

This past weekend I hit a major life milestone: I became an Empty Nester. Connor, the second of my two children, starts a whole new chapter in his life this week as a freshman at Indiana University. As excited as I am for Connor, any parent who has been through this dramatic shift knows that no amount of mental preparation really gets you through these changes quickly. You can't "logic" it away...you have to actually grind through it. So these last several days - in addition to eating lots of chocolate cake - I've been "resetting" my outlook, my priorities, my energies.

"Resetting" is a crucial skill for every innovator. Edison continually reset his goals, rapidly forming new ones when others had been achieved. He even reset his work environment from time to time. These shifts were always done with the intention of creating new pathways for innovation.

Sarah in Dearborn, Michigan at The Henry Ford with President Patricia Mooradian. (www.thehenryford.org)

In July, GE CEO Jeffrey Immelt, posted a letter to shareholders stating that he believes we're now in The Reset Economy. As we climb out of this recession, he states that a key priority for every employee and every organization is to reset mindsets, business models, strategy development, team structures, and more. (Click here for my recent blog post on this subject.)

Cisco is actually in the process of resetting its entire company right now. This month's feature article describes how Cisco is resetting its team structures and making team design an intrinsic part of its new business model. This strategic reset is allowing the company to pursue more innovation opportunities than ever before. Learn why linking team design to business model structure was crucial to Edison's success, is guiding Cisco's success, and how it can become key to your success starting now.

Members of the Continuous Quality Improvement Network (CQIN) had a chance to reset their innovation strategies during a 3-day Summer Institute I led last month in Dearborn, MI. One afternoon, 225 CQIN attendees toured the Menlo Park Laboratory at The Henry Ford, a beautiful 250 acre facility dedicated to American ingenuity, resourcefulness, and innovation. To learn how Edison's Menlo Park lab got from New Jersey to Michigan, check out this month's Edison Awards segment. Above is a photo taken on The Henry Ford campus with Patricia Mooradian, its dynamic President, who has recently initiated numerous innovation-related programs campus-wide.

For a real reset, in this month's Out Of The Box segment, read how you can begin activating higher thought processes in your brain by daydreaming more! So now, instead of discouraging your school-age children from daydreaming - you can join them!

To your innovation success,

PS: Please share this newsletter with a co-worker or a friend!

Feature Article - Ready, Aim, Reset: Linking Innovation Teams to Your Business Model

(click here to view past newsletter issues)

In the past several months, it's been hard to pick up a magazine, newspaper, or scan a blog without reading about "reinventing your company" or "reinventing yourself." Everyone is keen to discover new pathways to the future now that so many familiar economic landmarks have either been turned upside down, or have disappeared entirely.

In this unique economic climate, GE CEO Jeffrey Immelt's new phrase, "the Reset Economy" - which he coined in July - has gained some traction in Business Week, Fortune, and the Wall Street Journal. Immelt uses this term as a descriptor for the process shifts and mindset adjustments organizations must employ to refashion their go-to-market strategies, their approach to innovation, and their internal structures if they hope to recover effectively in this new environment.

In the August 6th issue of the Wall Street Journal, I read an article on Cisco which I believe exemplifies the kinds of changes Immelt is urging. Cisco CEO John Chambers is adopting a company design which, in key facets, echoes the types of flexible structures that enabled Edison to be so successful as an innovator for 62 years. In essence, Cisco is resetting its entire innovation approach to meet new market demands, and is linking team design to its new business model.

Cisco Resetting for New 21st Century Innovation Demands
In the June issue of Edison's Notebook I talked about "innovation force multipliers" Edison used to expand the innovation power of his key internal resources. Edison's use of small, multi-disciplinary teams represents another force multiplier which I will highlight in this article.

Shifting your organization's team design is one of the most powerful steps you can take to begin innovating faster. Through multi-disciplinary teams, Edison uniquely harnessed the intellectual and creative power of his employees, and drew cutting edge thinking from each one. Instead of having all chemists or all mathematicians on a team, he mixed the chemists and mathematicians together with the physicists and machinists. He then banded employees of diverse experience levels together in clusters of 2 to 8 people, and gave them the latitude to discover new insights that would either create new markets or improve existing products. This approach to multi-disciplinary teams was baked into Edison's business model. Without these team structures Edison's operating culture would have collapsed, and key discoveries would have been lost.

Cisco is undertaking a radical team design shift right now. I first learned of these changes at the World Innovation Forum in May 2009 in a speech given by Ms. Padmasree Warrior, CTO of Cisco. (Warrior was formerly CTO of Motorola.) She described how the current economic turbulence "will lead to new lifestyles" and new corporate structures. Specifically, she indicated:

• Traditional management models have to be adapted for 21st century innovation needs
• Operational excellence and innovation will need to go hand-in-hand
• Customer engagement models must withstand marketplace unpredictability and uncertainty
• Divisional silos will need to become boundary-less operations in order to drive innovation.

Sounds like resetting to me!

Cisco Remaps Its Team Structures to Drive Innovation
Below is an actual map of the team structures Cisco has begun using. (Note: This image is drawn from the Wall Street Journal article referenced earlier, and is an image developed by Cisco.)

The first step Cisco took in resetting its ability to innovate was to allow teams of individuals from anywhere in its global operations to free-form. Known as "Working Groups," employees can collaborate in whatever configuration they desire to forward an idea. Typically, Working Groups range in size from 2 to 10 people...which fits with the team size that Edison most often used, and also follows Management Science best practices for team size when new business ideas are first being concretized.

Next, from the Working Groups, ideas are presented to a Board, which consists (on average) of 14 people from diverse disciplines. A maximum of 2 Board members are either Senior Vice Presidents or Vice Presidents...so most of the Board consist of individuals with real market knowledge, real operating knowledge, or real hands-on customer knowledge.

If Working Group ideas pass muster with the Board, they are given one last review step by a Council (also 14 people each) before going to the Executive Operating Committee (15 people plus CEO John Chambers) for final review.

Doing the math, this means that roughly 850 members of Cisco's global management body are involved in decision-making or review of innovation-oriented ideas forwarded by the Working Groups. Although 850 is a relatively small number when viewed across the landscape of Cisco's global operations, it's a bigger number than existed in 2008, and it's a first step that allows rapid response and closer geographic access to where the ideas originated. Chambers states he will be expanding the number of key managers involved in his innovation Reset to 3000 in the coming years.

Advantages to Cisco: Speed, Diverse Thinking, More Markets, Gen Y Friendly
I see 4 key advantages to the resetting exercise Cisco is undertaking. First, Cisco has already realized that the Industrial Age 'Command and Control' structure requiring vertical communication across management teams will not be fast enough to respond to rapidly changing markets. Although its emerging system is not perfect - and Cisco will be the first to admit this - they are learning how to communicate horizontally instead of vertically. As they grease the skids further in this new pattern, Cisco will remap its internal corporate DNA. Edison's laboratory and manufacturing operations had few management layers, and encouraged horizontal communication versus vertical communication.

Second, Cisco is drawing upon a broader cross-section of its employee base in gathering new business ideas. Working Groups are formed around emerging market and customer needs and trend patterns that keep Cisco close to customers, and foster diverse thinking. Warrior stated in her May 2009 speech that innovation at Cisco is..."managed through Councils and Boards which are cross-functional, cross-geography, and cross-company." This diversity approach also aligns with Edison's practices.

Third, Cisco's Reset allows the company to go after more markets, and lower its revenue threshold for what constitutes a "viable" market to enter. Already, Cisco is in 24 market segments, and Chambers wants to expand this to 50. If Cisco can truly develop the nerve centers necessary to service this many market segments, it has potential to win the long term revenue and profit game; it will have more income streams to offset the buffeting effects of "market unpredictability" described earlier.

And fourth, Cisco is creating the kind of company that Millennials and Gen Y employees love to work for. As Warrior indicated in her May 2009 speech, the future model of innovation is one where "clusters of experts come together in a fluid manner to work on a project, and once they achieve a shared outcome they disband...(Millennials) bring an intuitive understanding of how to share ideas and how to communicate using tools that are multi-media, multi-modal, and synchronous." This means Cisco will attract the best talent; it is already winning the talent battle against Microsoft in this regard. As Edison would attest, there's nothing like having people lining up to work for you.

What You Can Do Starting Now - Resetting for Innovation
Here are three steps you can take starting right now which will begin to realign your organization with Edison's own multi-disciplinary team approach, and put you in Innovation Reset mode:

1. Take stock of your current operating teams and innovation teams: How many teams are responsible for driving innovation today in your organization? Are they all clustered in one discipline, such as Engineering, Marketing, or R&D? If so, consider recombining personnel to achieve a broader, multi-disciplinary approach that widens the thinking that goes into your innovation efforts. Look at how Cisco has created self-forming Working Groups and consider this as another option. Use wikis, internal blogs, and other even social media technologies to keep new Working Groups in touch.
   
   
2. Identify innovation champions in your organization who have leadership skills: This step is where many firms fall off the map. It is not enough to want to be innovative; you must also cultivate leaders who have an innovation mindset, and who can effectively communicate with multiple levels of your organization. If you cannot identify more than a handful of individuals who qualify to be innovation champions, put grooming innovation leaders into your 2010 strategic plan and take action now. It will take Cisco years to accomplish this Reset, and it will require years for you, too.
   
   
3. Look at a map of your organization's structure and see where there are silos that need breaking: Cisco has wisely decided that silos (operating units that don't play well with others) represent an Industrial Age structure that will hold it back in the 21st century. If you have division heads or operating leaders who do not advocate cross-disciplinary thinking, they need to be phased out or Reset. Indeed, ask yourself if you have a cross-disciplinary mindset. If not, why not? Do your annual objectives incentivize cross-disciplinary cooperation? Read up on how 3M and other leading innovation-driven organizations develops their annual objectives to incentivize exchange between divisions. Incentivize your organization to Reset!

In the next issue: Waging Disruptive Innovation

Out of the Box

Resetting Your Brain to "Daydream" Lights Up Your Innovation Neural Networks

Remember the scolding handed out by your grade school teacher when you were caught aimlessly daydreaming in class?

Well, here's a shocker for you...

I was surprised to read in a weekly newsletter from colleague Steve Goldberg that a recent study conducted at the University of British Columbia (UBC) suggests daydreaming actually provides powerful mental stimuli to the mind.

In fact, daydreaming lights up both sides of the brain in multiple areas (see photo below), contributing to information exchange between the left and right hemispheres - a valuable outcome if you're problem-solving, trying to generate creative ideas, or innovating.

During daydreaming, it also appears that the human brain engages a wider number of thought centers than previously believed. The UBC study showed that the "executive network" of the brain - which commands high-level, complex problem-solving - is actually quite active during daydreaming episodes.

So, rather than giving a hall pass to our Ferris Bueller impulses and skip out when things get boring, we should simply allocate time each day to allowing our minds to wander...an intriguing way to "reset" your thought patterns!

Image at left taken from UBC's 'Mind Wandering Study', April 2009. Lighted areas show brain activity while subjects are engaged in day dreaming.

Note: My colleague Steve Goldberg is an executive coach and consultant who commutes between Delray Beach, Florida and Vancouver, Canada.  His newsletter can be found at www.upsidetothedownturn.com.

Events and Resources

The Edison Awards
Dedicated to America's Innovation Competitiveness in the 21st Century

Where Is Edison's Menlo Park Laboratory Located?

Test your Edison knowledge! Here's a quick 3-question Edison quiz that I put together for a conference this summer. Only 6 people in the audience answered all three questions correctly...see how you do! (Note: The picture below is related to one of the answers...) Correct responses are shown at the end of the article.

Where was Thomas Edison born?

Sarah with Dr. Paul Israel, world's leading expert on Thomas Edison and Edison Awards Steering Committee member, at the Menlo Park Laboratory in Dearborn, MI. Sarah and Paul are standing in front of a case housing the Edison Electric Pen & Press.

1. Louisville, KY
2. Menlo Park, NJ
3. Milan, OH
4. Port Huron, MI

How long did Thomas Edison attend traditional school?

1. 10 years
2. 6 years
3. 4 years
4. 90 days

Which industry listed below was NOT invented by Thomas Edison?

1. Document Duplication
2. Air Conditioning
3. Electrical Power
4. Recorded Sound does.

Remember the popular grade school joke, "Who is buried in Grant's tomb?" Well, consider a similar tongue-in-cheek question: "Where is Thomas Edison's Menlo Park Laboratory located?"

Most of us would probably reply that Edison's storied lab is still located on the site where he built it...in Menlo Park, NJ. But in fact, the Menlo Park Laboratory is now located in Dearborn, MI! How did it get there?

In 1928, close friend and fellow inventor Henry Ford moved Edison's Menlo Park Laboratory board-by-board via train to a new compound he was building near his automobile operations in Dearborn. He called this new compound The Edison Institute.

Ford intended The Edison Institute to be a uniquely American representation of ingenuity, progress, resourcefulness, and innovation. Edison's Menlo Park Laboratory received the distinct honor of being the first building Ford purchased and brought to Dearborn.

Edison visited the reconstructed Menlo Park lab in Dearborn in October 1929 for the 50th anniversary celebration of his invention of the incandescent electric light. In fact, as part of the celebration, Edison - 82 years old at the time - reenacted the experiment which led to his invention. (The famed "life test" is described in the first several paragraphs of Innovate Like Edison.) Edison was pleased to see the fine job Ford had done restoring the laboratory. He then commented, "The only thing is, Henry, it's too clean."

Today, The Edison Institute is more commonly known as The Henry Ford. The Menlo Park lab welcomes millions of visitors each year from all over the world. If you haven't seen it, make plans to go with your family!

Quiz answers:

1) B

2) D

3) B

About Sarah Caldicott

Sarah Miller Caldicott is a great grandniece of Thomas Edison, a 25-year marketing veteran, and co-author of "Innovate Like Edison: The Five-Step System for Breakthrough Business Success." She has assembled teams of highly experienced consultants and trainers to assist her in bringing Edison's Five Competencies of Innovation™ to organizations of all sizes. Sarah and her teams are capable of addressing business challenges from a diverse array of industries, in either a business-to-consumer or business-to-business environment.

Sarah is a dynamic and award-winning speaker, whose engaging style combines substantive business content with humor. Her invaluable experience offers an ideal resource for organizations seeking innovation success in today's rapidly integrating global marketplace.

Born and raised in the Midwest, Sarah received a BA from Wellesley College, where she was named a Wellesley College Scholar. She also holds an MBA from the Amos Tuck School of Business at Dartmouth. Sarah resides in Oak Park, Illinois, and has two teenage boys, Nicholas and Connor. For additional information on Sarah, click here.

©2009 by Sarah Miller Caldicott. All Rights Reserved.