Time spent in the public sector as an accidental bureaucrat has made me a keen observer of how states and countries use tax incentives to attract and retain corporate investment and jobs. I have watched companies extract mind-boggling incentives from the taxpayer simply by either moving or threatening to move jobs across state and country borders. While tax incentives may be great for corporations they make little or no sense when viewed through a community lens. Corporate tax incentive deals are a terrible use of taxpayer dollars.
Communities everywhere have lost leverage to companies who now have all the buying power. Corporations have disaggregated their business models moving capabilities around the world like chess pieces. Companies are no longer dependent on a single location and force communities to bid against each other competing on who will offer the biggest tax breaks. Communities are treated like commodities. The pricing food fight is intense and all at the taxpayer’s expense. There is no net new value created when companies move activities and jobs from one community to another. Consider Captain Morgan & The Hobbit.
My favorite example of bad tax incentive deals gone crazy is the movie industry. Community leaders and politicians fall all over themselves to bring movie productions to their localities. It must be about having pictures taken with movie stars because it isn’t about the economics of the deals the movie studios cut playing communities against each other. The going discount to attract movie production in the U.S. ranges from 30 to 40% of the total production costs in the form of tax credits that can be sold to local taxpayers. I have reviewed several of these deals and can’t begin to make economic sense out of them for anyone other than the movie studio.
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Saul Kaplan: Captain Morgan & The Hobbit
Have you ever heard someone say they want to be a polymath? Have you ever heard anyone ask, how do I become a polymath? I haven’t. The word comes from the Greek polymathes or having learned much. A polymath is a person whose expertise spans a significant number of different subject areas. When we think of polymaths we tend to think of dead scientists from another era like Aristotle and Leonardo da Vinci. Rarely do we apply the moniker in modern times. We need more polymaths. We need a generation of youth who want to be polymaths when they grow up.
It’s easy to wrap our minds around the idea of a polymath in the context of ancient eras long gone. The entire body of knowledge on earth was accessible to an elite few. Those with an exceptional mind, privileged access, and the freedom to focus on interdisciplinary study, could become polymaths. In 384 – 322 BC Aristotle studied under Plato in ancient Greece. His writings spanned many subjects including physics, metaphysics, poetry, theatre, music, logic, rhetoric, politics, government, ethics, biology and zoology. In the late 15th and early 16th century Leonardo da Vinci was a prototype of the universal genius or Renaissance man. He was a painter, sculptor, engineer, astronomer, anatomist, biologist, geologist, physicist, architect, philosopher and humanist. Where have all the polymaths gone?
Polymaths need not apply in an industrial era defined by specialization. As the entire body of knowledge exploded beyond human capacity to absorb it, silos creating manageable chunks were inevitable. Each silo represents an opportunity to develop expertise and deludes us into thinking the brightest and hardest working among us can absorb all the available knowledge within it. The industrial era constrained knowledge access, limiting it to the privileged few. Barriers to entry proliferated along silo and socio-economic lines with exclusive professional credentials established in the name of protecting the public interest from charlatans without prerequisite experience and knowledge. In the industrial era, knowledge in the wrong hands was thought to be dangerous. Our current education and workforce development systems were designed for an era defined by specialization. It worked fine until it didn’t.
Three important inflection points have emerged calling to question an over reliance on specialization.
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Saul Kaplan: Calling All Polymaths
Institutional America has knocked the start out of us. We need to get back to being great at starting things in our country. Calling all entrepreneurs. This means you. Yes, you. In talking with some of the most entrepreneurial people on the planet I am surprised by how many don’t think of themselves as entrepreneurs. When did that happen? Our economic history is all about starting stuff but we have gotten away from our entrepreneurial heritage. We need a national entrepreneurship movement, one that transforms our current entrepreneurship conversation.
Many visitors to the Entrepreneur StoryBooth, an on-line platform the Business Innovation Factory (BIF) launched with Babson College to capture the voice and experience of entrepreneurs, have shared that despite significant experience in starting stuff they don’t think of themselves as entrepreneurs. The prevailing definition of an entrepreneur just doesn’t seem to apply. I consistently reply asserting the opposite, their experience is exactly what we need in the mix. These diverse stories are critical to changing our national entrepreneurship conversation and launching a new economic era. It’s a big ‘aha’ for me so many entrepreneurs don’t think of themselves that way. I have to admit, upon personal reflection, as much as I love to start new projects, ventures, and movements, I too don’t think of myself as an entrepreneur. Go figure. Clearly, we have serious work to do if our economic future is about entrepreneurship.
When did we reserve the entrepreneur moniker solely for technology ventures started by iconic college dropouts like Bill Gates and Mark Zuckerberg? I know we all love a good company origin story but by elevating these stories to mythical proportions aren’t we placing entrepreneurship out of reach for the rest of us mere mortals.
When did we so completely buy into a national invention narrative suggesting that if we invest enough in university based research it will produce a steady supply of new technologies, companies, and high-wage jobs. We have structured our entire national entrepreneur support system around an invention narrative in the hopes that tech transfer, venture capital, and technology company incubators will give rise to the promised new economy. It’s hard to see it happening any time soon with such a narrow definition of entrepreneurship. Maybe it’s time for a new expanded entrepreneurship narrative and support system.
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Saul Kaplan: Calling All Entrepreneurs
Capabilities are the amino acids of innovation. They are the building blocks that enable value delivery. Innovation is a better way to deliver value and is often the result of repurposing existing capabilities. Locking capabilities into rigid organization structures and proprietary closed systems gets in the way of unleashing new sources of value and solving many of the important challenges of our time. Innovation is about hacking capabilities.
A capability is simply the power to do something and is comprised of three elements, people, process, and technology. You might have the capability or power to make a mean western omelet. You possess the skill (people) thanks to hands-on training from mom, a recipe (process) handed down for generations, and a great cook top range, non-stick pan, and spatula (technology). Hacking the capability is easy. A Google search for western omelet recipes yields almost 25 thousand hits. That’s more variety than a lifetime of Sunday brunches. To stretch the analogy a western omelet capability can also be combined with other capabilities to open a cool restaurant, launch a cooking blog or cable television show, or to commercialize a new cooking utensil. Innovation happens when we enable random capability collisions resulting in new and unexpected ways to deliver value.
Perhaps a more relevant and timely example of the power and potential of hacking capabilities is Microsoft’s Kinect. Microsoft introduced Kinect on November 4th as a product extension to its Xbox franchise. Kinect adds a very cool capability for Xbox game players by getting rid of the hand held game controller and turning players into their own controllers. It lets players ‘be the controller’ with gesture recognition technology. On-screen menus are navigated by voice and hand waves. Game avatars are manipulated through body gestures. Microsoft and cool haven’t been used in the same sentence for a long time. Kinect is cool.
Microsoft predictably launched Kinect with it’s deeply ingrained proprietary product mind set. You could buy Kinect as a bundle with an Xbox or as a separate component to attach to an existing Xbox for $150. While Microsoft views Kinect as a product the global geek community views it as a capability. To geeks, Kinect is a powerful capability screaming to be hacked and repurposed for exciting new uses beyond its use as an Xbox extension. Hackers view Kinect as an interesting voice and gesture recognition platform complete with sophisticated cameras, software, and sensors with the power to detect movement, depth, shape, and position of the human body. What a bargain for only $150. It’s a hackers dream.
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Saul Kaplan: Innovate By Hacking Capabilities
Need to turn around your company? Trying to start a movement? Want to change the world? Easy Peasy! Just turn it in to a game. Everywhere we turn, it seems there are experts claiming that the best path forward is to engage people with elements of competitive play. The business world in particular has gone gaga for gamification.
I thought games were mainly for kids, and the occasional ice-breaker or temporary escape from reality. Why encourage more of them? As adults, aren’t we supposed to set aside childish things and get down to work on the problems of the real world?
Truth be told, I have always loved games. Stratego was a mainstay among my school buddies. We spent hour upon hour lining up red and blue soldiers to protect our flags. My family’s Monopoly games were epic battles, beginning with the fight over game pieces. (No, I get the Scottish Terrier!) The side deals we struck and the arguments that ensued still liven up family gatherings. In college I became a professional Risk player. Tell me you didn’t learn about the challenges of fighting a multi-front war from playing Risk. Who among us hasn’t attempted to conquer the world by way of Kamchatka?
Games ruled – till it was time to make my way in the real world where they didn’t. By the time online games exploded onto the scene, I was so immersed in reality that I managed to ignore them. I’ve never created a level-80 character in World of Warcraft, won the staff of life in Spore, mastered an artichoke crop in Farmville, or knocked over any pigs with Angry Birds. But others have – hundreds of millions of them around the world. Already, 5.93 million years of total time has been spent playing World of Warcraft alone.
One response to this is to despair of all that wasted time. Imagine if only a fraction of it had been focused on improving our education, health care, energy, and economic systems. Another response, though, is to say: if you can’t beat them, why not join them?
Jane McGonigal’s Reality is Broken makes a strong case for leveraging game design and mechanics to work on the big social challenges of our time. McGonigal suggests that the four defining traits of any game – a goal, clear rules, a feedback system, and voluntary participation – can be applied to any challenge. She even says game-playing makes us better people. The book is a passionate articulation of why we should pay attention to what is going on in the world of games.
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Saul Kaplan: If All the World were Gamified
If the goal is to develop markets start by developing talent. If you want to accomplish the most amazing things focus on developing the talent of amazing people. Mentoring and coaching are the most important leadership roles. Innovation starts by surrounding yourself and connecting with the best talent. If you want to attract the best talent develop a reputation as the best talent developer.
Put growth opportunities for others ahead of your own. Put growth opportunities for others ahead of your organization and your community. If you put developing talent first you will attract the best talent. If you consistently encourage and prepare talented individuals to grow into the best opportunities, wherever they are, you will become a talent magnet. People who want to get better will want to work for, with, and near you. If you prioritize talent development people will trust their talents to you.
When talented people move on to other great opportunities don’t think of it as a hole you need to fill. Don’t think of it as a transition inconvenience or a burden to take on additional tasks while filling a role. Be proud when people you mentor go on to new opportunities. High potential people will seek you out if you have a track record of celebrating and supporting the success of others. Talent development is self-fulfilling.
Too many managers think only about the work that needs to be done and how to keep people focused on the task at hand. When employees leave organizations it’s viewed as a management challenge. The difference between a manager and a leader is managers try to hold on to people assigned to them at all costs and leaders try to develop people assigned to them at all costs. Leaders encourage new personal and professional development opportunities for their best people even if they are outside of the organization. Leaders who build a reputation for talent development always attract the best people.
It’s the same for community leadership. Communities should worry less about “brain drain” and worry more about building the capacity for talent development. Communities should worry less about company incentives for job creation and more about investments in education and workforce development. Differentiate your community by its commitment to talent development. Don’t worry if talented people move on to explore opportunities in other communities. Encourage it. Stay focused on making your community the best it can be at helping it’s citizens be the best they can be. Talent development is the best economic development.
Talent development is on my mind this week as Melissa Withers, who I have worked closely with, mentored, and learned from for the last five years, was named by the newly elected Mayor of Providence, Rhode Island, Angel Taveras, as his Director of Communication.
I could not be more proud and happy for Melissa and the exciting growth opportunity that lies ahead for her. Throughout my career nothing has been more important than mentoring and supporting the personal and professional development of those I am fortunate enough to work with. I have enjoyed the privilege of mentoring and working closely with Melissa at both the Rhode Island Economic Development Corporation and at the Business Innovation Factory and know she will be successful in her new job. I am grateful for Melissa’s contribution to our success at BIF and I’m confident, thanks to Melissa, we are positioned to continue our growth and make progress on our mission to transform the next decade. As a resident of Providence and a big fan of Melissa’s I am rooting for her continued success.
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Saul Kaplan: Innovation 101 — Develop Talent
I highly recommend mapping your organization or community genome. Understanding the basic genetic code or wiring of any organization is key to understanding what drives the behavior of both internal and external stakeholders. Intimate knowledge of the genome’s chromosomal makeup is a prerequisite for alignment and making meaningful progress. It explains why employees, customers, and collaborators are attracted to an organization or why they aren’t. Passion for an organization, community, or movement is coded at the genetic level. If you want to transform an organization or a system, forget process reengineering and think genetic reengineering. If you want to launch a movement make your genome transparent and accessible to anyone with a similar genetic make-up.
I offer up the BIF genome as an example and with the hope you will improve it. The Business Innovation Factory (BIF) is catalyzing a movement to transform the next decade. This is no time to think small! Together with a growing community of passionate innovators we are re-imagining the future of education, health care, energy, and entrepreneurship. We have identified and mapped 11 chromosomes that comprise the genome of the BIF innovation community and transformation movement. Do they resonate with you? Do you share a similar genetic make-up? If yes, do we have a movement for you!
BIF Innovation Community Genome
1) Off the whiteboard and into the real world. Experiment all the time.
Work fast, make mistakes, push into territories of the unknown.Taking risks is an essential part of innovation. Exceed your own expectations.
2) Business model innovation is itself a creative act.
Design better ways to create, deliver, and capture value. Tweaking won’t work. Transformation is about new business models and systems.
3) Stories can change the world.
Storytelling is magic. Share compelling stories to create stronger emotional connections and purposeful networks.
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Saul Kaplan: Genome of an Innovation Movement
I am proud of my bona fides on supporting the advancement of women. It angers me to think how slow executive suites and boardrooms are to welcome more qualified females. Stubborn gender wage gaps for comparable work are unacceptable and must be closed.
However, with all of the attention and focus on supporting equal opportunities for women, we have taken our eyes off an alarming trend. Young men in the US are in trouble by any measure of educational attainment. It’s a big deal and, for reasons of political correctness, we aren’t talking enough about this growing national problem.
I refuse to believe the support of young American’s progress is a zero-sum game – that somehow if we call attention to the problem and take a different approach to improve the experience and outcomes of boys it would come at the expense of celebrating and enabling continued advancement of girls. We can and must recognize the unique challenges of young men and we had better start doing something about it now.
Have you taken a stroll on a college campus recently? Where have the men gone? In the latest census, males comprise 51% of the total US population between the ages of 18-24. Yet, just over 40% of today’s college students are men. In fact, in each year since 1982, more American women than men have received bachelor’s degrees. Over the last decade two million more women graduated from college than men. And the gap continues to grow. Michael Thompson, author ofRaising Cain, a great book on the plight of young males, illustrates the path we are going down with a startling extrapolation. He notes that if today’s trends continue unaltered, the last young man in the US to get a college degree will do so in 2068. Scary stuff.
The gender achievement gap is astounding. The average 11th grade boy writes at the level of the average 8th grade girl. Men are significantly underperforming women. According to a recent NBC news report, women dominate high school honor rolls and now make up more than 70% of class valedictorians.
Again, I am happy to see women succeeding. But can we really afford for our country’s young men to fall so far behind? A growing education attainment gap has profound consequences for the economy.
It mattered far less during the industrial era when young men in this country could find good high-wage jobs in the manufacturing sector without a college degree or post-secondary credential. In a post-industrial economy, the social contract has changed. The deal used to be that college was only for a narrow segment of our population. Everyone else willing to work hard could make enough money to raise a family and achieve the American dream of owning a home, without higher education. With the disappearance of those industrial era jobs, the rug got pulled out from under that assumption. We replaced it with a new social contract by which a college degree, or at least some form of post-secondary credential, was a necessity for anyone hoping to make a decent living. The numbers on this are clear. According to census data, annual earnings for high-school dropouts average $18,900; for high-school graduates, $25,900; for college graduates, $45,400. Add up those numbers over a lifetime and the importance of education comes into focus.
And that’s if there is a job at all. Take a look at how hard the current recession has hit men. Of the jobs lost over the last four years 78% of them were held by men. That leaves 20% of working age men out of work. These jobs are not coming back and men are ill prepared for the 21st century workplace.
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Saul Kaplan: Plight of Young Males
That hungry whirring noise heard around offices across the U.S. is the sound of March Madness brackets being fed to paper shredders everywhere. Bracket busting is reaching historic levels in this year’s NCAA Division 1 Men’s Basketball National Championship Tournament. Since the tournament was created in 1939 this is the first time there are no number 1 or 2 seeds in the Final Four. All of the country’s top eight teams, as annointed by the experts, will watch the Final Four from home.
That’s amazing. It’s the first time in March Madness history that two teams, Butler (8) and VCU (11), seeded 8 or worse in their bracket will play each other in the Final Four. So if you shredded your bracket, you’re not alone. According to ESPN Research only two people out of the 5.9 million who filled out and submitted brackets in the ESPN Tournament Challenge have the Final Four correct. Only two. That’s .000034%.
As I shredded my bracket I couldn’t help thinking about the parallels between innovation and bracket busting.
In many ways, from the time we are born, we are seeded into brackets. Education tracks, organization charts, and industry value chains are all brackets waiting to be busted. Experts are always telling us where we fit and what our role is. We are tracked into school programs at an early age based on perceived academic ability. We are placed into boxes in organization charts based on age and tenure, constrained from contributing beyond our “seed.” We work for too many organizations that only fight for market share within well-defined and accepted industry value chains.
Not only are we seeded into brackets created by someone else, we are expected to play our defined roles. Top seeds are supposed to win. Lower seeds make a valiant effort but lose to top seeds in the end. Most of us don’t even get an invite to the “big dance.” That’s the way it’s supposed to work because the experts say so…
Innovators, in their way, are bracket busters. While incremental improvements can be accomplished by working within current brackets and seeds, the biggest opportunities to create value come from transformational change, the kind of change that requires bracket busting. Solutions for the big social system challenges we face, including education, health care, energy, and entrepreneurship, require more than incremental change. The solutions we need require transformative bracket-busting business models and systems.
We need a new education system that doesn’t seed children into tracks and is designed to provide every student with a customized pathway to success. We need a new health care system that doesn’t track citizens through institutional and insurance sick care labyrinths and is designed for patients to champion their own pathways to wellness. We need organization structures that don’t constrain talent in boxes unleashing talent networks that enable everyone to contribute up to the limits of their imaginations. We need to transform industry value chains into value networks that break down boundaries between disciplines, organizations, and sectors to deliver value in completely new ways to students, patients, citizens, and consumers. We need more bracket busters.
So don’t be discouraged by your March Madness bracket now sitting at the bottom of the paper shredder. Celebrate the fact that none of the top seeds made it to the Final Four. Don’t settle for where you and your organization are seeded by so-called experts. Don’t allow anyone to say you aren’t allowed to go to the big dance. Don’t be constrained by brackets created by someone else. Create your own dance. Be the top seed in your own bracket. Be an innovator. Be a bracket buster.
(This post originally appeared here on the Harvard Business Review site.)
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Beware of random collisions with unusual suspects. Unless, of course, if you want to learn something new. In that case seek out innovators from across every imaginable silo and listen, really listen, to their stories. New ideas, perspectives, and value creating opportunities are in the gray areas between unusual suspects. It seems so obvious and yet we spend most of our time with the usual suspects in our respective silos. We need to get out of our silos more.
It’s human nature to surround ourselves with people exactly like us. We connect and spend time with people who share a common world-view, look the same, enjoy the same activities, and speak the same language. We join clubs to be with others like us. I want to belong to the non-club club. The only tribe I want to be in is a tribe of unusual suspects who can challenge my world-view, expose me to new ideas, and teach me something new. I founded the Business Innovation Factory to enable random collisions of unusual suspects.
I am reminded of the power of this simple idea as my friend Bill Taylor launches his new book,Practically Radical (a must read for all innovators). Bill is a magnet for innovation stories and a master storyteller. I’ve been a Bill Taylor fan since he founded Fast Company and was surprised when he showed up at BIF-1, our very first Collaborative Innovation Summit, back in 2004. I shouldn’t have been surprised. Bill loves searching for compelling innovation stories among the unusual suspects. He has attended all but one of our six annual summits to-date including co-chairing several of them. There have been countless random collisions. As I started reading Practically Radical I was immediately hit with a powerful reminder.
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Saul Kaplan: Practically Radical