Saul Kaplan: It’s the Innovator’s Day

innovation_leader_logo_intro-300x250-1Today is the Day of the Next-Generation Innovator

I am an innovation junkie. It’s a good place to be right now because there’s no more important time for New England to fulfill its promise as a regional innovation hot spot. Our region has the capacity to lead the way out of this economic mess and toward solutions for the big issues of our time, including health care, education, and energy independence. We must play offense.

Here’s some good news: Innovators thrive during turbulent times. In the 2001 recession, Apple Inc. unveiled the first iPod and The Procter & Gamble Co. launched Crest Whitestrips. The bad news is that innovation has become a buzzword. Everything is an innovation and everyone is an innovation expert. We must get below the buzzwords. I have a simple definition: Innovation is a better way to deliver value. I also differentiate invention from innovation. I assert it is not an innovation until it delivers real value to a consumer.

Ideas, inventions and new technologies are the lifeblood for innovation. We must continue to invest in basic and discovery research. It is necessary, but it is not sufficient. We also must improve our ability to get inventions out of the lab and into the real world, where they can solve problems and deliver value.

Business model innovation is the key to realizing the full potential of new technologies. A business model is a network of capabilities and a sustainable financial model to deliver value to target customers. Successful executives are really good at squeezing more value from existing business models. In this context innovation means either revenue growth from new products and services or reducing operating costs with process improvements. For most, innovation is about finding ways to ring the cash register by pedaling the bicycle of today’s business model faster.

Institutionalizing innovation While there’s nothing wrong with an incremental strategy, there is a problem. Business models aren’t lasting as long as they used to, and most CEOs have only had to lead a single business model throughout their career. Going forward, I suspect CEOs will have to change business models several times over a career and establish an ongoing process to explore new business models — even models that might threaten the current one. Organizations must establish R&D for new business models the way they do R&D for new products and services today. Business model innovation needs a discrete focus or it will get marginalized, producing again only incremental change.

In today’s networked world, business model innovation means connecting capabilities across traditional boundaries. Companies, schools and government agencies all must rethink existing business models and all struggle with the capacity to explore and test new ways to deliver value.

photo-saulDon’t you wonder, as I do, with so much new technology available why we haven’t made more progress? Technology isn’t the barrier to business model innovation. It is humans and the institutions we live in that are stubbornly resistant to change. Everyone loves the idea of innovation, until it has a personal impact. I used to think that we could enable large-scale change and create more innovators by proselytizing. But that doesn’t get you past the buzzwords. I now believe in sorting the world to identify the innovators and finding ways to connect them in purposeful ways.

The best opportunities to create value will be found in the gray areas between silos, sectors, and disciplines. And progress on the big-system issues of our time will require a road map and manageable platforms for systems-level experimentation and change. It doesn’t matter if the customer is a patient, student, citizen, or consumer. R&D for new business models is imperative to remain competitive, harness technology, and deliver more value with fewer resources.

In the months ahead I will share personal observations from around the region in the hopes of catalyzing conversation, connections and action. Join the conversation and pass along your business model innovation stories.

This post originally appeared as the debut “It’s Saul About Innovation” column in Mass High Tech.

Saul Kaplan: Cobbler’s Shoes. Do You Have a Family Vision?

cobblerWe all know the story of the local cobbler who was so busy making shoes for his customers that he didn’t have time to make shoes for his family.  I have led and participated in hundreds of organizational visioning sessions but in 1998 it was clear to me that my own family needed a shared vision for the future.  I was determined and proclaimed that we would spend New Year’s Eve 1998 together as a family working on our family vision.  Under duress my wife and three children amused me and participated.  My wife found the actual document I used to facilitate our visioning session in a file.  I hadn’t seen it in ten years and the question remains relevant today.  Does your family have a shared vision?

Here is the document I used to get us talking as a family ten years ago.  Maybe the questions will enable a similar conversation with your family.

Kaplan Family Visioning 12/31/1998

Imagine it is the year 2008.  The world survived the dreaded year 2-K disaster and the Kaplan family is thriving in the new millennium.  It is hard to imagine that ten years have passed since that silly New Year’s Eve in 1998 when our dad made us stay at home together and develop a family vision.  He said it was a mental picture or image of the kind of family we wanted to be.   And like any vision it wouldn’t happen by accident but because everyone in our family wanted to achieve it and worked hard to make it happen.  Well, ten years have passed.  Let’s see how we did in living up to the family vision we created that New Year’s Eve right after dad won the family monopoly game!

Before we can discuss the kind of family we have become in the year 2008 we should start by discussing the kind of individuals we have become.  I can’t believe how far we came as individuals.  It will help us with our family vision to understand what each of us will be doing in the year 2008.  Once we have a picture of ourselves as individuals we can take a look at how we relate together as a family.

How old are you in 2008?  Where do you live?  What kind of home do you live in?

Are you still in school?  What grade (high school, college, graduate school)? Where? What do/did you study?  What kind of grades do/did you get?

photo-saulAre you working now?  What do you do?  What are you planning to do after you graduate?

Describe your personal relationships (boyfriend/ girlfriend)? Husband/wife? Kids! How about friends?  Do you have a lot of friends?

What role does music play in your life?  Do you play any instruments?  How often do you play?

How much traveling have you done?  What parts of the world have you seen?  What parts do you plan to see?

How much do you read? What do you like to read? Do you read a newspaper every day? (Maybe there won’t be newspapers ten years from now!)

How much do you write?  Does your job require you to write? Do you write on your own?  What do you like to write about?  (your mother has been encouraging me to write more…blame her….she has a habit of encouraging all of us to be better…doesn’t she…I think one of her best traits)

What hobbies/sports are you active in? How active are you? Do you exercise?  Maybe we should know how much you weigh!  Are you a sports fan?  What sports? Have the Red Sox made it to the World Series in the last ten years?  Perhaps you live somewhere else and have become a traitor and don’t root for the Red Sox any more!

What are the most important things in your life in 2008?

Now that we can picture what each of us is up to in 2008 and can admire our personal successes we can start to discuss what kind of family we have become.

OK so the Kaplan clan is alive and well in the year 2008.  Who would’ve doubted that each of us would have an exciting and positive view of the future? It’s one of the great things about our family….the fact that as individuals we are all smart, funny, ambitious and have a ton of optimism about the future.  And of course it is the humor we share with each other which makes for an “interesting” combination with our competitive spirits.   I don’t know about you but I am extraordinarily proud and impressed with the individual integrity, talent, and personal motivation that we all possess.

But…(you had to know that there was a but somewhere!) …I am not as clear on what we will be like as a family.  What will we be like collectively?  That might seem like a corny question to ask and I know you are laughing at me for doing this.  I truly believe that what our family is going to be like ten years from now will have a lot to do with the importance we place on being a family and how we treat each other NOW.

Having a vision doesn’t mean you can predict the future.  Nobody can do that.   It simply means that you have a view of what you would like the future to be like.  Once you have a clear vision you can steer yourself toward it.  It helps you know every day/month/year if you are doing the things and acting in a way that points in the direction of the vision.

Anyway, here are a few questions to get us thinking about our family vision:

How often do we see each other as a family?  Are we together for the holidays? Do we go on vacations together?

What happens when our family gets bigger? Spouses? Are there any nieces and nephews? (I guess they would be grandkids huh?  YIKES)

How often do we talk with each other?  Do you talk often with your siblings?

What is the nature of our conversation? Are we talking about our lives and what is really going on or are we doing the adult equivalent of NOTHING REALLY!

How about email as an alternative to the phone.  Are we all hooked up on line wherever we live?

OK how about something a little tougher….How close are we as a family…..really? What happens if something really great happens for one of us…. Are we all there to help celebrate?  I suppose it is fair to ask the opposite question… What happens if someone gets hurt or has something bad happens, or just plain needs our help?  Are we all there for each other?

How will we treat each other?  Do we respect and love each other?  Can other people around us see how much we respect and love each other?

And finally….How much importance do we place on family versus individual? Ultimately the importance we put on it will determine the kind of family we will be in 2008.  I am willing to sign up to whatever vision we create and to work hard to make it happen.  Are you?

Back to the Future 2009

I cried when I read this, ten years later.  Because of its personal poignancy and its accuracy.   My family is as close as ever.  We communicate incessantly by every electronic means available.  We added a new member to our family when my oldest daughter was married this past summer.  We just returned from a great family vacation.  Newspapers are almost dead and of course the Red Sox have won the World Series, twice.   Life is good.

Saul Kaplan: Squeezing Harder Won’t Work

squeezing toothpasteHere’s the thing about toothpaste tubes. You can squeeze all you want on one part of the tube and the toothpaste will only pop up in another part of the tube.  Many of today’s important systems operate much the same way.

The big challenges we face today including health care and education are systems issues that require systems solutions. These systems have evolved over a long time and are well intentioned. Players in the system work hard year after year to deliver value, improve their position, and create sustained incremental improvements.  It is not enough.  We need new toothpaste tubes.  We can’t fix these system issues by squeezing harder on different parts of the tube.  We need to design and experiment with new system level solutions.

Everyone loves to point fingers at the other players in the system as the cause of the problem.  Health care is a classic example.  Observing our health care system today is like watching an intense rugby scrum that is moving in slow motion hoping the ball will pop out.  Finger pointing and incessant public policy debates galore.  We love to admire the problems: It is the cost of drugs that is killing us.  It is the high cost hospitals that are the problem.  It is the insurance companies that are in the way of change.  Doctors are the ones who are resisting change.  If only the government would get its act together.  If only patients would take more responsibility for their care.  It goes on and on.

In education, the same movie is playing with different actors.  It’s the unions that are getting in the way.  Teachers are resisting change in the classroom.  Administrators don’t understand what is going on in the classroom.  Parents are not engaged.  Public policy makers can’t make up their minds.  If only private sector companies were more engaged.  Students are unruly, undisciplined, and disrespectful.  Everyone is blamed and nothing changes.

I’m not a cynic. I’ve seen and participated in many innovative initiatives that are trying to create systems-level changes within healthcare and education.  And some of them have indeed succeeded in creating incremental value. But where are the disrupters? Where are the systems-level game changers? The problem is that great ideas coming from one silo are tried but quickly bump into the other silos and constraints of the system.  Promising new solutions squeeze on one part of the toothpaste tube only to learn that when you squeeze on one part of the tube it just pops up in another. We need safe environments to design and experiment with new toothpaste tubes or systems.

photo-saulThe student and the patient should be at the center of our redesign efforts in education and health care.  We need to experiment at the systems level, trying new approaches to see what works.  For instance, we’ve proven that innovation works at the school level with hundreds of successful charter schools across the country.  Now we need to experiment at the district level to test new student centered system approaches that are not constrained by the way the current system operates.  That is the only way we are going to learn what solutions can deliver value to the student at scale.  The same thing is true in health care.  We need to design and test patient centered system approaches that are more about well care than about sick care.  We can’t get there by playing at the margins of today’s system. Squeezing today’s toothpaste tubes harder will not work.

Saul Kaplan: Next Practices vs. Best Practices

next practiceEveryone bows down to the all, important benchmark.  How many times have you heard someone say, “You only get what you measure”? Most organizations commit to identifying and measuring performance against industry best practice.  Many have recognized the value of looking outside of their industry for practices that might provide a source of competitive advantage.  Adopting existing best practice makes sense if you want to improve the performance of your current business model.  Going beyond the limits of your current business model requires a network-enabled capability to do R&D for new business models.  The imperative is to build on best practices to explore and develop next practices.

Understanding best practices and applying them to increase business model productivity is an essential capability for all organizations.  No surprise most companies benchmark their performance adopting practices ranging from accessing benchmarking data to sourcing (internal and external) process improvement capabilities.  Like all learned behaviors the earlier it is adopted the easier it is to scale and to apply in other markets.  Entrepreneurs and small business leaders should start with a back of the napkin approach.  Be specific about goals and take the napkin out a lot.

It doesn’t take long to exhaust the library of best practices in any given industry.  Field organizations have seen most of what the competition is doing and can report their observations.  In addition your customers and networks have an important perspective that should be tapped.  Social network platforms, like Twitter, Facebook, and Linked-in make real time information interaction possible across networks. Leverage these new tools and platforms.  It is worth it.

photo-saulOnly exploring your own industry for best practices is limiting.  New sources of competitive advantage are far more likely to come from observing and adopting best practices in completely unrelated industries.  All leaders should spend more discretionary time outside of their industry, discipline, and sector.  There is more to learn from unusual suspects who bring fresh and different perspectives than from the ideas circulated and re-circulated among the usual suspects.  The big and important value creating opportunities will most likely be found in the gray areas between the silos we inhabit.  Get out more.

Best practices are necessary but not sufficient.  Business models don’t last as long as they used to.  Leaders must identify and experiment with next practices.  Next practices enable new ways to deliver customer value.  Next practices are better ways to combine and network capabilities that change the value equation of your organization.  Organizations should always be developing a portfolio of next practices that recombine capabilities to find new ways to deliver value.  Leaders should design and test new business models unconstrained by the current business or industry model.

It is easy to sketch out business model innovation scenarios on the white board.  It is far more difficult to take the idea off the white board for a spin in the real world.  We need safe and manageable platforms for real world experimentation of new business models and systems.  Since most leaders in the 21st century will likely have to change their business models several times over their careers it makes sense to do R&D for new business models the same way R&D is done for new products and technologies today.  Create the space for exploration.

It is not best practices, but next practices that will sustain your organization on a strong growth trajectory.  While you continue to pedal the bicycle of today’s business model make sure that no less than 10% of your time and resources is dedicated to exploring new business models and developing next practices.

 

Saul Kaplan: The Plumber and the Police Chief

plumberInnovation is about a better way to deliver value. Innovators are all around us. They are taking advantage of today’s technologies and creating new ways to deliver value. We can learn from them if we look up from our silos.

Sometimes the most inspiring innovators are in places we would never have thought to look. Or perhaps we just don’t notice them because our attention is focused on the inventors of new technologies or the entrepreneurs who are making progress in bringing inventions to market. Those people are important but not the whole story.

Meet the plumber and the police chief.

Anthony Gemma is president of Gem Plumbing in Lincoln, R.I. Together with his brothers, Anthony runs one of the most innovative businesses I have seen. I didn’t expect it when I first visited the company. After all, how innovative can a plumbing supply company be? The answer is very innovative.

Gem is on a mission to win the Baldrige National Quality Award. I believe they will achieve it. They have established a culture of excellence and innovation in every aspect of their regional business. They collect, analyze and share data ranging from the location of every part — from the supplier to the service truck to the home — to how long a customer waits to talk live to the dispatcher on the phone. They benchmark themselves against the best. Not the best plumbing supply company, the best companies.

Gem’s customer call and dispatch center would blow you away. It is like standing in NASA mission control. On 12-foot monitoring screens they have live feeds of real-time traffic conditions and satellite mapping of every service vehicle. If there is available capacity in the fleet, Gem is placing a customized radio ad to create tailored demand. They are so good at tracking traffic conditions they supply information to the Department of Transportation and local radio stations for traffic reports.

Saul KaplanTheir business grew from $9 million in 1999 to $40 million in 2007. They get so many businesses coming in for tours and information about their innovation programs they set up the Gem Institute for Performance Excellence. Who would have thought to look at a regional plumbing supply company as an example of innovation best practices?

Next, meet Dean Esserman, chief of police in Providence, R.I. When he was hired by Mayor David Cicilline in 2003, Esserman found a city where the crime rates were high and a force that was troubled by corruption and distrusted by the community. People were afraid to travel downtown. What he’s done since is a great story of business model innovation, and he has delivered significant value to the citizens of Providence.

In six years, Esserman transformed the Providence policing model from a centralized department where police were anonymous and came to the neighborhood after receiving a 911 call to a decentralized department with neighborhood substations and district commanders who are accountable for crime in the local community. His philosophy is that when police get out of their cars and into the life of a neighborhood they become trusted allies.

I have attended the chief’s regular Tuesday morning command meetings where a sophisticated crime tracking system displays crime statistics by district. Each commander is called upon to talk about crime activity in their district and what they are doing about it. The new business model is working, with double digit declines in the overall Providence crime rate. Who would have thought to look at a police chief as an example of innovation best practices?

The plumber and the police chief are just two examples of the innovators among us. Examples are everywhere. We just have to look in the places that we would least expect to find them.

Saul Kaplan: Unplugged

unpluggedOut of Office, AutoReply:  Sorry I will be out of the office this week.  In an emergency you can contact……   Away messages bug me.  Away from what?  Aren’t most of us away from our desks all the time?  If we aren’t maybe we should be!  Who doesn’t get emails remotely these days?  I don’t need to know that you are traveling this week.  I assume that you are not sitting at your desk waiting for an email but out at meetings and visiting with customers.  You will get back to me when you can.

OK. If you are on a personal vacation and need to disconnect or overseas and unable to receive emails it makes sense to let people know that you will not be able to respond while you are away.   But most away messages seem to just provide notification that you will not be sitting behind your desktop computer for the next few days.  Come on, we all know perfectly well that you will still receive emails on a remote computer, a laptop, or on a PDA.  Why tell us that you are away.

I find that quick responders are just as responsive when they travel and slow responders are just as slow when they are away.   I suspect many people leave an out of office message to manage expectations because they want the time away from the incessant drumbeat of emails, text messages, and twitter streams.  I understand that.  Sometimes you need to disconnect in order to reconnect.

A few vacation days away recently reminded me of the important perspective gained from disconnecting.  I didn’t leave an away message before leaving and while I left my laptop at home I did bring my iPhone, which allowed me to check important emails and Red Sox scores.  While I could have stayed connected to my Twitter stream on the iPhone I made a conscious decision (alright my wife insisted) that I disconnect cold turkey for the few days I was away.

Saul KaplanI enjoyed the respite from the cacophony of an over-connected and always-on life.  I thought a lot about what it means to live in a networked world where communication channels travel wherever you go and filtering becomes an important personal decision.   I am excited by the possibilities created by ubiquitous connectivity and personally experimenting with the right mix of channels and the right balance of being connected and finding time to disconnect.  The capacity to disconnect is important but can’t we come up with a more honest and genuine approach than a lame away message?

Saul Kaplan: Random Collisions

collisionBeware 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 the big value creating opportunities are in the gray areas between the 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 is human nature to surround ourselves with people who are 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.  Our tribe of unusual suspects can change the world if we connect in purposeful ways.

As an “accidental bureaucrat” over the last six years I had a front row seat to observe the silos in action.  Every week went something like this; On Monday I met with the health care crowd, on Tuesday it was the education crowd, on Wednesday the energy crowd and so on, you get the idea.  This cycle repeated over and over again.  Each crowd was comprised of the usual suspects, well-intentioned people rehashing the same discussion incessantly.  The scene is right out of Groundhog Day.  Most of the participants were there to represent institutional perspectives and to protect their respective interests.  In each crowd there are always a few innovators that want to change the conversation but they make little progress.   At the end of each week I always came away with the same conclusion.  If only we could take the innovators from across each of the silos and bring them together to enable more random collisions.

Saul KaplanMaybe we could change the conversation if we connect the unusual suspects in purposeful ways.  Maybe then we can make progress on the real issues of our time, little things like health care, education, and energy.  It will take cross silo collaboration and breaking down the boundaries between industries, sectors, and disciplines.

People always ask me how I could have worked in the public sector after being in the private sector all of my career.  Doesn’t it move too slowly?   I don’t know about that.  I worked with many large companies, during my road warrior consulting days, and I don’t remember them changing so quickly.  You are right, I would say, government agencies move pretty slowly too.  I can’t resist adding, I am certain that academic institutions move the slowest of all!  The point is few organizations across both the public and private sector have the capacity to innovate and change because they are working hard pedaling the bicycle of their current business model and trying to stay alive and competitive.

In this heads down mode, public and private organizations staying within their silos, do not work and play nicely together across boundaries.  Collaboration is an unnatural act.  Attempts are mostly under resourced and under supported by sponsors. That’s a shame because the issues we deal with as a community including, health care, education, and energy, will only be fixed it we can experiment with new system approaches that cut across all of our protected silos.  We need to think and act more horizontally.

Maybe we don’t need institutions to be the catalyst for change.  Maybe in the shiny new networked world we live in, with mega bandwidth and social media platforms, we can self organize to design and test new system approaches that deliver more value to the patient, student, and citizen.  It is time to try more stuff and take advantage of the disruptive innovation potential of all the technology we have within reach.  We have more technology available to us than we know how to absorb.  It isn’t technology that gets in our way.  It is our fault.  Humans, and the organizations we live in, are both stubbornly resistant to change.

Institutions are moving too slowly.  Most were designed for a different century.  We have to catalyze change ourselves.  Let’s go.

Wanted: Innovators to join a non-club club and tribe of unusual suspects.  Bring on more random collisions.

Saul Kaplan: Education Rant

“Education is not the filling of a bucket, but the lighting of a fire” W.B. Yeats

RantExcuse the rant but I am outraged by the state of the U.S. education system. We have let the pilot light go out and we are failing our youth. Particularly egregious is the way we are failing our urban youth.

We must refocus our national and regional innovation conversation on how to solve real world problems. Job number one is to design a better education system that lights a fire for every youth, creating lifelong passionate learners. It is time to move beyond public policy debates and institutional rugby scrums to try new solutions. What we are doing now isn’t working, and far too much of the federal stimulus investment in education is being spent to sustain the current system.

A report last year from the nonprofit network America’s Promise Alliance showed that 1.2 million students drop out of high school each year. Only about half of the students served by school systems in the nation’s 50 largest cities graduate from high school. The U.S. public education system, especially in the country’s urban centers, must be transformed.

Only about 40 percent of the U.S. adult population earns a college degree. That may have been fine in the 20th century when an industrial economy supplied good jobs to those without post-secondary education. It is not fine today when a college degree is a necessity for a good job.

Our education system was built for the 20th century.

photo-saulEveryone loves to point fingers at other players in the system as the cause of the problem. Observing our education system today is like watching an intense rugby scrum that is moving in slow motion hoping the ball will pop out. We have finger pointing and incessant public policy debates galore. We love to admire the problems: It’s the unions that are getting in the way. Teachers are resisting change in the classroom. Administrators don’t understand what is going on in the classroom. Parents are not engaged. Public policy makers can’t make up their minds. If only private sector companies were more engaged. Students are unruly, undisciplined and disrespectful. Everyone gets blamed and nothing changes.

The simple idea of “lighting a fire” expressed in Yeat’s quote says it all for me. Teaching is an important means to an end. Creating passionate lifelong learners is the objective of education. Content, subjects, jobs and requirements, will all change over time. The pace of change is accelerating and the half-life for assumptions and usable knowledge is decreasing. It has become a lifelong challenge to stay relevant. The only thing that is sustainable is a fire inside to keep learning.

The objective of education is to light a fire for learning in every single youth. When the pilot light is on, everything else is possible. For starters, let’s recognize that individuals have different learning styles. One-size industrial education models are not working and must be transformed. We have the enabling technology available today to create and scale an education system that provides access to killer content and experiential learning opportunities tailored to individual learning styles for every student. It is time to demonstrate that we can and will change our education system. Our country’s youth is waiting.

We need actionable platforms to enable real world experimentation for new education systems and solutions. We need to bring the voice of the student and student experience directly into the education innovation conversation. And we must create a purposeful network of innovators motivated to explore and test new system solutions. Join the conversation. The water is fine.

Let’s reignite the pilot light and demonstrate that there is a better way to light a fire for life long learning in every youth.

Saul Kaplan: Needed – A National Innovation Agenda

12f8fbbIn the coming months, our government is going to throw a lot of money at some very big problems. The amount is staggering—a $787 billion stimulus packagecombined with a proposed $3.6 trillion federal budget. That kind of market-making money should be able to drive the bold changes we need in health care andeducation.

I fear it will not.

It would be a shame if the nation’s palpable hunger for fresh ideas and approaches resulted only in incremental change. The problem I see is that most of the money is about to travel through existing pipes to sustain the way the health-care and education industries currently operate. This path simply maintains the status quo.

If we want bold change, we have to allocate more of the federal investment to the design and testing of new approaches that are not constrained by existing ones.

Saul KaplanEducation and Workforce Development

A report last year from the nonprofit network America’s Promise Alliance showed that 1.2 million students drop out of high school each year. Only about half of the students served by school systems in the nation’s 50 largest cities graduate from high school. The U.S. public education system, especially in the country’s urban centers, must be transformed.

Only about 40% of the U.S. adult population earns a college degree. That may have been fine in the 20th century when an industrial economy supplied good jobs to those without post-secondary education. It is not fine today when a college degree is a necessity for a good job.

Our education and workforce development system was built for the 20th century. Stimulus money spent solely to support the current system will not result in a population of life-long learners prepared for the new economy.

An example of how to channel resources toward bold change is the Labor Dept.’s WIRED (Workforce Innovation in Regional Economic Development) program. Launched in 2005 to catalyze the creation of a new 21st century workforce development system, WIRED has made three rounds of grants to 39 regions. Each grant recipient gets $5 million per year over a three-year period. The funds must be used to integrate a region’s economic and workforce development activities. WIRED funds are targeted to accelerate state agency coordination and system change in order to demonstrate that talent development can drive economic transformation in regions across the country.

WIRED is the right idea, but it doesn’t go far enough. There is not enough money allocated to it, and it is not bold enough in holding regions accountable for experimenting with truly transformative workforce development approaches.

Health Care

The first baby boomer turns 65 in 2011. By 2030 there will be 71.5 million Americans over the age of 65, vs. 36 million today. Our health-care system struggles to deliver quality care today at an affordable price. Imagine the implications of the coming silver tsunami, when 10 million to 12 million elders will need long-term care—and an estimated 5 million will need nursing-home care.

The current federal prescription calls for a big investment in electronic health records and making insurance options available to all. Ensuring access and increasing efficiency in today’s system is necessary but not sufficient.

We need bolder solutions to deal with the impending crisis. We need to transform from a sick-care system to a well-care system, with the patient at the center. Patients must become more responsible for their personal wellness and sick-care choices. Too much of the stimulus money is allocated to institutionally driven electronic health records, which will only increase the efficiency of today’s health-care system. A meaningful share (20%) of the funds should go toward electronic records controlled by the patient and to experimenting with patient-centered health-care approaches.

Unconstrained Experimentation

Every federal agency must be held accountable for channeling resources toward transformative and systemic change in its respective area. That should be the focus of Aneesh Chopra, America’s new chief technology officer, or Sonal Shah, head of the new Office of Social Innovation & Civic Participation. They should be armed with resources moved from agency budgets and tasked with driving bold change to build a national innovation agenda. While we balance the management of today’s systems, it’s imperative that we also experiment with new configurations that are not constrained by existing ones. It’s not easy, but all of the public and private sector levers and capabilities should be up for analysis—and reform—in order to enable these experiments.

I used to think you could catalyze innovation by proselytizing. You can’t. It is more important to network today’s innovators from every imaginable silo, sector, and discipline in purposeful ways. It is the innovator’s day. This is the time to experiment with bold new solutions. We must invest in the capacity to explore and test systems-level innovation. Our future depends on it.

Saul Kaplan: Innovation Hot Spot

Innovation-hot-spotI was invited by Boston Globe innovation columnist Scott Kirsner to participate in a brainstorming session to answer the question: how do we better communicate New England’s innovative, creative, entrepreneurial spirit to the rest of the world?  The meeting took place at Flybridge Capital Partners in a conference room with a great panoramic view of Boston and was attended by an eclectic group of twenty five leaders from across New England all with a passion for strengthening our region’s innovation story and voice.  It was an energizing session and I left with many ideas and a refreshed enthusiasm for New England’s potential as a national innovation hot spot.

Here are a few observations from the session:

New England cynicism left at the door. New Englanders take cynicism to entirely new heights.  One characteristic of innovators, which was true for those assembled, is that they remain optimistic even in the midst of a severe recession.  It is a pleasure to be around innovators because they always see the silver lining and look for ways to take advantage of these disruptive times.  Our discussion had a positive tone and there was a collective sense of optimism in the room.

More than a slogan. I shared a story about once filling a war room with the economic development ads from all fifty states.  I covered the name of each state with masking tape and brought people in to the room challenging them to match the ad with the state it came from.   All of the slogans were similar like “A Great Place to Start and Grow a Business” and no one could connect the ads with the right states.  The reaction to my story was immediate and strong.  This group was not interested in creating a new advertising slogan or catchy logo.  Slogans come and go and telling the New England innovation story has to be a genuine narrative backed up with real proof points of our region’s innovation capacity.

Saul KaplanAct as a region. The northeast knowledge corridor has an amazing collection of innovation stories, assets, and institutions.   As a region we have an opportunity to become a national innovation hot spot.  Collectively our story would be compelling and genuine.  While labor, knowledge, and capital move freely across state borders, political boundaries have caused us to fragment our economic development effort. We sub-optimize our efforts and our story and must develop a regional communication platform. Our brainstorming session had voices from NH, CT, MA, and RI.  It was a start.

Purposeful networks.    Many participants talked about the importance of networks and leveraging social media platforms to strengthen connections throughout the region and to share our innovation story.  Dave McLaughlin of Boston World Partnerships talked about the work they are doing focused on creating and enabling “connectors”.   I raised the idea of creating purposeful networks focused on solving the big issues of our time including health care, education, and climate change.  We are blessed in New England with an incredible concentration of the inputs for innovation. Within our region we have many of the world’s best colleges and universities and a hard-wired spirit for discovery and entrepreneurship.  I proposed that we develop an innovation story that is about better outputs and solutions.  Why don’t we create a regional innovation hot spot that delivers real transformation in our health care, education, and energy systems?  If we did it would deliver on the promise of technology for patients, students, and citizens and we would create a more prosperous regional economy.

You can find Scott’s blog post on the discussion, a list of attendees, and the audio from our brainstorming session here.