I’m in Bangalore speaking about design thinking, creativity and startups in India. The whole country is tuning into Prime Minister Modi talking with Facebook’s Mark Zuckerberg in Silicon Valley about–startups and Startup India.
I’ve been doing workshops with Spread, an amazing Indian design and innovation firm headed by Sonia Manchanda, training people to raise their creative capacities. The Spread folks are amazing and they had groups of people getting into Personas, connecting dots of behaviors and values to come up with fresh new business models. All in the space of an hour and all with great fun (each teach had to come on stage and play out how people would use their new product–my favorite was the “diggie dog” collar that enabled doggies to communicate with their owners but a close second was CHARGE, a female Uber-type car service by women–who drive Teslas–for women). The thing is, people walked in believing THEY weren’t creative and Spread showed them that they really were.
As for me, I talked about the Five Creative Competences of my book, Creative Intelligence–Mining for Meaning, Reframing, Serious Play, Making and Scaling. Getting into Personas allows them to understand what is meaningful to people. This is one big message that the Indian engineers of Startup India have to understand. Digital tech alone won’t get you a successful, profitable startup. You have to first mine for what is meaningful to people, then apply your technology to satisfy that aspiration, that dream.
Letter from Shenzhen
I recently went to China to speak at a conference on innovation and to launch the Mandarin edition of my book Creative Intelligence. I knew I was flying into China’s booming “Innovation Moment” because the conference topic was “disruptive innovation in banking.” And it was being held in the city of Shenzhen, where dozens of start-up incubators and maker spaces have grown in in the shadow of shuttered shoe and toy factories. What I didn’t understand fully was that this burst of creativity was facing powerful political and economic forces that could easily destroy it. China’s “Innovation Moment” may well be fleeting.
The banking conference itself was fun. Alibaba and Tencent, China’s online ecommerce giants, have been rocking the traditional state-owned banking world of marble and glass buildings, long lines and serious-faced guards with online personal mobile payments and investment platforms. To my surprise, instead of middle-aged men in suits, the banking audience was composed of mostly young women and men in their late 20s and 30s who clearly were deep into the digital, social world in their personal lives. They were confident and willing to disrupt the business models of their own banks, if given the chance. At dinner, a copy of Creative Intelligence was put on everyone’s seat and we played at book-signing (books make very good swag).
For me, what really makes this China’s “Innovation Moment” is the depth of the creative capacities in companies. It’s not just about harnessing the latest technology or the exploding local venture capital market or even Alibaba’s incredible IPO that’s so exciting. It’s that Chinese innovators can go beyond a tech-centric approach to innovation to understand what is emotionally meaningful to their customers. They can reframe the conventional business model narrative to fashion new b2c engagements with people. And of course, being Chinese, they can scale like crazy. In banking, retail, communications, media, there is enormous disruptive innovation going on in China.
Take virtual hongbao. Hongbao are the red envelopes filled with cash that Chinese give to relatives and friends on holidays. Companies use hongbao in a big way. There is no more important ritual exchange in Chinese culture, especially on Chinese New Year. Tencent was the first to design “virtual hongbao” by allowing people who use its WeChat messaging app to send digital hongbao that put real money into the bank accounts of others. It was a brilliant integration of a tech innovation—online mobile money transfers—with a deep cultural practice to generate a powerful user experience. With people linking their bank accounts and credit cards to WeChat, Tencent also boosts its online businesses, such as taxi-hailing and ecommerce. And retail companies can open new branding and marketing channels through WeChat by giving hongbao that are linked to New Year’s events. Very smart.
Innovation is moving so fast in China that the disruptors are disrupting themselves. Tencent disrupted Alibaba, the pioneer in mobil money transfers, with this product. Alibaba has since come back to offer, on its Alipay platform, virtual hongbao exchanges on its social networks, Laiwang and Sina Weibo, China’s Twitter. Of course, we know the disruptive innovation Alibaba has unleashed in recent years—crowdsourcing movie/media investing, offering higher rates to Chinese savers and opening up whole new areas of investments for China’s upwardly mobile. There are now Chinese companies—big ones including computer giant Lenovo, as well as thousands of tiny new startups– that are doing innovation on a global par with American and European companies.
But I have doubts about whether it can continue and they began just as I walked into my hotel room. In Shenzhen (like everyone who travels), the moment I checked into the (pretty fancy) hotel, I checked my gmail and knew something was wrong. It was so incredibly slow. I couldn’t Google. I couldn’t get the NY Times. I’ve been to China before and this has never happened. In fact, this had never happened to me anywhere else in the world, including Russia. So I went down to find out what was wrong and a Chinese guest in the elevator told me. The government censors were finally into the Virtual Private networks (VPNs). For years, the deal in China was that the government would censor the internet for the masses but permit the elite to use VPNs (virtual private networks) to get around government controls. That allowed foreign and local business people, engineers, scientists, Communist Party bosses and bureaucrats, students, professors, the military—China’s elite—to breach the Great Firewall of censorship. Since the start of 2015, that is no longer the case. For China’s business class, including its many young entrepreneurs, China is increasingly cut off from the world.
That’s what I felt in Shenzhen—cut off. No Facebook, Google, New York Times, Bloomberg News, the Wall Street Journal and my gmail of course (a month after I returned to the US, Beijing cut off access to Reuters as well). That’s cutting me off from pretty much all the global economic and political news I use in my life. The only site I could access was the Financial Times, which is great but a singularly British lens on the world.
In addition, everything was so slow on my computer. It felt as though a government censor was in my room, at my keyboard, reading everything first and giving me permission to see just a little bit of the flow. The slowness itself freaked me out.
And it is disturbing Chinese innovators, as well. The Great Firewall is now so high it is preventing China’s innovators from accessing global networks. That means being cut off from the latest technology, business models, concepts, trends, talent, tools and capital. It means not being able to be on Facebook with your friends and workmates. The South China Morning Post (2/18/2015) quoted Pin Wang (@pinwang on Twitter), a video game designer who founded Substantial Games, (http://substantial-games.com) as saying “something that should take 15 seconds takes three or five minutes, and it screws with the way you flow or you work. We don’t have the resources to move because we’re a startup but we talk about it all the time.” Pin’s team can’t access their email, share documents, talk on Facebook or use other online services blocked by the internet censors.
This can’t be good for innovation.
At the banking conference, a friend who knew the city took me to visit the electronics part of Shenzhen. It’s a great part of that city, with towers after tower, 10, maybe 15 floors each full of electronics stalls, selling the latest in Chinese, Korean and American cell phones. It was a mob scene. China is huge market for mobile technology products. People love them. On our tour, we walked to the back and there was another scene—dozens of stalls with three or four people each assembling new “Apple” iPhone 6s and putting them inside fresh “Apple” boxes, wrapped perfectly. It was all done in public and I was stunned. It’s one thing to read about copying and counterfeiting in China, it’s quite another to see it being done so openly.
Counterfeiting clearly hurts foreign tech companies but it is now seriously undercutting the growing number of Chinese startups as well. In the ChaiHuo co-working space in Shenzhen, Ryan Liang (formerly of Philips and ZTE) developed a VR (virtual reality) headset (SMCP. March 3, 2015). Premier Li visited ChaiHuo in February to support the government’s drive to generate economic growth through innovation. What Li did not see were the cheaper knockoffs of Liang VR headset that were killing the product in the marketplace. “The economy has relied too much on copying other people’s creations and selling them at cheaper prices,” Liang said.
“It will take a lot of change for people to realize the true value of innovation.”
This can’t be good for innovation.
Neither is what I call the “Russification” of China’s economy. In this visit to China, I kept hearing about “who’s behind” this business, “who’s behind” that entrepreneur. By that phrase, people meant, which family and/or political faction secretly owned and favored different companies. Innovation depends on original thinking that is able to harness resources to scale in order to generate profits and rewards. If those rewards are then captured and taken away by powerful political groups, the incentive for innovation goes away. This is what has happened in Russia, with politically connected groups grabbing control of companies away from their founders. It began in the oil industry and has now spread to high-tech. Pavel Durov, 29, founder of Russia’s largest social network (with 100 million users), Vkontakte, left for Berlin recently after his two co-founders were forced to sell their stake to United Capital Partners, which the FT describes as “ a fund whose senior employees have strong Kremlin connections” (FT April 25, 2014). Durov is being joined in Berlin by a small army of Russian startup entrepreneurs who are fleeing the politicization of innovation.
It appears to be happening in China as well. Politically-connected families dominate the private sector. Ownership is opaque and crossing the wrong people can end a startup’s future. Caixin, the only significant independent China-based media organization, reported (2/9/15) that police from Hangzhou, Alibaba’s home province, went to Shenzhen province to scare Xiang Jun, the CEO and founder of Shenzhen Dimeng, a website that is involved in the sales of heavy-duty machinery. The company had posted accusations of Alibaba selling counterfeit goods and in doing so, evading 5 trillion yuan in taxes. Caixin quoted Xiang saying the police told him “do you have any idea who is behind Alibaba? If we told you, you would be scared to death…”
Actually, we don’t know who’s behind Alibaba. Founder Jack Ma didn’t reveal his co-owners to the investors of his IPO. But they appear to be powerful and connected. And they may have enemies. Xiang’s accusations came after the State Administration for Industry and Commerce (SAIC) publicized a private meeting with Ma where they accused Alibaba of selling counterfeit products online and not doing enough to end the practice. By going public, SAIC has undermined Alibaba’s New York IPO and unleashed a series of investor lawsuits. I don’t know what’s going on—and neither does anyone else—except to believe that there are political forces we cannot see that could be acting against China’s most successful innovator. Since SAIC’s action, Alibaba’s stock has languished. It hit its low of 81 ½ on March 3, down from its high of 120.
Russification also extends to foreign high-tech companies in China who are coming under attack for “corrupt” business practices that identicle to those of all Chinese companies, local as well as foreign. Glaxo, Apple, Daimler, Qualcom are all great global innovators, forced to pay billions in fines, offer their technology to local competitors and publicly humiliated. When the CCTV ran a TV show slamming Apple for bad service in China, it wasn’t clear whether the attack came from local rivals who paid CCTV journalists to attack Apple, from the government itself which uses CCTV as a propaganda vehicle or from reporters trying to shake down Apple. People in the high-tech/startup scene believe it is only a matter of time before Apple comes under serious attack again and made to pay a huge fine and cough up more technology.
Again, this can’t be good for innovation.
So it’s a pivotal time for innovation in China. On the surface, innovation is boiling, with swarms of startups and much disruption. Beijing is strongly pushing innovation to replace exports as the engine of economic growth. Ma Xingrui, the head of China’s highly successful space program, has just been appointed party boss of Shenzhen. We are looking forward to Ma energizing Shenzhen’s ambition to be the next world-class innovation hub,” said Guo Wanda, vice-president of the Shenzhen-based China Development Institute. “ I think Ma’s reputation in academics and aerospace could attract overseas talent and capital.”
Perhaps. But his reputation will have to outweigh many policy negatives if he is to successfully stimulate an innovation revolution in Shenzhen. I wish China’s many startup entrepreneurs good luck but I can’t help worry that China’s “Innovation Moment” may be ending just as a thousand flowers are beginning to bloom.
Whether it is the HP ink jet printer or the writing of “To Kill a Mockingbird” the role of the patron–the provider of resources–is often key in the creative process. We can identify the role of creativity patron ( I call this person the “Wanderer” in my book Creative Intelligence) today among angel investors and VCs in our tech startup economy but they are everywhere, from the Medicis in Florence to the people who financed a year in the life of the writer who had the time to write To Kill A Mockingbird.
Leadership in the creative process is a poorly understood social phenomenon. It isn’t taught in engineering, business or design schools. But it is a key element of success in innovation and creativity. The amazing success of Mr. Hewlett and Mr. Packard in the early years of HP had a lot to do with their management style–Managing by Waling Around. They walked around the many labs, curated the science and technology advancements being made in them, and choose which to nurture.
Of course, Kickstarter shows that we can now crowd source the curating and resourcing of creativity and innovation. Each one of us can now play the role of Hewlett and Packard.
This ability to curate and nurture creativity is at the heart of successful startups and breakthrough art and music. It is probably the most important leadership quality we need today.
Read the Financial Time’s Edward Luce’s insightful piece on the failure of MOOCs and the need for Liberal Arts to foster innovation and jobs in the US. Brilliant. The MOOC movement is falling apart because its pedagogical premises are false. It transmits data in a 19th century methodology through a 21st century delivery system. We focus on the delivery when it is the skill set and value systems in education that are key to raising our creative intelligence.
In the US, IT jobs are crashing but creative work is soaring. We need to move away from an exclusive focus on STEM towards a Humanities-based education fostering creativity. Progressive education–Montessori, building with blocks, John Dewey, learning by doing, not memorizing, is the future.
Mike Mandel at the Progressive Policy Institute has new data which shows that cities and localities with lots of new tech and iT jobs have bounced back faster and better from the Great Recession than other parts of the US. This is a big plus for Richard Florida’s argument that the Creative Class is a key generator of economic growth and higher incomes in cities.
The PPI data shows that startups and entrepreneurship are key to generating high-paying jobs. Policy-makers and the business press tend to focus on big business and finance but the important action lies elsewhere.
The polity implications are important. Much more effort has go to into supporting new companies. This includes finance (bolstering crowd-funding, improving the archaic venture capital business), regulation (cutting it for startups and new companies) and education (university campuses are cheap platforms for generating innovation and new companies).
Check out the list of counties that have the most tech/it new job growth. California leads, of course, but Brooklyn makes the top 25 list and there are surprises in between.
Great job Mike!
At this 5-Year Anniversary of the crash of Lehman Brothers and the beginning of the Great Recession, we are stuck in a weak recovery (except for stocks and those who own them), with unemployment still at 7.3%. Good-paying jobs are hard to come by and lots of folks have just bailed out of the job market entirely.
There may be a better way. Mike Mandel, one of the best economists around, thinks that The Internet of Things has the potential of igniting a new manufacturing boom in the US. He may be right. We need to get rid of the Finance Capitalism that has taken over and get back to Making again.
Here is Mike’s report:
Of all the innovations of the past 20 years, one of the most powerful has been financial innovation. Wall Street “quants” used technology and math to create new financial instruments that sliced and diced mortgages and sold the resulting "derivatives" around the globe. In the end, this financial innovation triggered a huge crisis that nearly tanked the entire global economy. We are still suffering from low employment as a consequence.
Larry Summers, who just withdrew his name for consideration of running the Fed, the US central bank, was a key innovator in financial innovation. In the Clinton Administration he pushed for deregulating the banks and for not regulating the new financial products. He believed in financial “modernity,” the creation of new financial products and services and the efficacy of markets to always make the right decisions. In his way, Summers was a huge promoter of innovation. And the failure of that innovation is what tanked his candidacy for the Fed. Congress, especially liberal Congress people, hold him personally responsible for the havoc that followed financial innovation.
So let’s take a minute to understand something that most designers, entrepreneurs, artists and creators in general tend to forget. Creativity and innovation are value-neutral. You can do good and do bad with the new. You can even think you are doing good and still do bad with innovation.
http://www.ft.com/intl/cms/s/0/a78aea30-1e6e-11e3-85e0-00144feab7de.html#axzz2f3Y2SYS4
There is a big happening sweeping through New York City and it is officially called “Fashion Week.” But really it should be called “The Creativity Carnival” and anyone and any business interested in innovation needs to participate. Fashion Week is all about discovering what Chicago School economist Frank Knight calls “higher order wants” that people dream of, often can’t express but desperately want to have. Higher order wants are the true engine of new products, new companies and new profits.
How does Fashion Week do all that? Look at the process. It’s a series of big Play Grounds, in tents at Lincoln Center and in studios all over Manhattan and Brooklyn, where ritual, deep play by creators takes place. They offer their original ideas to fashion experts (professionals and consumers) who jury the work. It’s serious play with serious economic consequence. It is Creative Capitalism and it requires three things to work: creative people, experts who can judge cutting edge work, and scalers who can take what is judged to be great and scale it into commercial brands sold on the market. Fashion Week does all this.
I am teaching Mihaly Csikszentmihaly’s book on Creativity in a course at Parsons on Creativity and Cities this week and “Chicks” says that “creativity must, in the last analysis, be seen not as something happening within a person but in the relationship within a system.” Fashion week is that system.
“Chicks” talks about how creativity takes place within a domain–fashion, science, math, music, health, painting–and new work is judged “creative” by a field of experts within that domain. He says that there are domains with cultures that welcome change, insist on change and those that don’t. Creativity happens fastest and most where it is core to the culture. Fashion is that kind of domain. He also says that creativity happens fastest in domain cultures that have the experienced experts to just what is truly unique. Again, Fashion is that kind of domain (see how this is important to your business culture?).
Fashion Week mirrors our society and economy because there are formal and informal Play Grounds. I went to the opening day of Fashion Week at Lincoln Center and the first thing I saw walking up the steps to the wide plaza were dozens of young designers who were NOT invited into the official Fashion Week runway tent all dressed up in their own clothes being photographed by dozens of friends and professional photographers. They were all posting their own fashion blobs and sites or the many other online “street” fashion sites.
Social media is expanding both the domain of Fashion and the field of “experts” who judge new work. It was amazingly cool and a significant addition to capitalism. What is “creative” is increasingly being determined by the “crowd” expert. It may be that extending the domain and field of experts wider changes the nature of Flow (“Chick’s biggest intellectual contribution). There is a big new push on Flow research. When you talk to brilliant tennis players, chess players, artists, designers or basketball players–really brilliant– they always talk about being "3 to 4 moves ahead” of their competition. So Flow is not just a state of being, it is a state of being forward. Way forward.
Again, Fashion is a domain where experts reward that kind of Flow. Runway shows are about showing off cutting edge fashion that then gets toned down for the prevailing market. But the goal is to go way forward. Alexander McQueen was brilliant at this. And the Lincoln Center Plaza unofficial runway show allowed for even wilder fashion looks, maybe 4 or 5 moves ahead.
When we talk about innovation and creativity, we need to understand the relationship between creator, culture and the city. Fashion Week in New York highlights all this. Fashion Week is about a lot more than just fashion.
I just came across a Wall Street Journal piece that I wrote for their online Speakeasy column when my book, Creative Intelligence, came out. It’s one of my best pieces. I especially like the “10 Fast Ways to Boost Your Creativity.”
10 Fast Ways to Boost Your Creative Intelligence
1) Find a creative friend. The social aspect of creativity cannot be underestimated. Spending time with creative peers can boost your energy and help you identify your own creative skills.
2) Map your creativity. Keep a daily journal about the places and activities that inspire you. Add something new one every month. Just changing the way you go to work every day can help.
3) Go for a long walk–or run or bike ride. Give yourself “zone-out” time to let your mind integrate all the new ideas you’re taking in. Creativity is social but still requires “alone time” too.
4) Conduct a “creativity audit.” Take a weekend to think about the knowledge and skills you have that you might be underutilizing. Dive deep into yourself. Bring a close friend to help.
5) Play the “reframe game.” Is your business or industry stagnating? Change the conventional wisdom about the way things have always been done and create something entirely new by connecting two previously unrelated ideas.
6) Find a wanderer. In their heyday, the labs at HP were hugely creative thanks to the founders’ policy of “managing by wandering around.” They choose promising research and championed it. Seek out the person at your organization who can help you bring your ideas into the world.
7) Become a wanderer. Find out what your colleagues and employees are thinking about and ask yourself: how can you help support their ideas? Can you become the person who makes things happen, whether by partnering with them or hooking them up with the right people?
8) Slow down. The rise in social media has left many of us longing for deeper, more meaningful experiences and engagements. There is an increasing need for people and organizations who can devise ways to help people simplify their lives.
9) Venture past the possible. We are often so accustomed to seeing things in a certain way that we’re blind to the possibility of something we can’t yet imagine. Set aside time each week to think about why things are the way they are, and imagine them differently.
10) Embrace uncertainty . There is so much change in our lives and in our work that it scares us, even paralyzes us. Yet uncertainty offers the greatest opportunities. With the right creative skills, you can make uncertainty a place of discovery for you.
http://blogs.wsj.com/speakeasy/2013/03/11/how-to-become-the-creative-employee-of-the-month/
Core77 has played a huge role in my career covering innovation. When I was launching the Innovation & Design online site at Business Week, Core77 was my first partner. It proved critical. Partnering with outside sources of content was, at that time in the early oughts, revolutionary at a print magazine. I took a lot of heat but Core77 allowed me to make it happen.
Here’s my Q&A off my new book, Creative intelligence.