Online Education--Do It!

 The authors of Marginal Revolution, one of the economics blogs I read, pioneered a new open education venture sponsored by their employer's Mercatus Center at George Mason University.   I enrolled in the course not only because I am an economics junkie who is interested in development economics as part of a current project in Uganda I am working on, but also because I am an innovation blogger.  I am learning and enjoying not only the teaching, but watching the project develop as a participant. 

I have been a fan of accredited online university learning for many years, and am following online edcuational innovation leaders such as iTunes U, Khan Academy, Udacity, Coursera, and edX.  So I have jumped in to experience the wave of innovation myself. 

Online education is a leading force in creative destruction globally.  Over the past two years, I have learned through the lectures of massive open online courses presented by Yale University, MIT, Harvard, Liberty, RTS, Berkeley, and others.   MRU is the first of the open courses I have taken to offer some level of quizzes (they are very simple), mid-term and final exams, and a certificate of completion. 

The podcasts are short; designed for life in our fast paced world.  I listen while driving as well as on my iPod at home.  Each short two to five minute segment is packed with information and links to supplemental articles and data.  The Development Economics course topics are great for those involved in international business, diplomats, residents of developing countries, and economics junkies in general. 

On the downside, the somewhat dull monotone style of the presenter's scripted reading is a minor distraction.  Since this is the dismal science I suppose it is fitting.

According to a recent article in The Economist, Clayton Christensen, a Harvard Business School professor and author of “The Innovative University” predicts “wholesale bankruptcies” over the next decade among standard universities.   Mr Christensen predicts that most universities below the upper tier will have to integrate a “second, virtual university” into the standard one. Good online classes would reduce the need for costly campus facilities and free teachers’ time for individual tutoring.  

As a CFO and lifelong learner, I am riding the wave of innovation as an early adopter.  Over the Christmas break, I am taking a Udacity class on business startups and refresher course in statistics as we are working on new strategy and a lean initiative where I work.  Coursera also has some offerings later this winter on innovation, and I am considering an introduction to computer science from Harvard via edX.  

I challenge all of you who have been out of college for more than a few years to update your skills by experiencing one of these innovative opportunities.  It keeps your brain active and will keep you competitive as your degree value decays. 

If you never had the opportunity to go to college, now you can!  Open course education will give you an advantage over others in the marketplace who also do not have a degree, or those who have an earned degree but are terrible at what they do.

If you are an educator or administrator in one of America's colleges and universities--remember Kodak.  The innovator's dilemma is real.  As a resident local to where Kodak was once a giant, help us redeem the demise and bankruptcy of Kodak by learning the lessons of its failure.  Take a course by the leaders of innovation, and decide whether online education is for real or not by firsthand experience. 

Let your creativity run, write down your ideas, learn, and grow!

Merry Christmas,

Kevin

Entrepreneuring Father, Son

I grew up the oldest son of an entrepreneur.  My dad left his secure job with Service Systems (now part of Sedexo), and started his own small business when I was 12 years old.  His venture capital of $50,000 came from a friend and businessman who owned a paper company.  My father started a commercial printing business, and after several years of 12-14 hour days, our family business employed over 15 people serving a list of prestigious corporate clients.  

After my father sold his business 10 years after starting the venture, some of our employees ventured out and started a similar business having learned the printing trade in that shop we called Port Of Printing in suburban Buffalo, New York.  My father, mostly unbeknownst to him, transmitted an entrepreneurial spirit to all he worked with. 

My dad taught me strategy, sales, and operations.  My mother and later a bookkeeper taught me accounting.  By the time I was 18, I was leading people, overseeing operations on the overnight shift, and learning how debits and credits and green sheets became financial statements. 

Recently, I have been reflecting on my own life strategy--how did I get here, and where am I going.  I have founded two non-profits, and at present manage a medium-size hybrid non-profit/for-profit entity.  I am contemplating yet another entrepreneurial venture with my own son.  The power of my father looms ever larger as I am working alongside two of my sons.

Despite stresses that often made the sparks fly between us at "the shop," my father taught me how to have a vision and risk everything to pursue a dream.  He taught me the work ethic that I have, in turn, passed down to my children.  My love for business, innovation, building organizations, and pursuing an MBA all came from him. So did the tendency to work too hard and enjoy life too little. 

Why did he go the route of entrepreneurship?  I often think about that at the beginning of February each year when I remember the day my dad died.  The articles below reminded me of my father.  So today, I share them with you. 
 

• Nature or Nurture: Decoding the DNA of An Entrprepreneur (Ernst and Young)
• The Founder's Dilemmas (Kauffman Foundation)
• Strategic Planning: Not Just for Big Business (Small Business Notes)
  
  
  
   

Is America Not Being The #1 Research Nation Bad?

via chartsbin.com


I have a friend who is a subsistence farmer in Uganda.  As friends, we discuss family, business, and life in both our very different worlds.  As I was thinking about my life in the USA and his life in East Africa, I realized what the map above demonstrates.  

For over 500 years, Europe and the USA have developed most of the world's research knowledge and innovation.  In fact, what the data behind this graphic shows is seven nations account for 92% of world research and development.  When China, India, and other emerging nations were still living at subsistence level economies, their vast populations were contributing few ideas to the development of the world.  

As the wealth of emerging market nations increases in coming years, so will their contribution to innovation.  China and India, especially, are building an increasing number of institutions of higher learning.  With more universities, colleges, and tech schools comes more research, development, innovation, and entrepreneurship.  The number of idea creators per million is increasing.  

New knowledge, new ideas, and new innovation is creating a new world.  New innovations disrupt the old because idea consumers adopt them to make their life better, easier, or more productive.  We live in exciting times when more people are generating more ideas.  America does not have to fall behind!

The USA can now benefit from world research and development.  Why do Scandinavian countries have more researchers per million than an other nation on earth?  Maybe it is cold there with nothing else to do?  I think the answer is much deeper than that. 

Richard Florida's study "Creativity and Prosperity" concludes that where economic and social development occur, the more innovative and prosperous a nation becomes.  America will continue to be a leading innovator in the world as long as our social and economic progress continues. 

It is not so bad to have other nations like China and India beginning to add to aggregate world research and creativity.  We will get "lift" from the new knowledge economies.  America still has first mover advantage and can continue to lead if we get education and government policy right.  The American way still has the drive to innovate.  We need to simply get out of our own way. 

iTunes Inheritances, Store Trek, Antibiotic Free Meat, Innovation Culture

MONDAY STARTUP: IDEAS AND STORIES TO JUMP START YOUR BRAIN

• Who Inherits Your iTunes When You Die? (Smart Money)
• Store Trek:Virtually Browse Supermarket Aisles And Buy Real Goods With Kinect (PSFK) 
• Ecommerce Fashion Retailer Integrates Instagram Onto Product Pages (Mashable)
• Find Meat Raised Without Antibiotics in Your Zip Code (Real Time Farms)
• A Financial Model That Attracts Investors (Entrepreneurship)
• Staying Relevant (Idea Connection) 
• 3 Ways To Kill Your Company's Idea-Stifling Shame Culture (Fast Company) 
• Today's Video: How to Spot Disruptive Innovation Opportunities
  
  

My Innovation Listmania!

Here is my Amazon Listmania of books I have read that shape my thinking about the theory and practice of innovation.  Enjoy!

I Have Returned to the Blogosphere

You emailed asking whether I had disruptively innovated or creatively destructed myself! Not a chance!

On June 1, we had a new CEO come on board where I work.  This left me little time for my work on "What's New?"  

I am excited to be back telling the stories of great innovators and entrepreneurs across America, what we can learn from them, and how together we make America the greatest creative power in the global ecosystem!

As a fan of NCAA, NFL, and Fantasy football, let's do a kickoff!  If you like Hollywood gossip and worship at the altar of celebrity, check out my brother Ken Baker's latest entrepreneurial venture!  Ken is an on-air correspondent at E! News in Hollywood. His soon to be released book "Fangirl" already is creating buzz from Perez Hilton and other H-Wood celeb marketers.

Don't forget... New blogs are

The College Wage Premium--The Right College Degree Is Everything

The debate on whether going to college is worth it has become a political and social issue in America.  Stats are bantered around left and right, yet this work by The Cleveland Fed is the best I have seen yet. 

Electrical engineering, computer science, and nursing provide the best pay for the dollars you spend going to college.  In the business management world, accounting; economics; and finance lead the way over general business administration and marketing.

The decision to go to college has a profound effect on wages; however, we have seen that both college major and the pursuit of an advanced degree have a critical impact on the value one receives from a college education as well. Other factors affecting the return to college not discussed here include college quality, occupational choices, hours worked, and the relevance of unobserved skills.

Full Cleveland Fed report here

Innovation Disrupts Regression to the Mean

In most of life, with the exception of tax cuts, people hate change.  Regression to the mean is not only a statistical concept, it is a behavioral reality and a threat to innovation. 

As a manager, change management is such a challenge because people hate risk.  Organizations and people in them say they want to make more profits or more money, yet are not willing to make the changes, and take the risks necessary to disrupt the status quo, make something new, and reap the profits for stepping out of the status quo.

Here are some innovative ideas taking place because someone has resisted the forces of regression to the mean to become an outlier, disrupt the status quo, and reap the rewards of having great ideas.

• Diabetes May Be Reversed by Long-Used Vaccine for TB (Bloomberg) 
• Innovation The Optimistic Science (Innovate on Purpose)
• Improved Immigration Laws Would Help Foreign Student Entrepreneurs Launch U.S. Companies, Create U.S. Jobs (Kauffman)

 

Drought: The Genetically Engineered Food Debate!

The Great Drought of 2012 wears on across the American corn belt adding to the misery of the current soft patch in the sluggish economic recovery.   As the economics of drought emerge again, the question being debated by farmers, producers, academics, and consumers is "Do we combat drought with innovation in conventional agronomic practices, or do we look to agri-biotech to boost global food production?"

Genetically engineered foods can create plants with the exact traits needed for a desired purpose.  Plants can be engineered to withstand disease, drought, cold weather, pests, and poor soil conditions.  These enhancements reduce the risk of crop failure and offer price stability to the world aggregate supply of grain. Plants can be enhanced to add nutritional values to help the malnourished of the world.    These are the benefits of agri-biotech. 

Concern about unintended consequences is the majority counter-argument which has been losing the debate over the past decade.  The effects of cross-contamination, allergens, unknown effects on humans, and the economics of seed cost are most often cited as reason to view genetically engineered food with caution or not at all.  As CFO for a food producer, I witness first hand every day the volatility of the food supply.  Charts like this mean prices for food around the world are going to increase.

The demand for 40% of corn grown in America to meet USA ethanol mandates will put pressure on the livestock industry that needs corn for feed.  Livestock will then look to other grains for feed.   Demand for corn and grains then raises prices which is good for farmers.  The downside is when crops fail, families around the world pay more for food, for protein, and for fuel.  This causes the greatest suffering in the poor and developing nations of the world that depend on importing grains for food. 

Are genetically modified plants the answer to volatility, hunger, and famine?  Do we work for innovation in conventional agronomics or biotech?  Let the debate begin!

Monsanto Presentation on Drought Tolerant Corn

The Debate Over Genetically Modified Foods (Action Bioscience)

GMO drought-tolerant corn over-promises: plant scientist (Reuters)

Genetically Modified Food May Be Making You Fast (FastCo)

How Steve Jobs Solved The Innovator's Dilemma or How ClaytonChristensen Got Apple Wrong

On page 408 of Walter Isaacson's "Steve Jobs" biography, Harvard innovation guru Clayton Christensen is quoted as saying in Wired "If Apple continues to rely on its proprietary architecture...the iPod will likely become a niche product."  Steve Jobs read Christensen's book "The Innovator's Dilemma" and solved the paradox that has brought down many a successful company. 

As one who has read Christensen and followed how he got Apple wrong, I think it is worth taking a blog to talk about why the highly regarded academic expert on innovation was outsmarted by Steve Jobs--a real innovator. 


Let's back up and define the innovator's dilemma. By doing what good companies are supposed to do--focus on pleasing their most profitable customers--industry leaders are paving the way for their own demise. How? By ignoring disruptive technologies--the new, cheaper innovations that initially target small customer segments but evolve to displace the reigning product.

From Dr. Christensen's website:

Disruptive innovation describes a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves ‘up market’, eventually displacing established competitors. 

An innovation that is disruptive allows a whole new population of consumers access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill.  Characteristics of disruptive businesses, at least in their initial stages, can include:  lower gross margins, smaller target markets, and simpler products and services that may not appear as attractive as existing solutions when compared against traditional performance metrics. 

Because companies tend to innovate faster than their customers’ lives change, most organizations eventually end up producing products or services that are too good, too expensive, and too inconvenient for many customers.  By only pursuing “sustaining innovations” that perpetuate what has historically helped them succeed, companies unwittingly open the door to “disruptive innovations”.

In its simplest form, the dilemma is management practices that allow companies to be leaders in mainstream markets sustaining and improving products they have innovated are the same practices that cause them to miss the opportunities offered by disruptive technologies.

In other words, well-managed companies fail because they are well managed. Paul Smalera of Reuters puts it this way:

Christensen shows how well-managed, profitable companies can become abject failures in a breathtakingly short time by doing all the right things: They refine their existing products to be better and better. They cater to their best, biggest customers. And they try to grow their profit margins with every passing quarter. But it turns out the path they’re on is something like C.S. Lewis’s gently sloping road to Hell.

So when Christensen predicted the iPod would be cannibalized by disruptive technologies if Apple did not license its FairPlay digital rights management to other device makers or allow other online stores to sell songs for use on an iPod, he was wrong because Steve Jobs and his team solved the innovator's dilemma!

When Apple nearly closed after the John Sculley era they were three months away from a bankruptcy.  Jobs returned as iCEO and restored the passion that created Apple before profits. 

His philosophy was make great products that solve problems customers don't know they have with products they do not realize they need yet.  By not falling into the trap of sustaining profits to please investors with more profits, Apple innovated a solution to the innovator's paradox. 

Steve Denning of Forbes said in 2010 that Apple, Amazon, and others who have solved the dilemma have developed a: 

consistent ability to innovate and to disrupt their own businesses with innovation...The stakes are high. Firms that opt not to change won’t survive. The choice for them is clear: delight your customers or die.Those nations that don’t change will not prosper. The choice for them is equally stark: promote continuous innovation or accept economic decline." 

The foundation of this blog is America is the leading creative power in the global world because we are still the leader in ideas, innovation, and entrepreneurship.  So once again, we learn that "innovate or die" is how Apple overcame the innovator's dilemma.  

The lesson: Do not make maximum profitability your company goal.  Focus on creating value for your customers with great products, and if that disrupts and cannibalizes your own products--you have solved the innovator's dilemma.

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