Innovation in the Cognitive Era

Throughout the industrial age there has been breakthrough innovation that has changed everything.

Way back when … most manufactured products were made by hand. A craftsman, or team of craftsmen, would create products by hand. They would use their skills, and hand tools, to create the individual parts before assembling them into the final product. The process was very labor intensive.   The assembly line, institutionalized by Henry Ford, changed everything. It also catapulted Ford to market leadership with The Model T and re-shaped the automobile industry … as well as the way all products are manufactured.

American railroads were originally planned to serve cities and their surrounding areas. It didn’t initially occur to city planners, or the railroad builders, that these networks might eventually need to connect with one another. This led to a mish mash of track and rail sizes (or gauges in railroad speak) … none of which were compatible. While some standardization was inevitable, by the 1870s, there were still over twenty different gauges in use in America. This stalled growth and hurt the industries ability to expand. Railroad standardization did eventually change everything and traveling by train became the de facto way people traveled long distances … at least until other travel innovations disrupted the railroad industry. Many supplemental innovation opportunities were created (such as luxury Pullman rail cars) as the transportation industry innovated its way forward, eventually adding new ways to travel (airplanes and automobiles).

Before the telephone and wireless radio (yes this was also before fax machines), the only way to send messages was by telegraph. The telegraph was a hard wired connection of send/receive points. I guess the use of smoke signals and homing pigeons had other imitations … like being too messy. Ever clean-up after a bunch of pigeons?

The telegraph was the primary form of long distance communication for the better part of a century … and Morse code was the language of the telegraph. Morse code was a system of dots (shown as asterisk below) and dashes, that when combined, formed words, letters and sentences. As you can imagine, it was highly inefficient. One of the last messages sent from The Titanic was:

*** ** * *

*** **** ** **,

*** ** * *

***- — -*– *- –* *.

Translated to English … it says, “FINE SHIP, FINE VOYAGE.”

I wonder when the ship started sinking how many messages didn’t get sent because the Morse coding and reassembly process was so cumbersome, time-consuming and error prone.

When Alexander Graham Bell invented the telephone … you guessed it … it changed everything. Many supplemental innovation opportunities were also created including wireless radio, broadcast television and every facet of communications.

These kinds of “change everything” opportunies don’t happen that often. So recognizing one as an innovation and business opportunity … may be more important then the innovation itself. After all, Ford, Bell and the Railroads only reaped a small fraction of the spoils. Entire massive industries in the transportation and communications were created. The savvy innovators and intrapreneurs understood the follow-on opportunities being created and capitalized on them.

Well .. most did. William Orten was not among them. He was the CEO of Western Union Telegraph Company in 1876. Western Union had a monopoly on the most advanced communications technology available (the telegraph) in 1876. Western Union was offered the patent on a Bell’s invention (the telephone), for $100,000 (or about $2M in 2014 dollars). The CEO (William Orten) considered the whole idea ridiculous and wrote directly to Alexander Graham Bell:

”After careful consideration of your invention, while it is a very interesting novelty, we have come to the conclusion that it has no commercial possibilities … What use could this company make of an electrical toy?”

Two years later, after the telephone began to take off, Orten realized the magnitude of his mistake, and spent years (unsuccessfully) challenging Bell’s patents. Ooops!!!

The computing industry is about to undergo a once on in a generation innovation opportunity. We are entering The Cognitve Era of computing.

The current computing model has reached it’s limits. The next level of value can’t be unlocked by current approaches. Data already flows from every device, replacing guessing and approximations with precise information … yet 80% of this data is unstructured … and therefore, invisible to computers and of limited use to business. There is simply too much information and most of it is noise. We need the ability to know what is relevant and useful.

More importantly, why don’t computers learn, adapt, reason and apply information the way I do?

We got here by first building computers that solved basic problems and/or enabled us to new things … before moving onto solving more advanced problems and/or raising the bar on our own ambition. It all got started in the late 19th century.

1890s – 1950s: The Tabulating Systems Era

  • Massive growth in people and things demanded single purpose systems that could count.
  • For the first time, a program like the US Social Security system was possible.

1950s – Today: The Programmable Systems Era

  • The increasing complexity of business and society demanded multipurpose systems that can apply logic to perform pre-programmed tasks.
  • For the first time, landing on the moon was possible.

Today: The Cognitive Systems Era

  • Continually changing scale and complexity now require real-time judgment from systems that can sense, learn and understand to help humans make decision and take action.
  • With technology augmenting and extending human intelligence, it’s difficult to imagine what is not possible.

Welcome to the The Cognitve Era … where cognitive systems can understand the world through sensing and interaction, reason using hypotheses and arguments and learn from experts and through data:

  • Understand unstructured data, through sensing and interaction.
  • Reason about it by generating hypotheses, considering, arguments, and recommendations.
  • Learn from training by experts, from every interaction, and from continually ingesting data. In fact, they never stop learning.

This changes everything!

And like those other once in a generation innovation opportunities, now is the time to get involved. Start by educating yourself and begin experimenting. Look for cognitive innovation in these five areas:

  1. Deeper Human Engagement: Cognitive businesses create more fully human interactions with people—based on the mode, form and quality each person prefers. They take advantage of what is available today to create a fine-grained picture of individuals—geo-location data, web interactions, transaction history, loyalty program patterns, EMRs, data from wearables—and add to that picture details that have been hard or impossible to detect: tone, sentiment, emotional state, environmental conditions, strength and nature of a person’s relationships. They reason through the sum total of all this structured and unstructured data to find what really matters in engaging a person. By continuously learning, these engagements deliver greater and greater value, and become more natural, anticipatory and emotionally meaningful.
  2. Elevated Expertise: Every industry and profession’s knowledge is expanding at a rate faster than any professional can keep up with—journals, new protocols, new legislation, new practices, and entire new fields.
  3. Cognitive Products and Services: Cognition enables new classes of products and services to sense, reason and learn about their users and the world around them. This allows for continuous improvement and adaptation, and augments their ability to deliver on products and services not previously imagined.
  4. Cognitive Processes and Operations: Cognition also transforms how a company operates and functions. Business processes infused with cognitive capabilities capitalize on the phenomenon of data, from internal and external sources. This gives them heightened awareness of workflows, context and environment—leading to continuous learning, better forecasting and operational effectiveness—along with decision-making at the speed of today’s data.
  5. Intelligent Exploration and Discovery: Ultimately, the most powerful tool that cognitive businesses will possess is far better “headlights” into an increasingly volatile and complex future. Such headlights are becoming more important, as leaders in all industries are compelled to place big bets—on drug development, on complex financial modeling, on materials science innovation, and on launching a startup. By applying cognitive technologies to vast amounts of data, leaders can uncover patterns, opportunities and actionable hypotheses that would be virtually impossible to discover using traditional research or programmable systems alone.

Innovators, entrepreneurs and intrapreneurs should all be licking their chops at the numerous ways to capitalize on this.

This does change everything! … hopefully you agree.  More from IBM on The Cognitive Era … check out the short video.

As always, leave me your thoughts and ideas here.

A Personal Perspective on Entrepreneurship and Intrapreneurship in Africa

The first time I heard of Africa was probably my mother saying “clean your plate, there are children starving in Ethiopia” … at the dinner time (when I wouldn’t eat my vegetables on numerous occasions). The infamous famine was over 30 years ago now (remember Bob Geldof and Live Aid).  I don’t remember us studying Africa in school but I suppose we did … and until recently; many of my personal perceptions of the continent were out-of-date – probably too similar to that of most insulated Americans, which were very different from today’s reality.

It turns out, that Africa is on the rise.  According to the McKinsey Global Institute, by 2020 Africa’s nominal GDP is expected to reach US $2.6 Trillion (eclipsing Canada $2.19 Trillion and close to India’s $2.9 Trillion). 54 cities in Africa (more than Europe) have over 1 million people each.  400 million Africans live in cities (India has 340M).  Smartphone users are expected to increase from 67 million to 360 million by 2025.

Growth prospects for Africa remain positive and the region’s GDP growth is projected to rise.  African households in the middle income group are projected to rise to 128 million in 10 years.  The continent has more than 500 million people of working age (15-64). By 2040, that number is projected to exceed 1.1 billion … or more than in China or India.

I met some remarkable people this week who happen to come from Africa.  About this time last year, I became aware of an organization called The Young African Leadership Initiative (YALI) through my employer (IBM) … who sponsors this organization in part.  IBM is one of a handful of companies who are actively involved with YALI.  The United States’ commitment to Africa is long-standing and deep.  The United States has invested in development partnerships with Africans to foster sustained economic growth as well as improved quality of life issues.

Selected from roughly 50,000 applications, the class of 2015 YALI Mandela Washington Fellows represents the promise of an emerging generation of entrepreneurs and intrapreneurs.  Mandela Washington Fellows have proven track records of leadership and demonstrate a strong commitment to contributing their skills and talents to strengthening and serving their communities.

The current class of Fellows represents all 49 countries in sub-Saharan Africa and included equal numbers of men and women.  Many of them operate their own businesses.  Nearly all Fellows were the first in their families to visit the United States.  They are in the US for six plus jam-packed weeks of education and experiences.

I was asked to teach an all day course on entrepreneurship at the University of Notre Dame – one of the hosting campuses.

Even with a lifetime of both entrepreneurial and intrapreneurial experiences to draw upon, I was a little uncertain how to approach the class.  As I read the biographies of the Fellows, it was obvious that many in this group of people had a very different lifetime of experiences than I did.  I could only imagine the motivation they had to draw upon.  I was actually a little concerned that I might not be able to relate to them and the class might not go well.

Once the class started, all of these fears were washed away.  It turns out that the language of entrepreneurship is universal.  Defining a market, creating competitive differentiation or figuring out a SWOT Analysis is universal … regardless of where you come from, what you have done in your past or whether you eat your vegetables.

Hopefully the information I presented will help them succeed with their various endeavors.  I felt as if I connected with many of the students and in some cases, created relationships that will stand the test of time.  One student even gave me a personal momento he brought from his country. This small gesture touched me.

I am proud to be associated with YALI. The prospects for companies who choose to do business in Africa looks bright.  Most importantly, the future for this group of people is brightest of all.

As a side note … President Obama is scheduled to speak the upcoming 6th Global Entrepreneurship Summit being held in Nairobi.  President Obama elevated entrepreneurship to the forefront of the United States’ engagement agenda during a historic speech in Cairo in 2009. The GES has expanded each year, subsequently hosted by the governments of Turkey, the United Arab Emirates, Malaysia, and Morocco.  This is the 6th annual gathering of entrepreneurs at all stages of business development, business leaders, mentors, and high-level government officials.

Leave me your thoughts and comments.

What Is An Intrapreneur Anyway?

The word entrepreneur is more than 150 years old, having come into English from French in 1828. But it was not until comparatively recently that its intra-corporate counterpart, intrapreneur, was introduced to the business lexicon.

“a person within a large corporation who takes direct responsibility for turning an idea into a profitable finished product through assertive risk-taking and innovation.”

The term is usually credited to Gifford Pinchot (the grandson of the first Chief of The US Forest Service, also the 28th Governor of Pennsylvania, with the same name). According to Mr. Pinchot’s website, in a 1982 The Economist magazine article, Norman Macrae gave credit to Gifford Pinchot as the inventor of the word intrapreneur. Mr. Pinchot went on to publish his book “Intrapreneuring” in 1985. In 1992, The American Heritage Dictionary added Intrapreneur … giving new legitimacy to the term.

There are obvious derivations of the word … Intrapreneurship, Intrapreneurial, Intrapreneuring and even Intrapreneurist (the name of this blog – but I’ll save that explanation for another blog – it’s sort of a John Wayne thing).

In a September 30, 1985 Newsweek magazine interview, Steve Jobs used the term to describe his team, “The Macintosh team was what is commonly known as intrapreneurship, a group of people going in essence back to the garage, but in a large company”).

Wikipedia has embraced and references the original American Heritage Dictionary definition cited above. This definition is by far the best. I give this definition an “A”.  I will make a small tweak or two in my version below but it’s a solid “A” nonetheless. There are strong decision-making and collaboration components in support of the risk taking aspect … and navigating corporate politics make collaboration essential, which is something entrepreneurs don’t have to worry about. Also implied in the definition, is the fact that the role requires strategy, execution and delivery of results.

My tweaked version is: “a person within a large organization who takes direct responsibility for turning an idea (or innovation) into a profitable finished offering through assertive risk-taking and effective stakeholder collaboration.”

Here are some other popular definitions:

Dictionary.com (which is based on the 2014 Random House Dictionary)an employee of a large corporation who is given freedom and financial support to create new products, services, systems, etc., and does not have to follow the corporation’s usual routines or protocols.

My rating is a “C-“. This definition is a little loosy goosy … intrapreneurs may get some latitude but freedom is a stretch. Saying they do not have to follow protocols is also a stretch.

Dictionary.com II (which is based on the 2009 Collins English Dictionary)a person who while remaining within a larger organization uses entrepreneurial skills to develop a new product or line of business as a subsidiary of the organization.

My rating is a “B-“. This definition is tighter. Saying that an intrapreneur develops a new product as a subsidiary does not make sense organizationally though.

Merriam Webster Dictionary: a corporate executive who develops new enterprises within the corporation.

My rating is a “D-“. This definition is too short and limiting. You don’t have to be an executive, and intrapreneurs don’t develop just new enterprises or work in only corporations. Pretty poor for such a prestigious brand. I suppose being too narrow is not as bad as being wrong though.

Speaking of wrong … the usually reliable Investopedia has a rather bizarre definition: An inside entrepreneur, or an entrepreneur within a large firm, who uses entrepreneurial skills without incurring the risks associated with those activities. Intrapreneurs are usually employees within a company who are assigned a special idea or project, and are instructed to develop the project like an entrepreneur would. Intrapreneurs usually have the resources and capabilities of the firm at their disposal. The intrapreneur’s main job is to turn that special idea or project into a profitable venture for the company.

My rating is an “F” (can I rate it lower?). This definition is laughable. Being assigned an idea and instructed to be an entrepreneur is a hilarious notion. It sort of misses the point doesn’t it? … and takes all the initiative out of it. Having all the resources and capabilities at one’s disposal is also an amusing thought.

When I started writing this blog, I did not expect to find such a large disparity of definitions. I was disappointed to find so many uninformed (aka lame) “name brand” definitional sources.

What is your definition?

As always, leave me your thoughts and ideas here.

Entrepreneurship Alive and Well in Local DC Area

I had lunch recently with my good friend and local entrepreneurial legend Ching-Ho Fung.  Ching-Ho was the Chairman of Parature until the recent sale to Microsoft in January for $100 million.  We were both in a reflective mood and discussed the state of entrepreneurship in the DC region.  I was struck how much is happening in support of entrepreneurship.

Along those lines, I attended a DC I-Corps event on 3/28 on the recommendation of Jim Chung, the Executive Director of Entrepreneurship and Technology Transfer for George Washington University.  DC I-Corps is a regional program designed to foster, grow and nurture an innovation ecosystem in the nation’s capital, the nearby states of Maryland and Virginia, and the mid-Atlantic region.  It is sponsored by the National Science Foundation and jointly run by the University of Maryland College Park, George Washington University, and Virginia Tech.

The event featured presentations by four “teams” who are graduating to the next phase of the program and will/may become ventures one day soon.  Keep an eye out for ToxFix, ReadAhead, SmartPupilometer and RedShred.  All four look promising because they address real-world problems.  It’s part of the “Evidence Based Entrepreneurship” concept taught within the program.  I was particularly fascinated with RedShred as their RFP response solution is based on natural language processing techniques … something I have blogged about many times.  It’s a great example of a burgeoning Cognitive Computing solution.

Interestingly … the definition of a start-up by the I-Corps program is “A temporary organization designed to search for a scalable repeatable business model”.  I love this concept since it teaches entrepreneurs to find problems first that they can then address with a solution (and it’s value) before anything else.  It’s the right model.

I can’t tell you how many meetings I’ve been in where some product manager is trying to apply the “every problem looks like a nail if you are a hammer” mentality.  That’s the wrong model.  Additionally, many entrepreneurs think the first thing they need to do to find venture capital.  There is a place for that but it’s not first.

I-Corps has gotten it right.  From what I can tell, this looks like a good program for anyone with an idea, or invention, to get started on the right foot.  In recent years, all of the local universities seem to be been expanding their focus on entrepreneurship.

The Dingman Center for Entrepreneurship at the University of Maryland have certainly expanded their offerings.  Next for them is the 2014 Cupid’s Cup Business Competition.

I plan to attend that one as well … and hope to see you there.  I also plan to blog more on both entrepreneurship (as well as intrapreneurship) going forward … so stop back soon.

As always, leave me your thoughts and comments below.