MIT Sloan Management Review

A tech research firm CEO recently tweeted: “After six months with my Kindle I can now report that the damn thing is indispensible. This Amazon toast was perfectly
cooked.” I wish I had the version he seems to have. In mine, which seems to be the standard model, the screen isn’t bright enough, the lack of a touch screen makes it quite unbooklike, you can’t download any Saul Bellow, and don’t get me started on the digital rights restrictions it locks you into. For personal use, the latest version of the Kindle is decidedly undercooked, useful mostly when you’re traveling and want a lighter load. As Nicholson Baker noted in The New Yorker, reading Kindle books on an iPhone is a much more pleasant experience. There are, though, plenty of business purposes for the Kindle and similar competing devices, ranging from easy access to documentation of complex items (you try walking around the Boeing factory with a 30-pound aircraft manual) to relatively lightweight distribution of PDFs (as long as they’re mostly text).

But what about the Kindle as management tool? New devices, be they PCs in the 1980s or BlackBerrys right about now, rise to prominence in business when they are effective ways for managers to communicate and get work done. It’s no accident that business purchases of iPhones took off after Apple made it easier to connect to Exchange-based office systems. Anyone who has paid attention to the book business in recent years knows that a $300 device devoted solely to books is unlikely to be a blockbuster. You can read Kindle books on an iPhone, but it’s surely not the main reason anyone buys one. It’s unclear where Amazon wants to go next with the Kindle. A $500 large-screen version seems focused on reaching academic and periodical-reading markets, although I suspect that getting people already abandoning newspapers to buy a $500 device to read them will not reverse that slide.

What is clear is that the device won’t be a success among managers in its current incarnation. The device is great at selling books (it’s from Amazon; what did you expect?) but it’s not very good for reading or communication. Consider the web browser. There is one built into the Kindle, but it’s hidden in an “experimental” menu and it’s not very good. There’s no incentive now for Amazon to improve it, since the primary purpose of the device’s free connectivity is to download books and Amazon eats the bandwidth cost. Fixing the web browser will require software improvements (more self-evident controls), hardware improvements (touch screen, at the very least), and a business-model improvement: a subscription model. By making the software and hardware improvements, Amazon can make the Kindle more useful to managers. And by making the Kindle a subsidized device with a regular, reliable income stream, like a phone, Amazon can sell the Kindle to businesses in ways businesses understand. Without business buy-in, a decade from now we’ll be talking about the Kindle the way we now consider the Apple Newton.

Do you have a Kindle? Are you getting some management use out of it? Let us know what you’re doing in the comments.

We here at MIT Sloan Management Review are voracious readers. After all, part of our service is to read management literature so you don’t have to read all of it. But it’s not only academic journals that are full of smart management ideas you can act on. This week’s issue of The Economist has a pair of articles in particular that hit the spot:

In “Creative Tension,” the magazine looks at ways Google is trying to make sure that the inevitable bureaucracy that comes with having 20,000 employees doesn’t stifle innovation. The example in question is Google Wave, a still-in-development mix of email, chat, and file-sharing that some think might unseat Microsoft’s SharePoint. How different was the development of Wave from what the company does usually? Quite a bit. “Some Googlers felt this was a betrayal of the firm’s open culture.”

“A Maket for Ideas” looks at how the Eli Lilly startup Innocentive has created an “innovation marketplace.” “Seekers” post problems and quote a fee; “solvers” compete to answer them. It’s turning out to be a successful model, even as the parent Eli Lilly is cutting jobs.

Finally, the magazine also debuted a new column on business and management that it’s calling “Schumpeter.” As you might expect, the column kicks off with an entry on why it is named after Joseph Schumpeter, who the column identifies as “one of the few intellectuals who saw business straight.” We’re curious to see how this new page tries to do the same.

Here’s a sign of the times: McKinsey & Company’s ‘What Matters” site hosted an online debate about innovation — except both of the expert authors, Iqbal Z. Quadir and Robert Atkinson, agreed on the central topic of the debate: that Asia could become the world’s innovation center in the 21st century. (Quadir, who directs the Legatum Center at MIT and founded GrameenPhone, focused more on Asia’s strengths, Atkinson more on shortcomings in U.S. industrial policy.)

Meanwhile, Aneesh Chopra, the Obama administration’s chief technology officer, said in an interview this week with the San Jose Mercury News that he is concerned about the U.S.’s competitive position in technology innovation. Asked in the interview if he was worried about U.S. competitiveness in business and technology, Chopra responded: “Absolutely.”  

Chopra cited findings from an Information Technology and Innovation Foundation report earlier this year that reported that, although the U.S ranks reasonably well in current competitiveness, it ranked last among 40 nations in its improvement in various competitiveness indicators.

The New York Times  reports this week on how the rapid growth of “digital data”  – everything from public records in digital form to information generated from social network traffic  – creates all kinds of new opportunities for statistical analysis – and for statisticians.  “We’re rapidly entering a world where everything can be monitored and measured,” Erik Brynjolfsson, director of the MIT Center for Digital Business, told The New York Times.

This week was a big one for innovation here at MIT — in that the winner of the 20th annual MIT $100K Entrepreneurship Competition was announced Wednesday. Ksplice, the winning company from a record 260 entries, has developed technology that enables users to install software updates without rebooting their computers. The start-up was founded by five MIT engineers.

From an innovation point of view, the story of Ksplice’s founding illustrates an important theme: an idea born from a frustration with the status quo. According to an article by Ksplice COO Waseem Daher, Jeff Arnold, one of the company’s founders, was managing servers at MIT. A security update arrived in the middle of the week. Arnold decided not to install it until a more quiet weekend period – only to see the system compromised before then, so that all the software had to be reinstalled.

Arnold’s response, according to Daher? After expressing frustration, Arnold went on to write “an award-winning master’s thesis” addressing ways to update software without system reboots. And that’s the technology behind KSplice.

You can read Daher’s fascinating account of the company’s journey to the $100K finals at Xconomy.com.

How is innovation faring during the economic downturn? The answer depends on whom you ask. Recently, we have seen interesting, but somewhat conflicting, reports on the state of innovation in the U.S. economy.

First, The Wall Street Journal reported some surprising good news last week: Despite the economy, large U.S. companies spent almost as much on R&D in the fourth quarter of 2008 as they did a year prior. Write Justin Scheck and Paul Glader of The Wall Street Journal: “Big R&D spenders say they’ve learned from past downturns that they must invest through tough times if they hope to compete when the economy improves.” 

But Scott Anthony, president of Innosight, worries in a blog item on the Harvard Business Publishing site that, in this difficult economy, companies could focus too much of their R&D on improving existing products — rather than on bigger innovation opportunities.

And Sramana Mitra, in a column for Forbes.com, suggests that we need to address  systemic economic problems that inhibit innovation – such as a focus on short-term speculation. One key, she thinks: Government funding of technology research at universities.  She cites the Internet as an example of a technological breakthrough that emerged out of “a sustained R&D effort over a long period of time. ”

Similarly, diverging views on the future of innovation are represented in the Spring 2009 issue  of the MIT Sloan Management Review: Clayton M. Christensen of Harvard Business School predicts that the downturn will be good for innovation, whiles Joshua Gans of Melbourne Business School expresses concern about the effect of the financial crisis on technology start-ups.

What do you think? Are these auspicious or inauspicious times for innovation?

Will technology innovation eventually help lead the economy out of recession?   Simon Johnson of the MIT Sloan School of Management is predicting “a wave of entrepreneurship,”  which will start ”right away” but whose total effect won’t be felt for about five years, according to a recent article in The Boston Globe.  Johnson notes that, in recent years, the wealth of Wall Street attracted many of the best technical minds into “financial engineering.” That’s now changing, for obvious reasons.

Meanwhile, MIT President Susan Hockfield recently shared with attendees at the fourth annual MIT Energy Conference her view that innovation will drive economic growth. Said Hockfield:

“I’m convinced that the next wave of economic growth will rise from the same source that powered the information and biotechnology revolutions: from innovation. And today, by far the most powerful potential for immediate, catalytic innovation is alternative energy.”

In what areas could technology bring new prosperity? That question was posed to a number of MIT professors in various fields last spring. Their answers ranged from biosolar cells to robots to sustainable cities.

For more on the innovating-in-a-downturn theme, read about Clayton Christensen’s views on how hard times can drive innovation.

The new issue of Science features a guest editorial by MIT President Susan Hockfield titled “The Next Innovation Revolution.”  Writes Hockfield: 

U.S. Federal investments in basic research transformed life and commerce in the 20th century….The United States can anticipate comparable world-changing innovations in the 21st century if we adapt our education and research funding strategies to capitalize on new opportunities emerging at the convergence of the life sciences with the physical sciences and engineering.

However, Hockfield notes, fostering this wave of innovation will require changes — such as an increasingly interdisciplinary approach to funding research and to educating science and engineering students.

A new report declares Singapore the nation best positioned to compete on the basis of technological innovation. The rankings, put together by The Information Technology and Innovation Foundation, were crafted using a score based on a variety of measures, ranging from the level of higher education attainment for young adults to corporate investment in R&D and marginal corporate tax rates.

The report also suggests that while the United States ranked #6 among 36 nations and four regions considered, the U.S. is losing ground competitively, and ranked last in its improvement of its innovation capacity and competitiveness over the last decade.  The report’s authors, Robert D. Atkinson and Scott M. Andes, write:

“Like an aging sports dynasty that has won the Super Bowl for many years but blithely ignores the rising performance of younger teams, many in the United States still persist in believing that the United States is number 1 and that it is its destiny to remain so almost irregardless of what it does.”

Related link: John Kao, author of the book Innovation Nation, on the role of Singapore’s government in its innovation push.

(Follow all of MIT Sloan Management Review’s TED coverage.)

TEDsters smile through financial meltdown. That’s the headline of a blog post WIRED’s Steven Levy wrote yesterday, essentially arguing that all the optimism in the presentations ignored the multi-trillion-dollar elephant in the room: the current financial horror. TED curator Chris Anderson took that on from the stage first thing this morning. “There might be issues in our world more important than the Gross Domestic Product,” he said. “Market cycles come and go. Good ideas last forever.” To underline that final point, he pulled out a John Maynard Keynes quote from 1930 that felt like it could have been written today:

“This is a nightmare, which will pass away with the morning. For the resources of nature and man’s devices are just as fertile and productive as they ever were. The rate of our progress toward solving the material problems of life is not less rapid. We are as capable as before of affording for everyone a high standard of life … We were not previously deceived. But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time — perhaps for a long time.”

The point of the conference, I suppose, is to think beyond the current catastrophe to what may lie beyond. That’s how Juan Enriquez started the conference on Wednesday, and that’s how the mostly sober panels today ended it.

The best way to predict the future is to invent it, Alan Kay (once a TED speaker, naturally) said famously, so it’s not surprising that these makers of the future are interested in predicting it, too. The first session today took on the notion of prediction from a variety of angles. It’s a topic our magazine has covered intensely recently (see our most recent issue).

The first predictor up was Nate Silver, who became everyone’s favorite statistician during the last election cycle with his website fivethirtyeight.com. Silver has a point of view — he’s left of center (no surprise; I’m guessing there were more mosquitoes than Republicans at TED this year) — but he seems much more interested in where the numbers take him than in making political points. And his interests are wide-ranging: before he turned to politics he was best know for his sabermetric research. As with so many TED speakers, Silver started his talk with a provocative question — “Is racism predictable?” — and used presidential election results from 1996 to 2008 to back up his argument that it is. His evidence wasn’t particularly surprising: uneducated, rural whites who have little interaction with African Americans are most likely to be racist, the numbers show. This being TED, Silver also took a crack at how to fix the problem. The most provocative of his suggestions was an intercollegiate exchange program between urban and rural colleges. These might seem far-fetched, but they illuminated Silver’s basic point that what is predictable is also designable.

Political scientist Bruce Bueno de Mesquita was more grandiose. A consultant to the CIA and Department of Defense, he uses game theory to predict the future. Some of his more famous predictions weren’t particularly revelatory (everyone saw the second intifada in Palestine coming), but he agreed with Silver’s predictable=designable premise, saying “you predict the future so you can engineer it.” His provocative question was “What will Iran do?” Bueno de Mesquita argued that full development of a bomb is unlikely and President Ahmadinejad is likely to see his power lessen in the years to come. He “backed up” his hypothesis with plenty of charts, but unlike Silver, who labelled every slide meticulously, he offered up some charts that didn’t even bother to mention what both axes stood for. I hope his prediction of a relatively accommodating Iran is true, but I also took photos of all of his slides just in case. Trust, but verify.

Two MIT-associated speakers rounded out the session. Media Lab giant Nicholas Negroponte gave a brief talk about the status of his One Laptop Per Child (OLPC) project that managed to be both angry and optimistic. It was part rant against the makers of tiny “netbook” laptops, which dominate the market OLPC created, and part vision for the future of OLPC. Both parts were entertaining. “The commercial markets will go to no end to stop us. Netbooks didn’t steal the right things from us,” Negroponte said as he tossed two of the sturdy OLPC devices across the stage. They landed hard and unharmed; you could count on regular laptops to do only the former. The next step in the development of the OLPC is to move to open source hardware: build hardware with open specifications that everyone can copy. It’s a canny move, changing the playing field when the current one isn’t yielding ideal results.

Then Dan Ariely talked about behavioral economics. His stories wouldn’t have been new to anyone who read his book Predictably Irrational: The Hidden Forces That Shape Our Decisions or read senior editor Alden M. Hayashi’s interview with him in MIT Sloan Management Review. Yet he’s an energetic speaker and most in the audience seemed unfamiliar with his work, despite his book having been sent to TED attendees several months ago. His vision of a world in which people reliably make easily anticipated errors has quickly moved from counterintuitive to conventional wisdom.

“From counterintuitive to conventional wisdom” is also, in a sense, the dream that powers TED. Ideas are launched here and sometimes, as with, say, Al Gore’s initial climate crisis presentation, the world accepts them. Some may be put off by the event’s optimism and elitism — and there are good arguments against both of them, but the ideas are stronger than any inadequacies in attitude. As fellow TED attendee Paul Kedrosky twittered earlier today, “For all TED’s flaws, criticisms, etc., it remains a magic thing.” Now let’s see what happens to the ideas from this year’s TED over the next 12 months.

This week, MIT Sloan Management Review is in Long Beach, Calif., for this year’s TED conference, which starts tomorrow. We’ll report daily. Now in its 25th year, TED remains an unclassifiable event. The letters of the name originally stood for technology, entertainment, and design, but in recent years the tag line for the event has become “ideas worth spreading.”

The event is certainly an elitist one. It’s expensive, hard to get into, and you’re just as likely to bump into web inventor Tim Berners-Lee as Overboard star Goldie Hawn in the food lines. If nothing else, TED is a trip. The veteran conference (this reporter has been to six of them) has gone through many permutations. Under curator Chris Anderson, TED is still full of technology, entertainment, and design, but it has really lived up to the change-the-world rhetoric that was always a bit more under the surface during Richard Saul Wurman’s ace stewardship. One high-profile example: Al Gore’s warning about global warming turned into An Inconvenient Truth after a movie producer saw him deliver the talk at TED. Last year E.O. Wilson debuted here the first iteration of his Encyclopedia of Life, funded by a TED grant.

The change-the-world attitude gets a bit out of hand: there’s plenty of talk about how for the past two years the gift bags, by Rickshaw Bagworks, have been constructed from 100-percent post-consumer recycled beverage bottles, but hardly anyone points out that the bags are overstuffed with non-essential items that have a much greater impact on the environment. Indeed, TED is a place for conspicuous consumption, even if it’s relatively sustainable consumption; it’s the only conference I’ve been to in which I’ve seen anyone drive up in a Tesla. (I’ve seen two today here as well as an even more cutting-edge vehicle.) Those with similar ambitions to TED’s, but a more limited budget, may wish to consider attending the alt-TED BIL, which is also in Long Beach this week (and which I hope to visit while I’m here).

For many years, TED was held in Monterey, Calif., but success has brought it to a larger venue farther south, in Long Beach (there’s a smaller, parallel, event being held east of here, in Palm Springs). At Monterey, most of the conference took place in one area. Here, with banners everywhere and events more spread out, it feels like the event has taken over the town, like Sundance does in Park City, South by Southwest does in Austin, and Davos (aka the World Economic Forum) does in, well, Davos. We’ll see how that works.

Indeed, just like last year, TED is coming right after Davos, which was a downer and inspired anger from even sober-minded management thinkers. Last year, TED presenter Craig Venter contrasted the optimism of TED with the pessimism of Davos. This year, especially, we could use a little optimism.

Especially if that optimism is realistic. Except for its entertainers, TED is an irony-free zone, a place where earnest speakers talk about fixing the world as if it is not merely possible, but mandatory. As we’ll see during the conference, the speakers here have a pretty good track record at improving one or another part of the world. The theme for this year’s event is “The Great Unveiling,” which refers in part to the conference’s new location, but also to new ideas due to be debuted here.

So why should managers care what’s happening here? Because the best new ideas helps make good managers better. The joke among TEDsters (an annoying term, yes, but it has stuck) is that attending the conference is an endurance sport. It’s one thing to be in a room listening to spectacular insights for a few hours. It’s another to be doing so for half a week. Nonetheless, part of the experience you get from being at events like TED is that feeling of being overwhelmed: someone just said what feels like the smartest thing you ever heard — and then the next speaker says what feels like the smartest thing you ever heard — and then … well, you get the idea. It’s intellectually exhausting, but it’s also thrilling. And, during the best talks, you can’t help thinking: How can I act on this?

Americans sometimes express concern about the country’s future capacity to innovate in science and technology. But a new survey offers at least one hopeful sign: 85% of U.S. teens surveyed recently by the Lemelson-MIT Program expressed at least some interest in science, technology, engineering and mathematics, and 80% feel that their school has prepared them to pursue a career in one of those fields, if they choose to. One big motivator: Protecting the environment. Thirty percent of students surveyed indicated that the idea of helping and protecting the environment would most inspire them to pursue a scientific/technology-oriented career.

But the survey also highlighted some obstacles. When the teens were asked what would most discourage them from pursuing a career in science, technology, engineering or mathematics the most common answer — chosen by almost one-third of the students — was not knowing anyone who works in those fields.