Michael Porter on Innovation

Innovation: I am fascinated by innovation. I love the idea of pushing the boundaries beyond “what we’ve always done” into new territory. Innovation does not just have to happen in the area of new products or services (although that’s usually the first thought). Innovative ideas can also spring from changing how something is done.

Last year I went to Zurich Switzerland and attended a Harvard Institute for Strategy and Competitiveness course called “The Microeconomics of Competitiveness”. It was truly a highlight for me (partly because it was taught by a favorite author of mine, Michael Porter, and partly because it was in Zurich).

(Just for fun, here’s a pic of Zurich from the wall of an ancient Roman fort)

During the class we looked at a case study outlining Costa Rica’s effort at getting Intel to set up a semiconductor factory. Then we saw a pre-recorded video of Costa Rica’s President Jose Figueres talking to Michael Porter’s class and he nicely encapsulated Costa Rica’s innovative thinking. He said (and I’m summarizing) that Costa Rica had recently worked hard to increase tourism to the country. They were seeing more and more airplanes arriving and departing that were filled with tourists. But only the tops of the planes were filled. Now Costa Rica wanted to see about filling the bottom of the planes (i.e., the cargo holds). So the Costa Rican leaders asked themselves “what is highly value added and is inexpensive to ship in the air?”

Semiconductors is the answer. And today, Costa Rica has a burgeoning industry in this area.

A little more on innovation: In talking about clusters, Porter says that countries (or regions) start by using their natural endowments (natural resources or cheap labor) but need to move beyond those things in order to be competitive. We see this in some examples like Swiss watches and Costa Rica’s semiconductor industry.

I thought this made sense, not only from a cluster perspective but at a much more granular level — at a the individual business level. Many businesses essentially sell a combination of time and talent. At some point there’s a ceiling that the small business owner can provide: only so much time and only so much talent.

So, how does a small business grow and increase its competitiveness? The common way is to outsource work. There are positive and negative arguments about this idea. How else can small businesses grow and differentiate? Innovation is the key here. I think that niche markets might help also. But there’s so much more… way more than I could ever type in one blog. But the important thing is to think about it. Look to resources like Blue Ocean Strategy or the Business Diamond Framework™ to help.

Here’s a pic of me overlooking Zurich

Case study: Raising prices

The following is a case study derived from working with a client. To preserve confidentiality, I am only describing the problem and not the client.

PROBLEM: A client came to me with their need to raise prices. They’ve had prices set for a while now and it was time to raise them to keep up with inflation and the cost of hiring qualified staff. I had been hired to simply write an email to announce it, and the email was going to be a quick statement (like pulling a bandaid off as quickly as possible). However, I proposed an alternate idea that they used which involved some strategic changes in their offering followed by a more detailed marketing effort.

SOLUTION: We created tiers of service designed to express their value in different ways. We upped the ante on each tier so that the new levels of service offered additional compelling value to each customer (thus softening the impact of the increased price). While there will always be some backlash when raising prices, the message can be configured in a more positive tone by adding value at the same time.

RELEVANCE TO THE BUSINESS DIAMOND FRAMEWORK™: This was very much a Value Chain Axis effort because it meant an across-the-axis shift in thinking. However, it did require some Leadership Diamond work (in communicating the  overall positioning) and it involved some work in the Support Diamond (in delivering on some of the value-added changes).

Review of Microsoft Bing

Microsoft’s success for so long has been to provide usable tools that are standardized across many computers. They’re not the best tools, they’re not the cheapest, they’re not the most expensive, but they’re ubiquitous and workable. That recipe has worked for Microsoft for a long time; desktops were Microsoft’s domain. But now, plenty of their business is being eroded by web-based services and the unwieldy giant needs to enter the new marketplace.

One of their solutions is Bing.com, a search engine. I visited it and checked it out. Disclaimer: I’m coming at this as a business user and not as any kind of technical expert, search guru, or anything like that.

The initial interface is clean and simple, clearly rivaling Google. The picture is nice and without words shows their “see-it-all-from-here” claim. Just above the search bar are the familiar search options: Web | Images | Videos | News | Maps | More.


So I started my search for the word Money. I find this is a good word to test searches for because lots of people write about it — at all levers of users (commercial, consumer, government, etc.) and there’s always going to be advertising about it. So the result is below:


Search result layout is familiar in its listyness. Advertising placement is classic and familiar. Related searches on the left seem helpful, although I see those in Google, too.  Search history on the left looks like it might come in hand for someone like me who uses the web all day long to do research… but no major surprises. Hovering over the right-side of the search…


… produces a pop-up with more content from that result as well as other linking options within that page.  This looks like it could be a useful tool. In Google I have to click to the site itself to see the full thing but I get a bit of a preview here and can quickly see if the linking options are relevant to me.

I searched “Economy” to see what comes up. Voila.

aaronhoos_businesswriter_reviewofbing4Nothing crazy there. Comparing the search results to Google, 4 of Bing’s 10 first page links show up on Google’s first page: Economy.com, Wikipedia, Forbes, and CNN Money. The others appearing on Bing’s results actually seem somewhat strangely placed: There are two dictionaries, a link to Providence Journal, and a link to BoingBoing… hardly go-to sites for me when I’m searching.

Then I searched for “Aaron Hoos”:


This was a weird grouping of results. My site’s on top (that’s a good thing) but then there are a bunch of press releases and content that are several years old. Not the oldest stuff I’ve produced and not the most popular. Very little about me (i.e., from LinkedIn, Twitter, ZoomInfo, Squidoo, etc.). And, when I hovered over my site, the content that came up was from weeks ago. Now, I guess this is the last time they crawled the site but it seems far less relevant in a search that wants to be relevant.


No test would be complete without searching for “Business”. After all, that’s how I spend my day. The results are okay — all the big ones (Business.com, business.gov, Wikipedia) are reflected in both Google and Bing.

Bottom line:

I like Microsoft as a company. I’m fine with their products and their size. I liked the Bill Gates/Jerry Seinfeld commercials. But Bing isn’t going to make me switch from Google.

It’s just not different enough. Now, maybe this is an early stage version and maybe there are magical features that I missed in my quick review. But my initial test won’t be that different from everyone else’s and it wasn’t enough to make me want to change. Instead, I saw a lot of the same-old-thing and the content didn’t feel relevant since I knew that some of it was old.

If Microsoft wants to win search marketshare away from Google they need to be radically different, just as Google was when they first came on their scene. Here are a few suggestions for Microsoft:

Better interface: It’s understandable that Microsoft wants to use a familiar format (the list format) for search results because users will feel comfortable with it. If that’s the case then they need to provide information and a search algorithm that is WAY more insightful and up-to-date than Google. Microsoft may want to consider a different format. Kartoo.com and SearchMe.com are both good examples of new ways to approach search results. (No idea if they stack up in terms of quality but a potential partnership might be a good way to go). (Note: Searchme.com is no longer online).

Leverage your good points: That pop-up is about the only vaguely groundbreaking thing about Bing but it provides outdated info. How about: a picture of the website, links out, most reputable links in, and access to other sources about the same topic and/or keywords. For example, instead of displaying Wikipedia and dictionaries in the search results, display Wikipedia and dictionary results for that specific site in the pop-up.

Be different! Google made a splash because it redefined search. We were no longer forced to search directories by alphabetical or topical order and the search results had a reason for their order. If Microsoft wants to own search (or at least more search) it needs to redefine it again. How about this: Instead of giving me options to search Web | Images | Videos | News, etc., how about giving me options to search by some other parameter and leave those “channel” type searches to Google. How about creating parameters like “business”, “education”, “shopping”, “health”, and “leisure” or something like that. If someone wants to buy something, they go to shopping and search. If someone wants to work on their business, they go to “business” and search. You can still display advertising in each place for people to sell, but it just presents information differently. Ironically, Microsoft is part way there with MSN.com but then becomes more like Google to try and win traffic. How, how about search by what you want to do. i.e, have people finish the sentence: “I want to _______”. They fill in their search request with the rest of the sentence.

Something different Or, how about changing the interface. Instead of a website, give users a little search engine that sits in their browser. (No, not like ANOTHER toolbar that compresses the viewing portion of the browser but just a small hovering dot that is always there in the corner). Click it to expand a small search bar and enter what you want to do. Get “transparent” results in a small web riight over-top of the page the users are on.

If any search engine is going to win new converts, it will be Ask.com. Their whole premise of asking a question makes searching a different and more natural experience (and, you don’t just type in keywords, you type in the whole question, and questions are recommended as you type). Oh, and their NASCAR ads are hilarious.

Bing doesn’t raise eyebrows or drop jaws. It looks like Microsoft is trying to wear the trendy clothes that the cooler kids are wearing in the hopes that they will be considered cool, too. Unfortunately, what is really needed is an entirely new definition of search.

Look beyond your industry for best practices

My thinking about the sales process had me thinking about best practices and so I had a stack of borrowed books about best practices in my office.

One of the books in my “best practices book pile” I read recently: Best Practices: Building Your Business with Customer-Focused Solutions, written in 1998 by R. Hiebeler, T. Kelly, and C. Ketteman.

The book talked about the need to look outside of your industry to the best practices of businesses in other industries. Even though they might have different products, there is still value to learning what their best practices are and to discovering connections that you may not have thought existed. The book references some case studies early on to demonstrate. For example: GTE (a communications giant bought by Bell Atlantic in 2000 and rebranded as Verizon) wanted to improve transaction accuracy in billing. So it looked outside of its industry and asked the question “who deals with transactions with 100% accuracy?”. They realized that the New York Stock Exchange dealt with many transactions every day and needed to be accurate each time so they studied the NYSE’s best practices and adopted some for themselves.

This is a brilliant business choice. Rather than focusing on your own industry, look outside of it and adopt the best practice principles from others. It’s something that I’ve started doing for myself and a practice I am working on with a couple of my clients. I would encourage you to try the same exercise: Figure out what you do (at a high level) and look around at other industries that do a similar activity.

For example, if you make pizza, then you take a variety of ingredients that must be fresh and you put them together on a made-to-order basis and then wait while it cooks and then deliver it quickly to the customer. Are there other industries that do some or all of those things? The automotive manufacturing industry, for example, may be helpful in thinking about just-in-time delivery of the “parts” that make up the pizza. And perhaps their assembly line structure might also inform your process.