Some of the best examples of innovation discovered by David Rowan have included a CEO who doesn't want to be involved in decision-making and rewarding failure in the hope it will spur on experimentation
From electric jets that take-off vertically to drones supplying medicine in African countries without road infrastructure, David Rowan has witnessed some of the best examples of innovation.
The journalist watched in admiration as Amazon disrupted the supermarket concept with its Amazon Go cashier-free stores – which were dismissed as gimmicks by some retailers until they followed suit after recognising the friction it reduces for the shopper.
And while he has applauded the birth of technology that could progress mankind during his eight years as editor-in-chief of tech magazine Wired, he was also alerted to a number of what he frames “bullshit innovations”.
“There’s an amazing juncture between the human and machine that’s going to change the rules for all sorts of profitable businesses,” says Rowan.
“Everywhere you look, there’s crazy acceleration in tech and yet we celebrate innovation in a weird way.
“There’s always weird innovations at [Las Vegas technology expo] CES that the world probably doesn’t need.”
Wired’s David Rowan on needless innovations
Some of these unnecessary gadgets have included a digitally-enabled bottle opener that sends messages to friends every time a user has a beer, a self-cleaning cat litter tray or a smart milk jug equipped with sensors to alert owners when the milk has turned sour.
He gives the example of Juicero, a Wi-Fi-enabled juicer that could connect to smartphones using a QR code and was said to use “industrial-strength power” when squeezing special fruit packs.
It cost $400 but the concept collapsed after testers found they got similar results using their hands in 2017.
As the internet of things creates excitement for what it can offer, it’s also led to connected devices in the home like Eggminder’s “smart egg tray”, which uses an app to provide expiration dates and to notify people how many eggs they have left while out shopping.
There’s also been Prodrone’s invention of a drone with arms that can grasp objects and the “sphoon_phork”, a fork and spoon mobile phone attachment to help users “scroll through their Facebook feed while eating”.
This spoon and fork attach to your phone to lower disposable utensil usage. pic.twitter.com/CxeeRlTcZK
— Cheddar (@cheddar) January 18, 2019
Rowan says: “The cost of entry is really low as you can use crowdfunding and a lot of the parts are commodified.
“Sometimes I don’t know the difference between a real and fake innovation.”
It was these pointless gadgets, and the ease with which they could hit the market, that prompted Rowan to write the book Non-Bullshit Innovation: Radical Ideas from the World’s Smartest Minds, which was published in May 2019.
“Innovation in real terms simply means the tools you have to build future value – it’s not some mystical religion but how you build a future-proof organisation.”
He visited 20 countries to find the best examples of innovation and, speaking at the Customer Centric Conference hosted by AI-powered language translation service Unbabel in Lisbon earlier this summer, shared nine tips using a raft of case studies.
Wired’s David Rowan on the best examples of innovation
Empower your team so they forget the boss
Ilkka Paananen, founder of Supercell, the Finnish mobile games developer behind titles like Clash of Clans, speaks about aspiring to be the “world’s least powerful CEO”.
This was evident when, while working on a new game, his uninspired team took a trip to a Helsinki sauna and decided to kill the project in favour of new ideas – without even consulting the boss.
In the book, Paananen tells Rowan he wants to return power to the people who develop the games.
“My job is simply to create an environment where we hire the best possible people and then let them decide how they’ll have the biggest impact,” he says.
“And from that point I have to get out of the way.”
Design a service
In the era of Amazon and its utter domination in online retailing, an independent bookshop stands little chance of competing on price.
But the historic Heywood Hill bookshop in London’s Mayfair district – which was the setting of a scene in the 1974 spy novel Tinker Tailor Soldier Spy – and its owner Nicky Dunne came up with an idea to create book collections featuring recommendations.
Rowan says: “Nicky thought, ‘why don’t we become a human algorithm that sends books to people every month?’
“So he started a personalised book subscription service and now there’s thousands of people signed up.”
Build an ecosystem
No matter how unique your idea, working alone doesn’t always end up with the best results – instead, Rowan suggests building an ecosystem alongside other similar organisations.
He gives the example of Chinese tech company Xiaomi, which invested in and bought 460 start-ups in the hardware accessories business.
Having primarily been a smartphone manufacturer that took great inspiration from Apple previously, it has built its Mi.com platform into the third largest e-commerce site in China.
The start-ups Xiaomi has invested in – four of which have become unicorns – have also enabled the company to be the largest seller of air purifiers and one of the biggest in battery chargers, fitness trackers and power extension cords. They all form part of the Mi ecosystem.
Rowan says: “I asked the CEO why the company didn’t make the products itself and he said it would have twice the number of people and wouldn’t get anything done.”
He also raises the case of Estonia, which had to find a way of competing on the international stage after gaining independence from the Soviet Union in 1991.
With no natural resources to trade and a population of just 1.3 million people, its government created the e-Estonia digital society in which every public process can be completed online.
It has also introduced e-residency – a scheme launched in December 2014 that enables non-Estonians to access its services such as company formation, banking, payment processing and taxation.
“Estonia has created an ecosystem that enables people to be part of the country without actually living there,” says Rowan.
“You get a smartcard and then start a business in the Eurozone. It’s a borderless nation and the country has become a platform for start-ups to grow.”
With about 550 start-ups in the country operating in anything from fintech to greentech, Estonia now boasts one of Europe’s highest concentrations of these companies per capita – while four unicorns, chief among them Skype, have been founded there.
Embrace unmet needs
Insurance company Intercorp is one of Peru’s biggest success stories – employing 78,000 people, turning over $8bn each year and accounting for 4% of the South America nation’s GDP.
But click on its website and the first message it delivers has nothing to do with the business.
Instead, it says: “We are working to make Peru the best place to raise a family in Latin America.”
The company has tried to combat the country’s socio-economic problems – it has one of the world’s worst education systems and issues with terrorism – by establishing Innova Schools, a chain of about 50 “low-cost, high-quality private schools”, according to Rowan.
He says: “Intercorp couldn’t find good talent to work in the company because the education was so poor so CEO Carolos Rodriguez-Pastor decided he was going to build a school system that’s one of the best in the world.
“He went to experts at institutions like Harvard and Oxford to create Innova Schools for children aged three to 14.
“It’s now being exported to Panama and Mexico, and they’re getting double the national attainment in science and maths.”
Build cognitive diversity
At many workplaces, people are rewarded for their role in bringing in revenue for their employer – but for Kathy Hannun, she was given a bonus for failing.
As one of the youngest employees at Google parent company Alphabet’s “moonshot factory” in Mountain View, California – known as X, it’s where pie-in-the-sky ideas are tested – she came up with the concept of extracting a carbon-neutral from seawater.
Rowan tells the story: “Kathy’s team created the fuel in 2013 but killed the idea three years later because it was going to be too expensive.
“Yet Kathy and her team were given cash bonuses for being disciplined.”
By encouraging people to aim for the stars – and not shooting them down if they don’t quite make it – Alphabet has created a culture of experimentation that every now and again, produces something transformative.
One of the biggest successes of the X laboratory is Waymo, the self-driving car company that has become one of the pioneers in autonomous driving since graduating from the workshop in 2016.
Rowan, who believes Waymo could become a $100bn business in its own right one day, adds: “X is obsessed with getting different people together – whether they’re physicists or pianists – to come up with ideas.
“It wants to optimise people to do different things and has created a culture where it’s cool to propose things that probably sound stupid.”
Another example of this cognitive diversity concept is at the Pentagon, which hired Chris Lynch to lead its “digital SWAT team” alongside other “ethical hackers”.
Lynch had been briefly jailed for planting smoke bombs at his school, which expelled him, but he’d rebuilt his life to become a tech entrepreneur.
Rowan says: “He got a job at the Pentagon to solve the tech problems the bureaucracy couldn’t deal with.
“His team called itself the Rebel Alliance and came up with a signal jammer to deal with ISIS drone bombs.
“Every organisation needs pirates who have permission to get shit done.”
Data is collected from just about anything and anywhere now – and there’s plenty of examples of companies innovating in how they use it to boost the bottom line.
The future of Australia’s national airline Qantas Airways had been in doubt after enduring heavy financial losses in the early 2010s before it came up with the idea of Qantas Loyalty Ventures.
With data from the 12.4 million members of the frequent-flyer programme at its disposal, it has created new lines of business that offer rewards for customers.
They can now earn points from daily activities completely separate from air travel, including dry cleaning suits and buying lattes – which can then be spent on anything from playing golf to buying life insurance.
Qantas has also converted a warehouse next to Sydney International Airport in which a team of techies prototype new products.
In 2018, it returned 372m ($252m) Australian dollars in underlying pre-tax earnings at a 24% profit margin – close to the A$399 ($271m) figure posted by the international airline business at a tiny margin.
China Post is another big data advocate. It has set up the Ule e-commerce network that is turning the state-owned postal service’s hundreds of thousands of village stores into a national retail delivery network.
Digital tracking systems are applied in each store to learn exactly what customers are buying at any given moment.
By creating the world’s largest real-time retail database, it helps optimise the supply chain so companies know how much of a product it should deliver.
Find your blind spots
Since first being introduced in the 1960s, computer-aided design – or CAD – has transformed manufacturing by enabling workers to create products from a drawing made on a computer.
California-based Autodesk arrived a little later on the scene, in 1982, but became one of the industry leaders as its AutoCAD software was used in projects including One World Trade Center and Tesla electric cars.
But as the world embraces cloud services and artificial intelligence, the $30bn company has had to find a way to remain relevant by transitioning away from selling software in boxes.
It has invested heavily in technology like 3D printing and laser robots as it searches for its “blind spots”.
Following this path, Autodesk has begun to develop generative design principles, in which CAD software can generate a number of design alternatives within a set number of constraints using AI – without an engineer’s guidance, thereby accelerating the design process.
Airbus, one of its customers, has already used it to imagine a “bionic” aircraft partition that separates the passenger cabin from the galley – offering the potential of saving 465,000 tonnes of carbon dioxide each year and reducing fuel usage.
Rowan says: “Autodesk realised it’s changing the role of the designer and how human and machine work together.
“Generative design became the salvation of the company and it wasn’t even looking for it.”
Breaking down literal barriers can go a long way to achieving big things, believes Rowan.
The Francis Crick Institute, a 900,000 sq ft biomedical research centre in London, is designed without walls to encourage collaboration between biochemists, neuroscientists, immunologists and other specialists to take place more naturally.
“With so much knowledge in the building, its founders realised that if you get rid of the walls, you’re going to have these casual conversations,” says Rowan.
“That’s important because researchers will have to collaborate in unprecedented ways to make scientific breakthroughs.”
Pixar, the Disney-owned animation studio behind Toy Story, is another company famed for its innovation that has engineered serendipity by design.
When it moved into a new 215,000 sq ft California office in 2000, Steve Jobs, who co-founded the business, insisted on a vast single space with a large atrium in the centre to prompt unexpected interactions between software engineers and artists.
Meanwhile, Rowan believes Burning Man Festival in Nevada – in which 70,000 people come together to construct a temporary experimental city – has had a big impact on Silicon Valley’s creative thinking and open-minded exploration of new business models.
“It encourages people to try out different roles and I don’t think you’d have Airbnb without this prototyping of space to work out how best to use it,” he says.
Embrace new technology
Scepticism about new technology – hello blockchain – is rife throughout industry but Rowan believes it’s crucial for businesses to be adopt early than not at all.
He points to the example of UK cookware giant Meyer, which has stationed half a dozen chefs in a converted barn within a vineyard in California’s Napa Valley to experiment with new concepts for traditional kitchenware using the internet of things.
“They developed a smart saucepan to control the temperature with sensors in the pan,” says Rowan.
“It gets a signal from the smartphone app, which is filled with recipes, so you can cook like a Michelin Star chef.
“This is either going to be a zero or billion-dollar business but if you don’t play with the technology, then others will.”
Back to blockchain, often dismissed as a gimmick, and HTC has decided to become the one smartphone manufacturer to corner this slice of the mobile market.
It’s all part of a rescue bid for the Taiwan company after slipping from its perch as the number one seller in the US as recently as 2011 to have a global market share of less than 1% by 2018, with year-on-year sales down by 68%.
Rowan says: “HTC lost its business because it became an invisible white-label manufacturer for everyone else and now it’s dying.
“So it said ‘this blockchain thing is going to be serious – why don’t we create the first phone to connect to blockchain? We can rethink what the phone is’.
“It might not work but it could save the company.”