Can 17th Century French History Transform Healthcare?

By Henry Doss, Chief Strategy Officer of T2 Venture Creation, from Forbes

“Mankind are so much the same, in all times and places, that history informs us of nothing new or strange in this particular. Its chief use is only to discover the constant and universal principles of human nature.” – David Hume

If there is an industry that is in desperate need of innovation and innovative leadership, look no further than the healthcare field. From functional payment systems, to new technologies, to ethics, to distribution and delivery, virtually every feature of the healthcare system needs substantial change and improvement.   Nowhere is this more dramatically apparent than in the arena of payment systems and delivery.

Who are the leaders who will cause the transformations we need in healthcare, and what can we do to educate young people to take on the challenges of healthcare delivery? What might be a course of study and learning that would help prepare a leader to navigate the complexities of the healthcare system?

One area of study just might be 17th century French history. And Dr. David Lansky just might be the model.

David Lansky is the president and chief executive officer of the Pacific Business Group on Health (PBGH), an organization focused on improving the affordability and availability of high-quality healthcare. He leads a coalition of fifty large employers and health care purchasers representing over three million Californians, including CalPERS, Wells Fargo, Intel, Safeway, Chevron, and the University of California. In addition to working through the PBGH coalition, he also serves on various health policy boards, such as the Congressional Budget Office Panel of Health Advisers and the federal government’s Health IT Policy Committee.

Dr. David Lansky’s path to this leadership role was hardly linear, nor was it entirely intentional. The intersection of the study he engaged in to acquire a Ph.D. in 17th century French history and his ultimate career path is a glimpse into the mystery of how one prepares to lead. And his story provides insight into the role that the Humanities can play in the world of business.

I spoke recently with David about his work, his commitment to innovation leadership and the relationship between his academic background and his life’s work.

Henry Doss:     Your career path is an interesting one, to say the least, progressing from taking a Ph.D. in 17th century French history, to serving as the CEO of a healthcare organization. How did this happen? How would you counsel young people who are thinking about “career planning,” while pursuing their own degrees?

David Lansky:     Well, honestly, I’ve done almost no career planning. The only exception was a point in my early 30s when I figured the most interesting opportunities to influence society in my lifetime would be in either education or healthcare.  So I went out and talked to people in both worlds and picked healthcare.  Even then, I never contemplated formal training as a way to advance my career.

Doss:     So, luck, more than planning? What do you say to a young person –or anyone for that matter – who is engaged in actually planning a career path?

Lansky:     The positive elements of my career have been 70% luck and 30% taking advantage of opportunities.  I think all of us are exposed to “serendipity” and each person’s challenge is to be aware of and choose opportunities to latch on to and exploit.

Your education can and should help you to better understand what you value, so that you are prepared to make those decisions. The importance of my academic training is less about the skills that I acquired, and more about shaping my values and what I wanted to achieve in life.  Too much of an emphasis on job or skills development, too soon in life, I think can lead you away from understanding and codifying your personal value system.

I studied a lot of social history and felt a lot of sympathy for the “little guy” who is tossed about by the great figures and forces that we read about – kings, wars, famines, bankers. As a historian, I was taken with the question of how social institutions and their leaders can make life better or worse for most people.  I got pretty deep into the life of one 17th century French city – their courts, hospital, city council, church life, and so on — and felt a lot of empathy for those people.  It was a great experience to step back to 30,000 feet and look at the life of a whole society and then think about how we still operate like that today, but are rarely able to look at things dispassionately and comprehensively.

So, as a result – at least in my case – my in-depth study of social history led me to develop a value system or point of view that in turn prepared me to jump at the opportunities that chance or luck or randomness threw at me in due time.

Doss:     So, your education prepared you to be consistent in a value system, but maybe not so much in terms of the raw skills you need for a leadership role in healthcare?

Lansky:     Well, “yes,” to the first question, but “mostly no” to the second. Let me explain a bit.

For me, it has been important to know what I value.  I like to be ready to say “yes!” to opportunities that are consistent with my values and might move me forward towards my goals.  If my goal had been maximizing income, or academic standing, or political power I would have responded to different opportunities.  What was important about my own education, and what I would not want to have missed, is the opportunity to gain self-knowledge and an ability to place contemporary challenges in a historical context.  As part of my learning process while studying history, I concluded pretty early that I’d rather make history than write about it.  But I didn’t have the courage or hubris or charisma or brilliance to be a political leader or inventor.  So I just took the “lessons of history,” my own political and social values, and my particular, limited skills and applied them to a contemporary problem as best I could. And when I did this, I learned very quickly that being a “leader” may just be hanging around long enough and learning from some very wise people.

Doss:     So, now you find yourself in a position of leadership in a business setting.  But you started out preparing yourself to be an academic/scholar.  Looking back, would you change anything about what you studied, in order to better prepare yourself for business leadership?  Or, asked differently, what would you say to all those students out there who are studying in the Humanities, who are also worried about what they’ll “do with their lives” when they graduate?

Lansky:     This is a hard question, and it’s highly individualized. But there are two, distinct parts to this question. There’s the values learning that can support leadership development, and there’s the skills learning. I want to talk about them separately.  When it comes to skills, I think anyone who begins to grow in their career, and to take on significant leadership accountability is going to feel “skill constrained.” That is, you are simply never going to master all of the skills you need or want to have, as you take on more and more responsibility. In my case for example, I sometimes wish I knew more about basic business – the kind of things that are routine for someone who takes an MBA.   I’d like to know more about the law. And clinical medicine. But I don’t.  The lesson for me is you should surround yourself with really smart people who do understand these domains, and who can provide leadership themselves, teach you, and collaborate with you. You can’t think you’ll become a technical expert in every area you need to lead.

Doss:    Then the next question gets us to innovation, leadership and how the Humanities can inform your creativity and strategic thinking in an area like healthcare.  Do you see any specific parallels between the meta-issues you face today and those of 17th century France you studied? That is, are there things you learned that are unique and specific to your area of history that might give you unique and highly pragmatic insights into business challenges of 2014?

Lansky:     There are parallels between 17th century France and 2014. Most of those are probably obvious – as people are people and western culture, at least, has been fairly stable over the past few hundred years. As a student, it was sobering for me to realize that the way people perceived and solved problems four hundred years ago – in post-feudal France – was not much different than how we address them today. Most actors belong to interest groups, make choices to protect their economic interest and class position, and then offer rationales to deflect the discussion from those particular interests.

Doss:   Yes. And that sounds like a very precise description of the political struggles we see in healthcare today!

David:     I think policymakers and business leaders understand this well. Most successful day-to-day policy initiatives involve moving past these deflections, understanding the underlying interests, and negotiating among the competing interests. It’s hard to move past something you’re not aware of and I think – in my case at least – a deep inquiry into history helps me navigate toward practical solutions.

Doss:     So you learn that structural and economic forces drive the bulk of big, national conversations.   How then do you navigate through a force or forces that are that powerful?

Lansky:     Well, as I’ve worked in the world of healthcare, I’ve noticed something else, something that runs counter to my academic training: that is that relationships between individual people can trump structural and economic forces. You don’t see that very often because most people form relationships with other people who already share their interests. In any era, it seems that running a city or country is hard work involving lots of concessions and negotiations and patience – regardless of whether it’s a post-feudal kingdom or a 21st century global information economy. Individual leaders matter a lot – they do set the tone for consideration of important issues; people do pay attention to them; and a strong leadership vision can motivate amazing behavior. But for me, learning this in the context of training in history enabled me to better understand how to move past large-scale social forces and engage in leadership relationships. I think this is really important.

Doss:     So, in a very real sense, you are attributing your success as a leader, not to technical knowledge in any particular domain, but to a highly developed generalist view of history, culture, economics, and politics.

Lansky:   I think that’s mostly right, except for the implication that technical knowledge is somehow not leadership-oriented.   I encounter many people with valuable technical knowledge – and we really can’t get a lot done in the real world without their great skill, passion, and sheer hard work. But sometimes deep technical skill in one domain can obscure the larger context, what we often call vision. I observe that the teams that get important work done have both someone who communicates vision in a way that motivates people to pursue it, and they have people with passion and skill at applying technical skills towards achieving it. Conversely, and this is true of my own career as well, even a strong technical direction is very hard to fulfill if there isn’t a larger convergence around a vision.

Doss:     That makes a lot of sense from the leadership perspective. Now, more specifically, how do you go about leading, encouraging and developing innovation in the healthcare space?

Lansky:   It’s interesting. I sometimes fret that my organization isn’t innovative enough. We aren’t developing apps, we aren’t exploiting social networks; it seems like we’re slogging away to encourage change among the giant insurance companies and government agencies and hospital systems that still actually control our $3 trillion in annual health care spending. The visible “innovations” – which are wonderful – are just fleas on the elephant’s back. But my colleagues remind me that our efforts to provoke and redirect the US healthcare elephant are themselves “innovations.”

In that context, the innovation challenge is not to get a lot of people brainstorming the next cool app to solve a persistent health care issue. It’s to look for the little cracks in the vast healthcare ecosystem that might respond to a tactical disruption, and to help people locate them and wriggle into them in a way that gets a reaction. I need to give people hope that the system will respond if we provoke it in the right way, that we have thousands of allies wanting to see the system be transformed.  Then, our organization’s job is to guide them to develop the right kinds of evidence, communications, and advocacy strategies to maximize their impact.  What’s innovative, for us, is the process of instigating change – more than the change itself.

Doss:   So, to continue the thread of this conversation, do you see your educational background – professional historian — playing into innovation and new/better ways of doing things, in ways that a more traditional business training might not?

Lansky:   Hopefully, because I’m trained as a historian to think about longer periods of time, I’m less likely to sub-optimize my evaluations of innovative products and services by only asking whether there’s a market for it today, and instead looking at it in a larger economic, political, and cultural context. When I think of innovative ideas or approaches, I try to ask this:   “How can we help this innovation navigate the strong crosscurrents of the healthcare system so that it ultimately helps more people and is economically viable?” And my training as a social historian leads me to always ask: “How will each group respond? Who sees this as a threat or who could become an ally? Are there policy roadblocks or facilitators?” So, in a way, I think I tend to conceptualize problems in broader terms and in a values-driven context.

Doss:   So, you’ve had the benefit of both a broad, and intense education in the Humanities and a broad and deep exposure to the world of business and healthcare. There are quite a few young students and young professionals out there who are thinking about how to prepare themselves to be better leaders, and to have as broad a set of opportunities as possible. What would you say to them about what to study, what to read, what to take time to write about, in order to be on a long-term leadership path?

Lansky:   Well, first and most important, I would say to anyone who has the ambition to lead other people towards challenging goals that their path will be easier and perhaps more successful if they have a broad understanding of human psychology and behavior. I’m certain that most transformational initiatives in the real world must overcome the routines and comfortable preferences and economic positions of the society they seek to affect. And to do so requires a combination of forceful leadership and sensitive accommodation. Many great leaders discovered the combination of skills that was effective for their era, so understanding how they were able to detect those cultural drivers and adjust to them is very valuable.

The leadership of a vision requires something else as well  – a feeling for what inspires people to follow. For that, understanding culture and religion and social movements is really valuable, and in that context, anthropology, psychology and sociology can teach a lot. But it’s not about reading, necessarily. These lessons are all around us today and everyone is your teacher. So engagement in the world of give and take – participating on non-profit boards and government committees, volunteering in communities different from your own – those things can help you internalize the lessons of the “Humanities” just as much as academic training. I guess I’d say learn broadly, but also be engaged in meaningful ways in the world.

Doss:   And on that note, David, thanks for taking time to reflect on History, healthcare and leadership!

 

Henry Doss believes leadership can change the world.  He is a venture capitalist, a volunteer in higher education, a student and a musician.


Rainforest Rev: Crossroads Breed Innovation

The Rainforest Revolution
News on growing ecosystems for innovation and entrepreneurship

 

Greetings to the builders of the new economy. That means you.

Three months from today—February 15-21—the world will gather in Silicon Valley.  For the third time, entrepreneurs, innovators, and dreamers from over 50 countries will convene at the Global Innovation Summit + Week seeking ways to create value in the new economy.  Please click here to register before November 30 and get 20% off!

SUMMIT: FEBRUARY 17-19  |  WEEK: FEBRUARY 15-21
 
 

THE BIG PICTURE


 

Morocco’s Startups At The Crossroads

Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes
Crossroads are breeding grounds for innovation. For instance, Silicon Valley is a result of the American frontier, where ambitious people from diverse backgrounds were smashed together in a serendipitous cacophony. Morocco is in a similar situation. Is it African? Is it Arab? Is it European? The answer, of course, is yes. Read more here.

 

Economic Complexity: A Different Way to Look at the Economy

Santa Fe Institute
The traditional view of the economy as a system of balanced exchanges between rational agents is being challenged by new theories like complexity economics, in which agents react in more varied and unpredictable ways to a “nonequilibrium” economy that is constantly evolving. Read more here.

 

Charles O’Reilly: Finding a Corporate Culture that Drives Growth

Stanford Business
After examining the role corporate culture played in the rise of prosperous high-technology firms, Stanford Graduate School of Business researchers concluded that the most “adaptive” cultures had the greatest contributions to their companies’ success. Read more here.

 

Cooperation: This Time, Between Man and Woman

Social Evolution Forum
Conflict and cooperation are intrinsically linked: dividing up the benefits of cooperation causes tension and conflict, including between men and women. Read more here.

 

10 Books That Every Startupper Absolutely Must Have on the Bedside Table

StartupItalia!
The Google translation of an Italian blog that describes the most essential reading for entrepreneurs recommends 10 English-language books, including The Rainforest: The Secrets of Building the Next Silicon Valley, by T2 Venture Creation’s Victor Hwang and Greg Horowitt. Read more here.

 

THE LATEST NEWS


 

If You Build an Innovation Hub in Siberia, Will They Come?

CNBC
Russian officials seek to jump-start a tech industry in the most unlikely of places – Tomsk, a university town 1,900 miles east of Moscow. They’re hoping the city makes up in brainpower what it lacks in…well, everything else. Read more here.

 

Chinese Gadgets Signal New Era of Innovation

The Wall Street Journal
A new generation of entrepreneurs is changing the face of Chinese business, basing their reputations on creativity and innovation in an economy known more for its ability to cheaply manufacture copied designs. Read more here.

 

Maryland “International Incubator” Woos Foreign Start-ups

Republic 3.0
An incubator focused exclusively on foreign companies residing in the United States – has emerged from a partnership between the University of Maryland and the Maryland state government. Read more here.

 

CALENDAR OF EVENTS


 

Demand Solutions 2014 — Venture Night

December 2, 2014  |  Washington, D.C.

Demand Solutions: Ideas for Improving Quality of Life is a one-day event sponsored by the Inter-American Development Bank and the Blum Centers at UC Berkeley and UCLA.  The event will close with an exciting Venture Night where some of the most innovative and disruptive startups established by young entrepreneurs from Latin America and the Caribbean will present their projects, chosen in a competition, which will be evaluated on Venture Night by a panel of expert judges.  Register here.


 

APPLY FOR THE INNOVATION ECOSYSTEM AWARDS

Application deadline is December 31, 2014. 

We seek the world’s top companies and organizations that enable the super-linear growth of the ecosystems around them. They must catalyze the ideals of connectivity, openness, diversity, and trust that are essential to the innovation process. They must nurture the success of others.  Rather than a simple “Best Of” list, where one focuses solely on the entity itself, we are looking at what the entity does to catalyze more activity around itself.  We seek to reward those entities that create multiplier effects beyond themselves, that catalyze the growth of entire ecosystems.

Applications will be evaluated based on the following criteria:

  • Connections: does the company/organization connect people that are otherwise disconnected in meaningful, productive ways?
  • Platform: does the company/organization lower the cost of doing business across an entire system?
  • Culture: does the company/organization foster trust in the community, industry or society?
  • Motivations: does the company/organization demonstrate social responsibility or sustainable, systematic impact?
  • Team: how does the company/organization collaborate with employees, advisors, suppliers, distributors and other partners?

APPLY HERE


Morocco’s Startups At The Crossroads

Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes

A few weeks ago, I was a keynote speaker in Casablanca, Morocco at the Global Annual Conference of CEED, a organization that assists entrepreneurs in several emerging markets. There I met countless inspiring people, mostly from Morocco but also from nearby places. I could virtually taste the electricity in the air. Entrepreneurs and other businesspeople were continuously buzzing around the event, pitching, trading, and pursuing their dreams. Morocco, it seems, is rising.

Why is this happening in Morocco? Indeed, we might expand the question to ask: what makes some economies like Morocco rise, while others in the world languish? It’s a question with big implications for the world.

A key answer, I believe, is that crossroads are breeding grounds for innovation. For instance, Silicon Valley is a result of the American frontier, where ambitious people from diverse backgrounds were smashed together in a serendipitous cacophony. Frontier cultures tend to be innovative ones. Diversity often begets wealth.

Morocco is in a similar situation. Is it African? Is it Arab? Is it European? The answer, of course, is yes.

1024px-ISS-30_Strait_of_Gibraltar
Morocco, crossroads of three cultures, as viewed from the International Space Station.

Since antiquity, Morocco has been home to some of the most entrepreneurial cultures the world has ever known—from the seafaring merchants of Phoenicia to the Berber traders still active today in the marketplaces. The nation has been a center of commerce at the intersection of Europe, Africa, and the Islamic world for centuries.

Although times have changed, Morocco’s importance as a crossroads has not. And today—with the economic rise of the African continent and the political changes inspired by the Arab Spring—Morocco seems poised to leverage its role as an anchor connecting three major parts of the world again. For instance, at the recent CEED conference, participants had the choice of attending a panel discussing doing business in the U.S. or a panel on the same for Africa. Over 100 opted for Africa. Only a few dozen were interested in the U.S.

Entrepreneurship is in the DNA. According to CEED’s director in Morocco, Fatima Zahra Oukacha: “Moroccans are entrepreneurs. We were colonized by the French in the last century and acquired all of the modern institutions that came along with that. But prior to that, everybody was an entrepreneur.” In addition, entrepreneurs benefit from a relatively effective educational system and supportive government. As Fatima points out, Morocco has remained stable during the Arab Spring despite chaos elsewhere in the region.

But government cannot be a crutch. Fatima talks about the need for Moroccan entrepreneurs to “take the lead and start doing things for themselves.” They need to find their own solutions, and “generalize those solutions across the entire ecosystem.”

Therefore, CEED focuses on creating the whole ecosystem—particularly building strong networks between entrepreneurs, investors, mentors, and others. Innovation is about more than just money; it’s about people. Peter Righi, the Global Director of CEED, says, “The number one problem entrepreneurs say they have is access to capital. However, if I went in with $1 million, I don’t think [a lot of these entrepreneurs] would know how to use it. There are a lot of other things they need: a business plan, they need to know how to make a pitch, they need to have customers, they need to have a network, and more.”

What does success look like when building an ecosystem? Fatima tells the story of a young entrepreneur who joined CEED less than two years ago and wanted to build a telecom company. Mentors and peers at CEED told him repeatedly that the idea wasn’t feasible, that he would have no competitive advantage. More importantly, however, they encouraged him by saying it was OK to make mistakes and even fail, as long as he learned in the process and tried again—a core tenet in innovation culture. Through CEED’s network of entrepreneurs, the entrepreneur was eventually connected to a co-founder and together they started iTaxi, a car service with a similar business model to Uber. iTaxi is now serving over 2,000 riders, and they were chosen as the official transportation provider for CEED’s conference.

So can Morocco leverage its position as a cultural, economic, and geographical crossroads? The ecosystem—what we call the Rainforest—is the key. And ecosystems are shaped at the human scale, where people interact and build ideas into reality together. Peter himself said it best: “Entrepreneurship can break down barriers. When a critical element is missing, when trust is missing, when walls are up in the Rainforest, we can often bridge that gap.”

Human bridges are the modern equivalent of physical bridges in the past. They’re like the invisible infrastructure. You can’t actually see them, but they are the steel beams and reinforced concrete of the new economy. In that sense, Morocco has the opportunity to build some of the longest bridges in the world.

Victor W. Hwang is an entrepreneur, investor, and author in Silicon Valley.  He runs a major conference on building entrepreneurial ecosystems—the Global Innovation Summit + Week—which involves delegates from over 50 countries on February 15-21, 2015.


Rainforest Rev: Microsoft’s Nadella and Steve Blank’s Playbook

The Rainforest RevolutionNews on growing ecosystems for innovation and entrepreneurship

 

How do you design ecosystems that empower innovators, entrepreneurs, and problem-solvers?

The Global Innovation Summit provides powerful insights, practical tools, a global community of fellow practitioners, and the chance to design real-time solutions to real-world challenges. It’s part of Global Innovation Week — more than 20 events and 1,000 participants from over 50 countries exploring innovation at one place! Register before November 30 and get 20% off!

SUMMIT: FEBRUARY 17-19  |  WEEK: FEBRUARY 15-21

 

THE BIG PICTURE


 

Thank You, Satya Nadella

Janet Crawford, Co-Creator of Rainforest Architects and T2 Venture Creation Advisor from Forbes
Reactions to the Microsoft CEO’s controversial statements on gender inequality should be informed by an awareness of the human brain’s unconscious wiring that guides our perceptions and behaviors. Read more here.

 

Born Global or Die Local – Building a Regional Startup Playbook

Steve Blank (blog)
Lessons learned from building Australia’s sports technology ecosystem show how the creation of a regional playbook for an area’s entrepreneurs can help them build scalable startups that thrive in the global marketplace. Read more here.

 

Leveraging Technological Change: The Role of Business Models and Ecosystems

International Journal of Technology Management
Technological change is much more transformative than mere product innovation — it enables the design of previously unseen business models and radical new strategies. Read more here.

 

How Procter & Gamble Uses External Ideas For Internal Innovation

MIT Sloan Management Review
Procter & Gamble is using outside intellectual property to spur its internal innovation through a version of open collaboration it calls “Connect + Develop.” Read more here.

 

Radical Innovation, Part II: Managing the Unmanageable

Knowledge@Wharton
This second installment in a series of interviews with Boston Consulting Group’s Kimberly A. Wagner looks at her latest work: “The Most Innovative Companies of 2014,” a peer study of executives that gives credit to companies with the most innovative cultures. See more here.

 

THE LATEST NEWS


 

Stockholm Is The ‘Most Prolific’ Billion-dollar Startup Hub Behind Silicon Valley

ZDNet
Stockholm has produced more billion-dollar enterprises than any other city in Europe, and Sweden’s capital may be second only to Silicon Valley as the world’s most successful hub for Internet startups. Read more here.

 

How Startups Are Tackling D.C.’s Poverty Problem

CNN Money
Community-based entrepreneurs are having an impact in the nation’s capital, which has the highest concentration of graduate degrees – and the highest poverty rates – of any city in America. Read more here.

 

Jakarta: Ripe For A Tech Start-up Take-off

Financial Times
The Indonesian capital has enormous potential as a startup hub, though few local start-ups have had the scale to warrant big funding from foreign venture capitalists. Read more here.

 

CALENDAR OF EVENTS


 

Demand Solutions 2014 — Venture Night

December 2, 2014  |  Washington, D.C.

Demand Solutions: Ideas for Improving Quality of Life is a one-day event sponsored by the Inter-American Development Bank and the Blum Centers at UC Berkeley and UCLA.  The event will close with an exciting Venture Night where some of the most innovative and disruptive startups established by young entrepreneurs from Latin America and the Caribbean will present their projects, chosen in a competition, which will be evaluated on Venture Night by a panel of expert judges.  Register here.


 

APPLY FOR THE INNOVATION ECOSYSTEM AWARDS 

We seek the world’s top companies and organizations that enable the super-linear growth of the ecosystems around them. They must catalyze the ideals of connectivity, openness, diversity, and trust that are essential to the innovation process. They must nurture the success of others.  Rather than a simple “Best Of” list, where one focuses solely on the entity itself, we are looking at what the entity does to catalyze more activity around itself.  We seek to reward those entities that create multiplier effects beyond themselves, that catalyze the growth of entire ecosystems.

Applications will be evaluated based on the following criteria:

  • Connections: does the company/organization connect people that are otherwise disconnected in meaningful, productive ways?
  • Platform: does the company/organization lower the cost of doing business across an entire system?
  • Culture: does the company/organization foster trust in the community, industry or society?
  • Motivations: does the company/organization demonstrate social responsibility or sustainable, systematic impact?
  • Team: how does the company/organization collaborate with employees, advisors, suppliers, distributors and other partners?

APPLY HERE


Rainforest Rev: The Most Entrepreneur-Friendly City In America?

The Rainforest Revolution
News on growing ecosystems for innovation and entrepreneurship

 

How do you create value in the new economy?

Join over 1,000 of your fellow “new economy builders” from more than 50 countries as we learn, love, and build together.  It all happens in Silicon Valley at the Global Innovation Summit — the centerpiece of Global Innovation WeekRegister before November 30 and get 20% off!

SUMMIT: FEBRUARY 17-19  |  WEEK: FEBRUARY 15-21

 

THE BIG PICTURE


 

Albuquerque’s Plan To Build The Most Entrepreneur-Friendly City In America 

Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes
Albuquerque, New Mexico’s many assets can help the city achieve its ambitious goal with the help of people like Global Innovation Summit winner Elizabeth Kuuttila, who is helping to apply the science of innovation ecosystems to her work of cultivating a “Rainforest in the Desert.” Read more here.

 

Is Noise Good For Us?

Alistair Brett from the Rainforest Innovation Blog
T2 Venture Creation’s International Technology Commercialization Advisor Alistair Brett continues his analysis of the positive role “good noise” plays in the speed with which innovation moves through a network. Read more here.

 

The Blueprint of Multilevel Selection

Social Evolution Forum
David Sloan Wilson and Dag O. Hessen respond to comments on their essay that explores the potential role Norway could play as a “blueprint for the global village,” including the reactions of T2 Venture Creation CEO Victor Hwang. Read more here.

 

Four Ways Companies Can Encourage Innovation

Capital Ideas, University of Chicago Booth School
Data that emerged from a corporate database that tracked the progression of new ideas, and also tested whether incentives encouraged more and better ideas, has resulted in some simple steps organizations can take to promote creativity in the workplace. Read more here.

 

Radical Innovation, Part I: Unleashing Creativity

Knowledge@Wharton, Wharton School of the University of Pennsylvania 
Boston Consulting Group’s Kimberly A. Wagner explains in this video how companies can bridge the gap between managers who want to foster creative ideas, and the people under them who have creative ideas but can’t get permission from the manager to put them into action. See more here.

 

THE LATEST NEWS


 

Let a Million Factories Rise

The Economist
The insular nation of Myanmar has launched the Thilawa Special Economic Zone (SEZ), which could help the country formerly known as Burma boost trade and investment with nearby giants China and India, as well as neighboring Thailand. Read more here.

 

Where Does the Creative Class Move?

CityLab
A recent study by a Census Bureau geographer traces the migration of the roughly 40 million American creative class workers between 1995 and 2011. Read more here.

 

Once, Cleveland Was America’s Startup Hub. Can History Repeat Itself?

Cleveland Plain Dealer
Historians are looking at Cleveland, Ohio’s early 20th century “age of invention” for ways to inspire a new generation of young innovators. Read more here.

 

CALENDAR OF EVENTS


 

Demand Solutions 2014 — Venture Night

December 2, 2014  |  Washington, D.C.
Demand Solutions: Ideas for Improving Quality of Life is a one-day event sponsored by the Inter-American Development Bank and the Blum Centers at UC Berkeley and UCLA.  The event will close with an exciting Venture Night where some of the most innovative and disruptive startups established by young entrepreneurs from Latin America and the Caribbean will present their projects, chosen in a competition, which will be evaluated on Venture Night by a panel of expert judges.  Register here.

 


 

APPLY FOR
THE INNOVATION ECOSYSTEM AWARDS 

We seek the world’s top companies and organizations that enable the super-linear growth of the ecosystems around them. They must catalyze the ideals of connectivity, openness, diversity, and trust that are essential to the innovation process. They must nurture the success of others.  Rather than a simple “Best Of” list, where one focuses solely on the entity itself, we are looking at what the entity does to catalyze more activity around itself.  We seek to reward those entities that create multiplier effects beyond themselves, that catalyze the growth of entire ecosystems.

Applications will be evaluated based on the following criteria:

  • Connections: does the company/organization connect people that are otherwise disconnected in meaningful, productive ways?
  • Platform: does the company/organization lower the cost of doing business across an entire system?
  • Culture: does the company/organization foster trust in the community, industry or society?
  • Motivations: does the company/organization demonstrate social responsibility or sustainable, systematic impact?
  • Team: how does the company/organization collaborate with employees, advisors, suppliers, distributors and other partners?

APPLY HERE


Albuquerque’s Plan To Build The Most Entrepreneur-Friendly City In America

Victor Hwang, CEO & Co-Founder of T2 Venture Creation, from Forbes

The city of Albuquerque, New Mexico has declared an ambitious goal. It wants to become the most entrepreneur-friendly city in the nation.

That’s a tall order. But more and more, it’s becoming an achievable target, because people are able to understand and apply the science of innovation ecosystems. That knowledge is helping Albuquerque get the right mix of social, business, government, and cultural factors to spark together.

Albuquerque—or ABQ, as the locals call it—has many of the basic assets in place. The city boasts a high-ranking, well-respected research university, two major research institutions, and a business-friendly local and state government. It is the cultural and entrepreneurial hub of the region.

These assets are crucial to Albuquerque’s success. But to foster entrepreneurial innovation at scale, you need more than mere assets. More importantly, you need the ecosystem. And for the ecosystem to happen, a city and its people needs to interact, mesh, and flow together. Dance in rhythm, if you will.

In a natural ecosystem, certain species have greater impact than others. While almost every species serves a purpose, certain species are “more equal than others” when affecting the vibrancy of the entire system. These critical species are called keystones. One example of a natural keystone species is the beaver, whose cutting down of old trees to build dams promotes the growth of new trees. Beaver dams—and the water that builds up behind them—also create breeding grounds for fish, salamanders, newts, and frogs. And the water behind beaver dams irrigates the surrounding area.

In human ecosystems, certain people or institutions can be keystones as well. They facilitate connections, command respect, and influence the push and pull of an ecosystem toward greater strength.

Elizabeth Kuuttila is one of the keystones of Albuquerque. She’s the CEO of the University of New Mexico’s STC.UNM (formerly known as Science and Technology Corporation), a non-profit company dedicated to cultivating a “Rainforest in the Desert” in Albuquerque.  Her team won an Innovation Ecosystem Award at my organization’s last Global Innovation Summit for their efforts.

Kuuttila noticed that Albuquerque had the right elements, but they weren’t necessarily interacting in the right ways. Much of the institutional infrastructure is certainly strong. ABQ thrives because “we can recruit entrepreneurs who want to live in Albuquerque because of the natural beauty, the sense of community, the weather. We’re very fortunate that we have this cadre of really talented entrepreneurial resources.”

But, she notes, the geographical makeup of the city itself is a hindrance. Albuquerque is a mid-sized city in terms of population (just under a million residents), but it is enormous in terms of land area. As a result, the 8-10 startup companies that STC.UNM spins off every year are, according to Kuuttila, “scattering throughout the city.” And Albuquerque’s two major federal research labs, Los Alamos and Sandia, have historically been unable to leverage their considerable intellectual resources into economic benefit for the region, operating quite separately from the city and its people.

The lack of an innovation district—a place where the city’s entrepreneurs, researchers, students, startups, investors and others can come together and interact—is an issue Kuuttila and STC.UNM recognized as a major barrier to a healthy ecosystem. As a result, they spearheaded an initiative called Innovate ABQ, in which a section of downtown Albuquerque will be built and geared toward “creating space where these collisions can occur.” In short, they seek to create a new keystone institution.

The initiative is getting across-the-board support. UNM president, Bob Frank, has expressed the need for Albuquerque to create “a critical, nurturing environment to generate opportunities.” And one of Albuquerque serial entrepreneurs, Stuart Rose, noted the need for an “ecosystem” where innovators can experiment, fail, and develop into something new, different, and better. He added that “in the rainforest, things die and decay, the DNA mixes and new life forms are created.”

The city government has committed $1 million to building the site, and the state of New Mexico is funneling funds from oil revenues into the project through its State Investment Council program.

Even architects and city planners are looking to buck traditional ways of thinking in favor of cultivating “collisions.” David Green of the urban design firm, Perkins & Will, wants the Innovate ABQ site to fulfill four main criteria: livability, walkability, accessibility, and sustainability.

However, leaders in Albuquerque realize that building a project is different from building an ecosystem. You have to pay attention to human scale in the design. Culture change happens from the bottom-up, not the top-down. Kuuttila says, “We can’t simply make some strategic investments. We have to resist the idea of central planning. What we have to do is coordinate with each other and continuously talk to each other about what we’re doing.”

In short, you don’t build a “Rainforest in the Desert” merely by planting trees. You do it by nurturing new weeds sprouting up.

Kuuttila finds great joy in being a keystone in Albuquerque. She remarks passionately, “I’ve always loved the idea of being a keystone. I really get a lot of satisfaction from helping people make connections that help them further their own business and technology interests.”

She adds, “To watch people making connections—sometimes it was a startup to a startup, sometimes it was an investor hearing a pitch, and sometimes it’s a student getting a job. I really like that.”

Victor W. Hwang is an entrepreneur, investor, and ecosystem builder in Silicon Valley at T2 Venture Creation. He is primary co-author of The Rainforest: The Secret to Building the Next Silicon Valley.


Is noise good for us?

“Every body has their taste in noises as well as other matters; and sounds are quite innoxious, or most distressing, by their sort rather than their quantity.”
Persuasion, Jane Austen, 1817.

Jane Austen was describing the feelings of one of her characters on entering the town of Bath “driving through the long course of streets …. amidst the dash of other carriages, the heavy rumble of carts and drays, the bawling of newsmen, muffin-men and milkmen, and the ceaseless clink of pattens* …. these were noises which belonged to the winter pleasures; her spirits rose under their influence.”

This month we pick up again the issues of network resiliency, perturbations, and noise, introduced in our September and October Blogs in this series. In September’s Blog investigations were cited indicating that the speed at which an innovation moves through a network increases when there are a “greater number of errors, experimentation, or unobserved payoff shocks in the system” (also called noise or variability).

How does a network see noise? As a series of perturbations changing the network’s state. Picture kicking a network and watching the resulting impact rippling through it.

Instinctively we think of noise as something to be eliminated but as you may have already realized this is not necessarily so. Some people find listening to music to be an aid to learning (we don’t have space here to get into why music, and not just the kind we hate, may be referred to as noise). As I write this blog I feel comforted by sounds of the city coming through my open window; I find it difficult to work and learn in a completely silent environment. Likewise, for an innovation ecosystem no noise means isolation from its external environment. A completely static, isolated, network will become dysfunctional. We can probably all cite examples.

For an innovation ecosystem, good noise keeps the system, and its people, alert by being connected to the larger environment and responsive to needed change. Not-so-good-noise is, for example, a perturbation which may disrupt a key link and cause a serious malfunction not by virtue of the magnitude of the perturbation but its type. Some apparently minor event could trigger a breakdown in trust between two critical organizations which in turn create a damaging disruption.

Another way of understanding the role of noise is that some form of energy is needed to prevent self-organizing complex innovation ecosystems, which as we know from past blogs in this series, are in non-equilibrium states, from dropping into the dysfunctional, static, equilibrium state mentioned earlier.   A non-equilibrium state is called a steady state system.steady state equilibrium 4

Before relating all this to innovation ecosystems it should be noted that a steady state system is not the same as a system in equilibrium. In A and B the level of water in the container is the same, However, in A the level is maintained in a steady state as water flows out is balanced by water coming in. In B the water is in equilibrium – nothing interesting is happening.

Complex adaptive systems have “basins of stability” – as introduced in our August Blog – which are steady state systems maintained by the feeding in of external energy. In non-equilibrium thermodynamics this heat energy goes under the quaint name of “housekeeping heat.” This housekeeping heat prevents the system from falling into a non-productive, static, equilibrium state. For corporations and innovation ecosystems this equilibrium would be a kind of self-satisfied stasis. However, if this maintaining heat vanishes the system may flip into another steady state which will require new maintaining/housekeeping energy. In the language of complex adaptive systems these steady states are known as “attractors.” The need for permanent noise to continuously restructure networks resembles housekeeping heat in steady-state thermodynamics.

Features of a steady state:

  • Conditions are stable within the system
  • Energy is continuously put into the system (housekeeping heat)
  • Over time, the system is maintained in a higher state of order than its surroundings

Features of an equilibrium:

  • Conditions are stable within the system
  • Net free energy either enters or escapes the system
  • Over time, any difference in entropy (state of disorder) between the system and the external environment tends to disappear

Thus, equilibrium is a special case of a steady state.

To sum up: noise can be a friend or an enemy to innovation ecosystems depending on whether it keeps the system alert or damages critical parts of the network. Jane Austin was right; it is the sort of noise that matters.

* A patten is the model of the required casting made in wood metal or plastics. it is used to produce the mould cavity in sand.

Next time: End of the year recap on what these blogs have told us about the practicalities of Rainforest Innovation Ecosystems.

All blogs in this series can be found at http://innovationrainforest.com/author/alistair2013/


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