The February 2008 issue of Fast Company has an article entitled "Mad Scientist" about Jeong Kim who heads up Bell Labs. The article begins "*Can legendary Bell Labs--and its struggling parent, Alcatel-Lucent--be saved by a "crazy risk taker" who's betting that innovation can be captured in a mathematical formula?"*

The article is pretty interesting and Jeong Kim who heads up the group is undoubtedly a great innovator. He sold one of his companies (Yurie Systems) to Lucent Technologies for $1B and pocketed $500 million. Some of Kim's interesting insights & actions as the head of Bell Labs include

The use of a venture capital type approach to innovation as "*Kim has grouped the Labs' more audacious research efforts under what's now called Alcatel-Lucent Ventures, or ALV. By his estimation, Bell Labs' value is in its critical mass--a lot of researchers in close proximity, sharing insights and expertise. But he also points to two earlier Bell Labs inventions: "Remember, the transistor was invented by three people, not 30,000. The laser was invented by two." *

*ALV is essentially a venture-capital fund for scientists within the Labs--"intrapreneurs," as business theorists sometimes call them--whose ideas might have previously ended up as stranded assets because they were too far ahead of the curve or not relevant to Alcatel-Lucent's current customers. So far, Kim says he has considered about 150 proposals, routed to him through a semi-annual companywide "call for ideas." He has green-lighted fewer than 10. Each one, in his view, has the potential to recoup six times its initial investment and expand Alcatel-Lucent's reach into entirely new businesses"*

This skunk-works for innovation makes a lot of sense. And several interesting ideas are emerging from these efforts which the article details including a project called Evros which unfortunately has now been labeled "OmniAccess Nonstop Laptop Guardian."

But the article is prone to a few flights of hyperbole including:

__First example of hype__

The author writes about Kim's theory on innovation as follows:

"He envisioned a cube. One dimension, or one axis, could represent the impact of a particular innovative effort: Would it be incremental or revolutionary? Another axis could represent the process of innovation: Would it be achieved through painstaking analytic work or through artistic inspiration? The third axis was time itself: Was the innovation driven by the market today or in the distant future? None of this would tell his audience what or when to innovate--small inventions could be as lucrative as big ones and ideas for next year as disruptive as products for five years hence. Nor would this offer a foolproof strategy for how to innovate, since hiring an eccentric genius could prove as valuable as an overcaffeinated entrepreneur. But it did suggest to Kim that, for any company, innovation required visualizing the whole future, perhaps within something like this cube, a 3-D box where every idea in your portfolio was judged and plotted in relation to its potential impact, time to market, and creative process."

So although calling it dimensions and visualizing it as a 3-D box sounds impressive, there is nothing particularly amazing about this. This is a framework that many management consultants have come up with and hawked to their clients or that strategic venture groups have come up with. It's a simple matter of setting up a x, y, and z axis and putting each dimension down and then plotting points to your heart's content. It's a slight variation on some long-held views of innovation and not innovative into itself. The idea that innovation needs to be managed as a portfolio of options is spot on but again, nothing particularly earth-shattering about that. It seems the author was a bit enamored with this framework, but again, pretty standard stuff.

__Second example of hype__

Kim is enamored with the idea of developing a formula to quantify innovation in a mathematical formula. The author comments:

"Lately, Kim has been thinking about the Black-Scholes model, a set of mathematical equations formulated in the 1970s that forever changed how markets operate by providing a way to price options. In simplest terms, Black-Scholes helps financial institutions reach more precise calculations of risk and reward. Kim may have developed his innovation cube as a nifty visual for a speech, but he soon realized that by plotting Bell Labs' innovative endeavors in the three-dimensional box--based, again, on impact, time to market, and process--he could understand whether his bets were sensibly distributed. Perhaps the cube could do for innovation what Black-Scholes did for the financial markets.

There's no proven model, though, for a well-balanced innovation portfolio. Is your company pursuing too many near-term projects? Is it overestimating their impact? How much should you spend on internal research as opposed to buying new technologies? Research dollars are increasingly limited, and prioritizing ideas is crucial. So Kim has asked his best scientists to address what he calls "a really, really tough problem": quantifying innovations in a mathematical formula. "It doesn't have to be perfect. But if we can create a model that is used by a lot of people as a common tool, that would be a great contribution." "

This sounds like a nice luxurious pursuit when you have a bunch of mathematicians on staff, but the portfolio view that a framework would offer is probably enough to help prioritize innovative opportunities. I see little to no prospect for a generally applicable mathematical formula for innovation coming to light, and I'm not sure this makes much sense to pursue. For innovation, the old adage that "it is better to be vaguely right than precisely wrong" seems to be pretty spot on. Management and innovation as science is inherently impossible no matter how interesting/alluring the prospect of this is. There is no way to say "Add this + this" and you'll have a great company or an innovation. I'm sure such a formula will result in a book which will sell thousands of copies because this type of mathematical elixir is what some are hoping for. But its value is dubious.

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